Monday, February 16, 2015

It's crucial that you know where you stand financially BEFORE you retire!

It's crucial that you know where you stand financially BEFORE you retire!

A recent post by the Center for Retirement Research at Boston College regarding the findings of an HSBC retirement survey points to the troubling trend of folks coming up short, in terms of their retirement readiness i.e., not having enough money to maintain their lifestyles throughout retirement.


While this isn't surprising news, given the fact that every single piece of research in recent years has basically arrived at the same conclusion, what caught my attention and hopefully yours, as well is that of the startling number of folks who find themselves in this predicament, about two out of five said they did not realize that their preparation had fallen short until it was far too late"

Let me remind you that we are talking about real people with real lives and not a single one of them intended to spend their retirement this way.

But why is this happening?

Maybe they had the wrong investment portfolios. Or perhaps they didnt save nearly enough.

Personally, I don't believe that any sane person will intentionally drop the ball when it comes to their retirement nest egg. Obviously, there may be several legitimate as well as illegitimate reasons we often find ourselves on the wrong side of our retirement financial dreams. However, in my humble opinion, most investors never take the time to answer some very simple but crucial questions that will ensure they wont end up in an unintended predicament:

Will your retirement portfolio be able to provide the needed resources to support your lifestyle? How, exactly, do you know whether your investments are headed in the right direction or not?

Keep in mind that the folks referenced in the HSBC study had substandard portfolios all along but didnt realize it until it was far too late. Maybe they were too busy? Maybe they had unskilled financial advisors. Are you really paying attention and getting the best results you possibly could for your hard-earned money?
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Want real, fact-based information that will give you better results than relying on your intuition? Contact us so that we can help you to objectively evaluate your current situation and make a plan that will yield the results you want. Visit LaserFG.com or call 877.656.9111 right now to book your complimentary session.

Monday, February 2, 2015

Intuition Is Really Bad for Your Investment Portfolio

Intuition Is Really Bad for Your Investment Portfolio

Obviously, I cannot claim that intuition is flat out bad. I am aware that our creator gave it to us for a reason. But based on what I know and have actually witnessed in my years of being in the trenches with folks as it relates to investing and retirement planning, I can unequivocally tell you, without any restrictions whatsoever, that it’s not the best idea to use intuition for building your investment portfolio.

In fact, I have seen it destroy folks’ livelihoods, firsthand. Just this past week, I met with someone who, in her own words is really disappointed and scaredabout the outcome of her investments over the past 20 years. For two decades, she’s been diligently investing, expecting that she would be fine for retirement. All of a sudden, she finds herself at the crossroads of retirement, now realizing that her efforts have yielded terrible results.

My question was how she and her advisor had made decisions surrounding which funds to invest in - the stocks and bonds mixes, and why. Her answer: “I just picked those funds that I thought would do well. My advisor showed me the options, and I chose the ones I thought where good funds, based on the performance history. Then, from time to time, we switch funds when they don’t live up to my expectations.”

That should sound pretty normal and familiar. Isn’t this exactly how most people are investing today? But here is the problem. It is a surefire way to go broke in retirement. And that’s simply because making decisions this way is based purely on instinctive feeling, rather than facts and conscious reasoning. Contrary to what you may think or even believe to be true, investing shouldn’t be a guessing game because 9.5 out of 10 times, you are bound to guess incorrectly.

If you don’t know exactly why your portfolio is arranged the way it is, your expected return overtime, and the level of volatility associated with it, I am afraid that you are on a very slippery slope.


Would you expect a good medical doctor, mechanic, plumber, or any other professional, for that matter, to deliver good results purely based on intuition (as opposed to meticulous, conscious reasoning based on provable science)? Of course not.

So do you have a justifiable, realistic basis that explains the composition of your investment portfolio? Or has it all been left up to intuition – whether that of your financial advisor or yourself?

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Want real, fact-based information that will give you better results than relying on your intuition? Contact us so that we can help you to objectively evaluate your current situation and make a plan that will yield the results you want. Visit LaserFG.com or call 877.656.9111 right now to book your complimentary session.

Monday, January 19, 2015

Do You and Your Financial Advisor Have the Right Expectations about the Stock Market?

Do You and Your Financial Advisor Have the Right Expectations about the Stock Market?

The stock market on recent days can be described as a anything but smooth for most investors. And that's somewhat understandable, because we all want to experience the continued growth of our investments.

Most advisors, on the other hand, are scrambling to manage clients emotions vis-a-vis encouraging them to hang in there. Isn't this all too familiar? Of course it is. Its precisely what happens every single time the market enters undesirable territory.

But is this what investing in the stock market is supposed to be? An uncomfortable, highly emotional rollercoaster journey that has you living on the edge pretty much the whole time?

I believe that investing in the stock market shouldn’t be a nerve-racking ordeal. But in order to free yourself from what basically amounts to unnecessary drama, you must adhere to the scientifically proven investing approach that dictates three simple rules:

1: Avoid stock picking and focus instead on capturing market returns by building an efficient, diversified portfolio with a risk level you can live with.

2: Understand that the market will always fluctuate! Sometimes it will go up and sometimes it will dip. There’s nothing that you or anyone can do about it.

3: Use the market’s volatility to rebalance your portfolio and move on with your life.

As simple and logical as these proven rules may sound, failing to adhere to them could end up costing you countless moments of sleeplessness and unnecessary panic. 
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Want help making and KEEPING your financial resolutions? Contact us so that we can help you to  objectively evaluate your current situation and hold you accountable to make the changes you want to make. Visit LaserFG.com or call 877.656.9111 right now to book your complimentary session

Monday, January 5, 2015

1 Step to Resolving to Save or Increase Your Savings in 2015

1 Step to resolving to save or increase your savings in 2015
Happy New year to you! We’ve made it, and I wish you and your family nothing but the absolute best of luck in the days and months ahead! Whatever your resolutions are, I hope that you accomplish them.

Right off the bat, I’d like to be crystal clear that what I’m going to talk about here is in no way, shape, or form intended as a condemnation. Not at all. Rather, my intention is to encourage the person who needs to hear the truth in no uncertain terms about making a resolution to change certain spending habits in order to start or increase their savings.

Having said all that, if you are one of those folks who’s hoping to change your spending habits, here are a few suggestions to help you put the nail in the coffin this time around.

First of all, I’d like to congratulate you for admitting that you need to change certain spending habits. That’s really significant, because many with this issue never admit that to be the case, and by so doing simply keep the cycle going, digging deeper and deeper. So kudos to you for making that admission in the first place.

Secondly, I would suggest that if you are really serious about making such a change, you find an experienced advisor who will actually help you to make things happen. I’m not implying that you are incapable of fixing things on your own, but here’s what you must understand: we are all creatures of habit, especially when it comes to spending control. Sometimes, the only effective way to turn things around is by actually forcing yourself to do it – by not having that money available to spend in your checking account.

In other words, if you expect to suddenly become disciplined with your spending habits simply because the clock rolled over to 12:01 a.m. on January 1st, with all due respect, you are kidding yourself. That’s probably not going to happen. I’m just guessing here, but you didn’t just realized all of a sudden that your spending habits need some work, did you? Of course, you’ve known or expected there might be some unwanted behavior happening. But why did you postpone making a change you know will be better for you until the New Year? I think you get the point. Changing your spending habits can certainly be challenging, so we need to encourage you (or, perhaps, force you) to do it.

The other reason you shouldn’t try it at home by yourself is that your mind will play tricks on you by coming up with bogus, fear-centered reasons not to make the change. For example, if you start/increase your savings, you won’t have enough money to pay other pressing bills. That’s why you need a good financial advisor to help you pull it off. He/she can and should show you exactly how much you have to work with by laying out your expenses versus income. This will let you see exactly how much discretionary money you have available.

Here’s my challenge to you: Make the call, set the appointment, and let the paper do the talking – not your inner voice, which in this case might very well be corruptly biased.
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Want help making and KEEPING your financial resolutions? Contact us so that we can help you to  objectively evaluate your current situation and hold you accountable to make the changes you want to make. Visit LaserFG.com or call 877.656.9111 right now to book your complimentary session

Monday, December 22, 2014

Every time the market tumbles, people ask the SAME question

Every time the market tumbles, people ask the SAME question

On a fairly regular basis I get questions from folks – about financial planning, of course – either via the “Ask Your Question” portal on our website or through face-to-face interactions. Speaking of which, every once in a while such an interaction involves a total stranger walking up to me because they recognize me from one of the area magazines for which I write columns. I must mention that I find those moments to be refreshingly rewarding, not that I’m seeking them out.

This past week I stopped by a local coffee shop to grab my must-have chai latte. Out of nowhere, a woman walked up to me and asked if I was who she thought I was – the investment advisor guy in the magazine? After exchanging a few pleasantries, she got to the financial question of the day: What in the world is going on with the stock market? Look at what the DOW (Dow Jones Industrial Average) is doing – is this a sign of the next crash? Should I get out now?

That’s a fairly familiar line of questioning anytime things aren’t headed up, up, up with the stock market. And I understand folks’ desire to know exactly what the deal is, especially given that the past week or so has been pretty chaotic with the DOW sliding by 732 points. It was at 17,801 on December 9. A week later, on December 16, it was down to 17,069. Of course, as of last Friday, the DOW was back to 17,804 - My coffeehouse encounter happened prior to that.

Here was my response to her and, for that matter, to anyone with a similar question:

I don’t know what’s going to happen tomorrow. Never have and never will. And the same goes for every single financial advisor or expert you see in the media. Yes, no one knows exactly what’s going to happen.

And here’s the simple proof to back up my point: to date in the history of this planet, no one has been able to consistently and successfully predict the market’s exact path, beyond what everyone already knows – or more appropriately, must know by now – that sometimes the market goes up and sometimes it goes down. Period! And period again!

You may be wondering, but what about all these smart looking, eloquent folks you see on TV or hear about on the radio? They can’t predict the future either. I think what a lot of us tend to do is confuse someone telling you what has already happened in hindsight as forward–looking, but they are two completely different things. What most of these so-called media experts are doing doesn’t require any special powers, so to speak. There’s a reason we refer to that as Monday Morning quarterbacking.

So here’s the point I’m trying to get across. Don’t waste your emotions on the direction of the stock market, my dear friend, because the markets are going to do whatever they are meant to do. That doesn’t, however, mean to even suggest that you should simply buy a couple stocks or mutual funds and just forget about the rest.

There is such thing as a scientifically proven means to properly diversifying your investments so that you can capture market returns without needing to speculate and trying to do the impossible task of predicting (or worse, letting someone else fool you by telling you that they can predict) market movements.

I’d recommend that you work with someone who can help you to build an efficiently diversified portfolio with a volatility that you can live with. And then go about your daily life.
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Want an independent assessment to confirm that you are on the right track when it comes to saving for your retirement, including the money you will leave to your heirs? Come in so we can help you to  objectively evaluate your current approach. Visit LaserFG.com or call 877.656.9111 right now to book your complimentary session

Monday, December 8, 2014

If Your Financial Advisor Is Doing This, Tell Him/Her, “You’re Fired!”

If Your Financial Advisor Is Doing This, Tell Him/Her, “You’re Fired!”

Imagine a doctor who, when you consulted with him or her, allowed you, the patient, to tell him/her the medications you wanted, down to the exact dosage – and then pulled out a pad and wrote precisely that prescription. Should you – or would you – visit with such a physician? Of course, not! You’d be wise to stay as far away as you possibly could.

How about this other doctor? He or she speaks with you at length, makes a diagnosis, and decides that you need some antibiotics. However, he/she then gives you a list of say 15 to 20 different types of available medications, asks you, the patient, to choose, and then writes the prescription based on your choice. Would you deal with such a doctor?

Only a person who doesn’t value his or her life would have anything to do with either of these doctors. I’d even bet that if there were such doctors in real life, it wouldn’t be long before they’d lose their licenses to practice. I imagine they might even wind up behind bars.

Now let’s look into the way so many financial advisors, consultants, specialists, or whatever fancy-schmancy title you can come up with, operate. They talk with you; you tell them which product you want, like an IRA or a mutual fund. And what happens next? You get a list of available funds from which to choose. So you do your thing and there you go, your account is all set up. Or maybe you answer some quick questions on a computer program and a nice pie chart pops up with your available options – from which, you the client, make the actual selections for your account.

That may sound fairly familiar and even normal, but here’s the unfortunate thing: It’s a horrible way to plan your future! How different is that from the bad doctor scenarios I mentioned earlier? Just think about it. If your so-called financial advisor is asking you to make all the nitty gritty selections regarding your investment portfolio, you’re basically writing your own prescription. And the most incredible part is that, the advisor, the one with the license and “expertise” to guide you, is ultimately letting you do their work – and he/she still gets paid from your money. Is that how things are supposed to work? Of course not! The sad thing is that this is exactly the way that easily 9 out of 10 advisor-client roles are playing out at this very moment. Is it any surprise, then, that more and more folks have practically nothing tangible to show after all their years of hard work and investing?

Just so we are clear, I’m not suggesting by any measure that you should simply hand over your money and have no input. Of course you should set boundaries regarding what you can live with and expect out of your investments. But if the person with the training and license to actually write the prescription is leaving all the decision-making up to you, simply based on your intuition, why are you paying them? Maybe these so-called advisors prefer this setup because it works in their favor when it comes to being held fully accountable: “Hey, if I let you make your own selections, you can’t blame me later if you’re not satisfied.”

My dear investor, are you working with a REAL advisor? Or are you just paying someone to watch you do eeny-meeny-miny-moe with your future?
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Want an independent assessment to confirm that you are on the right track when it comes to saving for your retirement, including the money you will leave to your heirs? Come in so we can help you to  objectively evaluate your current approach. Visit LaserFG.com or call 877.656.9111 right now to book your complimentary session

Monday, November 24, 2014

What has the BIGGEST impact on your portfolio returns? The answer might surprise you

What has the BIGGEST impact on your portfolio returns? The answer might surprise you

In my last column I made the case for why it’s such a terrible idea – a lost cause, even – for trying
to pinpoint the best times to get in and out of the stock market. I’m hoping I was able to convince you to take that impossible, wealth-eroding enterprise off of your must-do list.

Today, I want to continue that discussion, but from a slightly different angle: By how much would you enhance the returns on your portfolio if you were able to perfectly time the stock market’s movements?

I must point out that we both already know this isn’t possible, but for the sake of this discussion, let’s say you or your financial advisor somehow had the proverbial crystal ball.

I think it’s a fantastic question, because the answer will really help you to decide whether it’s even worth the effort. At the end of the day, what it all comes down to is getting a good return on your savings, period.

According to the widely used Brinson, Hood, and Beebower (BHB) study into what really makes up the returns on a portfolio, here’s how an investment portfolio’s return breaks down:

  • Market timing: 1.8%,
  • Stock selection: 4.6%,
  • Other factors: 2.1%,
  • Asset allocation: 91.5%.
So say that a given portfolio earned 10 percent. Market timing will have contributed 0.2%, stock selection 0.5%, other factors 0.2%, and asset allocation 9%.

Now let’s put things into perspective. All things being equal, if you (or your financial advisor) were able to perfectly time the market by accurately predicting its exact movements with no error whatsoever, choose the right stocks/bonds, as well as arrange every other detail you feel is essential for the perfect portfolio investment, but got your asset allocation wrong, you’d have ended up with only a 1% return.

On the other hand, if you nailed your asset allocation (the broad proportionate mix of equities/bonds/cash) but botched the other three areas – including market timing, because you went about your daily business without constantly trying to predict what’s going to happen in the market on the next day – you’d have earned 9% out of the 10% return in this example.

So, my friend, you’ve got to focus on where the money is really going to come from – your broad asset allocation strategy – instead of wasting your time, energy, and emotions trying to time/predict the market for negligible results. And while on the subject, let me remind you once again that you shouldn’t allow the talking heads on TV, radio, or in print media to take you on a rollercoaster ride that could potentially rob you of what matters most.
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Want an independent assessment to confirm that you are on the right track when it comes to saving for your retirement, including the money you will leave to your heirs? Come in so we can help you to  objectively evaluate your current approach. Visit LaserFG.com or call 877.656.9111 right now to book your complimentary session