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Pockets of Opportunity
Despite a generally lackluster outlook for 2012, there are some areas that offer both short and long term growth opportunities. We are looking at categories of investment, not specific stocks or bonds. We will be happy to provide specific names to those interested.
2012 - Your Investments
In our previous article, we painted a cautionary picture for 2012. Continued volatility in stocks, low interest rates, problems in Europe, slowing growth in Emerging Markets. All this being said, this is not the time to stuff your funds in a mattress. There are opportunities to outperform the miserly returns being offered by money market funds, bank accounts and the like.
Beware. its that time of year
Typically, tax time, April and the month before, and year end are the times that we see the most outrageous claims for investments. If you have been watching the financial press you have seen a number of articles on high profile investment advisors finding themselves in big trouble for various indiscretions, ranging from outright thievery to insider trading.
Solving the Life Insurance Dilemna
Life insurance is a critical part of everyone's financial life. Sadly, it receives little in the way of thought and planning in most situations. A young family, thinking about affordability, will usually buy the least expensive term insurance that they can find. This is not a bad strategy, but the mistake is assuming that, when the term insurance guaranteed premium expires, there will be no further need for life insurance. So we see someone who has reached age 50-60, facing a choice between a term policy that is no longer affordable, and a permanent policy with a premium that is too steep.
Take a Giant Step Back
Surely everyone has seen and been amazed by the tremendous swings in stock market indices over the past several months. In a single day, markets will be up several hundred points at the open, down by even more in the afternoon, and finish up by over a hundred points. Scary? yes. Confusing.? Yes.
Safe Hideouts
In case you haven't noticed, we are in a period of turmoil, economic uncertainty, and a lack of confidence in our government and regulators. More than likely, the investment markets will remain stagnant, with little movement in either direction. If there is to be a strong movement, it most likely will be negative. Interest rates will remain low, so savers will get precious little from banks, and retirees will struggle with low interest rates on their retirement nest eggs. Not a rosy picture.
Comfort
A major financial publication recently ran an article about a 67 year old who had retired and purchased a variable annuity to fund his retirement income. He was feeling very comfortable, despite recent market declines and volatility, because he had a Guaranteed Income Benefit as a part of the annuity he purchased.
6% Buckets for Life
The primary concern of Baby Boomers is that they will run out of money in retirement. Many traditional financial advisors recommend a mix of stocks and bonds, usually about 50-60% stocks and 40-50% bonds. This may work, but is absolutely not guaranteed. Stocks rarely have dividend rates above 2-3%, and do not generate capital gains each and every year. Bonds pay the rate of interest stated, but do not have the ability to keep pace with inflation.
Invest With The Best
Modern Portfolio theory shows how risk adjusted returns of a porfolio can be improved by diversification across assets with varied correlations. This is a way of saying, while some assets are increasing in value, others are decreasing or remaining stable.
More for Less
Surprise, something is actually getting less expensive. A huge change has taken place in the life insurance industry and it couldn't have come at a better time.
Get Off The Sidelines
A client recently called in frustration. She had over $200,000 in a money market account,earning less than 1/2% interest, or about $1000. This represented money that she held for emergencies, or unexpected expenses. We proposed that she could create a ladder of quality deferred annuities and get a number of advantages.
Obtaining Health Insurance - Radio Interview
I was pleased and honored to be asked to appear on "Walking on Air" to discuss the difficulties of obtaining health insurance, particularly for people going through divorce. The broadcast presents some pracctical advice for anyone who is seeking coverage for themselves or their family. We hope you will spend a few minutes a listen.
7% Income Opportunity
Anyone who is interested or in need of income should pay attention. Any investor who is looking for diversification should pay attention. It isn't often that we see an opportunity to obtain a 7% cash flow with an opportunity for capital gain.
Not 20%, But 50%
Traditional asset allocation advice was to have about 20% of your investments in the International category. The reasoning was that international investments had potentially high returns, but also carried high risk. That is changing.
A Private Pension Plan
For years, pensions were regarded as uninteresting relics of days gone by. Employers stopped using them and switched to the sexier 401k plans. After a decade of little to no growth in the equity markets, many are starting to re-look at the value of a guaranteed income at retirement, supplementing 401K accounts and social security.
Things to Watch in 2011
This past year, 2010 was the second consecutive year of positive performance in the investment markets. This certainly feels good after we neared financial collapse in 2008. Like always, there are negatives to go with the positives, so investors need to be aware of some of the trends that will most likely influence markets in the year ahead.
2010 - A Pretty Good Year
As is usually the case, it requires more than one measure to determine how investors and savers made out in 2010. For those of you who stayed out of the game and parked in cash, sorry. Let's say you didn't lose anything, but probably earned less than 1% on your money.
Saving Your 401K Plan
Small business owners have been trying to understand the implications – and there are many – of the new healthcare plan. Then, on October 14, 2010, the Department of Labor released its final rules governing the conduct of 401k plans.
The Perfect IRA Investment
What do we all want from our Individual Retirement Accounts? We can safely say that we all want steady growth in the value of the account. We also want to produce a retirement income that we cannot outlive. If either of these can be increased, that would be a bonus, but basically these are the major benefits we all want from these retirement accounts.