It may be cliché to write a New Year’s Resolution blog in the waning days of the decade, but that’s exactly what I intend to do. The reason is simple. Every year we set resolutions in the sincere hope of this being the year we start (fill in the blank) or quit (fill in the blank) or make sure we always, always (fill in the blank.) It’s like a bad game of Mad Libs that never works out as planned.
None of the five tips below are groundbreaking or wholly original. But, practice makes perfect and if reading these tips just one more time helps any of our readers meet their goals, be it related to their financial well being, emotional or physical health or any other facet of their lives, then it will be time well spent. Worst case scenario, I’ve provided myself with that little extra oomph needed to make my own resolutions really stick in 2010.
So, join me in making these five “pre-resolutions” as we wait for the ball to drop on Friday.
1. I Resolve to Make no More Than One or Two Resolutions
All too often when we set goals for the upcoming year, there is a tendency to get motivated. Really motivated. All of the sudden, instead of making a few measured adjustments to our day, there is a 20 item list of ways to completely revolutionize who we are as a person. This is entirely too much to take on at one time, especially under the pressure of a New Year’s resolution. Resolve, instead, to make one or two reasonable changes to improve whatever area of your life needs a little work.
2. I Resolve to Educate & Evaluate the Changes I Plan to Make
You’re at the dinner table on New Year’s Day. If you’re in Cincinnati, you’re likely eating pork roast and sauerkraut. Someone leads off the dinner conversation with going around the table and announcing your resolutions for the New Year. You blurt yours out without really thinking, work on it for a few days or weeks before the motivation is gone. Make this the year you take some time to really sit down and evaluate your goals. The internet can be a great source of information and support from others who have blazed this trail before you. Learn why you’re making the change you’re making, why it has been so difficult to break habits in the past and evaluate the steps you need to take to be successful this time around.
3. I Resolve to Plan, Plan, Plan
Now that you’ve set a couple reasonable goals and researched how to go about achieving them, put a firm plan into place. Make sure the plan includes actionable goals with results that can be measured over time. Keep a journal or calendar or whatever it is that you feel will best help you stick to the task at hand. Put it on paper, post the plan at home, in your office, wherever you will see it every day and work it into your daily schedule.
4. I Resolve to Ask for Help
It’s not enough to just share your intentions at the dinner table. Ask your family, friends and coworkers to help you with your plan, support you in your efforts, even join in following your plan with you, when appropriate. You’ll feel more accountable for your actions, and having someone join you will make any habit breaking seem much more bearable.
5. I Resolve Not to Manage My Time Wisely
If your resolution will take up more of your already extremely precious time, make fitting it into your schedule part of your plan. We all have 24 hours each day and can choose to prioritize what gets done and what doesn’t however we choose. More importantly, if your resolution actually frees up some time, by giving up an activity, for example, it is just as important to fill up your calendar with something positive in its place in advance. Leaving gaps in your schedule will just remind you that it’s time to return to the bad behavior.
Keep these goals in mind ahead of setting your goals for 2010 and you’ll be just a few steps closer from really embracing the change you wish to see in yourself.
Have a very safe and Happy New Year from all of us at The Asset Advisory Group.
By Chip Workman, CFP®
cworkman@taaginc.com
www.taaginc.com
Monday, December 28, 2009
Monday, December 21, 2009
Be Thankful
Did you know that today, December 21st, is the shortest day of the year? It is the winter solstice and marks the beginning of winter. The sun will not rise today at the North Pole. Our northern hemisphere begins to lose more heat than it gains, and this will continue until late in winter. It looks like winter today in Cincinnati. The sky is grey and it is cold, although thankfully we aren't buried under a few feet of snow.
While we are experiencing our shortest day, the southern hemisphere is basking in sunshine and enjoying their first day of summer. The Centers for Disease Control and Prevention recently released the results of a study showing that the happiest people live in sunny states. Topping the list were Louisiana, Hawaii, and Florida. Ohio did not place well. We came in 43rd. Does that mean we are doomed to depression? I don’t think so, but Seasonal Affective Disorder is not unheard of around here.
While the days may be getting shorter and colder, I can still think of an awful lot that I am thankful for. I hope that you have a lot to be thankful for, too. Take a few minutes and write it down. Keep this list in a drawer and when you're having an awful day and need some perspective, pull it out.
As you sit down with your family and friends this coming week, why not share with them? It can be a very touching experience to go around the table just before dinner, having each person share one thing that you're thankful for.
By Amanda Bashore, CFP
arbashore@taaginc.com
www.taaginc.com
While we are experiencing our shortest day, the southern hemisphere is basking in sunshine and enjoying their first day of summer. The Centers for Disease Control and Prevention recently released the results of a study showing that the happiest people live in sunny states. Topping the list were Louisiana, Hawaii, and Florida. Ohio did not place well. We came in 43rd. Does that mean we are doomed to depression? I don’t think so, but Seasonal Affective Disorder is not unheard of around here.
While the days may be getting shorter and colder, I can still think of an awful lot that I am thankful for. I hope that you have a lot to be thankful for, too. Take a few minutes and write it down. Keep this list in a drawer and when you're having an awful day and need some perspective, pull it out.
As you sit down with your family and friends this coming week, why not share with them? It can be a very touching experience to go around the table just before dinner, having each person share one thing that you're thankful for.
By Amanda Bashore, CFP
arbashore@taaginc.com
www.taaginc.com
Monday, December 14, 2009
Home for the Holidays
Many people will be traveling to spend time with their families this month. When you gather with your loved ones over the holidays, the last topic you are likely to be thinking about is legacy planning. But maybe it shouldn’t be. This is the perfect opportunity to discuss with your children the plans you have put in place in the event of your incapacity or death and the legacy you would like to leave for your family. If your parents are still living and have not offered this information to you, inquire as to the plans they have made and what is important for you to remember about their lives.
I have seen many clients hurriedly create their estate plan as they struggle to cope with an unanticipated accident or illness. It is a topic that we all would like to avoid, but dealing with it before a crisis will benefit you and your family members. To most boomers, estate planning is more than simply having the proper documents such as wills, trusts, and powers of attorney in place. As Carl Rapp, CEO of Executor’s Resource, a leader in estate management and legacy planning states, “a legacy must be viewed in its broadest context; as a combination of values and accomplishments, wishes and instructions, together with heirlooms, memorabilia and finally, financial assets.”
We now have so many ways to keep in touch with far away relatives that it is easy to communicate only with short sound bites and lose the stories that have been passed down through the generations. Some of my fondest family memories are of my grandparents talking about all that they have seen and experienced and what their dreams are for future generations of our family. We need to use the technology we have been given to record these stories – through audio or videotape or by writing letters to future generations.
Make it a point for this year’s family gathering to be different. By discussing your history and hopes for the future, your family can share one of the greatest gifts this holiday season – a family legacy.
By Chris Carleton, CFP ®
clcarleton@taaginc.com
http://www.taaginc.com/
I have seen many clients hurriedly create their estate plan as they struggle to cope with an unanticipated accident or illness. It is a topic that we all would like to avoid, but dealing with it before a crisis will benefit you and your family members. To most boomers, estate planning is more than simply having the proper documents such as wills, trusts, and powers of attorney in place. As Carl Rapp, CEO of Executor’s Resource, a leader in estate management and legacy planning states, “a legacy must be viewed in its broadest context; as a combination of values and accomplishments, wishes and instructions, together with heirlooms, memorabilia and finally, financial assets.”
We now have so many ways to keep in touch with far away relatives that it is easy to communicate only with short sound bites and lose the stories that have been passed down through the generations. Some of my fondest family memories are of my grandparents talking about all that they have seen and experienced and what their dreams are for future generations of our family. We need to use the technology we have been given to record these stories – through audio or videotape or by writing letters to future generations.
Make it a point for this year’s family gathering to be different. By discussing your history and hopes for the future, your family can share one of the greatest gifts this holiday season – a family legacy.
By Chris Carleton, CFP ®
clcarleton@taaginc.com
http://www.taaginc.com/
Monday, December 7, 2009
The Sales Pitch Goes Like This...
“You’re a financially sophisticated and well-to-do executive (business owner, etc.) and you shouldn’t be in the same investment vehicles as the average investor. You deserve better. We’ll give you access to exclusive investments with above average returns that only we can provide."
We all know that Bernie Madoff used financial sophistication and exclusivity to attract wealthy and famous investors to his ill-fated Ponzi scheme, but I have become increasingly furious about the same sales approach being used by national brokerage firms, with horrible financial results.
Over the past year we have had people referred to us that were invested with well known companies like Merrill Lynch, Smith Barney and UBS Financial Services. These companies tout their size, financial sophistication and exclusive investment products as client benefits. Based on our review of portfolios they managed, their products have done nothing but separate clients from their wealth, while racking up profits for themselves.
One example is auction rate securities. According to SEC documents, these were sold by UBS, Citigroup, Morgan Stanley, Merrill Lynch and others as “cash equivalents” that could be liquidated in as little as 7 days, while paying higher interest rates than money market instruments and CDs. In February of 2008, the auction market used to reset the interest rates on these products failed, and clients learned how risky their investments actually were. A February 15, 2008 New York Times article said “some well-heeled investors got a big jolt from Goldman Sachs this week: Goldman, the most celebrated bank on Wall Street, refused to let them withdraw their money from investments they had considered as safe as cash.” Many people are still locked out of their investments, and the SEC has settled charges against several firms. One of our clients was finally able to recover 90% of his investment from his prior advisor, but only after several months of fighting and many sleepless nights.
Another example is structured investments. I couldn’t describe them any better than the May 28, 2009 Wall Street Journal article entitled Twice Shy on Structured Products?
“Wall Street burned thousands of investors with so-called structured products that were supposed to provide healthy profits and limit losses. Brokers, hoping investors' memories are short, are pushing these high-fee products again with safety as the big selling point. Brokers are eager to sell these structured products because commissions are high, but they face explaining why many of these products didn't perform as advertised. They also must convince clients that the firms behind these products are solid. Investors who bought products backed by firms that failed, such as Lehman Brothers, have big losses.”
The article goes on to tell the story of people who lost all their investment in these products. At The Asset Advisory Group, we have seen structured investments in portfolios we’ve been asked to review. In a UBS marketing piece, they describe a UBS structured investment product as an “integral part of a modern portfolio that provides enhanced return potential." But the same investment described in the brochure was held in a portfolio we reviewed, and it had created significant losses.
Every investor should understand the investments they hold. If your advisor can’t explain it to you clearly, then his cloud of complexity is probably covering up layers of risk and fees. Why in the world would you want to own it?
Jeannette Jones, CPA, CFP ®
jjones@taaginc.com
http://www.taaginc.com/
We all know that Bernie Madoff used financial sophistication and exclusivity to attract wealthy and famous investors to his ill-fated Ponzi scheme, but I have become increasingly furious about the same sales approach being used by national brokerage firms, with horrible financial results.
Over the past year we have had people referred to us that were invested with well known companies like Merrill Lynch, Smith Barney and UBS Financial Services. These companies tout their size, financial sophistication and exclusive investment products as client benefits. Based on our review of portfolios they managed, their products have done nothing but separate clients from their wealth, while racking up profits for themselves.
One example is auction rate securities. According to SEC documents, these were sold by UBS, Citigroup, Morgan Stanley, Merrill Lynch and others as “cash equivalents” that could be liquidated in as little as 7 days, while paying higher interest rates than money market instruments and CDs. In February of 2008, the auction market used to reset the interest rates on these products failed, and clients learned how risky their investments actually were. A February 15, 2008 New York Times article said “some well-heeled investors got a big jolt from Goldman Sachs this week: Goldman, the most celebrated bank on Wall Street, refused to let them withdraw their money from investments they had considered as safe as cash.” Many people are still locked out of their investments, and the SEC has settled charges against several firms. One of our clients was finally able to recover 90% of his investment from his prior advisor, but only after several months of fighting and many sleepless nights.
Another example is structured investments. I couldn’t describe them any better than the May 28, 2009 Wall Street Journal article entitled Twice Shy on Structured Products?
“Wall Street burned thousands of investors with so-called structured products that were supposed to provide healthy profits and limit losses. Brokers, hoping investors' memories are short, are pushing these high-fee products again with safety as the big selling point. Brokers are eager to sell these structured products because commissions are high, but they face explaining why many of these products didn't perform as advertised. They also must convince clients that the firms behind these products are solid. Investors who bought products backed by firms that failed, such as Lehman Brothers, have big losses.”
The article goes on to tell the story of people who lost all their investment in these products. At The Asset Advisory Group, we have seen structured investments in portfolios we’ve been asked to review. In a UBS marketing piece, they describe a UBS structured investment product as an “integral part of a modern portfolio that provides enhanced return potential." But the same investment described in the brochure was held in a portfolio we reviewed, and it had created significant losses.
Every investor should understand the investments they hold. If your advisor can’t explain it to you clearly, then his cloud of complexity is probably covering up layers of risk and fees. Why in the world would you want to own it?
Jeannette Jones, CPA, CFP ®
jjones@taaginc.com
http://www.taaginc.com/
Monday, November 30, 2009
What a Year It's Been
As we enter the last month of the last year of the first decade of the first century of the new millennium (got all that?), I’ll spare you a recap of the entire decade and simply reflect on what has been an eventful year for investors to say the least. While a lot of this has been covered in the media and even in this blog, I think it’s a good time to take one more walk through 2009 and how it might relate to the future.
We entered the year feeling battered and bruised by what was one of the most horrific quarters of a generation to end 2008. A little blip in December provided a glimmer of hope that the worst was behind us. That blip was met by what can only be described as roughly 10 weeks of pain and some of the worst months on record in January and February. In early March, there was a true feeling of desperation in the air when it came to investing and the world economy in general.
Since then, we have enjoyed what has been a fairly historic recovery, despite a lot of mixed messages in the media and the day to day lives of our friends and family. International markets and real estate, which led the way down, have performed exceptionally well as would be expected in leading the world back out of the recession. The US market has followed steadily behind, but still providing impressive returns. While unemployment and other economic indicators continue to depress, they certainly seem to have leveled off. As they are lagging indicators, it only makes sense that they would struggle to keep up with a historically forward looking market.
So what does all this mean? In terms of changing how you invest or what you invest in, not much in my opinion. Remember all of the so called experts back in early March telling everyone to get back in as the tides were about to rise again? I don’t either. Remember those who yelled from the mountaintops in late February that it was time to pull out of the market? Have they gotten back in yet? Have they already missed the bulk of the recovery? It simply proves that we are rarely able to predict what is coming around the bend and that anyone who claims they can is just another salesperson selling expertise they simply do not have.
The smart money will continue to thoughtfully plan their financial future over the long term, allocate investment choices accordingly and then stick to that plan to the best of their ability. Despite short term success and failure, this is the only method that time and time again has proven the most effective way to enjoy a successful investment experience. Chasing returns at the cost of meeting your goals continues to be a losing battle.
A columnist in the Cincinnati Business Courier recently used a quote from John F. Kennedy that seems appropriate for the times in which we live. Kennedy said, “Change is the law of life, and those who look only to the past or present are certain to miss the future.”
Nothing is certain about the current recovery or what lies ahead in 2010 and beyond. The climb back to prosperity may be slow, job growth may move at a snails’ pace, and challenges at home and abroad will continue to play their role as wild cards to any planned path. But how different are these challenges to those that the world has faced in one form or another for generations?
It has never been more challenging to pick who the winners and losers might be going forward. Knowing that you don’t have to in order to invest successfully is an empowering feeling. All you need is a belief in the continued growth of the overall world market in the long term. So long as entrepreneurs and businesses continue to use their ingenuity and scarce resources to produce value for an ever increasing amount of consumers; and so long as you have the ability as an investor to provide those entrepreneurs capital in trade for a fair return on your investment, you can still proceed into 2010 encouraged that the 21st century, while off to a slow start, will be another step forward for the world.
By Chip Workman, CFP®
cworkman@taaginc.com
www.taaginc.com
We entered the year feeling battered and bruised by what was one of the most horrific quarters of a generation to end 2008. A little blip in December provided a glimmer of hope that the worst was behind us. That blip was met by what can only be described as roughly 10 weeks of pain and some of the worst months on record in January and February. In early March, there was a true feeling of desperation in the air when it came to investing and the world economy in general.
Since then, we have enjoyed what has been a fairly historic recovery, despite a lot of mixed messages in the media and the day to day lives of our friends and family. International markets and real estate, which led the way down, have performed exceptionally well as would be expected in leading the world back out of the recession. The US market has followed steadily behind, but still providing impressive returns. While unemployment and other economic indicators continue to depress, they certainly seem to have leveled off. As they are lagging indicators, it only makes sense that they would struggle to keep up with a historically forward looking market.
So what does all this mean? In terms of changing how you invest or what you invest in, not much in my opinion. Remember all of the so called experts back in early March telling everyone to get back in as the tides were about to rise again? I don’t either. Remember those who yelled from the mountaintops in late February that it was time to pull out of the market? Have they gotten back in yet? Have they already missed the bulk of the recovery? It simply proves that we are rarely able to predict what is coming around the bend and that anyone who claims they can is just another salesperson selling expertise they simply do not have.
The smart money will continue to thoughtfully plan their financial future over the long term, allocate investment choices accordingly and then stick to that plan to the best of their ability. Despite short term success and failure, this is the only method that time and time again has proven the most effective way to enjoy a successful investment experience. Chasing returns at the cost of meeting your goals continues to be a losing battle.
A columnist in the Cincinnati Business Courier recently used a quote from John F. Kennedy that seems appropriate for the times in which we live. Kennedy said, “Change is the law of life, and those who look only to the past or present are certain to miss the future.”
Nothing is certain about the current recovery or what lies ahead in 2010 and beyond. The climb back to prosperity may be slow, job growth may move at a snails’ pace, and challenges at home and abroad will continue to play their role as wild cards to any planned path. But how different are these challenges to those that the world has faced in one form or another for generations?
It has never been more challenging to pick who the winners and losers might be going forward. Knowing that you don’t have to in order to invest successfully is an empowering feeling. All you need is a belief in the continued growth of the overall world market in the long term. So long as entrepreneurs and businesses continue to use their ingenuity and scarce resources to produce value for an ever increasing amount of consumers; and so long as you have the ability as an investor to provide those entrepreneurs capital in trade for a fair return on your investment, you can still proceed into 2010 encouraged that the 21st century, while off to a slow start, will be another step forward for the world.
By Chip Workman, CFP®
cworkman@taaginc.com
www.taaginc.com
Monday, November 23, 2009
Avoid Thanksgiving Stress
As we start this week, so too begins the holiday season. While it is wonderful to spend time with friends and family over the holidays, it can also be very stressful, especially if you’re the host.I had the unfortunate experience recently of witnessing a mother-in-law meltdown; she just became overwhelmed at the thought of fixing Thanksgiving dinner, hosting out of town relatives overnight, and deciding how to handle the family gift exchange. I fear the added stress of knowing her youngest son is getting married in just 100 days kicked her over the edge.
To help her hold it together, we decided to eliminate as much Thanksgiving related stress as we could by working together. Hopefully you can help lighten the holiday load by incorporating some of these tips into your family get togethers:
· Ask for help! If you’re kind enough to host, that doesn’t mean that you have to cook everything, too. When people ask “What can I bring?” take them up on the offer. Delegate! Ask someone to cover desert and another person to bring an appetizer. If Cousin Katie isn’t such a good cook, ask her to bring a bottle of wine or perhaps a store-bought veggie tray.
· Call in a prep crew. Six members of my family committed to spending Saturday afternoon at my in-laws home helping them prep for the festivities. The guys helped dad in the yard rake leaves and mow, while the ladies tackled cleaning the indoors.
· Prep as much as you can. We went ahead and set up the tables for Thursday’s dinner. Bringing in extra linens, tables, chairs, plates, and silver is a lot of work, so ask your crew to help you set it up. Lay all glassware on its side and cover the set table with clean sheets.
Don’t feel as if you shouldn’t ask others for their help. It was actually fun for all of us to chip in and help with the setup. Not only was our work truly appreciated, but it was great spending time with family and getting to talk before the holiday.
As we start this holiday season, keep the big picture in mind. Be thankful for the people who have chosen to spend Thanksgiving with you. Even if your house isn’t picture perfect, the only person who will probably notice is you.
Thursday, November 19, 2009
False Prophets, Big Bucks
This blog post was written by Dan Solin
Posted November 17, 2009 on www.huffingtonpost.com
Jeremy Siegel Ph.D. has very impressive credentials. He is the Russell E. Palmer Professor of Finance at The Wharton School of the University of Pennsylvania. He is the author of a number of financial books, including Stocks for the Long Run.
Professor Siegel has become a cottage industry. His web site refers to him as the "Wizard of Wharton" and offers subscriptions so that readers can benefit from his market newsletter and "investment strategies."
His stock market skills are extolled by no less an expert than Jim Cramer, who wrote that "Jeremy Siegel is one of the great ones. [His article at the market top was] one of the most stark and prescient calls I have ever seen."
Of course, Cramer said the same thing about Lenny Dykstra, who he also called "one of the great ones in this business". Dykstra recently filed for bankruptcy, declaring assets of $50,000 and debts of $30 million. But I digress.
Professor Siegel makes end of the year predictions about the performance of the stock markets. When he did so at the end of 2007, with his predictions for 2008, I wrote a blog warning investors not to rely on his predictions. I noted that we all wish there was a guru out there who could see the future but that these claims were "... a disservice to investors when those who should know better foster this false hope."
How accurate were Professor Siegel's 2008 predictions?
Professor Siegel predicted that "...the economy will avoid a recession" in 2008. His crystal ball also revealed that "the stock market will have another winning year in 2008" and that "financial stocks, which have plummeted 18% so far this year, will outperform the S&P 500 index next year [2008] as the credit crises fades."
The recession of 2008 was the worst since the Great Depression.
The S&P 500 lost 38.49% in 2008. It was its worst year since 1937. Financials underperformed all market sectors, losing 56.95%.
I am not picking on Professor Siegel. His predictions are no better or worse than many others.
The securities industry and the financial media inundate investors with market predictions. The reality is that they have no value, whether they are delivered by a carnival barker like Cramer or a well credentialed academic like Professor Siegel.
Dan Solin is the author of The Smartest Retirement Book You'll Ever Read.
Posted November 17, 2009 on www.huffingtonpost.com
Jeremy Siegel Ph.D. has very impressive credentials. He is the Russell E. Palmer Professor of Finance at The Wharton School of the University of Pennsylvania. He is the author of a number of financial books, including Stocks for the Long Run.
Professor Siegel has become a cottage industry. His web site refers to him as the "Wizard of Wharton" and offers subscriptions so that readers can benefit from his market newsletter and "investment strategies."
His stock market skills are extolled by no less an expert than Jim Cramer, who wrote that "Jeremy Siegel is one of the great ones. [His article at the market top was] one of the most stark and prescient calls I have ever seen."
Of course, Cramer said the same thing about Lenny Dykstra, who he also called "one of the great ones in this business". Dykstra recently filed for bankruptcy, declaring assets of $50,000 and debts of $30 million. But I digress.
Professor Siegel makes end of the year predictions about the performance of the stock markets. When he did so at the end of 2007, with his predictions for 2008, I wrote a blog warning investors not to rely on his predictions. I noted that we all wish there was a guru out there who could see the future but that these claims were "... a disservice to investors when those who should know better foster this false hope."
How accurate were Professor Siegel's 2008 predictions?
Professor Siegel predicted that "...the economy will avoid a recession" in 2008. His crystal ball also revealed that "the stock market will have another winning year in 2008" and that "financial stocks, which have plummeted 18% so far this year, will outperform the S&P 500 index next year [2008] as the credit crises fades."
The recession of 2008 was the worst since the Great Depression.
The S&P 500 lost 38.49% in 2008. It was its worst year since 1937. Financials underperformed all market sectors, losing 56.95%.
I am not picking on Professor Siegel. His predictions are no better or worse than many others.
The securities industry and the financial media inundate investors with market predictions. The reality is that they have no value, whether they are delivered by a carnival barker like Cramer or a well credentialed academic like Professor Siegel.
Dan Solin is the author of The Smartest Retirement Book You'll Ever Read.
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