Fear Sells…until you stop buying it

Dear Mr. Market:0

We wake up to you every day. Once the morning cup of coffee is poured, whether intentional or not, we constantly digest information for the next 16 hours. Most of us check our email, read and/or watch the morning news, glance at social media, and then mix in conversations with other humans that have almost exactly the same patterns. Does this type of routine parlay itself into one that sets you up for making good investing decisions?

NO…most definitely not!

Let’s take for example yesterday, June 8th. To what could have been just another Thursday certainly turned otherwise; yesterday even had it’s own name…”Comey Day”. Millions watched ex-FBI director James Comey testify in front of the Senate Intelligence Committee. There were literally “watch parties” held at bars, restaurants, and even yoga studios all across the country.

Regardless of your political leanings…take off your partisan hat for just a minute and look back 24 hours ago. For those who busted out the popcorn and awaited impeachment news or a massive decline in the stock market, you were once again served a huge Nothing Burger. The media hype did what it’s good at and drove you to tune in. Who really won yesterday? Trump? Comey? Lorretta Lynch? Russia?

Cable TV networks are enjoying banner years. Fox News viewership is 40% higher than a year ago and CNN is enjoying about 60% higher ratings over this same time period. This sad but very real episode of reality television is captivating America and driving people to make some rash decisions.

Fast forward to this morning and one of the first headlines we were treated to was this: JIM ROGERS: The worst crash in our lifetime is coming

Feel free to view the article here or read the full transcript via this link.

Should you listen to legendary investment guru Jim Rogers being interviewed by Henry Blodget? Who are each of these brilliant minds with a platform that has your eyes, ears, and full attention?

First and foremost, Henry Blodget is the CEO of Business Insider. Before heading up what is now the fastest growing and largest business news site on the internet, Blodget was a “top ranked Wall Street analyst”. STOP!

For those of you with short memories, Henry Blodget was head of Merrill Lynch’s global internet research team during the dot-com era and was charged with civil securities fraud in 2003. Blodget is now permanently banned from involvement in the securities industry.

Now let’s educate ourselves on who Jim Rogers is. If you don’t look too closely under the hood you’ll just assume he is as portrayed…a sharp bow tie wearing guy who is introduced as a “guru, renowned investor, author, and financial commentator”.

The reality of it all is that guys like Jim Rogers sell fear…and they’re good at it.

He uses a few polished sentences surrounding one or two pieces of economic data or personal observations and then sensationalizes it all to get you scared. It’s not hard to get people thinking about everything that is wrong in the world and when you add a media platform with a 24/7 news cycle, smart guys like Jim are making money off your fear.

Jim Rogers has been wrong for decades. Over the past few years he has been predicting a massive recession. In June of 2011 he said the global economy would be facing another epic recession. We saw him in person later the next year speaking at an investment conference and he said the U.S. is approaching a financial crisis worse than 2008. The next two years he pitched the same headlines and warned his followers of imminent disaster.Fear-Sells-Button-(0983)

Like a broken clock he’ll eventually be right but if you’ve been listening to him or acting on other fear pitches you may be out of money by that time. What’s more amazing to us than wrongly predicting the same thing every year is being offered the opportunity to continue doing so…

Have a great weekend!

Are you allowing the “tax tail” to wag the “investment dog”?

Dear Mr. Market:Tax tail dog 1

Not only do you toy with the emotions of every investor; you also have a partner that often surprises them and hits investors where it hurts the most… their pocketbook. Making money in the stock market is great but so many forget that eventually they have to reconcile with Uncle Sam come tax time. Look for example at some investments that we have recently discussed: Under Armour (UA) and InvenSense (INVN).   If you had purchased these stocks on the first trading day of this year (1/2/2014) you would be up 58% with Under Armour and up 20% with InvenSense. These numbers are impressive and would certainly make any investor happy but what happens when they are sold? How will they impact your tax return and how much of the gain will you have to pay?

Nothing is certain except death and taxes.

                            Benjamin Franklin 

*** Before we move any further in this discussion it is important to note that we are not tax advisors. In this article we will be discussing general guidelines. Every investor’s situation is unique and deserves personal attention. If you have questions we would encourage you to talk with a qualified tax professional.

Let’s take a moment to go over some of the basics when it comes to investor tax issues. Continue reading

Building Your Financial Team – The Road to Success

Teamwork arrowDear Mr. Market:

How ‘fit’ is your financial team? Putting together a financial team to help you meet your financial goals is like building a winning sports team. Each member of your financial team needs to know what their responsibility is and what they are contributing to your financial success.   With tax-season behind us and the equity and fixed income markets experiencing volatility, now is a great time to assess your team and see if it is truly making the grade!

There is no single approach to building your team or a guide on how to assemble one. The key is the team needs to work for you, they need to give you a sense of comfort and they need to work together. Whether you work with individuals or utilize software solutions it is important that an assessment takes place so that you don’t suddenly find yourself in a hole that you need to dig out of.

In this article we will discuss how to build your “Team of Trust”. We will look at three key areas that every investor should consider: Estate Planning, Tax Planning and Financial Advice. We will discuss some key elements with each member of the team: Why? Who? What? How Much? Continue reading

InvenSense (INVN) : Motley Fool’s Secret Wearable Technology Stock!?

 

INVN #2Dear Mr. Market:

Technology is a bit like true love. You have to believe in it but it can also bite you in the ass.
Read through this article and you’ll see how this relates to a particular investment!

The technology Industry can be a challenging sector for investors. Perhaps the best way to describe it is with a popular saying … “the one constant is change itself.” Plenty of analysts and investment firms scour through stock ticker symbols looking for the next Apple (AAPL), Amazon (AMZN) or Google (GOOG).

We couldn’t help but notice the Motley Fool’s recent …shall we say, “stock pitch” about a company that could be your next homerun! If you’re a die-hard Apple fan, wouldn’t you like to know who their next HUGE inside supplier is? Rewind the clock and take for example the desktop computer or the cell phone you have within inches of your hand right now…

Put Apple, Sony or IBM on the shelf for a minute and think about investing in the next company that has a stake in every sale regardless of the brand you choose? In other words, buy the “chip” or technology that’s inside of each device instead of trying to figure out which phone or computer manufacturer is going to win the battle. Continue reading

Top Tax Tips for 2014

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Dear Mr. Market:

Your whole world is about investing and the stock market. Stick to what you’re good at and leave things like repairing your car, fixing that leaky faucet, or doing your taxes to someone else-

(1) Don’t take investment advice from a CPA and vice versa.

Notice how we practice what we preach. Our first “tax tip” will be to let you know that for specific tax advice you should NOT go to your investment advisor. We’re not CPA’s and even though we understand a great deal about taxation (specifically with regard to investments) our job is to manage investments, not tax codes.

Why is it then that we see so many accountants, tax preparers, CPA’s, and even “enrolled agents” dole out investment advice around this time of year? Investors naturally gravitate to the professional that sees the majority of their financial house and by default it’s typically a CPA. We’re not bashing CPA’s but allow us to be crystal clear on this point: A CPA has no formal training nor better understanding of investments or the portfolio strategy you or your financial advisor has put together.

Look to Tip #2 on what your CPA should know about your investment situation:

(2) If the introduction hasn’t been made yet…Make it happen!

In the case of investments and taxes one old adage couldn’t be more true: ”The right hand should always know what the left hand is doing.”

If your investment advisor has not met or interacted with your CPA an introduction needs to be made. They don’t have to become best friends but your overall financial situation will be enhanced when key professionals that help you know each other.

(3) What type of tax professional do you need?

Do you simply need Continue reading

Update: March Madness: Final Four Investing Bracket 2014

March MadnessThe 2014 NCAA Basketball Tournament certainly had an eventful weekend!  52 games have been played across the country with 5 of them going into overtime. The $1 Billion that Warren Buffet offered to anyone that had a perfect bracket is now a distant memory. Every year there are plenty of surprises and this year has been no different:

  • 3 of the 4 teams that were seeded as #12 in their brackets posted wins over teams seeded #5! The one team that lost was beaten by only 3 points in overtime!
  • #1 seed and ‘media darling’ Wichita State lost to #8 Kentucky in the 2nd round.
  • The 2 longest winning streaks in the country have both come to an abrupt end – Wichita State with 35 and S.F. Austin with 29.

 Here are some other mind boggling numbers to take into consideration with the NCAA Tournament:

  • The odds of winning Buffet’s $1 Billion prize was 1 in 4,294,967,296!
  • It is estimated that Vegas takes in over $100 Million from bets on the NCAA Tournament – experts think this represents only 4% of all the money wagered on games!
  • The NCAA tournament costs businesses $1.7 Billion in lost productivity during the month of March.

Continue reading

What’s my number?? – Making sense of Financial Planning

Financial Plan #2Dear Mr. Market:

Let’s be honest… the vast majority of hard working Americans have one question in common – Will I be able to retire?  The circumstances pertaining to each individual are as different and unique as the individual themselves. The one connecting point we all have however, is to know if we are going to be able to reach our goals, whatever they might be.

Have you seen some of the commercials where an actor asks you if you know how much you need to retire? Other commercials have people carrying around a huge cut-out of a random numbers …like $1,456,298 around with them.  What’s your magic retirement number? Where should an individual go to get their many questions answered?  With few guarantees how is anyone to know if they are on track to reach their goals?

There is certainly not a lack of financial planning services and products available to consumers today.  It can actually be a bit overwhelming and frustrating for the average person.  Any Financial Plan should be viewed as a guide or a benchmark, serving as a road map to the ultimate destination.  As with other financial service offerings there are many different elements that need to be taken into consideration. Let’s take a moment to look at some of the more important ones and put it in plain English using some common phrases we are all familiar with….. Continue reading