Sound Advice

Don't Get Burned By Hot Stocks (and How To Find Good Ones) Early this past summer, I got a call from a fellow whose portfolio had lost almost one third in less than two months while the market was moving steadily higher.   When I asked how this happened, he said he was "investing" in hot tips he got online. I came across an even more troubling situation last year when speaking with the sales assistant of a stockbroker whom I had known for a long time.   The broker was an amiable gentleman who built a sizable practice based on a carefully cultivated image.   He was a tall man, with a neatly trimmed gray beard, and always wore gold-framed granny glasses.   His semicircular desk held a half dozen large monitors, each of which had a colorful chart or table prominently displayed. There was little beyond the image.   Although his background in investing was one step above nonexistent, his "marketing efforts" succeeded in rounding up hundreds of accounts.   ...

Financial Planning: The Basic Recipe   In the simplest terms, financial planning is about the question all of us should be thinking about: "Will I have enough?"   The answer to that question requires a fair amount of information gathering in four areas: What you own, what you owe, your income, and your expenses.   Few people really have a handle on this.   So until you get a grip on where you are today, it's quite difficult to make a plan to get you where you hope to be tomorrow.   Three of the four parts of the equation are easy enough to figure out.   The hitch, however, is on the expense side.   More often than not, the task of coming up with reasonable numbers for a couple of dozen or more key categories is a trip into the unknown.   You probably won't have much difficulty pinpointing the cost of things like cable TV and heating, but do you really know what you've been spending on gasoline and groceries?   Probably not.   How abo...

  Beware the Witching Season The months of September and October have historically been among the most difficult of times for the stock market.  On average, September has been the weakest of the year.   October has been Ground Zero for the biggest market drops of the last 100 years. Yet despite the fact that has been a period of increased volatility, it has often been a time when weakness has been followed by a significant rebound.   Even so, let's not jump the gun. There may be no weakness and there may be no rebound.  For the first seven weeks of this year, stocks were on a tear.   Then came the pandemic, which led to a national lockdown and devastation among the nation's businesses. While prices were climbing, so were valuations, almost to a point of excess. Then a new era of volatility showed up, with daily changes in the leading averages often running into triple digits.  In the wake of the plunge, market prices did a sharp about-face. ...

A Tale of Two Markets "It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we were all going to Heaven, we were all going direct the other way----in short, the period was so far like the present period that some of its noisiest authorities insisted upon its being received, for good or for evil, in the superlative degree of comparison only." Charles Dickens The words Dickens wrote 161 years ago resonate eerily with where we are today.   For some people, it is indeed the best of times.   For far too many others, however, it is among the most difficult of times. Amid the overwhelming flow of each day's news, we learn about the movements of the stock market, which until recently appeared to be on a fast track...

  Planning to start investing?   Outstanding idea!   Want to do it yourself?   Well, that’s a bad strategy. Sure, there’s a wealth of financial data and tools available on the internet.   But there’s a world of difference between a professional doing a job for which he or she is qualified, trained, and experienced, and an average Joe doing the same thing after a few hours of online research.   After all, would you trust a doctor to operate on you if he would be getting the instructions for the surgery from Wikipedia pages or YouTube videos? Bad retirement planning can ruin your financial goals and leave you penniless at an age when you need money the most.   That’s why it’s critical that you choose a trusted, reputable, and well-experienced personal financial planner to secure your financial future. Here are just some of the ways in which bad retirement planning can cause big problems. An Emotional Rollercoaster It’s not an unders...