Author - Michael J. Garry, CFP®, JD/MBA

1
Don’t Get too Wrapped up in the Dow Jones
2
Stop Trying to Guess the Direction of Interest Rates
3
Don’t Rely On A Straight-Line Model For Your Retirement Planning
4
Choosing A Financial Planner? Here Is How To Find A Competent One
5
Some Problems With Variable Annuities

Don’t Get too Wrapped up in the Dow Jones

I feel like I need to comment on something. As hard as it may be to believe, I recommend paying very little attention to how the big stock market indicators, e.g., the Dow Jones Industrial Average (Dow), the S&P 500, or the NASDAQ are doing. I also never recommend buying or selling investments based just on those numbers themselves.

After all of the ups and downs over the years, I am now getting as many nervous phone calls and emails when the market is up as when it is down. (It’s still not very many, usually 1 or 2 after …

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Stop Trying to Guess the Direction of Interest Rates

Expectations about interest rates change because of the news every day. This makes it very difficult to build an investment strategy around a forecast, so we don’t do that.

In a recent article, Bloomberg News noted that the rally in the US Treasury market in 2014 was stronger than every economist surveyed by its journalists had predicted. Yes, stronger than every one of 66 economists polled!

US 10-year yields were around 2.3% at the end of August, down from just over 3% at the end of 2013. Yields fall as prices rise, so those who heeded economists’ forecasts and sold …

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Don’t Rely On A Straight-Line Model For Your Retirement Planning

You might have a hard time believing this is actually out there, but make sure you don’t use a straight-line model in retirement planning when you try to determine the appropriate amount of withdrawals you can take from a portfolio without running out of money. Using the straight-line method, the software will assume that you earn the average return every year on your asset allocation and that you are taking a fixed dollar amount out every year, adjusting it annually for inflation.

Assuming that your portfolio is half in stocks and half in bonds, the software may assume that you …

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Choosing A Financial Planner? Here Is How To Find A Competent One

You may be considering help from a financial planner for a number of reasons. Whatever your needs, working with a financial planner can help you. You should interview and evaluate several planners to find the right one for you. You will want to select a competent, qualified professional with whom you feel comfortable. Here are the most important questions to ask your prospective planner.

What is your educational background and what experience do you have? Find out what areas of study your planner has pursued; how long the planner has been in practice; and the number and types of companies …

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Some Problems With Variable Annuities

Variable Annuities (VAs) have been very popular for about a decade now, ever since the tech bubble burst. Unfortunately, their popularity may be due to brokers’ commissions of 4 to 8%, and the fact that the benefits are not clearly understood by clients or many of those that sell them. I think their biggest draw is that they have some guarantees, and believe me, sellers tout those guarantees. Unfortunately, those guarantees are not quite what people think they are.

Annuities may seem complicated, especially if you read their prospectuses, but the basic structure is simple. An insurance component provides a …

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