Archive - October 24, 2014

1
Don’t Be Motivated by Low Rates to Go Into Stocks
2
The Short-Term Implications of Diversification
3
Key Investment Insights: Bringing the Evidence Home
4
Why You Should Consider Long Term Care Insurance

Don’t Be Motivated by Low Rates to Go Into Stocks

An interesting anomaly with the Federal Reserve’s low interest rate polices is that it supposedly hurts retirees but if an affluent retiree has mostly stocks then investors may have been subsidized by Zero Interest Rate Program (ZIRP). For example, low rates effect on $1million 80% in stock and 20% in bonds portfolio* would suffer from receiving a reduction of yield of $2,600 a year after-tax on bond interest (assume a real return that is 2% too low less tax means savers are deprived of 1.3% after-tax and inflation times $200,000 investment in bonds) but gain roughly 1.5% before-tax earnings yield… Read More

The Short-Term Implications of Diversification



Asset allocation is one of the key factors contributing to long-term investment success.  When designing a portfolio that represents their risk tolerance, investors should be aware that a portfolio that is 50% stocks is likely to obtain approximately half of the gain when the market advances but suffer only half the loss when the market declines. 

This general
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Key Investment Insights: Bringing the Evidence Home

Welcome to our final installment in Key Investment Insights. We hope you’ve enjoyed reading our series. Here are the key takeaway messages from each installment:

  1. Market Prices – Understanding group intelligence and its effect on efficient market pricing is a first step toward better consistency in buying low and selling high in free capital markets.
  2. News and Market Prices – Rather than trying to react to ever-changing conditions and cut-throat competition, invest your life savings according to factors over which you can expect to have some control.
  3. The Myth of the Financial Guru  – Avoid paying costly, speculative “experts” to
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Why You Should Consider Long Term Care Insurance

Long term care insurance is insurance that will pay in the event that an individual needs caregiving due to a number of afflictions or diseases. For example, if an individual is suffering from Alzheimer’s disease or dementia they made needs round the clock care. Generally, that care is provided by family members, with the majority of caregivers being daughters and spouses of caregiver. The costs for needing long term care can be expensive. Depending on the area of the country, care can range from $50,000 to $80,000 per year to stay in a nursing home and may run in the… Read More

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