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12/8/2010 - The white paper, “The Myth of a Lost Decade: How Following A Disciplined Retirement Investment Strategy Still Worked During the 2000′s“, evaluates the assertion that some in the financial media are making that saving for retirement through investing in the last decade was a futile exercise. Using actual mutual fund performance data and a basic, age-based asset allocation with period investment and annual rebalancing, I show that the returns from a balanced portfolio of bonds and stocks outperformed the low-risk treasury bill alternative. One conclusion to draw from this result is that one of the most important roles of a financial advisor is to help clients stay on course with a long-term savings plan that avoids making decisions based upon the hype and hysteria so prevalent among the financial punditry.
11/11/2010 - My article “Risk Management for Individuals: How to match investors’ risk appetite with their assets” appears in the October issue of Financial Advisor. It discusses the differences between traditional risk management and the priorities when carrying out the process for individual investors. In particular, the article focuses on the need to for individuals to match assets with future liabilities and model various scenarios rather than trying to quantify risk through correlations and standard deviations.
10/12/2010 - A recent article in Forbes highlighted the importance of considering fees and taxes when managing a portfolio. In the quote below, the author, William Baldwin, couldn’t have stated more succinctly why an advisor’s most important role is not trying to choose market beating stocks, but minimizing risk, expenses and taxes by utilizing their knowledge and expertise in asset allocation, fee minimization and tax reduction.
So here’s my investment philosophy. It’s hard, but not impossible, to beat the market. It is easy, and imperative, to save on taxes and money-management costs. If you pay a lot of attention to taxes and costs you will have 50% more wealth at retirement than if you are clueless about these things.
For the full article, see John Bogle and the Cost of Mutual Funds
9/30/2010 - With capital gains taxes scheduled to rise, we’ve identified a way to increase potential after-tax returns on appreciated assets. For more information, see Maximizing Realized Value of Appreciated Assets under a Capital Gains Tax Increase or contact us.