Some readers were surprised by my piece published in The Jerusalem Post and on Profile Perspectives called, “The Most Important Thing to Do Before You Retire.” In it, I argued that you should try to eliminate all debt, including mortgages, before quitting work.
One reader wrote: “Doug,… Read more
Some investors’ fear of losing money compels them to completely avoid the stock market and other volatile investments. This phenomenon is often called “loss aversion.”
People suffering from loss aversion will sometimes wait until they see the market has gone up a lot, and then they invest. They forget about history and just believe that the economy will continue strengthening…. Read more
Many readers have recently contacted me because they received a letter from their U.S. brokerage firm informing them that either “You can no longer purchase additional shares of mutual funds in your account,” or “We will no longer provide investment advisory services to you and/or you may only enter liquidating orders or non-solicited orders in your account.”
This letter is not a result of new American legislation;… Read more
When I started my career as a financial planner, my mother, who was also a licensed stock broker, gave me this important piece of advice: “Just listen to what the clients are saying and let them talk. Then, it will become obvious what investment is appropriate for them.”
The importance of listening to what others have to say is vital in so many fields and professions,… Read more
One of the easiest ways to diversify your portfolio is to invest in a mutual fund. A mutual fund is like a basket in which lots of investors place their money and then that single large account is managed by a team of professionals. There are mutual funds that specialize in stocks,… Read more
While it’s important to divide your assets between stocks and bonds, cash plays an important role in your asset allocation.
Cash as an investment vehicle is not the same as any cash in your emergency fund, which should be the equivalent of three to six months’ living expenses. Successful investment portfolios sometimes have a slice of their pie invested specifically in liquid (cash) investments…. Read more
The compliance officers at many mutual fund companies seem to believe that the Patriot Act (which was supposed to deter and punish terrorism, and strengthen U.S. measures to prevent, detect, and prosecute international money laundering and financing of terrorism) made it illegal to let people living outside the United States buy U.S…. Read more
Since Americans living abroad are frequently denied the opportunity to buy mutual funds, how can investors diversify their portfolios without being responsible for the day-to-day management of dozens of individual stocks and bonds?
One possible answer is a separately managed account, or SMA. An SMA is a customized portfolio offered by a brokerage firm and managed by an independent investment management firm or money manager…. Read more
Many people consider their home to be their best investment because they get to live in what they hope is a one-way street to real estate appreciation. People’s homes are often the largest percentage of their net worth. However, as I often remind clients, it may be fine to enjoy living in a nice house,… Read more
When I recently offered a client the services of a money manager, he was surprised and asked, “You’re my financial guy, so why don’t you trade my account? Do you have some secret tool in your back pocket?”
I’ve heard this question quite often, and the answer is that having a third-party money manager alongside a financial planner can help clients get the best of both worlds…. Read more
