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 Personal Money Planning'se-Newsletter for August 8, 2009 (to look at past issues, click here) |
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Unanswered Questions
Part 1 |
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How important does a person have to be before they are considered to be assassinated instead of just murdered?
Why do you have to "put your two cents in"...But it's only a "penny for your thoughts"? Where's that extra penny going?
Why does a round pizza come in a square box?
What disease did "cured ham" actually have?
How is it we put man on the moon before we figured out it would be a good idea to put wheels on luggage?
(From an anonymous Internet source.) |
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Disclosure |
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This newsletter is produced by Gary Silverman, dba Personal Money Planning, a registered investment advisor located in Wichita Falls, Texas.
Information in this newsletter is believed to provide accurate and authoritative information in regards to the subject matter covered. However, the accuracy, timeliness, or applicability of the information is not guaranteed and is provided with the understanding that we are not rendering legal, accounting, tax, or other professional advice or services.
This publication should not be construed by any consumer and/or prospective client as Personal Money Planning's solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet. Nor should links provided to other sites be construed as the recommendation of the services or products mentioned on those sites. If such services are required, the help of a competent professional should be sought.
Remember that past performance may not be indicative of future results. Therefore, you should not assume that the future performance of any specific investment, investment strategy, or product made reference to (directly or indirectly) on this Website will be profitable or equal to indicated performance levels. Different types of investment involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for your investment portfolio.
Historical performance results for investment indexes and categories generally do not reflect the deduction of transaction or custodial charges or the deduction of an investment management fee, the incurrence of which would have the effect of decreasing historical performance results.
A copy of Personal Money Planning's current written disclosure statement discussing Personal Money Planning's business operations, services, and fees (known as an ADV Part II) is available from Personal Money Planning upon written request (and can be downloaded from our web site).
Personal Money Planning does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Personal Money Planning's web site or incorporated herein, and takes no responsibility therefore. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.
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Last month, Congress announced the members of the Financial Crisis Inquiry Commission that they set up back in May. Of the 10 commissioners, six will be Democrats and four will be Republicans. Findings from the commission are due to come out December of 2010, though these things often take longer than expected.
Don't put too much hope on this Commission doing anything that will "fix" the system.
First, since they decided not to split the membership equally between the two parties, as they had done with the 9-11 Commission, there is no reason for the Democrats not to sway the report to make them look good and the Republicans to look bad. (And no, I'm not partisan in this, the Republicans would have done the same thing if they had the majority.) Instead you are likely going to get a majority report and a minority report. I'm willing to wager that the vote will be 6-4 for the majority report.
Well, at least they'll find some of the problems and fix them, you may say. I doubt it. Remember, the Commission's report isn't due out until December of next year. If things go as currently planned, all of the financial reform legislation will be law by the 2010 mid-term elections...months before the Commission finalizes their report.
That's right. They'll fix the problems first, then figure out what the problems were after that.
Gotta love politics!
Gary
Gary Silverman, CFP |
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Understanding Investment Risk |
Risk taking is invigorating to those who plunge down white water rapids, soar through the skies strapped to a hang glider, or descend into the abyss while spelunking. For most, those feats bring not exhilaration, but fear. The same can be said when it comes to investing. Ask most investors about risk and you'll hear that it's something they want to avoid.
Like it or not, investment risk is an essential part of any investment decision. Every investment, including stuffing cash in your mattress, involves risk. The key is to understand what risks you are taking. That way you won't back yourself off a cliff trying to get away from a lesser danger.
Find out the risks involved here:
Then come back for the next edition where I tell you how to get around some of them.
(This article was originally printed in the Wichita Falls Times Record News.)
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Why Economists Fail |
There is a long list of professions that failed to see the financial crisis brewing. Wall Street bankers and deal-makers top it, but banking regulators are on it as well, along with the Federal Reserve. Politicians and journalists have shared the blame, as have mortgage lenders and even real estate agents.
But what about economists? Of all the experts, weren't they the best equipped to see around the corners and warn of impending disaster?
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Of Kickbacks and Bias |
"Few things are more important to investors than getting unbiased advice from their financial advisors," Robert Khuzami, director of the SEC's Division of Enforcement.
Unfortunately, that's often not the case.
I don't want to pick on any particular company, and Ameriprise says that what they were caught at "is not an issue today." Yet to me, it points out that consumers need to be constantly questioning where their money is going and why.
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Your Brain On Money |
A while ago, in a time when it was not 100 degrees outside, I was reading Jason Zweig's book, Your Money & Your Brain. It's a catchy title, but the subtitle is even more fun: How the new science of neuroeconomics can help make you rich.
Zweig is the long-running former Money magazine writer and the current personal finance columnist for the Wall Street Journal. Which is nice, but who cares? What we want to know is how to get rich.
(This article was originally printed in the Wichita Falls Times Record News.)
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Marketing Choices |
One of the joys of having a blog, a talk show, or, in my case, a newspaper column, is the ability to rant. Let's face it; we all have things that, well, perturb us. While you get to share your observations of life with friends and family, I get to share it with the world...or at least North Texas.
My rant today had to do with activating a credit card. You know how it goes, you get a new credit card in the mail and it's got a sticker on it saying that you need to call a toll-free number to activate it.
If you want to listen to my rant, read the rest of the story here:
(This article was originally printed in the Wichita Falls Times Record News.)
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parting thoughts
Democracy is a Necessary Evil |
Democracy is an interesting invention. It is inefficient, messy, and really makes little sense. After all, the basic functioning gives everyone an equal say in matters. This comes off the central tenet that we are all equal-which is hogwash.
I'm Gary, and I'm not equal to any one of you. I'm superior to most of you in a few things. I'm inferior to most of you in many others. Not acknowledging this is at best naïve, at worst, evil.
Nevertheless, I see this democratic thinking as a necessary evil here on earth. That's because democracy is not in place because we are all wonderful folks who want the best for all and, therefore in aggregate, will produce a utopian society. It is in place because we are all capable of sin. As power is consolidated in a few, the ability of those few to selfishly dictate becomes dreadful.
Democracy, in its idiotic way of declaring us all equal, spreads out the power from the few to the many. (Let's never fool ourselves in thinking that power spreads to the all.) This then lessens the ability of the few to lord over us. We are saved from the tyrannical dictator.
We are also saved from the benevolent dictator. And while I agree with the theory that the benevolent dictator is quite possibly the most efficient form of government, it doesn't seem to work out in real life. You see, every seemingly benevolent dictator has her or his own problem with sin. History shows us that none has been successful in forever suppressing it.
Save one, that is-but that's a discussion in theology that I'll reserve for another day.
That's all for this now.
Gary
Gary Silverman, CFP
Personal Money Planning
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©2008 Personal Money Planning. All rights are reserved by Personal Money Planning and content may not be reproduced, disseminated, or transferred in any form or by any means, except with the prior written permission of Personal Money Planning unless specifically noted. (Permission is not difficult to obtain.) The one exception is for downloading and printing information this newsletter for general education by the original recipient. |
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