Greetings! Hey, everyone! I trust everybody had a great start to the new year and that February keeps it up. I know the weather is certainly taking a turn for the better already, so that's good!
I've added a lot of new addresses to the mailing list since last month because we had a couple fantastic workshops in Huntersville a few weeks ago and had the chance to meet a ton of great new people. I hope all the first-time readers enjoy the newsletter this month and in future months!
As many of you know, Jim started writing articles every month for Lake Norman Magazine a few months ago. We both thought it would be a good idea to start including those articles in the newsletter since the content is relevant and because not everyone we send this to gets Lake Norman Magazine. Jim puts a lot of work into writing stuff that he thinks can help people. Subsequently, I put a lot of work into editing it to make sure it all sounds good! Anyway, the article Jim wrote for the February issue of the magazine is the first article included in this newsletter. We hope you enjoy it!
We've also decided to double up on the Thoughts for the Week this month since they're both good reads with fresh information.
We have workshops this month in Davidson at the North Harbor Club right off exit 30. If you're interested in attenting, or know anyone who's interested in attending, check out our website (you can find the link to the right) for the dates and times!
 -- Tyler Stillman |
Retirement: A Fundamental Change in Life
Lake Norman Magazine, January 2012
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Ah, retirement. Dreams of cruises, umbrella drinks on the beach, sleeping late, and spending more time with loved ones and close friends. I've learned over the past fourteen years as a retirement planner that most folks have not planned properly for retirement. Why? Your guess is as good as mine, but as much as I hate to say this, a good amount of the blame should go to financial advisors and brokers.
In my opinion, retirement represents a fundamental change in life. So doesn't it make sense that a fundamental change should also take place in your portfolio and with your financial planning? In our office, we call this moving from "paycheck mode" to "retirement mode."
Here's a very important point to remember when planning for retirement, and especially after retirement: the advisor or firm that got you to retirement may not be the best choice in retirement! Look at it this way: I bet most of you had a 401(k), 403(b), SEP, IRA, or some other type of retirement plan while working. These plans would have a "menu" of investment choices. This menu was comprised of mutual funds, stock funds, bond funds, a money market, or stable value fund. Your plan was probably with a big financial firm like Fidelity or Vanguard. You became familiar with them, knew how to navigate their website, and became comfortable with them.
Read more...
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Balancing Risk and Returns
Thought for the Week, January 9, 2012 | The financial crisis of 2008 is still firmly fixed in the back of the minds of most investors.
If 2008 was a car crash, recent bad news can often cause painful memories to flood back; I think we all flinch to some degree when a media "talking head" offers a doomsday prognosis. And after all, even though the stock market bottom is nearly three years in our rearview mirrors, 2012 is the year the Mayans think will be our last.
The management of capital in the shadow of 2008 requires one eye firmly checking whether 2008 can happen again. This has made risk management much more interesting as we seek to balance the need to generate returns for our investors against the need to minimize risk.
Where Income is the primary return being sought, finding a comfortable equilibrium between risk and return is tilted heavily by the low rates of return on offer.
How low is low, you might say? At the time of writing, the commonly accepted risk free rate of return (the U.S. Government 3-month Treasury) is offering a whopping five basis points (0.05%) to investors.
It may also interest you to know that many Money Market Funds are losing money in the current low interest rate environment, even though they yield virtually zero. Since September 2009, they are no longer FDIC insured. We wonder how long until their value starts to float - more on this at a later date.
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Market Outlook Summary
Thought for the Week, January 16, 2012 | After starting the year with a defensive outlook, we are gradually moving to a more bullish stance, if not for the next few months, for the year as a whole.
As an active manager, one of our oft repeated maxims is: "Our opinions change with the facts and data."
At the time of writing, we do not feel confident about the direction of the next 5% in markets, but think the next 10% to 15% may be upwards. Once earnings are out of the way, most of the world's risks may be priced in to current prices. These risks include:
Read more... |
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