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March 2015 Newsletter The Most Important Thing—Ethics and Gimmicks

Posted on Sunday, 26 April 2015 20:07:38 March 2015 Newsletter  The Most Important Thing—Ethics and Gimmicks

March 2015 Newsletter The Most Important Thing—Ethics and Gimmicks As usual, tax season got the better of me, and as a result, I am nearly two months behind with my monthly articles.   I hope to get caught up over the next three weeks. As most of you know, I have a nerd-like passion for personal finance and investing.  I became a financial advisor, however, because I grew tired of seeing good people receive bad advice from unscrupulous advisors.   On that topic, I wanted to reference…

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The Most Important Thing—February 2015 Edition

Posted on Thursday, 12 February 2015 10:32:10 The Most Important Thing—February 2015 Edition

This article is part of a new series in which I explain aspects of personal finance and investing that I believe are the most important for you to understand.  The title is based on a book by Howard Marks, who is Chairman of Oaktree Capital Management, and I will borrow a couple of topics from him.   I will try to keep these articles short and sweet. For February, I want to write about market cycles.  One of the most basic rules of both economics and finance is that asset class values…

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January 2015 Newsletter--IRAs, Roth IRAs, Conversions and Rollovers

Posted on Thursday, 22 January 2015 08:36:17 January 2015 Newsletter--IRAs, Roth IRAs, Conversions and Rollovers

  Happy New Year! As I conduct end/beginning of year meetings with clients, one of the most frequent topics has been IRA and Roth IRA contributions.  I want to take this opportunity to summarize the IRA rules so we can have them readily available going forward. Let’s start with some of the basics.  There are two types of IRAs, Traditional and Roth.  Traditional IRA contributions are generally tax-deductible, and they grow tax free, but when you pull the money out of the account,…

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November 2014 Newsletter

Posted on Monday, 03 November 2014 12:23:00 November 2014 Newsletter

“Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.” -Albert Einstein   In June, I wrote about compounding interest on debts, and how it is best to pay off your highest interest debts (factoring taxes) first.  Today, I am going to discuss the much more fun side of the coin, and that is compounding returns on investments.  The easiest way to look at compounding income is to use the rule of 72, which is that you take…

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My Investing Manifesto

Posted on Tuesday, 23 September 2014 19:49:12 My Investing Manifesto

One of the most important questions that you should ask your investment advisor, and get him or her to state in writing, is what is his or her investment philosophy?  For me, out of the hundreds of different strategies that are out there, there are only three that I believe are legitimate.  Before I list the strategies, I want to briefly summarize some research that has guided my beliefs over the past few years. The first is an article is by Eugene Fama, who shared the most recent…

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Which Debt Should You Pay Off First?

Posted on Tuesday, 23 September 2014 19:21:29 Which Debt Should You Pay Off First?

    For this article I want to perform an experiment on the subject of choosing which debt to pay off first, since this topic has some up quite a bit recently.  Let’s assume that the hypothetical client has three debts: 1) student loans of $100,000 at 4.5% interest, payable over 20 years; 2) mortgage of $300,000 at 5% interest, payable over 30 years; and 3) car loan of $40,000 at 2% interest, payable over 5 years.  The hypothetical client’s effective tax rate is 25%, but he makes…

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Momentum Investing and What I have Learned from Warren Buffett

Posted on Thursday, 27 March 2014 19:43:50 Momentum Investing and What I have Learned from Warren Buffett

In an effort to maximize my time, I intend to stop posting to the blog separate from the quarterly newsletters/updates that I send to my clients.  That said, I reserve the right to change my mind, especially if I am told that people are actually reading what I write. As part of this change, I do not intend to continue the monthly momentum investing updates.  Please trust that I am still performing them and still believe in that investing methodology.  In fact, I have changed the methodology…

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POSCO Steel--Value Stock or Value Trap?

Posted on Tuesday, 21 January 2014 18:48:26 POSCO Steel--Value Stock or Value Trap?

With the U.S. stock market somewhere between fairly valued and expensive, it is important to be willing to look outside the U.S. for value opportunities.   When I look for value stocks for my “deep value” portfolio, I require a greater margin of safety than in my dividend growth stock portfolio.  Currently, I am looking for stocks that I believe are undervalued by 50% or more.  To determine whether that margin of safety exists, I perform a relative value analysis and a discounted cash…

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GTAA January 2014 Update

Posted on Monday, 06 January 2014 17:52:00 GTAA January 2014 Update

GTAA January 2014 Update For my clients that are applying Global Tactical Asset Allocation, there are two changes this month.   Specifically, emerging market stocks, as represented by VWO, and foreign REITs, as represented by RWX, both moved to cash from being owned.  As I mentioned in my New Year’s post, I want to write more about investing philosophy this year, and I will do so by starting with a 30,000 foot view.  At the broadest level, there are traders and there are investors. …

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2013 Year in Review and a Look Ahead

Posted on Wednesday, 01 January 2014 22:35:01 2013 Year in Review and a Look Ahead

2013 Year in Review and a Look Ahead I hope that everyone enjoyed the Holiday season and some extra time with their families.  Looking back to the beginning of 2013, I focused my expectations on larger economic factors much more than specific stocks.  I had concerns regarding U.S. government shutdowns, significant inflation in the U.S. and the weakness of the US recovery.  I expected a U.S. stock market correction in 2013, and not a significant return overall.  I expected interest…

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