Crystal Balls, Market Timing, and Predicting the Future

As the markets continue their cycle, we are hearing two questions over and over again from you. They are "is it time to get back into the market" or "are we near another crash". While they may seem like similar questions, they are actually very different with different answers.

The first question relates to an investment strategy those in the business refer to as market timing. The belief is that you should be in the market during good times and get out of the market before the market begins a down cycle. What's more is the average investor expects their financial broker to make these moves for them. Many brokers believe you never need to make moves because your investments are long-term!

Market timing sounds great and looks good in theory. Who wouldn't want to enjoy the market going up and get out before it goes down? In reality, it just doesn't happen. If these programs and systems worked, we would see trillionaires instead of the billionaires we have in our society. When these programs and systems don't work, it's YOUR money that is lost, not theirs.

The second question, 'are we near another crash', ties into that, but the underlying question goes deeper. People want to know if we are near a crash or what do we think the market is going to do going forward. The talking heads of TV debate whether we are in a bull market (going up) or a bear market (going down). You will hear them going back and forth about previous market events and use that to prove what will happen going forward.

The true answer to the question is NO ONE has a crystal ball, so how can they predict the future. Don't worry about a crash or a raging bull market. You need to be sure that your portfolio properly reflects how much risk you can tolerate.

To hear the Smart Money Radio Show segment focused on this topic, Please Click Here! (about 7 minutes long)




To hear the full Smart Money Radio Show where Bruce discusses this topic and more, Please Click Here! (about 25 minutes long)

The Television, Internet, and Your Money

With the satellite companies and cable companies, and more people accessing the internet, the TV and the world wide web are the frontiers of valuable information sources. Right?

Wrong. When it comes to wealth management, most of these provide little to no valuable information. As a manager, it is very important to monitor the investments and make decision based on new information. By the time it is REPORTED on the internet or TV, it is old news that has already affected your investments.

The primary function of television is advertising, not information or entertainment. Without sufficient advertising, any channel will go off the air. Their job is to draw you to their channel so you see the advertisements (that companies have spent millions on to get you to see their product).

The information, especially in today's turbulent markets, is creating an emotional response about investing, and financial decisions should never be based on emotion!

To hear the Smart Money Radio Show segment where Bruce discusses the influence of media on investors in today's market, Click Here! (about 7 minutes long)



To hear the full Smart Money Radio Show where Bruce discusses Private Wealth Management, Click Here! (about 25 minutes long)

What is Your Biggest Problem Inside Your Portfolio?

You are taking on too much risk. Most of the losses in people's accounts over the last few years can be attributed to risk. If your losses upset you, then there is a good chance that the risks in your account are much greater than your tolerance. Too many brokers overlook the significance of risk in designing your portfolio.

You are placing your trust in someone to choose investments that are suited correctly for you. If they make the wrong choices, it is your money that will be lost—not theirs. If you are unhappy with results, then YOU have to take actions to correct the matters.

One of the limitations of brokers or planners is the lack of flexibility in the investments they sell you. If the choice was not a good fit, it requires you to sell out of one investment and purchase another. Truth be told, it is almost impossible to assess someone's risk tolerance and make the best possible recommendation from one or two office visits.

As a private wealth manager, we assume from the beginning of our relationship with a client that we are going to have to make adjustments. We learn more about them, they will learn more about us. It is our job to manage the assets and allow for a better fit as a time goes on. We use the same principles that wealthy people demand—flexibility. When you have investments that have no sales charges, you can move within a universe of literally thousands of choices without any additional cost to you. It's like having a tailor made suit or dress that comes with free unlimited alterations!

To hear the Smart Money Radio Show segment where Bruce discusses possible pitfalls inside your portfolio, Click Here! (about 7 minutes long



To hear the full Smart Money Radio Show where Bruce discusses Private Wealth Management, Click Here! (about 25 minutes long)

Is There Ever a Free Lunch?

Sadly, the answer is no! When times are good, people will overlook the possible downsides of a situation. Investors are no different. People ignore risks and pitfalls that can be easily seen if you just use some common sense. When things get bad, people try to absorb an overload of information to understand how and why they got there.

Whether you are buying a house, a car, or an investment, a salesperson points out all of the strengths and benefits of your impending purchase. They will not point out the weaknesses or drawbacks, which will jeopardize their chance of a sale.

The only way to make a smart investment decision that will affect your financial future is to have both the benefits and drawbacks laid out in front of you, equally.

Get the facts, use common sense, and remember there is no free lunch before making a decision that can decide whether your retirement will be a success of a failure!

To hear the Smart Money Radio Show segment where Bruce discusses paying fees for private wealth management, Click Here! (about 7 minutes long)



To hear the full Smart Money Radio Show where Bruce discusses Private Wealth Management, Click Here! (about 25 minutes long)

The True Cost of Fees

One of the biggest objections we hear is that you don’t want to pay a fee for private wealth management service. You’ve already lost enough money in this market and you don’t really want to lose more money to fees.

But the fact is that unless you have your money under your mattress or in a jar, you are paying fees and the amount you are paying would surprise you! There are hidden fees inside your insurance contracts, management fees inside all of your mutual funds, account fees inside your 401(k) or pension plan, and sometimes 2,3, or 4 sets of fees inside your retirement account.

Instead of being billed directly, these fees are taken from your account values, and you get a NET return. In a down market, you are actually using your principle to pay these fees since the account is not making any money.

There is no such thing as a free lunch. Whether you are working with a financial advisor, a broker, or a private wealth manager, YOU are paying fees. The real question is how much are those fees and what are YOU getting in return.

To hear the Smart Money Radio Show segment where Bruce discusses paying fees for private wealth management, Click Here! (about 7 minutes long)


To hear the full Smart Money Recipes Show where Bruce discusses Private Wealth Management, Click Here! (about 25 minutes long)

Is Your Portfolio One Size Fits All? Should It Be?

The simple truth is there is no such thing as a perfect investment. If one existed, everyone would own it. Every program or product is a compromise. You have to understand your goals, take an inventory of the strengths and weaknesses inside your portfolio, and see if there is a reasonable match.

Many times, we see people that have a ‘one size fits all’ portfolio. In private wealth management, the portfolio is much more tailored to the specific needs of the client, yet flexible enough to make future changes without any great expense.

Is it possible for you to have a ‘tailored’ managed account for the same or less money than the ‘one size fits all’? In many cases, it is!!!

To hear the Smart Money Radio Show segment where Bruce discusses finding the right portfolio through private wealth management, Click Here! (about 7 minutes long)


To hear the full Smart Money Radio Show where Bruce discusses Private Wealth Management, Click Here! (about 25 minutes long)

How Good Are Answers if They Fail to Address Your Issues

You, the financial consumer, should expect good communication from any professional regardless if they are a planner, broker, or private wealth manager. We don’t believe that any planner or broker would want to give less either.

However, there are times when many communications and answers given to a client fail to address the issues at hand. This may seem counter-intuitive, so let us give you some examples.

Given the shaky market we’ve seen over the last decade, you were probably told at some point that “You have to realize your investments are long-term”, especially when discussing significant losses.

We fail to see how this answers your concern about losing money. Your investment strategy or philosophy should be long-term, but buying and holding a bad investment will rarely have a positive outcome for the client. Management involves routine evaluation of the investments and removing those that are counterproductive to the goals of the investor

Another common response we hear in response to a poor performing investment is “That’s only a paper loss unless you actually sell it”. An investment worth exactly what its value is on a given day when the market closes. If you invest $50,000 in something three years ago that is worth $30,000, you have lost $20,000. There is no crystal ball to tell us if it will ever come back.

There are many reasons why you may hear these universal answers to your questions. Pride-not wanting to admit failure-could be one. People not liking bad news or sharing bad news is another. Finally, people have a wrong assessment of their own ability when it comes to finances.

Money is NOT that complicated if you use common sense and we use easy to understand terms. If something doesn’t seem right or add up to you, there is probably something wrong!

To hear the Smart Money Radio Show segment where Bruce discusses dissecting the information out there for your benefit, Click Here! (about 7 minutes long)


To hear the full Smart Money Radio Show where Bruce discusses Private Wealth Management, Click Here! (about 25 minutes long)