Follow my logic here…

Quotes from Steve Jobs’ 2005 commencement speech @ Stanford University:
“Don’t let the noise of others’ opinions drown out your own inner voice… and most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.”  -Steve Jobs

Fact 1: A monumental shift in the earth:
The 9.0 earthquake off the NE coast of Japan on Fri March 11, 2011 had a significant impact on the earth.  The earthquake moved Honshu 2.4 m (8 ft) east and shifted the Earth on its axis by estimates of between 10 cm (4 in) and 25 cm (10 in)…

Fact 2: NIKE’s “Just Do It” slogan:
It’s been measured and proven that this NIKE slogan and corporate tagline had a fundamental and profound impact on the way people thought of themselves – not just to go out and buy a pair of Nike shoes.  This slogan actually got people off the couch and got them more active.  People ended relationships that were weighing them down for years and finally “did it”.  There are countless other examples of how this slogan (originally designed to sell more shoes and apparel) — actually cut deeper into the fabric of our lives and conscience thought — for many years afterward.

Hypothesis:
What if Steve Jobs’ death, along with the worldwide media attention it has garnered, has actually shifted a certain percentage of the human population to think differently.

WHAT IF – there is another shift happening right now.  A change afoot that the mainstream media has missed!

WHAT IF – Steve’s passing has fundamentally caused a shift in the thinking of people all over the world to take the opportunities at hand and run with them.

WHAT IF – after reading Steve’s quotes above (and his other quotes within other social media outlets) – entrepreneurs around the world emulate his thinking and passion toward their own dreams.  Finally making their dreams a reality!

WHAT IF – many people around the world make a conscious effort to create real value in human evolution…

WOW — What a better place our global community will be!

My Take-away: I think Steve will live on in more ways than just the technological gadgets, products and solutions he brought forth.  I also believe Steve Jobs will live on in many, many qualitative and subtle ways that can not be quantified.  Thanks Steve (from my personal perspective) - as you continue to inspire me to take my next steps in life, toward the life I was truly created for.  - Mark Brogley

Final Quote from Steve Jobs:
“Remembering you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.” - Steve Jobs

 
Passive VS. Active Account Management:

Ever since the inception of the first “index fund” – a fund that tracks a particular index, such as the SPY ETF that seeks returns equal to the returns from the S&P 500 index – the debate over “active” versus “passive” asset management continues to rage on. 

“Active management” refers to any portfolio management strategy in which the manager “makes specific investments with the goal of outperforming an investment benchmark index.”

Picking individual stocks, for example, represents “active management.”

“Passive management,” on the other hand, refers to investment strategies that seek to match a particular stock or bond index – the idea being that by investing directly in index funds, trading costs are minimized, and there is essentially no risk of “underperforming” relative to the corresponding.

Many financial advisors take a stance on this issue, and there are compelling arguments on both sides.

On the passive management side, proponents point out that, “Over the last ten years, 82% of all money managers in the large-cap universe under-perform the market averages.”

Several advisors that support passive management believe that picking individual stocks, or investing in actively-managed mutual funds, is futile; they cite the relatively high management costs that come with actively managed investments, as well as the fact that approximately half of all mutual funds do not outperform their respective benchmark every year.

On the “actively managed” side, advisors will point out that, “the returns of funds with well-known managers that have outperformed the market significantly, and may argue that there are inefficiencies in the market that make certain stocks more appealing than others.”

They may also point to the recent recession, during which “passively managed” funds typically plummeted.

So how does one choose between “active” and “passive” financial advisors?

1) First of all, costs and fees are very important; even if a certain fund outperforms the market consistently, it most likely charges high fees that aren’t reflected in its return figures.

2) Secondly, the line between the two camps doesn’t have to be absolute; financial advisors may invest directly in indexes (passive investing), as well as picking individual stocks and funds as well.

Asking a potential advisor about his or her view on this topic is always a useful indicator of their investment philosophy and strategy.

We hope this helped.  Thanks for visiting AllFinancialAdvisors.com

We are now in a New Era of Investing and Money Management

Every day, there are more and more products, services and companies pushing the idea that you should be your own financial advisor. 

Do-it-yourself brokerages like Scottrade, TD Ameritrade and E*Trade lure you to “discover how millions of customers are taking control of their future with one of the most powerful investing and trading machines” (an actual quote from the E*Trade website).

Such marketing tactics – while great for corporate profits – are often dangerous because they make us feel like we should all be managing our own money and investments.

Let’s step back a minute.  Financial advisors and asset managers dedicate their entire careers, and often lives, to managing investments and financial plans for their clients. 

How would you feel if your money was being managed by someone who “moonlights” as a financial advisor, finding time apart from their day job to look after your finances and retirement?

Probably the same way you’d feel if it were suddenly your responsibility to manage all your personal investments, savings, and retirement funds. 

So don’t be fooled by brokerages and research services claiming that you can instantly become your own professional, market-outperforming financial advisor; be realistic about the time, training and especially experience necessary to securely and effectively manage your assets. 

Best wishes in your search to find the right financial advisor for you.

It is recommended to choose 2-3 financial advisors to contact before you select one to work with.  This will allow you to see the various expertise each advisor has and give you choices to base this very important decision on. 

This decision will most likely be one of your major ‘partnering’ decisions in your business life…

We hope you have a great weekend.  The AllFinancialAdvisors.com team.

Getting Started and Taking a Step Back: Financial Planning

In our world of ubiquitous financial information, it is easy to get caught up in short-term trends when thinking about our money:
* What are the hottest stocks?
* Which mutual fund managers have the best performance this year?
* What is Jim Cramer telling me to sell today?
* What is Suze Orman telling me to do this week?

However, turning your hard-earned cash into more cash is only the tip of the iceberg. 

Knowing how to manage and budget your spending, income and saving is crucial, and in the long run trumps returns of any size.  This is where financial planning comes in. 

Think of stars like M.C. Hammer, Michael Jackson, and Mike Tyson.  Each of these individuals made tens (if not hundreds) of millions of dollars, and had access to high-end investment solutions – yet managed to wind up broke and bankrupt before the middle age of 40.  Why? Because of a lack of financial planning!

Contrary to popular belief, the easiest way to become rich is not to start a company or win the lottery, but instead to start saving from an early age and create a financial plan that maximizes tax efficiency and suits your lifestyle needs.

If you begin saving for retirement at 25, putting away $2,500 per year, you will have an astonishing $700,000 by age 65 (assuming annual growth of 8%).  By contrast, if you put away $2,500 per year, but wait until age 35 to start, you will have only $306,000 by age 65 (assuming the same growth rate). That is the magic of compounding and saving – or as Warren Buffet likes to call it, the “snowball” effect.

So… instead of chasing the latest financial trend, start by choosing a financial planner or a financial advisor who provides this service.

Financial advisors or a financial planner will examine your situation individually, create a customized financial plan, and help you achieve the future you desire.  Financial planners typically charge an hourly or fixed fee for their services; some financial advisors offer financial planning solutions in-house as well. 

Don’t expect this kind of personalized help and service from a mutual fund!

NOTE: Experts recommend contacting 2-3 financial advisors or financial planning firms, in order for an individual to contrast and compare each financial advisor or firm; thus making the best-qualified choice for their unique situation.

AllFinancialAdvisors.com is an online resource of financial advisors, financial planners and wealth managers.  It is a independent 3rd party directory of Registered Investment Advisors (RIAs) managed by FINRA and the SEC (United States Securities and Exchange Commission).

Financial Advisor Accountability and Incentives: Performance-Based Fees

Performance-based fees have always been a staple of the hedge fund industry, providing wealthy investors with the comfort of knowing that their money managers have a personal incentive to outperform the market.

The famous “two-and-twenty” fee structure refers to hedge fund managers taking 2% of assets under management as a base fee, and in addition taking 20% of all returns that exceed or outperform a given benchmark (such as the S&P 500) or a “high water mark”  (the highest net asset value previously seen at the end of the fiscal year). 

Mutual funds and financial advisors, for the most part, do not embrace the performance-based fee structure, and simply take a fixed fee based upon clients’ assets under management [AUM] – meaning they charge the same fee regardless of whether their fund (or investment) tanks or beats the market.

Given the obvious and mutually beneficial value of employing such a fee structure, more and more investors are seeking out financial advisors and investment advisors that offer performance-based fees.

Why shouldn’t ordinary investors be able to invest the way the wealthy do?

After all, there is a certain feeling of injustice in knowing that your financial advisor or money manager is raking in the same amount of fees win or lose. Performance-based fees help ensure that your financial advisor is sharing the profit – and the pain – of the investments they are making on your behalf.

While performance-based fees appeal to all investors seeking a financial advisor, there are currently restrictions on what types of investors can be charged such fees.

Under the Advisers Act of 1940 (the Advisers Act), RIAs (Registered Investment Advisors, which include most financial advisers) can only charge performance-based fees to “Qualified Clients.”

“Qualified Clients” are currently defined (under Rule 205-3) as clients who have assets under management with the RIA of $750,000 or more, and clients who have a net worth of $1.5 million or more.

However, as the demand for performance-based fees increases among investors of all types, we can expect that in the future, performance-based fee investments may become available to a wider range of investors.

We hope this helps.  Let us know. 
Thanks — The All Financial Advisors Team

Rebalancing Your Retirement Investments:

No one has been sheltered by the latest economic downturn, including your retirement portfolio.  This may be the opportunity of a lifetime to rebalance your investments to take advantage of the future upswing of a recover.

Rebalancing your portfolio should be done with a money manager, financial advisor and/or a financial planning professional, as it is truly a difficult task to accomplish on your own.

You can do most of the leg work first, however, by evaluating your existing investments and assets, then present them to your existing or your newly found financial advisor and discuss what you want to change, alter, or liquidate.

First, why do you need to rebalance?

Typically you need to rebalance your portfolio because of your age, your risk tolerance has changed for any number of reasons (see latest economic crisis), or the relative values in your portfolio have changed and no longer meet your desired asset and risk allocation.

Age
In your late 20’s, you were probably inclined to invest in high risk, high yield, but once you are closer to retirement age, converting most of your assets into more liquid forms will probably be your primary goal.  Deciding and weighing the risks and benefits of these type changes are best suited for a financial advisor who has a diverse client base and a varied background of experiences to draw from.

Risk Tolerance
Again, when you were younger and still had a long-term time frame to invest for retirement, you were willing to tolerate higher risk. On the other hand, an investor in their 50’s who is counting on using their retirement fund as a reliable source of income might not be comfortable with a large decline in their portfolio’s value, even for a short period of time. It’s time to lower the perceived risk.

Asset Allocation
There are really only two choices to rebalance your portfolio’s asset allocation: either make direct adjustments by reallocating funds from one asset class to another (as you grow closer to retirement age you may divert some of your stocks and properties into something more liquid), or add new stable investments (such as bonds or cash) to the portfolio.

Any number of high-quality money management advisors within our independent directory ( All Financial Advisors ) can help.  Maybe selecting 2-3 to talk with before you make your decision; will help you get a feel for each financial advisor’s experiences, background, credentials, client to advisor ratios, etc. 

We hope this helps!

Buying U.S. Treasury Securities As A Way To Diversify Your Investments

If you are new to investing, you may want to look for ways to invest within a reduced risk format.  Good news: There are low-risk and risk-free investments available to everyone.  We recommend that you check all options with your financial advisor…  One of the safest is:

Treasury Securities. The U.S. government sells securities to raise the money it needs to pay off debt. There are many positives to purchasing Treasury securities.

Because they are backed by the government, which guarantees principal and interest will be paid on time, many consider Treasury securities to be free from risk. Most Treasury securities are liquid, or easily sold for cash, which should be a consideration if you think you might need to access the money you have tied up in them. What’s more, the interest earned on Treasury securities is exempt from state and local income tax, making Treasuries that much more attractive for those hoping to make money on their investments without substantially impacting their tax liability.

You can invest in various types of Treasury securities, including:

• Treasury bills, or T-bills. T-bills are short-term securities you buy at less than face value, determined at auction; when your T-bills mature (in less than one year), the government pays you face value for them. You can also sell T-bills at market value before they mature.
• Treasury Notes and Bonds. These pay interest every six months and, like T-bills, can be sold any time at market value, whether they’ve matured or not. If you hold them until maturity, the government will pay you face value for your Treasury notes or bonds. Treasury notes mature between one and ten years from date of issue, while Treasury bonds mature more than ten years from their issue date.
• Treasury Inflation-Protected Securities, or TIPS. TIPS pay interest every six months; their principal value is adjusted for inflation according to the Consumer Price Index. The government determines TIPS’ interest payments and maturity value according to that inflation-adjusted principal.
• Electronic or Paper EE Bonds.  EE bonds pay a fixed rate of return. You can purchase electronic EE bonds for face value and sell them for face value anytime after one year later.  Paper EE bonds, on the other hand, can be purchased for half of face value, but you can’t sell them for face value until they have matured.  If you sell your EE bonds less than five years after the purchase date, you’ll forfeit the last three months’ interest. 
• “I” Bonds. Both paper and electronic, “i” bonds are purchased and sold at face value.  Like EE bonds, they pay fixed interest.  If you sell them less than five years from the date of purchase, as with EE bonds, you’ll lose your last three months’ interest.

 
There are other types of low-risk investments out there, but only you and your financial advisor can determine which “safe” investments are right for you!!!  We invite you to browse AllFinancialAdvisors.com to find a financial advisor that can meet your needs and help you determine whether low-risk investments should be part of your financial plan right now.  Thanks for visiting AFA!

If you are not currently working with a financial advisor or wealth manager and you would like to search for financial advisors with a specialization in Money Management… just ENTER YOUR ZIPCODE in the Search Bar NOW (at the TOP of our Home Page).   Best wishes in finding the most qualified Financial Advisor in your area.

Grow Your Money Without Risk: CDs, Money Market Accounts etc.

If you’re new to investing, or if you’re getting close to meeting major financial goals like retirement, you may be looking for ways to invest without much–or any–risk of loss.  Good news: There are low-risk and risk-free investments readily available to you.  Check these options with your personal financial advisor first…  Some of the safest are:

• Certificates of Deposit.  CDs don’t give you a huge return on your investment, but you’re not likely to lose money on them unless the bank or credit union goes belly-up.  With a CD, you earn money through interest, just as you do with a regular savings account.  But CDs pay a higher interest rate because you agree to let the bank hold the money you’ve invested for a specific amount of time. The longer the term of the CD, the higher the interest you’ll earn.  Once the CD matures, the bank or credit union will automatically roll the money over into a new CD, unless you give instructions that it’s to be deposited into your savings or checking account or mailed directly to you. 

 
The drawback to a CD is that you’re tying your money up for the term of the CD. If you need to get your hands on it quickly before the CD matures, you can count on paying a penalty.  But if you know for sure you won’t need the money, a CD is a safe investment that can produce decent returns. 

• Money Market Accounts.  A money market account is a way to keep your cash safe and growing, but it is more readily accessible than a CD in case of an emergency. When you deposit funds into a money market account, the bank uses it to invest in fairly safe financial instruments like CDs and Treasury bills.  In exchange for the privilege of using your money to make its profitable investments, the bank pays you a higher interest rate (in the form of a dividend) than it would on a standard savings account.  But because of that higher rate of return, a money market account typically has a minimum balance requirement and a limit on the number of withdrawals you can make from it. As long as you open your money market account at a bank, it is FDIC insured. 

 
Our next Blog Post on AllFinancialAdvisors.com will focus on additional ways to conduct lower-risk investing.  An example Treasury Securities.  Make sure to ask your current financial advisor or financial planning professional what steps you should take to reduce your investment risks.  Thanks for checking back with us… Cheers.

If you are not currently working with a financial planner and would like to search for financial advisors with a specialization in Money Management  ENTER YOUR ZIPCODE in the Search Bar ABOVE.  Best wishes in finding the most qualified Financial Advisor in your area.

Diversified Investment Management

Excerpts written by Bill Valentine: VALENTINE VENTURES (Bend, Oregon).

MYTH #1:

ASSETS THAT AREN’T APPRECIATING ARE BAD AND SHOULD BE SOLD. 

This oversimplification represents several levels of flawed thinking.  First, while most investors will tell you, “Buy Low / Sell High,” many financial advisors and investors alike, really do the opposite.  They sell assets into periods like Fall 2008, and buy in periods like Summer 2009. They dump falling assets and pile into those that have already gone up. Secondly, many investors confuse impairment with price fluctuation.  That’s very understandable, and is an outgrowth of the long standing practice of stock-picking.  Stocks that become worthless fall notably in price first.  Therefore, when something declines in price, it triggers the “emotional response” that the chance of permanent impairment is growing, and thus the idea of purging to prevent a total loss.  BUT… what if the chances of a total loss are virtually non-existent?  Like a portfolio (ETF) of all the big REITs in the country, spanning thousands of investment properties?  The only way this basket becomes worthless is if all investment properties become worth $0.  That will only happen at the end of the world.  There are many other examples too.  Commodities for one.  The same is true for any basket of assets–you’ve diversified away the chance or impairment, thus there’s no need to purge.

Diversification of assets is one of the most important risk reduction tools at the disposal of financial advisors, investment managers and investors alike.  Financial advisors should take this tact more often than they actually do.

To Be Continued…

 * * * Many of our advisors are members of the Financial Planning Association (FPA) and also the National Association of Personal Financial Advisors (NAPFA: the nation’s leading organization promoting Fee-Only comprehensive financial planning). Using the services of a qualified financial advisor (to help you identify the strengths and weaknesses in your financial picture) will ensure you can retire comfortably! NOTE: Experts recommend contacting 2-3 financial advisory firms, so that one may compare/contrast each firm, thus making the best-qualified choice.