Month: November 2013

70,000 Brokers Don’t Have a Clean Record. Check Yours At BrokerCheck.

I don't know about you, but I am tired of reading about thieves posing as advisors who steal or lose their clients' money. Celebrities are too often the target, but the minute you say, “It can't happen to me,” look out, don't let your guard down.

According to the Wall Street Journal, about one in every eight brokers has red flags including complaints or other problems disclosed in their regulatory filings. It is caveat emptor since 70,000 brokers have at least one disclosure, nearly 3,000 brokers have at least five disclosures, and they are all out there still working with clients. Don't give these brokers the benefit of the doubt. It isn't worth risking your hard earned savings.

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Asset Protection 101: Enhancing returns with a prudent bear market strategy

My early days on Wall Street

I graduated college in May of 1997 and hit the ground running when I landed on Wall Street as a research analyst. Just a year later, Long Term Capital almost crashed the global markets but the Fed stepped in and then the fun began as the Internet bubble inflated to hysteria. Taxi drivers and barbers would tell stories of how they made thousands on eBay or Yahoo, but all bubbles end in a bust. By then I was working as an assistant portfolio manager to a multi-billion dollar fund.

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Grandparents’ 529 College Distributions Can Be a Ticking Time Bomb

Are you a grandparent thinking of helping out a grandchild fund their college expenses? Be aware of 529 plan structures to ensure that your gift doesn’t turn into a bomb that destroys your grandchild’s financial aid.

According to a recent Fidelity Investments survey, 65% of parents saving for college expect grandparents to contribute. In recent years, a growing number of grandparents have set up 529 college savings plans but before writing a check, grandparents must be aware of the potential pitfalls. Grandparents shouldn’t have to worry about their 529 gift but many websites don’t explain things clearly and many people are shocked when things go seriously wrong. Don’t be left like tennis legend John McEnroe who famously stated “You can’t be serious!”

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Asset Protection 101: Diversification strategy gone wrong

The consensus among most financial professionals is that asset allocation is one of the most important decisions that investors make. However many people mistake asset allocation for diversification. This is the definition from the SEC:

The Magic of Diversification. The practice of spreading money among different investments to reduce risk is known as diversification. By picking the right group of investments, you may be able to limit your losses and reduce the fluctuations of investment returns without sacrificing too much potential gain.

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Asset Protection 101: When Buy and Hold Fails

Welcome to our Asset Protection 101 series. With exception to diversification, the industry doesn't like to talk about asset protection because it goes against conventional thinking and the way that most advisors operate. However, one size doesn't fit all clients so we will take on these topics in this series.

Buy and hold refers to an investment strategy in which investors hold on to their stocks for a long period of time regardless of fluctuations in the market. One of the main benefits of a buy and hold strategy is the easiness of the process. It is no surprise that Wall Street pushed this message as they no longer had to make the tough decision to actually protect client assets before a bear market. Lucky for them, the market had a huge secular bull market from the mid-1970's to 2000 as interest rates declined from the mid-teens to single digits and the stock market had an epic run in the 90's culminating in the Internet bubble.

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