10 Questions to ask your Adviser. Right Now. Today.

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He was annoyed with me after a while. He said I asked too many questions.”

It’s tough for me to imagine speaking these words to a client or anyone seeking guidance.

I don’t have the guts. Or the hubris.

Or the stupidity.

I wonder about (and I’m thankful) for complacency among some advisers. It allows me to continue to gain thoughtful, inquisitive clients who never feel that I’m annoyed by a passion to learn.

The noblest efforts we undertake as trusted financial partners are to listen, answer questions, validate good behaviors, empower improvement and communicate effectively to our audience.

How does a prospective client – One who has a genuine curiosity in her finances, a successful saver and investor, ask “too many questions?”

If you’ve been with an adviser long enough to feel comfortable together, or maybe you’re exploring a new financial relationship, asking questions should be encouraged.

There’s no such concept as “asking too many questions.” You query enough to satisfy your need for information requested. I’ve noticed how the more self-aware an individual is about their financial situation, the more questions that arise.

There’s no reason to feel intimated or stifled.

You’ve earned the right (and the money).

Channel your inner Columbo.

Remember Columbo?

Columbo

The disheveled, inquisitive, seemingly frazzled (like a fox), detective was a master of detection. His questions on the surface were unassuming. Some appeared silly. However, underneath, there was a method to his madness.

Columbo knew the importance of questions no matter how insignificant they appeared

And when you were convinced he was done with the investigation.

There was always “just one more thing.”

It drove the perpetrators crazy.

Columbo was intrusive, occasionally annoying and he couldn’t care less. He was purposely oblivious. He felt he had the right to ask.

So do you. When it comes to your family’s financial well-being every question you have should be addressed.

Now’s the perfect time, too.

Why?

The market is complacent. Volatility is low.

Yet, dark clouds are forming on the horizon.

storm clouds

Political ill-wind is beginning to stir and capture the market’s attention, bond yields around the world are falling (some are negative). The 10-year U.S. Treasury yield is at it’s lowest close May 2013. A clear sign of economic distress. U.S. corporations are in their fifth quarter of negative earnings growth.

There’s never been a more perfect time to ask these ten questions: It would be a mistake not to.

Are you a registered investment adviser or a stock broker? There’s a difference.  A big difference. When people ask me I respond: “Well, I don’t really want to help you break anything. Most likely, I’m going to help you mend something a broker, broke.” You need to ask the question and comprehend the difference.

A registered investment advisor or “RIA” is held to a fiduciary standard. According to www.thefiduciarystandard.org, a committee of investment professionals and fiduciary experts who formed in June 2009 as advocates for fiduciary-level advice:

“Registered representatives of broker-dealers are subject to a suitability standard under the Securities Exchange Act of 1934, while investment advisers are regulated as fiduciaries under the Investment Advisers Act of 1940.”

What does that mean to you? Plenty.

Fiduciaries are held to a high standard of ethics and care which affects all the advice they provide. It’s a much stricter standard. There should be no conflict of interest and if one exists, it requires clear disclosure.

The Committee for the Fiduciary Standard outlines 5 core principles of a fiduciary:

  • Put the client’s best interests first;
    • Act with prudence, that is, with the skill, care, diligence and good judgment of a professional;
    • Do not mislead clients–provide conspicuous, full and fair disclosure of all important facts;
    • Avoid conflicts of interest;
    • Fully disclose and fairly manage, in the client’s favor, unavoidable conflicts.

 “Suitability” guides a broker to recommend an investment that is appropriates for your situation, is not held to the same standard. A broker is required to know your risk tolerance, tax bracket, and time frame for the money you seek to invest. All skeletal in nature. Yet legitimate. Well, it’s suitable.

Feels like something is missing, doesn’t it?

My belief, based on how brokerage firm compliance departments operate and an unpleasant experience with a former employer, is that suitability has been misaligned to protect the financial organization from lawsuits or arbitrations and NOT designed to safeguard individuals seeking guidance.

The Fiduciary Standard is a high calling. It’s there to position the client front and center in the financial advice model, as it should be for every professional who assists consumers with their financial decisions.

 On April 6, 2016, the outdated foundation of financial services was slammed and cracked to make ground for hopefully, a safer, increasingly objective industry with the issuance of the Department of Labor’s Fiduciary Rule.

Mind you, it’s the genesis of a higher standard of care for brokers, so there’s much to be accomplished. I expect the Rule will be pushed, pulled, fine-tuned before it fully takes effect on April 10, 2017 and final policies put in place by January 1, 2018. My thought is this will be a continuous work in progress long after 2018. That’s ok. It’s a step in the right direction.

The new rule resurrects the definition of fiduciary from the 1974 ERISA – (Employee Retirement Income Security Act) and expands upon it. ERISA’s fiduciary standard outlines how a retirement plan fiduciary must act prudently and with undivided loyalty to the participants. Obviously, the retirement landscape in 1974 was very different. The 401(k) plan wasn’t in existence. Defined benefit plans, or pensions, were the most popular retirement vehicles.

Crucial elements of the rule – advice provided must be in a client’s “best interests,” full disclosure of conflicts of interest, and charge no more than “reasonable compensation,” for services. Generally, the fiduciary must sign a “Best Interests Contract” with the client that outlines how he or she will provide advice in the client’s best interest.

A broker’s financial institution will also be subject to the rule. Ostensibly, sales quotas, contests, awards or special compensation that may tempt an adviser to stray from his or her fiduciary responsibilities, will be prohibited.

The message is growing strong (there’s a long way to go), to an industry driven by sales pressure: Change your culture. In other words, those ads you run that give the appearance of fairness, caring and client first that not one consumer takes seriously? Make them reality, not fantasy.

Ethical employees who serve financial clients in publicly traded brokerage firms are torn between serving clients holistically for the long term and at the same time are up against the wall every quarter, starting from scratch, to meet outrageous quarterly sales goals and tremendous pressure to sell the hot product of the day (these tactics still exist). The internal friction can generate great turmoil and perhaps push an employee to make sales first and fail to responsibly counsel.

The mixed message from senior corporate puppets to do what’s right for a client and oh, meet big sales targets (or you’re out), builds conflict and distress. Talented workers become discouraged, burned out and move on. It’s an ancient business model. Change is required and it appears to be coming.

Slow is better than no.

Unfortunately, the recent ruling only covers retirement accounts. For now. The Security & Exchange Commission is expected to release a fiduciary standard in 2016 which would cover fiduciary responsibilities for taxable brokerage accounts. Although a uniform fiduciary standard (with the DOL), would be welcomed, it’s too early to draw any conclusion that this will occur. Nor is there any assurance that the SEC will adhere to an October release.

While the Feds work to figure it out, ask the question. Keep in mind, not every professional you engage will operate in a fiduciary capacity regardless of federal rulings. My suspicion is you’ll be hearing interesting, articulate, creative responses but not a clear “yes” or “no.”

Based on the answers received, you’ll gain valuable perspective about what’s best for you and your family’s finances.

Think fiduciary over suitability.

How much will I pay for your services?

 Simple question deserves a simple answer. Unfortunately, not so simple. People share with me their frustration as they’re unclear how their current financial professionals get paid or are compensated for selling investment products.

It’s especially perplexing for mutual fund investors sold multiple share classes and perpetually unclear of how charges are incurred. A clear comprehension of the class share alphabet (A, B, C), is as thick and jumbled as the inside of Campbell’s Soup can.

B &C share classes are popular selections on the product-push list. They represent the finest alchemy in financial marketing. As consumers are generally hesitant to pay up-front sales loads like in the case of A shares (even though when taking into account all internal fees and expenses, they’re the most cost-effective choice for long-term investors,) B & C shares were created to mollify the behavioral waters.

To avoid having a difficult conversation or facing reluctance about opening your wallet and shelling out 1-4% in front-end charges that reduce the principal amount invested, the path of least resistance is to offer share classes with internal fees, marketing charges and deferred sales charges. Either way you pay. With B & C shares generally, you pay more. However, big fees reduce returns, they’re stealth. Thus, they feel less painful to invest in (even though they’re not).

Frankly, the only funds worth considering are no-load mutual funds where you can purchase or sell anytime without a commission or sales charge. Avoid the A, B, C’s all together. Meet with an hourly-fee based Certified Financial Planner or a fiduciary to help you assess your current mutual fund holdings and for recommendations based on your personal situation.

A financial professional may be compensated hourly, by annual flat fee, a percentage based on assets under management, commissions or perhaps a combination. Regardless, to make an informed decision, you must understand how your adviser puts food on the table. If you can, get it in writing.

 There’s no ‘right way’ to be compensated as long as it’s fair and reasonable for services rendered. You also want to understand what motivates your broker or adviser to recommend investment vehicles. If you’re not getting straight answers, well you know what to do. Move on.

How do you incorporate my spouse, life partner and children when it comes to planning for me? You don’t exist in a vacuum. An adviser should maintain a holistic approach to financial planning and that includes communicating with loved ones and teaching children how to be strong stewards of money. The meetings, communication must be ongoing. At least annually.

Why did you select financial services as a career? I recall vividly how the stock market intrigued me through my teenage years. I never missed an episode of Wall Street Week. As early as 13 years-old I was fascinated with how markets worked.

In grade school I enjoyed helping classmates understand how our passbook savings accounts (and compound interest) worked. Every Wednesday, a bank representative from Lincoln Savings Bank would meet with our elementary school class and collect deposits and stamp our passbooks.

This question should be used to gauge a perspective financial partner’s penchant for helping others and passion for his or her role as a mission, not a job. How do you know whether a professional sincerely cares about your financial situation and goals? You’ll know it, intuitively.

 What are your outside interests? A successful life is about balance. This question gets to the weekend and evening person behind the financial professional you observe from behind a desk, charts, book, and computers. You may discover activities you have in common and develop rapport on a personal level.

To gain a complete picture of the kind of person you’re entrusting with your investments is a crucial element of your interviewing process. By the way, it’s not prying. It’s curiosity. Ostensibly, you should like the individual you and your family may be working with for decades.

Can you tell me about your firm’s service standards? You want to know how many times a year you’ll be meeting with your financial partner whether in person (preferably), over the phone or web meeting like Go To Meeting. Is it quarterly? Every six months? How would you like to work as a client? What are your preferences? Will you be receiving calls and e-mails throughout the year about topics important to your financial situation like the market, economic conditions, financial planning, and fiscal changes that may affect me?

What is your investment philosophy? Recently, I meet a couple who was upset how their broker placed a million bucks into the market in one day. They believed there would exist a more thoughtful strategy for implementation especially in the face of the second-highest stock market valuation levels since the tech bubble. But THEY DIDN’T ASK. Are you ‘buy and hold?’  You seek to discover  whether the adviser is merely towing the employer’s line or does outside research and shares his or her personal opinion based on research and study.

Is there a portfolio sell discipline? What is it? Frankly, if the word no, or something like it comes up, excuse yourself politely and find another adviser. This investigation is over.

The dirty little secret in financial services is that ‘sell’ is a four-letter word. I’m certain you’ve heard about missing the 10 best days in the market (brokers preach this ad nauseam). How detrimental it is to portfolio return. And it is. But what about the other side of the coin? What about the math of loss?

Math-Of-Loss-122115.png

Per Lance Roberts, Clarity Financial’s Chief Investment Strategist:

Clearly, avoiding major drawdowns in the market is key to long-term investment success. If I am not spending the bulk of my time making up previous losses in my portfolio, I spend more time growing my invested dollars towards my long term goals.

Markets can’t be timed. That’s true. However, risk management is about controlling the math of loss which can be devastating compared to possible gains. Your broker or adviser should have a strategy you believe in to guard against market storms.

Whether it’s a conservative portfolio or asset allocation right from the beginning, or a specific sell and re-entry discipline to minimize portfolio damage, a sell strategy is crucial.

Academics and influential financial service providers are on the band wagon when it comes to sell disciplines. Whether it’s Dalbar, the nation’s leading financial services market research firm, or MIT Professor of Finance Andrew Lo, there’s a growing body of work that shows how investors spend most of their investment life (20-30 years), making up for losses, playing catch up.

Investing, closing your eyes and hoping for the best is not a wise strategy especially in a market propped up by central bank intervention and a P/E 10 ratio at 25.7, the second-highest level since the tech bubble at 44.2. The historic average is 16.7. Real price/earnings over 10 year averages are not going to drive market returns in the short term. However, as an investor, you must be aware of the environment you’re dealing with. Placing 100% of your stock allocation into the market at these levels should be a strategy you avoid, especially if you’re 5-7 years from retirement.

How will I have access to you and your team? A caring adviser will make sure you have the ability to text, access to a cell phone number, the phone contacts and e-mails of support staff and make you feel comfortable to reach out at any time. You should also expect a prompt response to voice mails within 24 hours or less.

When can I meet your clients? Advisory clients possess knowledge and intellectual gifts they love to share with others. Intimate client gatherings provide clients opportunities to communicate, generate business, form friendships. It’s rewarding to witness. The ability of clients to gather and know each other also helps new retirees transition to their next life adventures easier by hearing the life stories from people who have been there already.

Questions are an integral part of any relationship. As a friend recently taught me – not asking them in a timely fashion can create resentment and anger.

You’re not being nosy.

You’re not a nag.

You’re seeking information to make an informed decision.

About a topic close to your heart.

Financial well-being.

No questions asked.

Unless you’re Columbo.

Then keep asking.

Watch For Dust People: 5 Lines Of Defense.

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“You don’t have to try to keep the tears back.

You couldn’t cry if you wanted to. You couldn’t cry if you wanted to.

Even your thoughts are dust.

Even your thoughts are dust.”

Lucinda Williams

The Dusters thrive among us.

In the misty whirlwind of false, trenchant phrases and gut-hemorrhaging head games you’ll be captured.

The haze created by the escape, their false feelings that conclude in emotional entrapment, will set the outer reaches of your soul ablaze like high velocity, ghost-pepper shots to the eyes.

The singed ends of nerves you never knew you had will explode in dry fire, like staccato firecrackers going off in a cloying sulfur-mist tethered by a humid summer sky.

The lies will choke off your oxygen.

Your capacity to think straight will evaporate.

You’ll feel yourself shrivel from the inside out.

shriveled man

Because you’re gagging on dry death. 

Helplessly falling into the cracks of the parched splintered arteries.

Ground into a foundation of splintered bones and pulverized hearts.

And you won’t. Even. Know. It.

By the time you get it, you’ll be dried out completely.

The hour, the minute, the month, the year you’re shaken from their lives.

As they move to the next dirt destination.

You’ll re-live each terrifying moment.

So you see.

Sadly, you must understand.

Fresh victims are plentiful.  Always close.  In the wings. Waiting to be dried and shaken while you’re stirred.

Before a Duster rolls down to a new pubic town (population YOU).

Before they release you to a wind that flows on apathy and stinks with the rot of deceit.

Another poor soul is near.

Unaware.

This group? Get to know who they are.

Society is overrun with them.

They feed on on others to build themselves. They fire up egos. Their own.

The Dusters.

Beware of them.

Let me show you the way.

Let me help you understand.

Allow me to help you avoid the dusters.

Because.

If you’re a victim?

****************************************

dust people two

                  You’re gone already. 

It’s called an expiration date and it’s on your head right from the get go.

Random Thoughts:

Dusters don’t feel remorse. Apathy. Or anything.  The antics, every thought they possess, is based on an end game first. the grand exit. They re-live the escape plan. The goal for them is to leave with more than they entered your life with. Their timing is perfect.

Right from the start you are in a burning house with the door padlocked shut.

Dried meat. Turned into a jerk(y).

Oh who knows what keeps them around, sometimes for years.

I rattle this around in my head every day.

Good sex, a sympathetic ear, a travel bud, shared business contacts, an image boost, outright free stuff, a paycheck for nothing, a friendship controlled for personal gain.

Who knows?

The Dusters are indeed a diverse bunch. The breed is a non-partisan feeder.

They come from all walks of life.

Frankly, they represent an epidemic. One that’s going to be around a while because the ongoing deterioration into a Tinder culture demands it. And I fear it’s just begun.

I fear there are more of them than us, now.

So the odds are they will come for you, too.

You’re gonna get dusted.

It’s just a matter of time. The day you’re shaken, swept out to the dustbin of the past.

Once Dusters have gotten what they need from you or something/someone else to play with, you are dust (dead) to them.

And if  you’re stupid or unfortunate enough to fall in love with a Duster, you’ll ignore the signs because nobody can be that evil, right?

Wrong.

So. So. Wrong.

Dust storm #1– Dusters create grandiose exit-preparation stories. It’s a first assault. An initial test of your resolve. It’s an attack on your sanity. A Duster wants to gauge the power of your commitment to stick with them long enough to be damaged. Because you see, it’s not a conscious effort to hurt.

It’s a part of who they are.

So, let me ask – How much can you handle?

Duster victims are steadfast suckers.

Others are smart and flee quick.

Who are you?

stop stop

Dusters swirl words into flirty-dirty demons that revolve around and within you. It’s a tactic designed to confuse a victim before the slaughter.

Since Dusters don’t trust their own actions, naturally they can’t trust yours. In addition, they have not completely shaken the packed-on remnants of past particles (which is interesting) because they abhor how some of their victims have moved on to healthy relationships.

How dare they???

dust_by_forgottenx

You can’t make Dusters feel bad because they can’t feel. Anything. People who can’t help them and those who have outlived their usefulness are swiftly discarded.

You’re an ash in a flash.

Their love is not permanent. Frankly, there’s no such thing as love (outside of self) for this cancerous spin-off of the species. Oh, they’ll say they love you, they’ll promise long term just to keep you in the storm, as they’re not quite done with your bloody carcass, yet.

It’s like that monster grizzly. You know – In the DiCaprio film “The Revenant.”

Just when you’re convinced he’s finished tearing out your neck, ripping open your back, dragging you like a puppy toy, THE BEAR RETURNS. THE MAULING RESUMES. NO MERCY.

Each lie, a claw to the face: They’ll be a friend forever (slash). They’re working for you (slash #2). They have your back (final gash). Actions prove different. Over and over again.

Love does not reside in their core. It’s not at home there. It dies before it’s able to breach the wall.

The warm fuzzies are icy-knife-ies.

The world is indeed their stage and you’re merely rolling across, stuck in it, used in it, then released from it.

dust world They’re comin’, they’re comin’!

Dust storm #2: Duster emotions are fleeting, float light on the breeze, subject to change in a blink. There’s nothing in the soul when it comes to feelings.

Remember – Duster’s are always on the move even when still, constantly searching for exits. Lusting for the water of another’s life because the newest victims are the juiciest!

It’s how they prosper. Duster victims are flesh commodities.

Dust a dozen.

There are so many choices, so many people they can dry out, it’s like a feeding frenzy.

“Harvest time, all the time,”is their motto.

And surprise!

Look who’s on the menu..

human menu

Dusters are ghosts, shells of humans with important stuff missing. People are nothing to them unless you have something they desire. When a Duster shakes you off, it’s done with rehearsed platitudes, false language of leaving they’ve recycled from the dusty remnants of other departures. They’ll even fool your relatives. Suck in the kids!

Dusters thrive deep in finances.  They’re the cuts you never do anything about. They’re stealth hits that keep on hitting. Recently, I received an e-mail for fees, an auto-renewal from a service it took me 3 hours to cancel.

Most would rather have their money turn to dust before they halt this auto-finance terrorism. Take a day. Stop all auto-payments. Gain control. I know consumers who have lost hundreds, thousands, robo-paying for services they never use because it’s easier to pay than to stop. Huh? No.

Dusters rarely say “I’m sorry,” or admit mistakes. And why should they? You should bow. Die noble in their grace. Just dust, bury yourself before they get to it. After all, they’re terrific. You’re the reason they’re fucked up, remember?

As a matter of fact they’ll make you feel wrong for being right.

Remember that line from the classic film “Love Story?”

Love-Story.png

Yea, it’s nothing like that.

Not at all.

Identify Dusters with 3 simple inquiries. No kidding. To kill a Duster you must be the Duster (not for long because that’s not you).

Keep it simple. The best deaths occur in plain sight. Every minute. Not even Kojak would be able to figure it out.

kojak

Keep sucking, buddy. You won’t catch me!

Tell me about your long-term friendships. Dusters have few close friendships to speak of. That’s not a bad thing on the surface. Loners can be cool. You just want to get a handle on the quality of the relationships. How a Duster defines them.

If you can’t adequately get a handle on why and how these friendships are maintained, step back. If there appears to be a pattern of breakage and it’s always the fault of others, well you know what to do, right?

Describe your last break-up in detail, please. Dusters are expert ghosters. They refuse to face a victim in person, or communicate verbally, on a forever departure. They conjure up lame-ass, re-hashed excuses through e-mail or other electronic channels. This query is your most insanity-driven dive into the Duster psyche. Stay strong. You’re going in deep.

Break-ups aren’t perfect. You’re not looking for clean, neat separations. You’re seeking to identify respect for a former partner in the throes of a heartbreaking life episode.

Dusters hold below-zero respect for people who love them, especially at goodbye time.

Remember, this is their heart, a life code: They want to slap-clap you off their tails. Like they would from their jeans after a long journey on a dirty mud-cut of ground.

Tell me about something, an incident, you’re sorry about. My personal favorite. You know why? Because Dusters are rarely sorry. About anything! After all, it’s never them. Be sensitive to a consistent string of “remorse code.”

Let me explain.

Remorse codes are strings of negative roads well traveled.The same circle patterns of mistakes. Ghost-like breakups, busted engagements, cheating. Could be they’re tough heartfelt lessons. Perhaps your Duster has vowed never to do this to you. Or maybe you’re delusional and the next stop on the heartbreak express.

Have you fooled yourself, convinced yourself that it’ll be different with you?

Question: Are you up for the risk?

Are you willing to take the chance?

Well, if you do.

Then:

_ _ . _ _ _ _.. … ._ _. . . _ ..

(Morse Code for Godspeed).

morse code

It’s not Morse Code, it’s Remorse Code. Silly.

Dusters feel guilt but it’s merely an odd form of self-flagellation. A seemingly strange internal coping mechanism. A futile effort to connect with what’s shoe-string left of their humanity (who am I kidding?). There’s a peculiar sadness that arises their victims move on. Re-hydrate.

The ones who escape really irritate them. So much so they can’t visit the ground zeroes, the towns, where these survivors survive.  They feel something odd – REMORSE. Well, only because the ones left behind made it through the pain parlor. Their happiness, their recovery is Kryptonite.

Go figure.

Dust storm #3: Dusters will lament to you about the love or friend who got away. How they’ve mourned. How bad they feel. Really? They don’t. Take it as a warning. A brief wet spot they sit in with us three-dimensional mortals. It’s a worm hole you must crawl through. Listen. Discover. Run!

Dusters relish the stories they create. With disparate mental fragments of dark plot-lines, they form a sick square-fits-in-a-hole puzzle designed to validate an exit strategy, a distrust, even a hatred of their prey.

Dusters believe all people are bad so they must strike.

Destroy them first. Always.

Dusters are narcissists who frolic with sharp blades yet never cut themselves. They are expert slicers, compart-mentalists, molders.  They’ll work diligently to galvanize fellow Dusters against you to protect their personal lack of accountability and courage.

I tested this theory recently. I placed my head on the chopping block. It’s in the bloody basket. Rotting. It turned out exactly as I figured it would.

They are steadfast cowards at intimate human interaction, connection, above all else.

basketcase

Great movie from the 1980s: Basket Case.

It’s personally rewarding to discover people who are so damn good at Duster detection and deft at avoiding attacks from Dusters and their fuck-flunkies (not a dance move from the 1970s, or is it?).

I unfortunately, am not one of those special people, proficient in these skills.

Dusters will push, twist you into a different person. A human you’ll no longer recognize. The ultimate betrayal, the way they depart, the manner in which they leave frayed ends dangling like bloody entrails on a clothesline at a zombie laundry party, will drive you insane, out of your own skull.

You won’t recognize yourself. Your pets will avoid you. You smell different.

It’ll take time to return to the light, the living, the waters. The clear. The still.

Like a storm on the plains they’ll lift, carry, then drop you like a rag doll.

One day it’ll happen, you’ll look up. You’ll stop dragging what’s left of yourself across a gravel road and start all over.

You’ll be boarding the life train again. Sniff the spice off a summer breeze.

The light of day will no longer feel like night.

Oh, you’ve been there.

Sometimes it feels like exposed nerves are rubbing against broken and infected parts of my heart.

I wish Johnny Cash were still alive.

I would have loved to share my dust theory with him.

Would my thoughts be set to lyrical magic?

How would he take the words. Improve them?

Hmm, maybe this?

Dusters.

In this world.

As a new day bursts blue. Clear-on-clear.

They have their smoke eye on you.

For now.

I’ll wish you good thoughts.

I’ve walked there. I fear the footfalls.

And when the time arrives for you to be a target.

Or no longer play with the player.

Perhaps you’ll remember my words.

Heed the warnings.

Consider and respect my ongoing torment.

And dust the Dusters at their own dirty game.

I’m on your side.

Breathe in deep.

As deep can be.

Hold.

Release.

Walk.

Now you’re steady.

Prepared.

Thriving.

Dust free.

And a connect with the universe again.

Where it’s cool and clean.

And calm again.

dust free

*****************************************************************

Sidebar: The Dusters know who they are. They know this post is about them, don’t they?

They’re reading right now. In denial. Ready to strike. 

Listen. Learn:

Lucinda Williams’ Dust.

Writing is part of my healing process . A closure activity.

I hope ya’ll enjoyed this lil’ ditty.

Dedicated to my very clever friend – Tami Denny. 

Five Lessons from an Urban Supermarket.

Random Thoughts of a Money Muse

Damn you Google Maps, Google Earth, Google Detectives: Damn you all to hell!

heston damn you

The first/best “DAMN YOU ALL TO HELL!” ever. The original “Planet of the Apes.” I believe Hollywood has had the balls to remake this film like three times. 

Eckhart Tolle, known as the “father of inner peace” should be arch nemesis of this Google invasion of privacy, but I’m thinking he’s way too self-actualized to even sweat the effort. I can hear him – “who needs this Google you speak of?”

To arrest a mind troubled by the lambasting of ego, an individual must seize the now, the present. Today. This moment.

I’m sorry ET – I’m a work in progress. Always evolving. BUT THAT DAMN GOOGLE.

Tolle ego

Allows me, so easily, to scope out the physical landmarks from my history. It tempts me to unlock doors I prefer remain closed. Behind that granite-like barrier in my mind…

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Rules To Live & Die By: Life, Money & Otherwise.

Aside

I appreciate rules.

Rules derived from the heart and mind have saved me.

Rules, forged from experience, can safeguard precious resources – financial and otherwise.

They will protect you from losing your pants.

just got naked

Naked rules are best.

Pure, simple, raw.

Here are mine.

What are yours?

 

Random Thoughts:

Part I: Life Rules.

my life my rules

 

If a woman can’t listen to the Eagles’song Lyin’ Eyes without wincing, or quickly changes the station, run.

Beware of people who carry a stash of ’emergency’ condoms (indeed run, but feel free to have sex first).

You can’t wipe your ass enough (especially men – we’re the worst). When you believe it’s all clear in the deep, take another swipe. Just to be safe.

Never trust a person who rarely uses turn signals.

Be cautious of those who judge based on past mistakes when they’ve made the same ones or worse.

Don’t step back without looking (there’s a dog there, especially in the kitchen).

Never let open wine go to waste. Never. (Did I say never?).

Distrustful people are black pitch through the soul. Avoid them.

Be wary of those who can’t maintain close long-term relationships of any kind.

When I ignore rules I create, bad things happen.

Misjudgments remain with me. I see injury in the mirror every day. I lose a spark that will most likely, never return. Perhaps it’s part of a natural process, like aging.

Living without a personal guide book can hurt you.

Along with Clarity’s Chief Market Strategist Lance Roberts, we’ve created rules to help you protect and understand the key drivers of your wealth.

Remember – For every beginning there is an end. Investments have a shelf life. Eventually you’ll need to liquidate them to fulfill a financial goal, create a paycheck in retirement, gift to loved ones. Whatever. Money is to be spent, enjoyed.

Not hoarded.

And yes, you can indeed sell investments to protect capital.

Huh? What?

Sell: The scariest 4-letter word on Wall Street.  Just the mention of it and you’re branded a loon. Leprotic, running amok and licking the neighborhood children.

Part II: Investment Rules:

Cut losers short. Let winners run. Underperforming positions are reduced or removed from portfolios on rallies.

Set financial life benchmarks and take action. Every position purchased has a sell target. Investments without goals are arbitrary, which increases portfolio risk.

Emotional biases are not part of the investment management process.

Follow the trend. 80% of portfolio performance is determined by the underlying trend.

And the current trend is south. 

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When markets break their long-term bullish trend supports combined with important long-term sell signals and a sharp decline in momentum, it has historically denoted the start of a “bear market trend.” The red highlight denotes the start of the bear market. The yellow highlight shows the ensuing bear market completion.

Never let a profit turn into a “loss.”

Investment discipline is successful if consistently followed.

Losses are part of the investment process. Losing positions are regularly culled to reduce portfolio risk and free up capital for better investment selections. However, you can’t completely avoid losses. Sorry. If that’s the case you’re better off in certificates of deposit. You can minimize but not eliminate. You play, you pay.

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As fiduciaries of OTHER PEOPLE’S money, the biggest concern is not how much money we make during market advances, but rather how much we keep from losing during market declines.

While this seems counter-intuitive, in reality it is where long-term gains are generated. As William Lippman, CEO of Investment Management at Franklin Templeton quipped:

“Better to preserve capital on the downside rather than outperform on the upside”

A strict discipline of portfolio risk management will NOT eliminate all losses in portfolios. However, it will minimize the capital destruction to a level that can be dealt with logically, rather than emotionally.

This isn’t market timing, people. That doesn’t work. ‘All-or-none’ is a losing strategy. Never go all cash. From a management standpoint, this is a bad idea. Trying to “time the market” is impossible over the long-term and leads to very poor emotionally based decision making.

The objective is to reduce portfolio risk to manageable levels to preserve capital over time. We can do that by increasing and reducing our exposure to equity-related risk by paying attention to the price trends of the market.Odds of success greatly improve when the fundamentals are confirmed by the technical indicators (see? Another rule).

Don’t add to a losing position. This is called “averaging down” and rarely is it effective. How many investors are caught in the energy sector value trap? Or treated master limited partnerships ‘safe’ as fixed instruments?

The slide has been ugly and getting uglier.

XLE-011516

Don’t be a hero. Buying energy or “averaging down” at this juncture will most likely be hazardous to your wealth.

Markets are “bullish” or “bearish.” Remain neutral or long in bull markets. In bear markets be neutral and increase cash.

When markets or portfolio positions are trading at extreme deviations from long term trends, do the opposite of “the herd.”

If you haven’t trimmed positions yet –Wait for an opportune time. Most likely, a  market bounce is coming. Trim your weakest holdings into strength especially if your gut is in turmoil or you’re 5 years or closer to retirement.

A goal of portfolio management is to achieve a 70% success rate. No process is perfect. Consistency wins the long game.

Manage risk and volatility, not returns. Also, manage emotions. Humans are not wired to invest. Knee-jerk reactions, overconfidence, seeing trends that don’t exist will only destroy portfolio returns.

Never discount the importance of financial planning. The investment process is an element of a financial plan. An important one. However, it’s not the full story. It’s the sexiest chapter, I know.

There’s more to consider.

So we created.

Part III: Clarity’s Financial Planning Rules.

Take a holistic approach. Proper planning integrates all assets, liabilities and sources of income for a complete perspective.

Money is fungible. For planning to be effective, remove the mental boundaries around the dollars you earn and save so they may be allocated to their highest and best use.

Don’t discount Social Security strategies. Take steps to maximize earned benefits. Coordinate Social Security withdrawals with those of other accounts to minimize the impact of taxes.

Healthcare costs including Medicare, and senior housing options must be included in the planning process.

Successful plans are grounded in financial self-awareness which includes prioritizing needs and wants.

Conversations with loved ones and friends about aspects of your financial plan are important. Make sure your estate, gifting and future housing intentions are clearly communicated.

Don’t Get Fooled By Averages. The financial markets do not return 8% a year. A realistic financial plan includes variability in returns, including losses, over time.

Accountability Matters. A financial plan not followed is not a financial plan at all. Long term financial goals need to be broken down into monthly objectives and you and your adviser are accountable in meeting those objectives. (It is easier to consider a savings goal of $500/month versus $6000/yr.) Mental trickery works. Milestones broken down to millstones will convince your brain to take action. Move forward.

Rules.

Boundaries.

They work.

Follow them.

Survive.

With less wear on your face.

Less dark circles under the eyes.

You’ll preserve joy in your heart.

Stamina.

Will be yours.

And you’ll live to play another day.

For a glossy (fancy) copy of our investment and planning rules email me at RichardRosso@myclarityfinancial.com.

Charts by Lance Roberts. Sign up for his weekly market/economic newsletter at http://www.realinvestmentadvice.com.

10 Resolutions in ’16: Simple Steps to Your Financial Best.

Most likely money is at the top of your resolution list – Whether it’s to increase savings, pay down debts, find a new job, purchase a house or auto, financial aspirations abound in January.

Resolutions start strong. Unfortunately, as the novelty of a new year fades, so does motivation to stick to a list.

happy new year vintage

What if I told you that financial goals don’t need to be onerous to make an impact to your bottom line.

Millstones, as I call them, lead to milestones. You’ll be empowered, less frustrated if you keep your financial improvement list simple.

Here are ten ideas to consider for 2016.

Finally ditch the brick and mortar bank. An unusual event occurred after the Federal Reserve raised short-term interest rates by a quarter-point after seven years of holding steadfast to a zero interest rate policy. Several banks were quick to increase lending rates to creditworthy customers but kept deposit rates unchanged.

Historically, deposit rates on savings accounts, certificates of deposit, and money markets tend to correlate with changes in federal funds rates. Not this time. Savers lose again. In 2016 take a stand. Transfer your emergency cash or savings to a virtual bank. Online banks are FDIC-insured and with less overhead costs, offer attractive yields compared to a bank with physical bank locations. Several offer ATM fee rebates, too. Check out Nerdwallet’s list of top high-yield online savings accounts.

Keep an eye out for yet another refinancing opportunity. I know – Most financial ‘pundits’ are claiming higher interest rates in 2016. I see a sluggish economy ahead. Since mortgage rates are driven by demand and moves in the ten-year Treasury rate, don’t be surprised if 2016 provides another chance to refinance your home mortgage. A decision to refinance should be based on additional monthly savings and how long it will take to breakeven after closing costs. An easy-to-use refinancing calculator is available at www.zillow.com.

Initiate a balance transfer. According to Nerdwallet, the average American household carries $15,355 in credit card debt. Be proactive in 2016 and move your high-interest debt to a balance transfer credit card. If your household credit card balances are $5,000 or greater, consider reducing retirement contributions to the company match and direct additional cash to paying off credit card debt.

Use smartphone applications to save on purchases and track spending. Make technology your financial partner in 2016. Use the Mint app to track financial activity, Shopkick to browse products and find deals at major retailers. Download Ibotta, an Android and IPhone app that allows users to unlock rebates to earn cash on purchases.  

Buy off-season. Maintain an ‘off-kilter’ sense of finance. Purchase holiday décor and greeting cards after the respective season. Think Christmas cards in January. Shop for real estate during winter, summer items in the fall, and so on. Thepeacefulmom.com has thoroughly researched and lists by month the best times to buy everything.

Do a better job protecting your identity. Avoid public Wi-Fi to access secure information or shop, password protect your electronic devices and check your credit card statements monthly for suspicious activity. Place a freeze on your credit files with the three major credit bureaus. Before applying for credit a freeze can be removed easily using a password or PIN. There may fees to initiate security freezes. However, costs are nominal ($5-$10) and worth it to protect against identity theft. The Federal Trade Commission offers a FAQ  page to make it easier to understand how credit freezes work.

Check your credit report. Every January make it a habit to check your credit report for free at www.annualcreditreport.com. Examine your report closely for discrepancies and rectify promptly with the credit reporting agencies. The Consumer Financial Protection Bureau outlines common credit report errors to identify.

Curb your impulses. Make 2016 the year of the wait. Before a purchase of greater than $50, delay for 7 days. If you still want the item or service after the wait period, move forward. Holding off will reduce impulse spending and allow you to think before spending. Seven days has been an effective time frame from my experiences with people I counsel. If super-ambitious, wait 14 days. If you can’t wait days, at least give the decision 24 hours.

Purchase a shredder. Simple identify theft solutions remain effective. Shredding documents should be an ongoing exercise. Shredders are inexpensive. Invest in a micro-cut shredder for maximum security protection. I’m shocked by the number of times I’m told that shredding seems unnecessary. Throwing intact personal documents, bills, statements in the trash is asking for trouble.

Develop a money principle. Dig deep. Early in the year is a great opportunity to develop or fine-tune a money philosophy. Keep your thoughts short. Make them passionate. Consider how money fits positively in your life and what you can do to reach goals, control spending, reduce debts or earn a higher income this year.

Financial resolutions are strongest when simple. Consider these 10 small steps to financial enrichment and live a fiscally healthy new year.

 

 

Spend Your Way To Happiness: Five Ways To Do It.

Random Thoughts of a Money Muse

I read 75 books a year.

Thank god for Kindle where I can highlight and store notes.

Don’t hate me.

It’s an illness. The thirst is quenched temporarily and it drowns me too.

I’m a slave to words. They own me.

Like good food or great conversation.

Sharing sparks with others; absorbing energy from people smarter and passionate than me.

I can’t get enough of the moments.

I’m nourished and starved at the same time.

book crazy

Associate professors Elizabeth Dunn and Michael Noonan who wrote the book “Happy Money: The Science of Smarter Spending,” outline research which shows how money can do a better job of buying happiness – if you spend it right.

This book sticks with me.

Can you get a bigger bang for your happiness buck?

print your own

I think so.

How?

Random Thoughts:

1). Buy experiences. Research shows that spending on experiences edges out purchasing stuff as experiences…

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Doors you Open. Doors you Close – Four Ways to Know the Dangers.

Random Thoughts of a Money Muse

At 4:45am. Every day. Even Sundays. She smelled like cherries. Sourced from somewhere. Her hair. Her skin. Her moving silhouette near a window, a small lamp reflecting on a sheer, white nightgown. I can see from the doorway. I can feel her spirit.

Not real cherries. Well, they were from nature. Once. Before the sulfur dioxide and calcium chloride polluted them. Transformed them into a syrupy, cherry-like Frankenstein concoction called Maraschino. That was the scent I detected. It hung heavy in the hall. In the mornings. Every morning. Seventh floor of a majestic, tall apartment complex.Ocean Parkway. Brooklyn. 1975.

Maraschino Sexy

I exited the elevator below her. Always. Floor 6. Nerves. Excitement. Fright. Anticipation – Mrs. Antolini’s donut breakfast. Strategically tucked. In a corner. Where the welcome mat joined the bottom of the front door. A brown paper bag. Inside a glazed beauty – carefully (lovingly) wrapped in wax paper. Precious…

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