Welcome Back To 10,000 … Sort Of

“Tonight we’re going to party like it’s 1999.”


There was much celebrating on Oct. 14, when the Dow Jones Industrial Average closed above 10,000.  It was the first time the Dow reached that mark since October 2008 and it marked great progress from the 6,547 close on March 9, 2009.

Still, as Dorsey Wright & Associates wrote in an analysis, it’s sobering to recognize that the Dow is right where it was 10 years ago.  That’s more than 2,500 days of market openings and closings with a net result of zero growth. read more

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No Recovery For Most Investors

Two factors make reaching the 10,000 milestone for the Dow what Dorsey Wright calls “the quintessential Pyrrhic victory” for many investors around the world.

First, bond funds attracted net deposits of $209.1 billion in the first eight months of 2009, while stock funds drew just $15.2 billion.  For every new dollar moving into equities, $14 was moving into bonds.

This shows that investors who lost money in the collapse of 2008 were moving what was left to the perceived safety of bonds, just as the market bottom materialized.  This is not unusual. read more

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Roth IRAs May Be Antidote To Rising Taxes, Market Losses

Your retirement portfolio hasn’t fully recovered from the recent bear market, the economy is weak and your taxes will soon be going up.  So what can you do about it?


Starting next year, anyone will be able to convert traditional IRAs, including SEP-IRAs and SIMPLE-IRAs, to Roth IRAs.  Currently, conversions are allowed only for individual taxpayers or couples filing jointly with less than $100,000 a year in taxable income.

Those who convert either a portion of their assets or all of them should be aware that converted assets will be taxable as income during the year in which the conversion takes place.  Assets on which taxes have already been paid – i.e., IRA contributions above the allowable limit for deductions – will not be subject to taxation when converted. read more

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The Risk of Doing Nothing

I have a confession to make.

When I first became an investment manager, I followed the “buy and hold” strategy that almost every investment manager in the industry follows.  That strategy served my clients well through the 1990s, as the stock market soared.

In the new millennium, though, as the market turned down, I couldn’t understand why my colleagues were advising their clients to sit tight.  There were plenty of warning signs leading up to the crash that began in September 2000.  Yet the firm I worked for was telling their clients to “buy and hold.”  read more

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Knowing When To Sell

“Investors spend most of their time deciding what stock to buy. They spend little if any time thinking about when and under what circumstances their stock should be sold. This is a serious mistake.”

William O’Neil, founder of Investor’s Business Daily

Whether you’re investing for yourself or for clients, knowing when to sell is as important as knowing when to buy.

Today’s market is an ideal example of why this is so.  Many investors feel like they are reliving the stock market decline that took place from the spring of 2000 through 2002, when investment portfolios declined by an average of 40 percent or more. read more

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Why Diversification Matters

Diversification is a term most investors understand as “Don’t put all your eggs in one basket.” While that phrase captures the essence of what not to do with your investments, it helps to understand why this is sage advice.

Let’s consider a portfolio comprising U.S. large-cap, mid-cap, and small-cap stocks. While most individual investors would consider this a diversified portfolio, it’s not. That’s because it’s vulnerable to various sources of risk that could lead to a less-than-desirable rate of return. read more

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Trustee vs. Co-Trustee

Today I received a phone call from a dear and close friend about her eighty something year old father. She was vacationing with him and the topic of his trust came up.

He mentioned to her upon his death a very well known bank would serve as trustee. My friend was taken back by the idea of some stranger taking on the role of corporate trustee and making decisions for her and her family members.

I thought about her comments and put myself in her position. I personally would not want an impersonal bank serving as trustee for my family’s fortune. Immediately I think of a stranger as uncaring and mean-spirited especially if they are making decisions on my behalf and not granting my request. Who’s side are they on and why would I trust them? read more

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Nine Common Investing Mistakes

Individual investors often jump into the investing arena without having a financial plan in place. The risk? Committing common investing mistakes that end up lowering overall returns. Avoid the mistakes below and you’ll be equipped to make better investment decisions.

Mistake #1: No Investment Plan. You’ve heard it before; “If you don’t know where you’re going, how will you ever get there?” Don’t feel bad if you don’t have an investment plan. You’re not alone. Many professionals do not have a formal investment plan; even investment professionals managing money for others! read more

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Financial Advisors: Making Sense of All of Your Options

As you seek help with your investment decisions, it’s useful to understand the different types of financial professionals and how each can help you achieve your various financials goals.

Are you confused by the variety of professionals who call themselves experts at managing money? Does your head spin when you hear the following terms tossed about: certified financial planner (CFP), stockbroker, money manager, investment advisor, and financial consultant?

While many of the names overlap in one way or another, with an understanding of each professional’s role you can quickly decide which is appropriate for your situation without sitting through endless meetings. In this article, I’ll help you understand the roles of CFPs, stockbrokers, and money managers. read more

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Women and Investments

What issue do you think women worry about most? You might guess spending quality time with the family, time management, health, reducing stress, or maybe the environment?  While this is from the pre-9/11 era, is still interesting to consider the March 2000 gallop poll shows the top answer was their finances. This response may surprise you now, but consider the following list of financial issues unique to women (results from a women-and-money incubator, and research by William L. Anthes and Bruce W. Most):  read more

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