Monday, January 9, 2017

I WasThinking

As we move more and more into a cashless society, it dawned on me how much more effort we need to spend to make sure our transactions are correct and safe. There are many benefits to being cashless; I hate carrying change around in my pocket. I also don’t worry as much about losing money or leaving my wallet in a cab. Being cashless forces me to check my banking and credit cards balances more often too. One upside to checking my balances is that it is easier to monitor and budget my spending habits. Most bank and credit cards have tools to help you track your spending.

Clients ask all the time, “How can I teach my children better spending habits?” For starters they should be logging into the banking app and making sure all of their debits and credits are correct. Money is moving back and forth between Venmo and debit cards so quickly, they better be checking their balances. Let them know that if something isn’t right, they should contact their bank immediately. Same holds true for credit cards.

Recently I read two great articles that I want to share. You may have read about France’s new law allowing workers to disconnect from the internet when not working. Say what you want about the French, but this makes a lot of sense in a world that doesn’t let us take a deep breath and pause.

Charles F. Feeney is a very wealthy man, and you probably have never heard of him. He has spent years giving away most of his money (billions) anonymously and without fanfare.

If you haven’t seen the documentary Supermensch: The Legend of Shep Gordon on Netflix, watch it immediately. Shep’s story, of a life committed to paying it forward, is truly legendary.

Tuesday, November 15, 2016

Taking Care of Our Elders

Recently at my brokers/dealers national conference, I attended a seminar on protecting seniors from financial fraud. The elderly are victims of thousands of schemes each year, with billions of dollars being stolen from them.
The seminar started off with a gut-wrenching story from our general counsel, whose parents were scammed out of $4,500 from a late-night caller pretending to be a bond bailsman telling them that their grandson had been in an accident and to release him from custody they needed to wire money immediately. The caller even went on to tell this elderly couple not to call the boy’s parents because he didn’t want them to know. As crazy as this may sound, schemes like this, which prey on the elderly, are taking place every day. 
As we age or watch our parents and grandparents age, the threat of financial exploitation grows exponentially; at the same time, aging increases the possibility of cognitive decline.
AARP published a very good piece that addresses some red flags to watch out for. If you, a friend, or a trusted caregiver recognizes these signs, please proceed with heightened awareness and take action or seek help.

Social Red Flags
  • Your loved one or friend informs you they have a new, particularly close friend or “sweetheart” and /or they move away from existing relationships toward new associates.
  • The person is being isolated by family or a caregiver as a result of life changes. 
  • He or she appears or sounds like they are being “coached” by another individual.
  • The person has an overly trusting personality or a temperament susceptible to manipulation.

Physical Red Flags
  • Your friend or loved one indicates that items are missing from their home.
  • He or she demonstrates a lack of responsiveness or inability to follow through with a decision.
  • He or she repeatedly calls seeking the same information.
  • He or she requests frequent password/username resets.
  • He or she has a disheveled appearance or poor hygiene.

Behavioral Red Flags
  1. Your friend or loved one has become fearful, distrustful, and withdrawn.
  2. He or she has memory lapses and confusion over accounts.
  3. The person exhibits changes in their normal routine.
  4. He or she has mood swings.

Proceed with caution, there may be abuse.
  • Does this person have a family member or others who are financially dependent on him or her who are taking an excessive interest in their finances?
  • Is the person reluctant to discuss personal financial matters that were previously a matter of standard practice?
  • Has your friend or loved one been denied access to their account statements or funds by someone?
  • Has he or she had an unexpected address change on their accounts?
  • Are there atypical or unexplained withdrawals, wire transfers, debit transactions, or other changes in this person’s financial habits?
  • Has your friend or loved one abruptly changed their will, trust, power of attorney, or beneficiaries of their accounts?

Having an open and fluid dialogue with your parents and/or grandparents about their finances will help you stay informed and hopefully pick up on things out of the norm. Keep a copy of their will, trusts, and power of attorney. Discuss with them scams that are going on, whether it is the lottery or a call from the IRS. The IRS does not call you. The best suggestion is for them to hang up on these calls and call you immediately.

Thursday, June 2, 2016

Summer Brew

Well, Memorial Day has come and gone, meaning that summer is officially here. The U.S. stock market has inched up very modestly year to date, while interest rates on U.S. bonds have crept modestly lower. After January’s stock market sell-off, global markets have stabilized. And the U.S. Federal Reserve has signaled it will probably raise rates later this year. What’s an investor to do? Yawn, head to the beach, the mountains, the golf course, and enjoy the best of summer and its libations.

While warmer weather usually cries out for rosé wine, I have found myself gravitating toward fruit-infused beer. Yes, fruit-infused beer! Don’t get me wrong—I have been enjoying a nice dry rosé from California, Vin Gris de Cigare from Bonny Doon Vineyard, but to really quench your thirst, try one of these beers.

Many moons ago, Blue Moon, the not-so-crafty craft beer, owned by Coors Brewing, introduced us to Belgian-style wheat beer. Wheat beers can be brewed with herbs, spices, and fruit and tend to be lighter in alcohol content. Blue Moon gained popularity because it was served on tap with a slice of orange. The beer is brewed with Valencia oranges, and the orange slice on top really opens up the flavor and makes it easy to drink.

This past weekend I did a lot of yard work, the type of backbreaking labor where you build up quite a thirst. A heavy beer like an IPA or ale won’t suffice when you are looking to put out the fire in your throat. You want something that is cold, bubbly, alcoholic, and a little bit fruity. My favorite of all the fruit beers is Shiner Ruby Redbird. Brewed by Shiner Brewery in Texas, this beer combines the tartness of ruby red grapefruit and a kick of ginger, perfect for a hot day or hot night sitting around the fire pit. This beer is easy to quaff, and the alcoholic content is a low 4%. I also really enjoyed IPA Citradelic from New Belgium Brewery in Colorado. This IPA is brewed with tangerine peels that cut down on the bitterness of the hops. While you can taste the tangerine, it is not sweet or overpowering.

Two other fruit beers that I have also enjoyed are Grapefruit Sculpin from Ballast Point Brewing in California and Magic Hat #9 from Magic Hat Brewing in Vermont. While hard (alcoholic) cider is not beer, I have been enjoying them as well recently. Prior to my life as an investment advisor, I imported wine and hard cider from France. I must have been ahead of my time because 17 years ago no one was interested in alcoholic cider; today it is one of the fastest-growing beverages in the country. My favorite, Nine Pin Cider, comes from Albany, NY. All of the apples are sourced from the Albany region and Hudson Valley. Nine Pin Cider Works’s signature cider, also available in cans, is well balanced between sweet and tart while still being dry. Cider is the perfect beverage with smoked ribs or grilled sausage. If you come across any other fruit beers or hard ciders you enjoy this summer, please pass along. I am always up to try something new!

Enjoy the summer, relax, and have some fun. With the presidential elections on the horizon this fall, it looks like we could be in for nasty weather!

Thursday, May 19, 2016

Lacing Them Up Again

Willis Reed: Phil Jackson is

When I first started writing a blog several years ago, fellow bloggers warned me about burnout. As someone who has the attention span of a hummingbird, I am guilty of being susceptible to burnout. I felt repetitive in my message, and so blogging was moved to the back burner.

Well, I’m back and giving it the old college try once again. The fans have asked for more, so I am lacing up the Chuck Taylors and making my way back to the court à la Willis Reed.

My financial message has been clear from the get-go: keep it simple, ignore what Wall Street and the financial talking heads are saying, keep your costs down, diversify, save as much as you can, and live your life. That message ain’t changing!

I recently went to see the new George Clooney movie Money Monster and thought it was pretty good. Is Clooney ever not good? The movie was a little bit dated, post financial crisis, but still relevant. It's about an angry investor who shows up on the set of a financial news show and takes it over. I am still amazed when I go into a bar or restaurant and they have CNBC on in the back ground. I can’t remember the last time I heard someone say, “Did you hear what stock Cramer was talking about last night?” In that respect the world of investing has changed.

When I think back to my days at Smith Barney and Bear Stearns, it was a different era. Thousand-dollar suits, suspenders, Gucci loafers, and slicked-back hair. The message of an advisor wasn’t important. What was important was: can you sell, and what stock are you pitching today? At the Smith Barney training program we didn’t discuss retirement planning, social security, and tax strategies. It was, “Pitch me a stock, and convince me to buy Lucent in 60 seconds.” What a disservice to all of us.

There are still many dishonest salespeople out there who disguise themselves as advisors, but for the most part this industry has changed for the better. It is a rare occurrence when a client calls up to buy an individual stock. Technology has made investing better and easier. We can build diversified portfolios using ETF’s and index funds and rebalance with one click on the computer.

My concern after seeing Money Monster was that the general public would be concerned that the stock market was still rigged or fixed. It is, but for those who don’t trade often or pay no attention to the Cramers of the world, it doesn’t matter. The market gives you what the market gives, and as long as you still have faith in capitalism and free markets, you can safely assume that companies will be doing all they can to grow their earnings and move the price of their stock upward.

Hard to believe that Memorial Day is upon us. If you live here in the Northeast, it still feels like winter. Like the stock market, the weather can be unpredictable, but I sure hope it starts to warm up quickly!

Friday, March 18, 2016

On Being A Better Client

The relationship between investment advisor and client has changed tremendously since I rejoined the business in 1999. Back in the day, we were called “stockbrokers” or “financial consultants.” Today it’s “wealth manager” or “wealth advisor.” While sometimes I have a problem with the term wealth manager—it sounds so highbrow—this is in fact the direction the business has moved. Gone are the days of recommending stocks and bonds. The bigger picture today is about planning and advice, truly understanding your clients’ goals, dreams, and fears about money. Conversations revolve around questions like “How much will I be able to draw down on each year when I retire?” and “How much do I need to save for college?” Clients want to know what kind of insurance they need instead of whether it’s better to own stock in Coke versus Pepsi.

A few weeks ago I wanted to review my will—I couldn’t remember whom I had appointed as executor. I also couldn’t remember where I had filed a copy! After tearing about my file cabinet, I remembered that I had downloaded a copy of our will onto the online vault with Commonwealth, where I keep my investment accounts. After a few clicks, I was able to read a digital copy and have my question answered.

This got me thinking . . . what if all of my clients did this? What if I urged them to take advantage of the tools that are available when working with an advisor? How can you truly work with a wealth advisor if you don’t have your whole financial picture? Would you go to the doctor for a checkup and not tell the doctor that your chest hurts when you breathe or your hip is constantly sore?

If I were a client of a wealth advisor, these are the things I would want to know and do.

1.       Store all important documents—wills, trust, insurance policies—in the company’s electronic vault. Then, when I need them, I know where they are and can read them easily. (Make sure you understand the company’s data security policy.)
2.       Make sure my advisor knows about my life insurance policies—the face value, carrier, and policy number.
3.       Store a copy of my power of attorney and health care proxy. (If you don’t have them, get them.)
4.       Share my life plan or goals. What am I saving and investing for—to retire early, arrange to leave money to charity, because I am concerned about how my kids will live?
5.       How much am I paying for services, and how am I paying? In some cases advisory fees are tax-deductible.
6.       Run a retirement income projection to see how much money I can live on after I stop working.
7.       Embrace technology by signing up for electronic delivery for all statements, confirmations, tax documents, and prospectuses. Aggregate all outside accounts, such as my 401(k), so I can see my financial picture in one place.
8.       Introduce my older children to my advisor. They can learn about savings and setting up retirement accounts and discuss how much to defer into their 401(k) at work. (If they have children, consult with your advisor about a 529 plan.)

Today’s advisor is more than an investment manager. It’s worth taking advantage of both the technology and, more important, the human touch in your relationship.

Friday, January 22, 2016

Making Lemonade from Lemons

January has not been very kind to global stock market investors. As of January 20, 2016, the S&P 500 is off nearly 10% for the year. By the same token, many had thought that U.S. bond yields would rise, but the yield on 10-year U.S. Treasury Bonds is lower than at the beginning of the year, less than 2%! Not a pretty picture. Which leads us to the question, what should I do?

Volatile markets lead us to look in the mirror and examine our asset allocation, our investments, and our tolerance for short-term pain. We can choose to do nothing, which may be the best thing to do, or take advantage of this sell-off and do something.

A few thoughts about what you can do:

  • 1.       Review your asset allocation plan. Are you comfortable with your stock, bond, and cash allocation? How do you know what is the right asset allocation for you? Legendary investor and founder of Vanguard, John Bogle, says you should allocate the percentage of your portfolio to bonds that matches your age. For example, if you are 50, you should have 50% of your portfolio in bonds. With interest rates as low as they are and many Americans living much longer these days, I don’t think that is the best answer. Your money will have to last longer, and historically, stocks over time offer the best returns for growth, however they also come with risk
  • 2.       If your allocation is not right or doesn’t fit your appetite for risk, REBALANCE. If your bond allocation has grown too large, consider selling some and reinvesting the proceeds in stocks. We have had a nice bounce from the stock market lows of 2008–9. Maybe consider selling some stocks and deploying that money in cash or bonds?
  • 3.       With the stock market being lower, make your IRA contribution sooner. Instead of waiting until April or later in the year, invest your contribution now.
  • 4.       If you have cash sitting on the sidelines, consider investing some now and bringing down the costs on some of your investments. The market rewards those with patience and a long-term perspective.
  • 5.       Sell some of your losers and take the tax loss now versus waiting until later in the year. Capital losses can come in handy to offset capital gains.
  • 6.       My biggest and best suggestion is to tune out the noise. Newspapers and television channels have to sell advertising. The best way to keep you glued to the TV is to scare you. The stock market doesn’t go up every year—it’s not a given. Over time it goes up more than it goes down, and those who ride out volatility are paid for that.

It is easy to panic and make rash, impulsive decisions. Better to empower yourself: consider the suggestions here and remember the wise words of Aristotle: “Patience is bitter, but its fruit is sweet.” 

Thursday, November 19, 2015

Vive la France!

Time to kick it into overdrive—it’s “the holidays.” A lot has been going, and I apologize for the lapse in postings. My bad!

The horrible events in Paris last Friday have certainly upset me, as I’m sure they have disturbed all of us. As a New Yorker, memories of 9/11 flash before my eyes. Those were difficult days. I was so appreciative of the emails and calls from people checking in to see if my family, friends, and other loved ones were safe. It was comforting to know, and feel, how connected we were to each other. For the weeks and months that followed, there was a special bond among New Yorkers. We helped each other; we were kind and giving. We were not going to be defeated and let the evil of cowards change our lives and upset our sense of freedom.

I don’t know anyone who lives in Paris, but as soon as I got to work on Monday, I went into the office of French colleagues who import and distribute tea from France. I asked if their family and friends were safe. Thankfully, everyone was accounted for. They were hurting, but I could tell that checking in with them had brought some comfort.

Before I was an investment advisor, I imported wine, mostly from France. It was wonderful to travel there a few times a year. The wine that I imported was from the Jura region, which borders Switzerland. The company that owned the property was based in Alsace, but I would travel to Paris and Bordeaux and throughout the Burgundy region.

I never ate and drank so well in my life. The French are passionate about their food and wine, and I took it all in. Lunches always lasted at least an hour, usually accompanied by a bottle of wine. Dinners ended with an amazing array of cheeses that still permeate the inside of my nose.
Americans like to joke about the French, as the French like to joke about Americans. At the end of the day they are weak generalizations that don’t capture the essence about what we, as people and as cultures, are about. Paris is my favorite city in the world. Even this jaded New Yorker can say that Paris is the city that truly never sleeps. Paris is as beautiful as it is energetic and passionate.

It is a sad state of affairs that the world finds itself in, but I am strengthened by, and feel connected with, our brothers and sisters in Paris. In the long run good will triumph over evil, and we will never surrender to terrorists, whose only goal is to provoke fear and angst in us.

This is a terrible transition, but maybe that’s fitting: in support of the greatest wines in the world, I offer up the following French suggestions to accompany your Thanksgiving turkey.

From the Alsace region both the Hugel et Fils Riesling Classic and Pinot Gris Classic. Both are flavorful with fruit but not sugary sweet. The Pinot Gris will be drier, but both are a perfect pair for your bird and sides.

While many wine lovers prefer pinot noir with their turkey, I am stepping it up a bit and recommending a Côte du Rhône. I have been drinking the Clos du Mont Olivet Côtes du Rhône Vielles Vignes of late. It is packed with jammy flavors with a bouquet of mint and fresh earth. (I hate wine descriptions but went with it.)

Please enjoy your holiday with friends and family and appreciate how lucky we are. All the best for a wonderful, safe, and happy holiday season.