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.


Thursday, October 29, 2015

To Give and Not Accumulate

I resolved to stop accumulating and begin the infinitely more serious
and difficult task of wise distribution.
Andrew Carnegie

As we move closer to year’s end, my thoughts as a financial advisor tend to drift toward taxes and how I can save clients money on their tax bills come next April. There are two significant ways to save on taxes. The first is to sell the securities that are negative in your portfolio and realize the loss. The second is to make charitable contributions for a tax deduction. There are several factors that dictate how much you can deduct in a given year, but I am not going to get into those specifics here.
What I would like to discuss is giving and charitable consciousness. Chances are if you are reading this blog, you are in a better place than many others. You have a warm place to sleep, food in your refrigerator, and clean clothes to wear. Hopefully, there are not gunshots being fired nearby, and you are free to practice your faith, politics, or sexual preference as you wish.
This presidential election will probably be the ugliest and meanest one in U.S. history. Buckle in, or tune out now! Our country is divided between those who want to protect the wealth and privilege of a few and those who believe in a fair and decent country in which everyone has the chance to be happy and successful. Let’s all take the high road here and agree that if we all succeed, we are stronger as a nation.
Money can be great. It’s fun to buy new clothes, eat a great meal, or take a fantastic vacation. Money can buy freedom, but it doesn’t buy happiness.
So, as we head into the holiday season and begin assembling lists of gifts for Christmas or Chanukah, let’s check that list twice. While giving is great and watching a smile erupt on a child’s face is priceless, why not consider checking your privilege this year and pledge to stop accumulating more stuff.

Personally, doing this won’t be easy, but I am going to try. Whatever the net savings, what we would have bought versus what we did buy, I will give to charity. Are you with me? 

Monday, October 26, 2015

401(k) for the Youth

This week I had the pleasure of doing a 401(k) educational meeting for a client. Once a year I like to meet with the company’s employees, go through the plan, discuss the funds, and answer questions about savings and retirement.

If you read my blog with any regularity, you know the idea or the concept of retirement is a pet peeve of mine.  The media markets retirement as if it were Fantasy Island. Retirement is just another word for not working and how am I going to fund my life at that point. But it’s not a game.

The company that I visited has a lot of young and enthusiastic employees. Most of them are enrolled in the 401(k) plan. Unfortunately, not everyone is deferring a portion of income into the plan; most are not deferring enough.

Here is my list of to-dos for your 401(k) plan. Parents, feel free to share it with your working children.

·         Participate, participate, and participate.

·         Try to defer at least 10% of your salary, with a goal of reaching 15%.

·         Defer enough to max out on a company match if it is available. It’s FREE money!

·         Sign up for auto-escalate so you are automatically increasing the amount you are contributing to your savings. If you get a raise, give yourself a raise in how much more you will save.

·         If your plan doesn’t offer target date funds, demand that it does.

·         If your plan doesn’t offer low-cost index funds, demand that it does.

·         Diversify between stocks and bonds. If you are young, you can defer more to stocks than bonds. If you are risk adverse, talk to the advisor for your plan about an appropriate asset allocation.

·         The world is a big place, and half of the world’s companies are outside of the United States. Have some international exposure to your portfolio.

·         If you are concerned about how your money is invested and what kind of companies you are invested in, ask your employer about socially responsible funds.

·         Your 401(k) is portable: if you leave your company, you can roll your account into your new employer’s 401(k) or into an IRA account. You can also leave it in your employers 401(k). I would discuss with an advisor the benefit or drawback of doing so.

·         If you are older than 50, you can put up to $24,000 annually into your 401(k) account.

·         It’s important to check your account balance at least twice a year. Make sure you have your log-in credentials.

·         Don’t look at your account every day; focus on the long term, not the day to day.

·         Pick a day to rebalance your account once a year; your birthday is a good reminder.

Tuesday, September 29, 2015

Guess Who's Back

Volatility in the stock market is back. You could hang your hat on a number of reasons why: the slowing Chinese economy, interest rates potentially rising in the United States, Volkswagen lying about its emissions testing, or an “overvalued” stock market. There will always—I repeat, always—be risk in investing in the stock market.

Since 1970, the S&P 500 has returned about 10% a year on an annualized basis. This doesn’t happen every day—if it did, everyone would put their money in the S&P 500 index fund and go to the beach. Some years the market is up 20% or 7%, and some years it’s down 10% or even worse, 30%. That is the nature of the stock market. It goes up, and it goes down. Fortunately, it has gone up in more years than it has gone down. We have had some very bad markets over the last 15 years; there was the tech bubble in 2000, the financial crisis in 2008, the “flash crash” in 2010, and a war of words that almost shut down the U.S. government in 2013.

Despite all of these events, the Russell 1000 index (the index of the 1000 largest market cap stocks in the United States) as of September 23, 2015, is up 12.62% over the past 3 years, 14.07% over the last 5 years, and 7.22% over the last 10 years.*

There is no guarantee that these results will continue in the future, but if you believe in capitalism and that companies will grow their earnings and develop new products and that there is the next Google, Apple, Facebook, GE, or even Chipotle out there, stocks may offer you, over time, some of the best investment returns to help grow your money.

Remember, we invest to fund certain goals—retirement, college, a wedding, or a trip to a place we have dreamed of visiting. Keep all of this in perspective and, as I like to say all of the time, control what you can control. You cannot control the stock market. You can control how much you allocate to stocks, how much you need to save, how to cut down your expenses, and even how often you look at your account balances.

This volatility will pass. It may be next month or next year or in two years, but it will pass. Keep your eye and emotions on your goals and, most importantly, on the things that matter most in your life.
I am attaching an article on long-term investing that was written by David Goetsch for Dimensional Funds, a fund company that I use in many of the portfolios we manage.

I hope you enjoy the article. And remember: control what you can control, and enjoy this beautiful fall weekend.
*Source: Russell Investments 2015. Return and value data utilized in this calculation tool comes from sources believed to be reliable but is neither guaranteed nor warranted and is subject to revision without notice. This tool is being provided for analysis purpose only and should not be used to make investment decisions. Tool and data is to be used at your own risk

Monday, August 24, 2015

The Art Of Budgeting And Back To School

Around the Cohen household one of our favorite movies is Billy Madison—not exactly heady stuff but good for a few really good deep belly laughs. I bring this up only because one of the many great songs in the movie is “Back to School,” which I sing over in my head as Labor Day approaches, the days get shorter, and the new school year is right around the corner.

As we get closer to school starting, parents who are sending their children off to college for the first time ask, “Do you put your kid on a budget at school?” The quick answer is yes. If you happen to be asking this question for the first time as your child heads off to school, it could be a tough transition for both of you. Setting up guidelines about spending or establishing a weekly or monthly allowance early in a child’s life is an excellent practice.

As I often tell new parents when saving for college, save as much as you can and then save some more. Start early teaching your child about money, specifically how much things cost specific to how much income you or you and your spouse make. If you don’t establish a context for the value of money, it will be hard for a child to understand.

When establishing a college budget with your child, I would suggest the following.

·         Let them know what costs you are covering: tuition, books, rent, meal plan, health care costs, cell phone, etc. . . .

·         Outside of those fixed costs, you will (or will not) give an allowance on a weekly or monthly basis. It is easy to transfer money from your personal account to your child’s personal account online. You can, for example, set up automatic transfers with most banks, moving $100 from your account to his or her account on the 1st of each month.

·         Don’t dump and run! Do not dump a lump sum of money in your child’s account at the beginning of the semester. This will lead to frivolous spending during the first month(s) of college. A good idea might be to ask your child to keep a journal of his or her spending habits for the first month and then review it together in order to get a better understanding of finances going forward.

·         WORK is a four-letter word, but it’s not a bad word. Yes, your child is in school to learn, but having a job teaches many valuable lessons, including the value of financial freedom. It also teaches real-life skills that will be important after graduation, like showing up on time, working hard, and the value of earning a paycheck. This income can supplement expenses you are covering, providing money to for a few good meals out during the month, going to a concert, or buying a new pair of jeans.

Like most guidelines, these are really suggestions, and in the real world life doesn’t happen as well as in a written blog post. I try to adhere to these guidelines, but I’m human, and we humans stray. So, for the true reveal, here is how things go in my life.

I do establish with my children up front what costs I am covering and what I am not covering. I do cover all of the basics mentioned, plus airfare when they fly home, social dues for a sorority, and groceries for their apartments. They pay out of their own pockets when they go out to a restaurant, bar, or convenience store. My children do not have cars and are responsible for their Uber fares (modern world problem). My children do have credit cards for which I cover the bill, but when they purchase items that are out of the terms of our agreement, I debit their checking accounts.

I have begun to share with my children how much their parents earn mostly because we have had to cosign on their leases. Anytime I can share with my children how much something costs relative to what we earn, it is a good lesson in curbing frivolous spending.

Another lesson I try to implement with my children, as well as with myself, is the concept of wants versus needs. When you are in a store, pause before you buy something; ask yourself, “Is this a want or a need? Do I really need another pair of running shoes? Do I need to buy 8 pieces of chicken when we probably only need 4?”

We never did the dump-and-run thing, and I never asked my children to write down and record their spending habits. Truthfully, my children are pretty good about watching their spending, so it has not been an issue.

My son worked his junior and senior year in college at one of the museums on campus, giving tours and working in the gift shop. My daughters do a fair amount of babysitting and have worked during the summers to earn money for the school year. A quick shout out to my daughter Laura, who had a fantastic paid internship this summer and brought her lunch to work every day, saving herself at least $50 a week. Best part is she banked a few thousand dollars this summer, learned some great saving habits, and will be paying for all of her spin classes herself.

As I write this, I have to admit we sound very privileged. My kids have it really easy compared to most. Their sacrifices and what they are paying for are minimal. Budgeting is hard work for grown-ups. It is harder for young adults. If they are going to be successful in life, learning to live within their means, understanding what things cost, having a realistic sense of expenses versus income, and appreciating the value of working are life lessons they probably won’t get in school but will serve them forever.

Monday, August 10, 2015

Learning To Let Go

When you are a young parent, meaning a parent with young children, there is no shortage of books with tips on parenting. How to Breastfeed, How to Get Your Child to Sleep, What to Feed Your Picky Eater, etc. Friends, colleagues, and parents are chock full of advice on what to do when your child won’t nap, what doctor is best, or which homeroom teacher is the nicestWhy is it, though, no one gives advice to parents as their children grow up and get older?

I can tell you this: when you drop off your child at college for the first time and, as it was for us, leave him alone in his dorm room, that is a really tough day. You have raised him under your roof, and now he’s on his own. You leave him like deer in the headlights, and you’re supposed to suck it up and walk away. 

Today my oldest left for Chicago, seeking his fame and fortune in the Windy City. As you know from a previous post, he graduated a few months ago and spent a good part of the summer living at home. It was like old timesweekends together, watching a movie or baseball game on television or just enjoying a beer by the barbeque. It felt awkward at times leading up to today, knowing that this chapter was about to end.

As I walked out of our apartment this morning, I put on a happy face, gave my son a big hug, and told him to text me when he landed. As I closed the front door and started to walk down the stairs, tears were rolling down my face. I was uncontrollably sobbing.

No one told me there would be days like this. Be warned, they happen, and it’s hard. What is getting me through it is the excitement I feel for him as he starts a new chapter of his life. Your twenties are an amazing timedifficult but also exciting. Youre figuring out who you are, what you stand for, what you want to do, and how and where you want to plant your flag.

Letting go is the most difficult thing for a parent—letting children go and figure stuff out on their own, experience both the pain and joy of life without you. I am a control freak; I like to help map out plans, create ideas and businesses, but in this instance I can’t. I have to let go and hope that whatever advice or influence I’ve given (good or bad) will resonate and help shape a strong and confident child, ready to take on the world on his own two (immeasurably capable) feet.

Wednesday, July 15, 2015

Financial Planning versus Financial Preparedness

This past year I began incorporating financial planning into my practice. For years I had been more of an investment manager and financial advisor but never a planner. To clear up the jargon, an investment manager evaluates and selects securities to construct a portfolio for clients. A financial advisor gives advice on an array of investments and coaches clients through good and bad markets. A financial planner helps individuals set objectives and create a plan to achieve their goals.

In day-to-day life I am not much of a planner. I kind of like to fly by the seat of my pants. When my family travels to a new city, I never map out where we are going or what we are going to visit. I prefer to wander and see where we end up, which usually leads to a fight and the five of us lost in some obscure part of town. Don’t believe me—ask my wife about our trip to Montreal a few years ago.

When it comes to college or “retirement” planning, you can’t really afford to fly by the seat of your pants. You have to save, and you need a plan to manage your assets accordingly. Hoping that you’ll have the funds to pay for Junior’s first year at Michigan is not a good plan. Maybe your daughter surprises you with news that she’s getting married. It can be extremely challenging to fly blind.

My problem with financial planning is the assumptions it makes. We run numbers and scenarios through computer models, and they spit out a plan. Fortunately or unfortunately, life is not like this. Markets don’t go up 5% a year, interest rates go down, you lose your job, Junior decides he wants to go to medical school after he gets his MBA, and the inheritance you think you may receive doesn’t pan out. Mike Tyson said it best, “Everyone has a plan until they get punched in the face.”

Another wise person once said, “He who fails to plan, plans to fail.” The statement easily applies to financial planning, but instead of calling it that, can we call it “financial preparedness”? Planning assumes static inputs with a predictable outcome, but things are never that neat and tidy. I like my new phrase, financial preparedness. Being prepared is being ready for what might occur down the road, nimble enough to turn on a dime, but also honest enough to admit we never know what’s around the corner.

Friday, July 10, 2015

Golden Road

Away from the hamster wheel of noise about Greece and the falling Chinese stock market, I find myself thinking about the Grateful Dead. In case you were away or checked out, the Grateful Dead performed 3 shows last weekend in Chicago commemorating the 50th anniversary of the band. I was never a Dead Head and never even appreciated their music growing up. I probably was anti-Dead, favoring the music of Rod Stewart, Elton John, and Kiss. Dead Heads were “hippies,” and for some reason that had a bad connotation for me.

As I have grown older and wiser, I have a newfound appreciation for hippies and what they stand for. Believe it or not, having the hippie aura has actually made me a better advisor, and here are some of the reasons why:
  • If you think the news and papers were overloaded with stories about Greece, you should have been in my seat. The amount of whitepapers and webinars that hit my inbox was staggering, every money manager espousing the same analysis. Every firm had the same reaction to the action. My inner hippie advised me to tune out and turn on to continuing to live my life the way I have been doing. A pebble on the road is not going to derail me from my own personal financial goals
  • When thinking about your financial goals, be a free thinker. Don’t worry about what your neighbor or office mate is doing. Live your life, reject the mainstream, and stay focused on what is important to you and your family.
  • Don’t trust the man, the man being conventional Wall Street “wisdom.” Wall Street is not interested in your well-being; Wall Street is interested in its own well-being and how much it can extract from your pocket. Proprietary products, hedge funds, and structured notes are chocked full of hidden costs and fees you would never know about even if you read the myriad of disclosure pages. Keep it organic and simple.
  • Caring about investing with companies that make a difference in the environment and workplace is a good thing. Being kind and generous always help. In your financial plan, think about philanthropy. There are great benefits not just in the feeling that giving produces but also possibly tax wise.
  • When it comes to financial planning, and I have written about this numerous times, the easiest way to ensure more successful outcomes in the future is to keep your overhead down. Of course it makes sense to save and invest, but if you spend less, be less of a consumer, the better your chances of achieving financial freedom.

I’ll finish by quoting the poet Robert Frost, who I don’t think was a hippie or financial advisor but thought independently:

Two roads diverged in a wood, and I—
I took the one less traveled by,

And that has made all the difference.

Tuesday, June 30, 2015

Good Morning America

It’s the 4th of July weekend, the real start to summer. Lazy days, grilling, vacations, catching up on the books you wanted to read over the winter. Soak it up and enjoy. These are the days to remember . . .

I wanted to get a quick post out before the long weekend in celebration of summer and taking time off. According to a survey conducted by Staples Advantage, the business-to-business division of the office supplier Staples, 53% of American workers are burned-out and overworked. What is even more disturbing, according to the same survey, 86% of workers are happy and willing to work for a promotion within their organization despite being burned-out and overworked!
While I don’t dismiss the value of hard work and the importance of putting food on the table for your family, there has to be a balance between work and life and also greater emphasis on valuing what is truly important.
We all probably have different values and thoughts on what we want out of life. I won’t judge and say that one is better than another. But I do know that if you can’t go to work and have fun and find purpose in what you are doing every day, it’s time to rethink what you are doing with your time.
One of my mentors, Ari Weinzweig, has written and lectured extensively about the “energy crisis” in the American workplace. If you are working in an environment that does not provide a financially sound, supportive, sustainable way to be, you either need to foster change or find a workplace that does create positive energy. In order to have the power to create positive outcomes, we must have a stake in the outcomes.
This weekend tune out what doesn’t thrill you, fire up the grill, crack open a few cold ones (whatever your choice), and enjoy the time off with friends and family. Recharge your battery and ponder your own energy crisis at work and how you are going to fix it on Monday morning. (Need a little extra nudge getting to that vacation state of mind? Check out the latest post at Harvard Business Review’s “Work-Life Balance” blog:
Have a safe and enjoyable 4th!

Thursday, June 25, 2015

Put Me In Coach

Last weekend I was listening to an interview with the famous golfer Gary Player on local sports talk radio. Player has a new book out, but what caught my attention was that he said he never worked with a coach when he was on the pro circuit. He went on to say that he doesn’t understand why today’s pros have a swing coach, a strength coach, and a nutritionist all on staff. Player feels that if a pro cannot fix his own swing or get in shape, he or she isn’t a top professional.

I couldn’t disagree more. There are very few people who can actually motivate themselves consistently to get better. On top of that, very few of us have the discipline to push ourselves to make that change. To take this even further, I have yet to meet someone who can objectively look at a situation and remove his or her own bias in making a decision or undertaking change. This is why we all need help and why we need coaching.

Take working out or training. You can join a gym, but gyms make their money betting you aren’t going to show up. You sign up after Christmas or before the summer when you need to get back in shape. You go for a week or two, but after that your credit card is billed every month and you are lucky if you show up once a week.

When do you actually show up on a regular basis? When you have hired a trainer/coach. A trainer holds you accountable to show up and do your work out. A trainer pushes you when you don’t want to do that extra burpee or sprint the last 100 feet. Despite what Gary Player thinks, most great athletes have a coach or multiple coaches to push them to be better!

The same could be said for investing and financial planning. Most of it is not rocket science. It’s common sense. The problem is that most of us don’t have the time or discipline to do it. More importantly, we as human beings can’t be objective in looking at our own financial lives. When was the last time you and your partner had an honest conversation about money, values, or retirement?  It’s not the type of conversation that we generally want to have. Americans spend more time planning a one-week vacation each year than looking over their finances—scary!

Last year Vanguard did a study outlining a financial advisor’s value. The company concluded that a good advisor could add 3% net value to returns, half of that coming from behavioral coaching. Investors by nature don’t like to sit still and let their investments work for them. There is a psychological need to move from one investment to another, chasing yesterday’s winner, which inevitably will be tomorrow’s loser. A good advisor/coach keeps his or her clients invested in a properly allocated portfolio according to their individual risk tolerance. Sometimes there is greater value in what you don’t do versus what you do. To quote financier George Soros, “If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring.”

We are human beings, which is to say that in much of what we do, we could benefit from a second opinion. If you want to see better results in your golf game, health, or portfolio, it pays to work with a coach.

Friday, June 19, 2015

Your Value Proposition

Some of us hit the wall at different times in life. There is the proverbial wall that one hits during a running race or long bike ride, where you just run out of gas and can’t take another step or push the pedal one more time. Some of us hit the wall when we can’t take doing the same activity or job any longer. I hit the wall hard while working at JPMorgan. Going into work at 277 Park Avenue every morning zapped the life out of me, and I knew I had to make a change. A few weeks ago a good friend and client hit the wall in terms of how he wants his money invested. He no longer wants to invest in companies that negatively impact our environment and/or are involved with the manufacturing of guns or ammunition. A very noble and impactful decision.  

A few years ago it might have been a tall order to fill unless you had a multimillion-dollar portfolio and could hire several money managers to assemble it. According to the Forum for Sustainable Investing, nearly $7 trillion dollars are being invested today in responsible and sustainable investment strategies. The same study also states that nearly $1 out of every $6 is being invested in sustainable or socially responsible securities. Today there are several hundred investment options focused on environmental, social, and corporate governance (ESG) strategies.

The question for investors for many years had been “What do I have to give up in terms of performance to invest in ESG strategies?” There was a time when these investments’ performance lagged, but over the last few years, according to a Calvert Investments study, ESG strategies/securities/investments/portfolios have slightly outperformed the general global stock market. The stronger performance over the past few years may be attributable to energy stocks severely underperforming the general market because of falling oil prices, or could it be attributable to better security selection? Your guess is as good as mine. It is my opinion that today one does not have to sacrifice performance to invest in socially responsible, or “impact,” securities that are more aligned with his or her personal values.

While performance is certainly important and we want our money to grow, investing in ESG strategies has other benefits. Your money can have an impact on how companies act or invest. Your money can help bring about change! Two weeks ago, for example, Norway’s $890 billion government pension fund elected to divest itself from investments related to coal. The New York Times said it was “the biggest institution yet to join a growing international movement to abandon at least some fossil fuel stocks.” The issue of climate change will in the foreseeable future have a very big impact on companies that use or produce large amounts of fossil fuels and potentially on their stocks as well.

If you don’t think that investing in strategies that align with socially responsible values can cause changes in policy, you need not look further than the divestment efforts in the 1980s that eventually led to the end of apartheid in South Africa. Institutions and endowments can have a strong say in the way governments and businesses operate.

I hit the wall in terms of my own investment style 15 years ago. I realized that trying to outsmart the stock market was a loser’s game. If you have never read Burton Malkiel’s book, A Random Walk Down Wall Street, read it now—it is a great starting point to understand the fruitless exercise of picking stocks and trying to beat the market on a consistent basis. Whatever your values are, don’t be afraid to express them in terms of how you want your money invested. After all, it is your money.

Investing in the stock market involves gains and losses and may not be suitable for all investors. The investment’s socially responsible focus may limit the investment options available to the investment and may result in returns lower than those from investments not subject to such investment considerations

Thursday, May 21, 2015

The Joy of Playing Small Ball

I am not what you would call an avid baseball fan. I cheer for the New York Mets and Detroit Tigers for sentimental reasons, not because I love the game. I do miss the summer nights, driving around Michigan listening to Ernie Harwell on the radio and enjoying the best ballpark hot dogs ever at the original Tiger Stadium. Even though it was a dump, part of me misses Shea Stadium where the Mets played until they moved to Citi Field a few years ago. 

Talking baseball

There is a term in baseball called “small ball” that I appreciate. Small ball essentially is playing to manufacture runs. The idea is to get runners on base, advance them and get them home to score. In small ball you don’t rely on walks or home runs, it’s about taking control of the game, getting runners in position to be successful.
When I speak with clients, most of them are overwhelmed with all the stuff we have to do and remember. There are forms, login usernames and passwords, emails upon emails, bills to pay, and investment accounts to review. It seems that if you throw one more thing on the proverbial plate to do, you will explode.
This is the time to play small ball. Take control of the situation, simplify your activities and hand off what you can hand off. There are only so many waking hours in the day and you don’t want to spend it on the phone with a help desk in Manila.
I am not an organization expert but I find short cuts that work for me. Start with unsubscribing from all of those email distribution lists. That should cut the clutter in your inbox in half. Create folders and rules so that certain emails go into folders that you can review at your convenience.  Set up bills to be paid from auto debit. Put as many bills as possible to be paid on your credit card. Warning: only do this if you are paying off your credit card bill each month. You don’t want to ring up additional interest charges.
When it comes to investing, there are do-it-yourselfers and delegators. If you have the time, expertise, and ability to remove yourself from making emotionally charged decisions, by all means do it yourself. Most of us don’t have the time, expertise, or temperament. A good advisor more than pays for themselves by being tax efficient, harvesting tax losses each year, rebalancing, and keeping you invested when markets get ugly. Fees may be less if you do it yourself, but when you measure what your time and good advice is worth, I think you’ll find delegating to an advisor is a smart choice. 
Returning to baseball for a moment, the sacrifice fly ball is a great example of small ball. A sacrifice fly ball is when the batter will hit the ball into the outfield to allow a runner to tag up and advance the base he is on. The batter in essence is giving up his chance of getting a hit for the sake of advancing the runner. Giving up something, or simplifying a process for your greater good, is playing small ball.  The next time you are feeling overwhelmed with all that you have to do, take control of it, and play small ball.

Friday, May 15, 2015


One of my favorite movies is High Fidelity starring John Cusack.  The movie is based on the book by Nick Hornby, which I am ashamed to admit I never read. Cusack plays the owner of a record shop who is an obsessive list maker. Lists are great to stay organized and keep track of things to do: groceries, packing, or items that need to be accomplished at the office the next morning. Lists are also a great way of ranking or prioritizing what is most important to us.

I spend a lot of my time getting to know what is important to clients and potential new clients. What makes then tick, what keeps them up at night or, even, what is their favorite cocktail? It recently dawned on me to ask my clients, how well do you know me? Below are a few lists of some of my favorite things. Let me know what you think.

Favorite Movie
1.       Rocky

2.       Dog Day Afternoon

3.       American Beauty

4.       Big Chill

5.       Annie Hall

Favorite Song
1.       Can’t you hear me knocking

2.       Roxanne

3.       Smells Like Teen Spirit

4.       Thunder Road

5.       Levon

Favorite Band
1.       Rolling Stones

2.       Bruce Springsteen and the E Street Band

3.       Bob Marley and the Wailers

4.       The Police

5.       Nirvana

Favorite Food
1.       Veal Parmigiana

Favorite Wine Region
1.       Bordeaux

Favorite Whiskey
1.       Laphroaig
Favorite Team Logo
1.       Chicago Blackhawks

2.       Baltimore Orioles

3.       Detroit Tigers

Favorite Football Helmet
1.       Michigan Wolverines

Favorite Book
1.       Catcher in the Rye

Favorite Writer
1.       Michael Lewis

Favorite Actor
1.       Robert Redford

2.       George Clooney

3.       Paul Newman

Favorite Actress
1.       Julianne Moore

Favorite TV Show
1.       Friday Night Lights

2.       Sopranos

3.       St. Elsewhere

4.       Curb Your Enthusiasm

5.       Cheers

Favorite Athlete
1.       John McEnroe

2.       Andre Agassi

3.       Anthony Carter

4.       Michael Jordan

5.       Walt “Clyde” Frazier

6.       Bo Jackson

Wednesday, April 29, 2015


It’s hard to believe that it’s that time of the year again. I’m talking about graduation time. Over the next month you will hear and read a lot of fantastic graduation speeches. Well, my son is graduating from the University of Michigan this Saturday, and this is my commencement address to him.

Charles, I am very proud of you. I know that I put a lot of pressure on you as well as your sisters to attend Michigan and I hope it was as great an experience as I told you it would be. You have taken some wonderful classes from inspiring professors. Unfortunately, Michigan football was not Michigan football during your four years, but I will never forget how excited you were after defeating Notre Dame your freshman year.  On the flip side, you experienced an incredible run by our basketball team your sophomore year and watched one of the true gentlemen of college sports, John Beilein.  You have made incredible friends who will be with you for life. I am truly in awe of the relationships you have forged over the past four years.

As you are about to enter the next chapter of your life, I want to offer the following advice:

Be kind. It is so much easier to go through life with a smile and compassion in your heart. There is no room for nastiness or selfishness in this world, so please be kind and considerate of others.

Be engaged. Be aware of everything that is going around you. Remember, life is what happens while you are busy making other plans. You must truly live in the moment.

Keep it simple. It really helps.

Eat well. There is so much bad food in the world and by that I mean food that is actually bad for you. Stay active, your body is a temple – treat it that way.

Be passionate .Whatever you believe in, be fully invested.

Trust your gut. Your inner compass will always guide you.

Be aware of easy money and scams. If something seems to be good to be true, it probably is.  

Stay humble and appreciate what you have, not what you don’t.

Don’t watch the television news. It’s not news and it only serves to scare you and make you anxious.

Surround yourself with positive people.

Live within your means. If you spend more than you earn, it will lead to problems.

Save your money but don’t deprive yourself of joy.

Invest in yourself. Nothing is more rewarding than betting on you.

Appreciate good luck.

Never get too high or too low.

Only dead fish go with the flow.

Don’t worry if you don’t know what’s next. You’re not supposed to. Life is not a sprint, it’s a journey. Savor this next chapter. It will be hard at times but it will also be really exciting. You’ll figure it out. Words cannot express how proud I am and how much I love you. I am so excited for you and what you and your friends will do. Congratulations and Go Blue.