A recent survey indicates that an increasing number of high net worth investors are willing to pay for solid, unbiased, fee-only investment advice, which is not surprising considering the challenges of today’s markets. What is surprising is that there are still some investors who would rather go it alone, thinking they can do better on their own, or that investment advice is not worth the cost, or both.
In the realm of financial planning, time is our most valuable asset. It’s available to all of us, providing each individual with the same opportunity to optimize its value in building wealth. It’s the only resource we all have over which we have some degree of control.
Investors are prone to many behavioral mistakes that can cost them dearly. Trying to time the market, trying to pick the winners, chasing returns, trying to go it alone are among the most common. But the one that can inflict the most damage over a period of time is when they succumb to investing inertia. What is investing inertia?
There are many who would suggest that, in a digitally-wired world in which information travels at light speed to all corners, the investment playing field has been leveled between individual investors and the institutions. In reality, however, the incessant noise and information overload can do more to fuel the irrational behavior of investors than it can to provide any sort of advantage.
No one could have foreseen the convergence of two of the most consequential economic events in our history – the mass migration of the Baby Boom generation into their final life stage and the tectonic shift of a declining global economy. Unhinged stock market volatility, rising health care costs and historically low interest rates on savings have caused millions of pre-retirees to rethink their plans and their vision, especially as they consider the prospect of having to stretch their retirement income over 25 or 30 years.
Amidst the more obvious lingering effects of a sluggish economy, such as slow job growth, decreasing incomes, low interest rates and shaky consumer confidence, there lurks a more insidious threat which, thus far, has largely been ignored. Inflation or the prospect of its resurgence has somehow remained under the radar; perhaps because the official measure, the Consumer Price Index (CPI), is still below historical averages, or perhaps because the government has done such a good job in convincing the public that inflation is not a real threat at the moment.
Balance is seen as one of the keys to making the most of your investments. But what does a balanced portfolio look like?
Although the stock prices are trading near their all-time highs, it hasn’t exactly been a joy ride for retirees who are counting on their retirement plans for a lifetime of income. The type of unruly market action that we have seen over the last few months always unleashes a flurry of “expert” commentary that seems to be directed at those who are most vulnerable to flash declines. Specifically, the pundits are talking to those investors who are now relying upon stock market returns to feed their incomes and instilling doubt over their investment strategy.
If you’re trying to decide where to spend (or save) it, here are some ideas for how to make the most of your tax return.
Caught in an extraordinary convergence of unhinged stock market volatility and historically low interest rates on savings, many people are rethinking their plans and their vision for the future, especially as they consider the prospect of having to stretch their retirement income over 25 or 30 years.
