Emotional Response

Jan 22, 2016

Emotional Response

The plunge in U.S. stock markets is an “emotional response” obscuring expansion in both the American economy and corporate profits, said Abby Joseph Cohen, president of Goldman Sachs Group Inc.’s Global Markets Institute. 

The fair value for Standard & Poor’s 500 Index is 2,100, Ms. Cohen said. The S&P last closed above that level on December 1 and has fallen 11% since, after turbulence in China’s stocks and currency spurred a global market rout. “What is happening is really very much an emotional response,” Ms. Cohen told Elliot Gotkine on Bloomberg Television. “We need to put things into perspective. Stocks are probably… Continue reading “Emotional Response”

Chinese Volatility

January 13th, 2016

Chinese Volatility

A “clown show is how one analyst described China’s stock markets recently:  The world’s second largest economy is home to the developed world’s most immature stock markets.  Here’s a few reasons China’s stock markets are down over -12% this year so far and why our stock markets are suffering in sympathy, S&P 500 down almost -6% at the end of the first Continue reading “Chinese Volatility”

Better than Buffet?

December 21, 2015


2015 Recap: Better Than Buffet?

As a persistently turbulent, frequently disappointing, but by no means disastrous 2015 comes to a close, we’d like to recap some of the topics we’ve been addressing this year:

Short Term Forecasts

November 19, 2015

Short-Term Forecasts Best Left for Weathermen

The investment business is full of people who make wild speculations of short-term price movements in the financial world. We choose not to engage in this practice, mostly because we’re terrible at it. Our opinion of these short term forecasts is they’re largely entertainment and useful only to sell TV commercials and newsletters.

Continue reading “Short Term Forecasts”

-Video- Can You Trust Suze Orman in Retirement?

November 4, 2015

Suze Hollywood or Grandma Suze?

Despite the Hollywood-esque appearance, the Emmy award-winning financial advisor, Suze Orman, seems more like your depression era grandma after reading her advice on retirement planning. Invest safely, project conservatively, plan for longevity and don’t invade the principal… that’s just the way we like to plan for retirement too!

Continue reading “-Video- Can You Trust Suze Orman in Retirement?”

-Video- Investing in the Iraqi Dinar Scam

October 12, 2015

Iraqi Dinar Scam

Washington State’s Department of Financial Institutions posted a webpage back in 2011 warning consumers of an Iraqi currency fraud. Why talk about this now? Recently we’ve had personal knowledge of several investors planning retirement who’ve been defrauded by this not-so-new scam.

The desire to make up for late retirement income planning has apparently led some to throw caution to the wind. Desperate investors grasp for straws without seeking advice, and risk most or all of their savings in this retire-rich scheme. Continue reading “-Video- Investing in the Iraqi Dinar Scam”

-Video- Virtuous or Vulnerable

October 2, 2015

Virtuous or Vulnerable

While in the midst of a downturn marked by a quarter that had the DOW down the most in 4 years, approximately 8%, how should we evaluate companies in our own portfolios to determine if they are virtuous or vulnerable? One-way to answer that question is to look at the dividends.

Dividends are payments a company agrees to pay its shareholders. These are very important and we count on these payments for our retirees to live on. When a company projects they will increase their dividend then does not do so, it’s a sign the business is potentially vulnerable and a signal to sell. If a company cuts the dividend or ceases to pay one altogether, that confirms the business is vulnerable and the investment will suffer.

Continue reading “-Video- Virtuous or Vulnerable”

-Video- An Annuity Victim: Michelle’s Story

September 28, 2015

Actual Case Study from September 21, 2015:

“Michelle” (we’ll call her), a retiring Portland area public school teacher, came to our office for a complimentary evaluation of her financial situation including two small variable annuities promising 5% and 6%. These had been purchased six years ago through a School District approved vendor.

At purchase Michelle had asked the agent what each annuity would cost her in fees and was assured the fees were “minimal.” We agreed to analyze all of her assets but began by calling the nationally-known annuity companies’ customer service lines to clarify her choices for annuity retirement income.

We discovered:

Annuity A-client paid $53,000; Internal fees client pays every year $1,272 (2.4%); Agent’s 5% commission = $2,600;

Annuity B-client paid $37,000; Internal fees client pays every year $1,295 (3.25%); Agent’s 6% commission = $2,220

Annuity A was purchased for over $53,000 and had earned only $88 total over the last six years.

Michelle’s money was going to be locked up for ten years. The policies limited the 5% and 6% promises to restricted time periods, did not cover the life of the contract, and would be canceled for early withdrawals. We counseled that there are many kinds of annuities and/or other products that may have had better or worse fees and returns. Being better informed now, Michelle is in a better place to make decisions about her future.

By Bruce Porter, co-owner and founder of Retirement Income Advisors.

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