Being smart with $$ - With stocks, don't just buy what you know

Doctors love healthcare stocks.  Programmers love tech stocks.  Bankers love financial stocks.  It has been said "buy what you know."  But if each group is buying different sectors, how can they all be right?  They can't.  But if they buy a stock index fund that tracks the whole market, they don't have to worry which sector will perform best or worst and in the long run they will enjoy the upside of the market without the added volatility of being exposed only to one sector. So I say to you Mr. Plumber:  Roto Rooter should not be the only stock in your portfolio.
- Larry Pike, CFA, Client Priority Financial Advisors LLC
- www.clientpriority.com

Being smart with $$ - Kids need financial discipline

46% of parents go into debt buying something their kids want (according to Reuters/ChrisTaylor/04.18.16).  Is this really best for you OR your kids?  Children who get everything they want may become adults who can't make good choices with their money.  These kids may discover late in life that they are buried in debt and have no money for retirement or their own kids' education.  Start saying "no" now.  Give them an allowance and make them choose how to spend money.  If they need more, they can get a job and learn to earn what they want.  That's a lesson best learned early.
- Larry Pike, CFA, Client Priority Financial Advisors LLC
- www.clientpriority.com

Being smart with $$ - Beware the mutual fund ads boasting strong performance

"Awesome 1-year performance", boasts a mutual fund ad. But did they mention that several of their other mutual funds did not do so well, and that they even closed some funds for inferior performance?  If a company has enough funds, they are pretty likely to have at least a couple that are above average.  But knowing in advance which ones will be the winners is the hard part.  And funds often find it difficult to perform above average on a consistent basis.  So be careful not to be the investor who is always chasing last year's winners only to find that you own this year's losers.
- Larry Pike, CFA, Client Priority Financial Advisors LLC
- www.clientpriority.com

Being smart with $$ -- Working forever may not be possible

"My retirement plan is to work until I'm 90!" I hear this a lot.  But perhaps we should consider Plan B: Save more now.  People overestimate what their ability will be to keep working.  1/3 of workers plan to keep at it past 65 but only 14% do and the reason is usually unexpected health problems or a layoff.  (Per Employee Benefit Research Institute in Money Apr '16).  Having trouble sorting out how to save more?  Call me and we'll figure it out.
- Larry Pike, CFA, Client Priority Financial Advisors LLC
- www.clientpriority.com

Being smart with $$ - Stop worrying about bear markets

Still worrying about stocks falling? If so, you are probably trading rather than investing.  Stocks often fall hard.  But the patient have been rewarded.  Bear markets averaged 33% drops since 1946 and it took over 3 years on average from the start of the fall until you recovered your losses. (Source: Sam Stovall of S&P Global) But what's 3 years?  If you're not investing in stocks for your needs many years out, you're approaching it wrong.  Kiplingers (4/16) says money invested in stocks in 1965 has increased by 100 times!  But you would have had to patiently wait out 8 bear markets.
- Larry Pike, CFA, Client Priority Financial Advisors LLC
- www.clientpriority.com