Being smart with $$ - Who Wants To Be A Millionaire

Who wants to be a millionaire? Forget the game show. Ask the rich how they got their millions. Did they inherit it? 80% say no, they earned it through jobs, business and investing (US Trust survey reported in Money Mag). Did they buy hedge funds? Mostly no. 90% report that buying and holding basic stocks and bonds is the source of their success. Did they roll the dice and take big risks? No, they mostly played it safe. Living within your means, saving money every month and investing over the decades is how you get there. Or maybe you CAN win it on a game show.
- Larry Pike, CFA, Client Priority Financial Advisors LLC
- www.clientpriority.com

Being smart with $$ -- Advertisers in mutual funds entertain us

TV ad: A big mutual fund company asks why settle for average returns with an index fund that simply mimics a sector when you can buy their company's funds.  Here's why: One of their 3 large-cap funds did an average of 1% worse per year than an index fund of large stocks over the last 3 years.  Their 2nd large-cap fund did an average of 5% worse per year for the last 3 years and their 3rd (and newest), large-cap fund did over 8% worse in the last year. So do they really need to ask why we would settle for average? Wouldn't it be simpler if they suggested that we buy index funds and then just write them a check for entertaining us with colorful and exciting ads?
(Disclaimer: Only large cap stock funds were analyzed and their funds in other sectors may have done better.)
- Larry Pike, CFA, Client Priority Financial Advisors LLC
- www.clientpriority.com

Being smart with $$ -- Buy American, AND Foreign

Maybe you like to buy goods made in America. But when it comes to your portfolio don't ignore international stocks. Maybe you're turned off by the horrible returns of international stocks vs. US stocks in the past 5 years. Many analysts say that makes foreign stocks cheaper by comparison. And a decade ago foreign stocks had trounced US stocks in a similar fashion. Gerstein Fisher says (in Money Mag, Sept'16) that over the last few decades a portfolio with 25% international stocks did equally as well as one without but with substantially less volatility along the way. So while you are buying American, don't forget to also buy foreign.
- Larry Pike, CFA, Client Priority Financial Advisors LLC
- www.clientpriority.com

Being smart with $$ -- Be More Buffet than Gekko

I often hear people say they think stocks are going to fall so they will get out of the market for a while.  We all think we can time the market.  At what cost though?  IShares reports that being out of the market for just the 5 best days for stocks in the last 20 years (through 12/31/15) would have cost you over $17.000 in gains on just $10,000 invested.  You would have missed over 40% of the total gains you should have earned.  Be more Warren Buffet than Gordon Gekko and stop believing you have the magic power to zip in and zip out at just the right times.
- Larry Pike, CFA, Client Priority Financial Advisors LLC
- www.clientpriority.com

Being smart with $$ - Tomorrow is hard enough to pay for

How not to have debt?  Don't buy what you can't pay for today.  Put $5k on your credit card to go on vacation and you'll pay about $15k over 10 years to pay it off (at 12% card rates).  Pretend there's no such thing as credit and find a way to get by on what you have.  Your future will be hard enough to pay for.  Don't get there and find you have to pay for your past as well.
- Larry Pike, CFA, Client Priority Financial Advisors LLC
- www.clientpriority.com