Being Smart with $$ - Get Ahead of the Fraudsters with your Social Security

Protect Yourself from Fraud. 
If you haven’t done so, set up an online Social Security account.  If you do it, thieves can’t beat you to it and apply for YOUR benefits.  Doesn’t matter how far you are from claiming benefits.  Set up the account now.  And while you are there, make sure all your earnings have been correctly reflected so you don’t get cheated out of benefits later.  www.ssa.gov/myaccount  (Credit to Kiplinger’s Magazine, 09/2017, for this tip.)
- Larry Pike, CFA, Client Priority Financial Advisors LLC
- www.clientpriority.com

Being Smart with $$ - Look Rich or Be Rich

Do you want to be rich or look rich? The advice for getting rich is usually the same. Save more, spend less and invest the difference. In a Kiplinger's interview (09/2017), author Thomas Corley said the most common thing people do to prevent themselves from getting rich is to spend more when you start earning more.  If you save the new income, it can grow and compound and voila, you're rich!  In a study Morley conducted of the wealthy, they all save a big chunk of their earnings. So the question comes down to this: will you be happier if you have less stuff but more money or if you have less money but more stuff (looking rich)?  For most people it's one or the other. Go ahead and choose. 

- Larry Pike, CFA, Client Priority Financial Advisors LLC

- www.clientpriority.com 

Being Smart with $$ -- 10 Years into the Financial Crisis

News sources say today is the 10-year anniversary of the start of the financial crisis.  So it’s an opportunity to see how different forms of investing behavior served you.  Did professional investment management protect you from the huge downside in 2008 and then give you great returns in the strong periods thereafter?  If you have done nothing but own Vanguard’s Total Market Index Fund over the last 10 years, meaning you did not time the market and did not panic and sell when the market was falling, you earned an annualized 7.94% return on your money.  Not bad!  But what if you hired a pro such as a hedge fund to manage this period of turmoil; someone who should know when to stay out of the market and when to get back in?  Despite their very high fees you’d surely do better, right?  Well, results don’t paint the picture you might expect.  An index of Hedge Funds over the last 10 years has returned less than 4% annually and many of the most-respected names in hedge funds contributed to the mediocre performance.  After compounding, that’s a huge hit you took for trying to time the market. Buy and Hold wins by a mile.  You cannot predict that buy-and-hold will always win but for those who believe that you must pay someone big fees to avoid the bad markets, perhaps it’s time to rethink your strategy.

Larry Pike, CFA

www.clientpriority.com

Being smart with $$ - Are Market Bubbles Obvious

Don't stock market bubbles seem so obvious after the fact? Many of us pat ourselves on the back saying we knew it was coming. That's not to say we didn't participate in the upside and take losses on the downside. A few weeks ago I sat with a fellow financial advisor who said bubbles are easy to spot. I disagreed and posed this question: is Amazon.com at bubble levels? At $1000 per share it has nearly tripled over the past three years. It has a P/E ratio of 250 and a forward P/E ratio of 140 (approximately). But it is a great company and it seems like every analyst on CNBC loves it. And no matter how high the stock price goes they raise their target to a new yet higher level.  Perhaps they are right and we will only see the stock continue to skyrocket. But if it loses half its value, how many analysts will swear it was an obvious bubble ready to burst?

Larry Pike, CFA

www.clientpriority.com