To thine own self be true ~ William Shakespeare

As an investor, these words are essential for a successful outcome. We see two different types of investor strategies in the stock market: those who like to see an active (changing) strategy used in their investments and those who like to see a passive (develop the model, buy and then hold) strategy. There are pros and cons to each strategy, and both can be successful. But people don’t typically spend enough time in understanding who they are as an investor and then building the right investment approach from those strategies.  

The investment approaches aren’t as simple as they sound, and can often be confusing. There is the passive (also know as Index) approach to investing, which is explained perfectly by William F. Sharpe: “Indexed investing is a strategy designed to match a market, not beat it.” And there are two different types of active investing approaches. The most common is simply known as active management (also called active investing), which refers to an investment strategy where the manager makes specific investments with the goal of beating its index. And the second is a market timing strategy, which can be either day trading (where you buy and sell an investment usually within the same day) or a longer term approach where you actively manage the investments but will move to cash if you feel the risks are getting too high. Getting confused yet? Most are.

A commonly asked question is: “When is the right time to invest?” But a far more important question to be asking is: “What’s the best strategy for me? Once you know who you are as an investor, you can put the right investment team and portfolio together and feel prepared to invest today.
What can also help you to stay the course with both approaches is a prepared financial plan. According to Money Magazine’s October 2012 edition, a recent study sponsored by the Consumer Federation of America showed that 50% of those with a prepared plan felt on track to meet their goals, vs. 32% of nonplanners.
 
With the holiday season quickly approaching, we would like to offer a gift: We will evaluate where you are today and help you build a personal financial plan for $500 (50% off our standard rate). We will answer your questions and help you define what who you are as an investor and develop a personal investment strategy that is right for you. All good things must come to an end, so sign up before it disappears - before 12/23/2012 to receive your special discount and be ready for 2013! 
With the holidays around the corner, we would like to wish you and your loved ones a Merry Holiday Season and a Very Happy & Healthy New Year.

We invite you to reach us @ info@bersonmoney.com

We offer a complimentary 30-minute phone consultation ...

and promise to use common sense when talking to you if at all possible



Investment advisory services are offered through Berson Money Management, a registered investment adviser offering advisory services in the State of California and in other jurisdictions where exempted. The contents of the blog are not to be copied, quoted, excerpted or distributed without express written permission of the firm. Any other use beyond its author's intent, distribution or copying of the contents of this e‐mail is strictly prohibited. Nothing in this document is intended as legal, accounting, or tax advice, and is for informational purposes only.

Getting Affairs In Order

When people speak of "getting their affairs in order" regarding death, what can we do financially and personally to make the transition to the grave easier for our loved ones?

This is a conversation that folks are usually uncomfortable talking about but is very much needed. I will share with you some basic items that you or your loved one might consider when getting your affairs in order to create an easier transition with regards to your financial situation.

What I won’t discuss in this article is: What is the Estate Tax? • What are the pitfalls of probate? • How can I control the distribution of my estate? These questions and their answers can be found on my website by clicking on each link.

Wills and/or Trust
If you have a will or trust in place, make sure that it is current and that if you have moved to a different state, that it meets that state’s legal requirements. A quick story to illustrate the importance of this: My clients—husband and wife—for over 40 years had a legal executed will that was put in place while living in California. When they moved to New York they didn’t check the laws for executing a N.Y. will. When one of the spouses died, there was added hardship for not having a valid will recognized by N.Y.

Beneficiary information on IRA and other accounts
Make sure that all accounts have current beneficiary information, including full social security numbers. Incomplete names and/or social security information may require that you produce a valid will or go through probate.

Make sure you have funds available for immediate use upon death of a loved one
Upon death, if you are not a legal signer on the account, the account will be frozen awaiting the correct documentation reflecting the legal beneficiary and/or account executor. However, that takes time, and you could be relying on those funds to continue to pay the home mortgage—so make sure you have prefunded an account with some easily accessible joint money.

Create a list of important information, contacts, and passwords
Upon your death, your loved ones will need to update information that may require a password. If you have a social media site like LinkedIn and/or Facebook, they will want to update the site and will require your password for access. What about your laptop? Where is the safe deposit key - and which bank and address? You get the picture.

A dear friend of mine who was my mentor, teacher, and, for a time, my boss once told me: “The devil’s in the details.” That is the wisdom I want to leave you with.

We invite you to reach us @ info@bersonmoney.com

We offer a complimentary 30-minute phone consultation ...

and promise to use common sense when talking to you if at all possible



Investment advisory services are offered through Berson Money Management, a registered investment adviser offering advisory services in the State of California and in other jurisdictions where exempted.  The contents of the blog are not to be copied, quoted, excerpted or distributed without express written permission of the firm.  Any other use beyond its author's intent, distribution or copying of the contents of this e‐mail is strictly prohibited.  Nothing in this document is intended as legal, accounting, or tax advice, and is for informational purposes only.  

Garbage In, Garbage Out

So many of us are confused when trying to figure out how to invest our money for a positive return over our lives.  We aren’t asking for much: We want to know how much we need to save today so that we will have enough money to pay for the necessities (not wants) of life—for as long as we shall live.

Seems simple enough to me.  But is it?

I recently read an article from our benevolent Vanguard Group, titled “Revisiting the 4% Spending Rule,” which addresses the question at retirement: Is there a safe amount of money that I can withdraw each year from my accounts so I never run out of money?  Interestingly, Vanguard uses the 4% rule when, after all this time, I thought it was 5%.  The short answer to this question: After a lot of fine print, 10 pages of explanation, and CYAs —Yes!

Keep in mind that the article referenced was written by Vanguard, who is known as a passive, index style investment company, versus an actively managed non-index style investment company.  Now, I am not debating passive index style investing over active non-index style investing at this time.  It would be like debating Democrat or Republican and arguing that there is a one-size-fits-all approach.  There isn’t, and as far as I can see, never the twain shall meet...or agree.

So, without making you hang on forever in today’s short-attention-span world…

With proper planning, a strategy that takes into account your comfort level over your lifetime, and the knowledge that—unfortunately—inflation is a fact of life, you can create a portfolio (index based and/or actively managed) that will allow you a reasonable amount of money to live on throughout your lifetime.  And yes, a good rule of thumb for spending is 4%. 

What Vanguard and others don’t stress enough is that 4% of a portfolio that just dropped 25% or more may not be okay with you.  You just got a 25% cut in your spending.  Good luck calling your bank and telling them you are dropping your mortgage payments by 25%.  But not to worry—the investments are expected to grow again and you should soon be on track!

The key decisions to make with your advisor, or with yourself if you subscribe to the do-it-yourself surgery kit, are:

• Am I willing and able to decrease my spending if my portfolio drops by 25% in any given year?
•  Is there a way I can avoid dropping my spending amount and even possibly grow it over time?
• What is the time period of investment returns you are looking for (as 1926 was a long time ago)? How have the investment returns faired over the past 10–20 years (as that is more in line with where we are today)?

Happy to help with questions like these.  We invite you to reach us @ info@bersonmoney.com 

 We offer a complimentary 30-minute phone consultation
...and promise to use common sense when talking to you if at all possible.

Investment advisory services are offered through Berson Money Management, a registered investment adviser offering advisory services in the State of California and in other jurisdictions where exempted.  The contents of the blog are not to be copied, quoted, excerpted or distributed without express written permission of the firm.  Any other use beyond its author's intent, distribution or copying of the contents of this e‐mail is strictly prohibited.  Nothing in this document is intended as legal, accounting, or tax advice, and is for informational purposes only.