Earlier this week, I asked one of my clients, “What monthly expenses will you need to cover after you retire?” He responded by telling me how much he had accumulated in his retirement account. So I tried a different approach, “How much will you need to withdraw from your account each month to pay your bills?” This time, he answered by telling me how much he planned to invest. Finally, I realized that he wasn’t answering my question, because he didn’t know. He has always made a respectable salary, lived frugally, and saved diligently – but, he’s never once tracked his expenses. Sure, he has a general idea of what his expenses are. But is that good enough?
ETF Portfolio
Exchange Traded Funds (ETFs) are quickly becoming a significant piece in investment portfolios. As of December 2011, the total assets in ETFs exceeded $1 Trillion. Like index mutual funds, they track a basket of assets. Unlike index funds, they can be traded throughout the day and are optionable. This opens up the possibility to make them an integral part of a Snider Investment Method portfolio.
There is No Such Thing as a Free Lunch
Investment expenses have always been a hot button issue within our organization. We’ve spent years stressing the importance of understanding and controlling the fees and expenses within investment strategies. The inability to compare fees across different investment products is one of my major complaints about the entire industry.
Generation Perspectives on Financial Responsibility
Does a 25-year-old view financial responsibility to family members differently than someone who is 45? Or 65? According to the MetLife Mature Market Institute’s recent study, Multi-Generational Views on Family Financial Obligations, they do. The study reveals there are some distinct differences between the views of Baby Boomers, Generation X, and Generation Y.
The S&P 500 at Post Crash Highs, What to Do Now?
Since the beginning of the year the S&P 500 is up nearly 8 percent. This quick jump in the stock market has taken place depite the fact that much of the debt crisis remains unresolved in Europe as well as in Washington. China’s economy is showing signs of slowing while inflation fears could lead to a surge in emerging markets. All the while a presidential race is heating up and the prognosticators are calling for all sorts of calamity. This surge has sparked frenzy in the media bringing about predictions from financial pundit bulls and bears.
Understanding the Rights of Option Buyers
Options are the bread and butter of the Snider Method. If you are a Snider Method Alumni, you most likely have a solid understanding of the reasoning why we sell options, but you are probably less familiar with the strategy of those who buy options. Recently, I have received more questions than normal about the rights of those who buy options and how they work. I will address a few of the most frequently asked questions.
Volatility and Risk – The Missing Link
Which stock would you rather own:
– Stock A has a return of 15.8%
– Stock B has a return of -11.5%
I’m assuming this is pretty much a no-brainer, right? In the example above, there’s no way you would choose Stock B over Stock A. So let me ask the question again, but this time, I’ll give you a little more information.
Gold Rush
I recently wrote about how Cash was Today’s Hottest Investment. I made this assumption based off the billions of dollars investors are adding to cash accounts (checking, saving, and money market) and removing from equity funds. This is a great way to track investor behavior. Although cash seems to be where investors are moving money, I hear the most questions about Gold.
Employee Stock Options
Employee stock options have been a hot topic recently due to Facebook’s filing for an Initial Public Offering (IPO). Employees of Facebook reportedly own about 30% of Facebook from the stock options they have been issued over the years. Based on the most recent valuations 30% of Facebook is worth about $30 billion and analyst predict over 1,000 Facebook employees will become millionaires when Facebook goes public. Even if you weren’t lucky enough to get in on the ground floor of a multi-billion dollar company like Facebook there is still a good chance you have been granted stock options at some point in your career if you have worked for a publicly traded company. We often have clients ask us what they should do with the stock options they have been granted and how the process of exercising them works.
Is your financial advisor a fiduciary?
Over the last several years there has been a lot of focus on providing investors with a higher degree of protection by increasing the oversight of industry regulators. One very important term that sets advisors apart, is whether or not they are considered to be a fiduciary.
