The 8th Wonder of the World

Albert Einstein once said . . . “Compound interest is the eighth wonder of the world. He who understands it, earns it . . . he who doesn’t . . . pays it.” No doubt Einstein is correct . . . time is the essential component to compounding your wealth over time. It’s something that every parent should be teach their kids, every grandparent should be teaching their grand kids and every school in this country should be teaching it in the classroom. To illustrate the importance of this principle here’s a story of one of the greatest American’s that has ever lived, Benjamin Franklin . . . Let’s take another look using an ETF (Exchange Traded Fund) that tracks the S&P 500, the SPY. If you were to invest in the SPY back in 2005 (10 yrs. ago) you would have a return of 75.37%, a very nice gain. However,
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Categories: Personal Finance.

9 Facts about Retirement

Retirement can have many meanings. For some, it will be a time to travel and spend time with family members. For others, it will be a time to start a new business or begin a charitable endeavor. Regardless of what approach you intend to take, here are nine things about retirement that might surprise you. Many consider the standard retirement age to be 65. One of the key influences in arriving at that age was Germany, which initially set its retirement age at 70 then lowered it to age 65.¹ Every day for the next 15 years, another 10,000 baby boomers will turn 65. That’s roughly one person every 8 seconds.² In 2010, people aged 65 and older accounted for 13% of the population in the U.S. By 2025, they are expected to make up 18% of the population.³ Ernest Ackerman was the first person to receive a Social Security
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Categories: Personal Finance.

4 things you can do in today’s market sell off

There is a whole lot of red on my screen today! Below is what the current markets look like. The S&P 500 (/ES) is down 1.31% . . . the Nasdaq (/NQ) is down 1.55%. It seem like whenever a day like this comes that people are calling for the end of the bull market.             While no one knows if that is a legitimate call or not (we will know in the coming months), there are a few things that people can do during a little sell like we are experiencing today. 1. Sell some puts. If you’re in need of income or if there are stocks that you really like that you are not yet in, consider selling some puts. We talk more about this strategy in our Finding Income in Today’s market video. Click here to see watch. With the rise in volatility and the
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Categories: Markets and Strategy.

The Week that Was

Each week we try our best to provide our thoughts on the market and other stories happening around the globe. We do this by writing blog posts and by using other forms of social media including Twitter. For those of you not following us on Twitter we thought we would show you what you’re missing.  For those that do follow us then this will be a good recap of the week that was. Please know that we did not post everyone of our Tweets just a few of our favorites. Some of the links are below in case you missed the story. If you would like to follow us on Twitter just click the links below . . . Brett Pattison @brettmpattison Brian Hunsaker @BrianWHunsaker As always, please remember these are just educational thoughts and not recommendations to buy or sale any security.                  
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Categories: Markets.

Words of Wisdom for Every Investor

The first weekend of March is one that we look forward to each year. It is the one time of the year where you have the opportunity to read what arguably the best investor ever has to say about investing, the market, the economy and much, much more. We are talking about Warren Buffett and his annual letter to his shareholders. We read each this letter religiously for the opportunity to learn from the “Oracle of Omaha.” This year was no different. Below is a portion of the 2014 letter. If you read nothing else you must read what we have pasted below. If you would like to read the entire letter just click here. (The bolded sentences below is our emphasis not Buffett’s.) From page 17 and 18 of the 2014 Berkshire Annual Letter . . . “Our investment results have been helped by a terrific tailwind. During the
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Categories: Markets, Personal Finance, and Strategy.

Buy and Hold vs. Timing the Market: Which one is better?

There is debate that has been going on for decades and decades. Of course the two sides of the debate both think they are correct  when answering the question which is more profitable, buy and hold or timing the market? Before I give you my thoughts and answer that question,(which is probably different than any answer you have heard before), let me attempt to make an argument for both. Buy and Hold To make sure we’re all on the same page buy and hold would mean buying a stock, ETF, or mutual fund at a price you are comfortable with and never selling it. That definition seems obvious and the concept seems simple. However, it’s probably one of the hardest investment techniques for most people. Emotions, fear, and lack of discipline are just a few reasons why people have a hard time staying true to the buy and hold investment style. Below
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Categories: Markets and Strategy.

A Glimpse at the Global Markets

Global Markets For the past two years the U.S. market has crushed the rest of the globe! The U.S. (S&P 500) is up 42% compared to 15% for Developed Non-U.S. (Europe, Asia, Australia) and -3.5% for the Emerging Markets (China, Brazil, India, etc.). While no one knows when the rest of the globe will catch or even pass the U.S. the returns year to date are interesting. Below is a chart highlighting the returns of the global markets.   As far as the global PE ratios go, here is a brief list. This list highlights the opportunities from a price perspective. While we remain cautious of some areas of the globe, there’s no doubt that there are some great potential opportunities beyond the U.S. United States – 20.3 China – 10.1 Japan – 16.6 India – 19.1 Europe – 18.7 The Good Ole’ U.S. of A.  According to historical probabilities
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Categories: Markets.

Probabilities of Stock Investing

I recently saw a study that helped confirm something that I’ve known for many years but just didn’t have the data. It’s the probability that you will lose money on stocks based on holding them a certain time frame. The statistics shouldn’t be too surprising.   In the 10 years I spent in financial education I would witness these probabilities come true as people would “trade” their hard earned money away looking for the next home run. I could tell you sad story after sad story of those that just didn’t understand the importance of building a portfolio based on fundamentally sound stocks . . . stocks that you would actually want to be a business owner in . . . stocks that you may never want to sell. Warren Buffett said something as it relates to the types of stocks you want to buy . . . “when we own
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Categories: Markets and Strategy.