AdviceIQ Articles

  • The New Asset Allocation

    Submitted by Matthew Tuttle on Tue, 07/17/2012 - 9:00am

    Time was, everyone thought the best asset mix came from Modern Portfolio Theory, which spreads your holdings among as many different, seeming uncorrelated, asset classes as possible. But that didn’t work during the 2000-2002 and 2008 downturns. So now, many question the viability of MPT. Fortunately, there’s a better way to allocate your assets.

  • Stopping Future Mistakes

    Submitted by Dan Crimmins on Mon, 07/16/2012 - 3:00pm

    One reason people need a good financial adviser is to coach them on avoiding mistakes. Human emotions can get in the way of sound decision-making. That lesson was driven home for me as the coach of a Little League softball team for girls.
     

  • Is Retiree Travel Do-able?

    Submitted by Rick Kahler on Mon, 07/16/2012 - 12:00pm

    What's at the top of your retirement bucket list? If you are like most folks who I help prepare for retirement, travel is high on the list. But there are big obstacles to retiree journeying.
     
    As I've grown older, my views on retirement travel have changed. I used to buy into the dream of retirement as the “Golden Years.” I thought of this as the time in life when people are free to do what they want, when they want, with whom they want.
     

  • Time to Ditch Your Bank

    Submitted by Walid L Petiri on Mon, 07/16/2012 - 9:00am

    Big banks get the blame for the financial crisis and all the other recent horrors, from the foreclosure mess to the JP Morgan Chase trading gaffe. But for most people, big banks are most culpable for their high fees and poor service.
     
    Luckily, there are alternatives. Credit unions, for instance. Let’s compare them:
     

  • More Indexing = More Risk

    Submitted by Thomas Villalta on Fri, 07/13/2012 - 3:00pm

     
    The rise of index funds – and especially index exchange-traded funds – is making the stock market riskier and more volatile. That’s the thrust of recent academic research. So the trend toward more and more indexing is not good news for individual investors.
     
    An index fund, like those following the Standard & Poor’s 500, automatically contains all the holdings in the index, or at least enough of them to track it. That’s why index funds are known as passive investing. But these instruments often take some wild rides.
     

  • How to Diversify Your Stocks

    Submitted by Rob Lyman on Fri, 07/13/2012 - 12:00pm

    Diversifying your investments by both asset class and geography make sense. Historical returns provide evidence of that. And this means owning U.S. and international stocks. 
     

  • So Why Not Hire an Adviser?

    Submitted by Larry Light on Fri, 07/13/2012 - 9:00am

    Why don’t more people have a financial adviser? Several reasons: public concerns about adviser honesty, doubts that they have sufficient assets to use one and lack of understanding about what an adviser does.
     

  • Large-Caps: Why Bother?

    Submitted by Thomas Villalta on Thu, 07/12/2012 - 3:00pm

    Some investors don’t see the value in large-capitalization stocks. Smart stock investments often involve a “digging deeper” mentality, discovering information that others don’t. But that’s hard to do with a big company covered by legions of analysts. The advantage comes by sussing out investor behavior regarding the company.

  • 3 Investor Success Principles

    Submitted by Rob Lyman on Thu, 07/12/2012 - 12:00pm

    Successful investors have one thing in common: a solid set of principles that allow them to a) effectively build wealth over time with their at-risk capital, and b) avoid the emotional ups and downs that invariably come along. 
     
    First, what exactly are principles? At root, they are an attitudinal approach to investing that exists in the mind of a long-term investor. Principles are foundational in nature, and lead to effective investment practices — in the same way that belief leads to action. 
     

  • Grads: Where to Seek Work

    Submitted by Ray Ferrara on Thu, 07/12/2012 - 9:00am

    Graduations are now behind us, and for those heading out into the world of work, it’s on to finding a job during a very difficult economic time. Where do you locate the city with the right mix of housing affordability, employment opportunities and starting-level salary?
     

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SMART ADVICE

 

A Tragic Mistake: ‘I Don’t Need Help Handling my Money’

 

By Larry Light, Editor-in-Chief

May 1, 2013

 

We all like to think we’re smart and self-sufficient. A lot of folks believe they can manage their financial lives by themselves. These do-it-yourselfers are woefully wrong.

 

AdviceIQ is about giving the world the wisdom of smart, honest (none can have any regulatory infractions) advisors. Are we blindly pro-advisor? No, we are clear-eyed about being pro-good advisor. Everyone, even the financial cognoscenti, should have such a helper to sort out life’s perplexities.

 

Lamentably, the financial crisis and the Bernard Madoff scandal convinced many to steer clear of advisors. According to a Deloitte consulting firm study, 57% of those polled say they’re more comfortable handling their retirement planning on their own. Plus, 38% contend they need no professional advice to plan.

 

Really? A story from Paul Sullivan shows how wrong-headed they are. Sullivan is enormously well-versed in personal finance, which he writes about for the New York Times. But it turns out that even he could use some help with his portfolio. One day he went before Tiger 21, an investment club of very wealthy (with at least $10 million in net worth) types who assessed his financial situation. To Sullivan’s surprise and dismay, the group found major holes: He and his wife didn’t have enough insurance, they carried an unneeded vacation home and spent too much.

 

The blasé DIY attitude vexes Edmond Walters, founder and chief executive of eMoney Advisor, which provides support services to advisors. He watches discount broker TV ads that promise you can direct your investments by yourself, without paying an advisor. “It’s dangerous,” he says. “The ads say you can come home after work and spend a couple of hours trading a month. But the professionals have a lot more information than you.” Result: You get slammed.

 

As the Times’ Sullivan attests, it’s good to have a more knowledgeable someone guiding you, an expert who keeps up with all the arcane changes in the financial arena. Do you know how much disability coverage you need? Are you saving adequately for your kids’ education? How much money are you wasting for no good reason? Will your investments support you through your retirement?

 

Walters spent almost two decades as an advisor before he started his current company. “But,” he says, “even I have an advisor.”

 

 

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