The Market, Investing and You

Hello 2016, Goodbye 2015.  I am not normally one who looks backwards and rarely one who talks about the market. However, I am a CFP® so I do have to ask the question…how are things going with your portfolio these days?

With the market acting like a two-year-old throwing a tantrum, are you holding more stocks than you are actually comfortable with?  When you first invested, you may have thought yourself a daredevil but, recently, you feeling more like a backyard gardener.  Are you getting towards the stage when you are thinking more and more about retirement? Contrary to the commonly held belief, you can’t make up for lost time with a more aggressive portfolio and the last couple of days are proof positive of that. Even if you are in your thirties and the market volatility is driving you nuts, perhaps you shouldn’t have as much exposure because, rest assured, this isn’t the markets last roller coaster ride. The point is, it is important to reassess your risk tolerance and investment objectives at least once a year.

Too often, people pick an initial couple of investments and call it a day – the “once done and forget about it” style of investing. Unfortunately, your money is a little like that goldfish you had as a kid – forgetting about him means Mr. Goldfish is getting flushed down the toilet just like…well, you get the picture. Investments are just like that goldfish, they don’t need much but every once in a while they do need some attention.

Now, while the year is young, why not take a look at how your money is positioned? Give your portfolio some attention and make an appointment with your advisor to review your allocations. Perhaps you have some tax losses you can stock pile for when the market rebounds. However, try to focus more on how your portfolio is balanced and whether or not it matches who you are. That way when the market decides to throw a tantrum in the future, you may not have to worry so much.


Fees? What Fees?

Many Investors Are Unaware of Their Broker Fees

We’ve all heard the old adage that “nothing in life is free.” So, why do so many people assume that there are no fees associated with their money and investments? A recent survey conducted by the North American Securities Administrators Association (NASAA) shows that one in four investors had no idea what fees they were being charged by their brokerage firms. Additionally, it finds that about 30% aren’t even aware of any management fees or expenses.

Virtually every account that holds money has fees. These days it is tough to even find a bank account that doesn’t charge a fee. However, this survey also reveals that over 80% of investors recognize the importance of fees. That’s quite a disparity between those who feel that fees are important and those who actually know what they are paying.

First, let’s all admit that fees are important in servicing and maintaining your account. However, it’s your money so you should probably have some idea of how and what fees are assessed.

So, what to do?  If you want to be bold, and I recommend that you are, ask. Ask your retirement plan representative, ask your investment advisor, ask your banker. Have them total the fees charged on your account on an annual basis. Any good financial services representative should be more than happy to do this for you. If you are little shy about it, and that’s okay too, you can also check the Activity section of your statements for a rough idea of what you are paying. It won’t include the fees associated with the actual investment, but it will give you a good idea of what you are paying the firm who holds your money. If that seems too daunting, hire an objective hourly-only advisor to calculate it for you.

Next steps. You need to decide if the value you are getting from working with that advisor (firm or account) is worth what you are paying them on an annual basis. Sometimes it is, and that’s great. Nothing hits the sweet spot better than a good financial services relationship at a reasonable fee. But what if you aren’t getting great service and figure out that you are paying quite a lot in fees? First, have a heart-to-heart with your rep. Sometimes, just letting them know that you aware of the management fees can open up a dialogue on expectations.

This step might also be the wake-up call that you need to start looking for a new advisor, firm or bank. Either way, knowledge is power and you are in the driver’s seat once you have the information at hand.