What do you need?

You may want investment advice. Or you may have other concerns or issues.

You may have various investments that are not coordinated and lack a plan. We can help you put these pieces of the puzzle together. We can coordinate and help you see the big picture. We can strive to provide you with clarity and perspective.

Planning for a successful retirement can be a daunting task. We can guide you through this complexity. Together, we can work towards increasing your chances of meeting your financial and retirement goals, as well as trying to reduce your financially related stress.

We listen. We are empathetic. We have expertise and experience.

You may be uncertain about the future. We can guide you through the maze of options, such as how to fund college costs or the various retirement savings and 401(k) plan choices. We will strive to increase your confidence and help you to worry less.

We have clients with all kinds of needs. Everyone faces different issues. We can work with you to identify these problems or issues, then develop solutions. We can then guide you with ongoing advice, throughout your life.

You may have recently lost a spouse. You may not be experienced in dealing with financial matters. We will listen to you and help you to clarify your concerns. We will then patiently guide you, with the goal of reducing your worries and providing you with excellent advice that is always in your best interest.

We want to help you make progress and strive to resolve your financial worries.

We want to build trusting relationships.

It all starts with a conversation.

What do you need to talk about? Let us know.

Investing with a Shutdown and Uncertainty

The current partial Federal government shutdown that now extends over 30 days is another example of the type of uncertainty that investors must deal with.

Investors never know what kind of news is coming next, as no one can predict the future.

Investors sometimes say they will invest more in stocks or get into the market when there is “less uncertainty.” When will that be?

Is there ever a period where there is no uncertainty? We don’t think so.

There may be times when the markets are not as volatile, where there are not wild day-to-day swings…but that does not mean that the markets are more “certain.”

When can you really be certain about the near-term direction of the stock market? We don’t think that you can truly be certain about the short-term direction of the stock market, whether its US or global stocks.

If investing in stocks is uncertain in the short term, say days, weeks, months or even a few years, then you must develop a way to handle the uncertainty and volatility that comes with investing in stocks.

We think the best way to cope with the uncertainty in stock investing is to develop what we refer to as a rationally optimistic and long-term mindset.

  • You should strive to focus on the long term and not on day to day news events.
  • You should not focus on whatever the current issues or crisis that the financial markets are dealing with and not try to analyze what the ramifications are or could be.
  • You should focus on what you can control, such as the percentage of your assets that are allocated to stocks, not on things which you cannot control.
  • You should remember that in the long term, stocks have trended higher, not lower. Stocks have had more up years than down years. This leads us to be rationally optimistic for the long-term.
  • You should talk with a financial advisor who could help you deal with the uncertainty that is inherent in investing.

While we cannot predict when the government shutdown will end or what the S & P 500 Index will be in 6 weeks, 6 months or 6 years, we can strive to help you deal with the uncertainty that comes with investing.

Talk to us. It could be beneficial to you.

The Impact of an Investment Icon

Jack Bogle may have had more impact on investing by individuals than any other person of our generation.

Bogle, the founder of the Vanguard Group, died Wednesday at the age of 89.

His impact was in the significant reduction of mutual fund expenses and other fees paid by investors, as well as being one of the moving forces in the acceptance of index investing.

For many investors today, primarily younger ones, the concept of fee-only investing and no load mutual funds may seem normal. For example, our firm only recommends investments that do not come with any sales charges, either when you buy or sell the investments.

However, if you go back a decade or two, and prior to that, mutual funds that were sold by major brokerage firms and most other financial institutions were sold with up-front sales charges that may have ranged from 5-7% of your initial investment, and some may even had back end loads, which would charge an additional fee if you didn’t hold the mutual fund for a long enough period of time.

Bogle was an innovator, or today, would be considered a disruptor. As the Wall Street Journal stated, Vanguard was “continually cutting the costs of investing… Vanguard’s asset weighted average fee has fallen in the past 20 years to .10% from .27%, according to Morningstar Inc. Many traditional funds still demand 1% or more.” **

We are strong believers in the general concepts which Bogle advocated. We recommend mutual funds and ETFs which have internal costs which are far below industry averages, yet still have solid investment performance over time. There is no question that the competitive presence of Vanguard is reflective in the management fees of the investments we recommend.

Bogle strongly believed in index investing, where an investor would own an entire market sector, such as the S&P 500, rather than buying a mutual fund which has a money manager that would try to pick and choose selected stocks based on the manager’s forecasts (active investing). He believed that a mutual fund which tracks an index, at a much lower cost than an actively managed fund, would be to most investors advantage, over time. He has been proven correct, as years of mutual fund data has shown that index or passively managed funds outperform active funds over time for nearly all US and International asset classes.***

While we do not generally recommend that all stock investments should strictly track an index, our use of asset class funds is a variation of the concept which Bogle is credited with introducing and making widely available. We feel that the type of investments that we recommend, asset class funds that don’t strictly adhere to an index and some which add tilts toward various investment factors, such as value and smaller companies, are taking his concept to the next level.

John Bogle was an extremely influential financial executive, who was patient and disciplined in his beliefs, which investors throughout the US have benefited from, even if they do not invest with Vanguard.

Thanks for your contributions to the investment industry John. You will be remembered and missed.

** “Vanguard Founder Dies at 89,” Wall Street Journal, print edition, page 1, January 17, 2019.

***See blog posts for SPIVA content, 10 Things You Should Know and 10 (or more) Things You Should Know.

The Power of Diversification

Since my junior year in high school, for nearly 40 years, I have read the Wall Street Journal almost every day it has been published.

For almost a month, I have carried an article from the Wall Street Journal around with me, because I wanted to share the story in our blog.  The headline read…. “GE….Burned Out..This is the story of how General Electric lost power.“**

When I read this article the weekend it was published, Saturday, December 15th, I knew I had to write about it.  The story of GE and its stunning demise was too important.   The article covered part or all of 8 pages. This was the longest article I can remember seeing in the Journal.

In August 2000GE was the most valuable company in the US, with a market value of nearly $600 billion. For perspective, Apple is worth $721 billion today.

While GE was worth $600 billion 19 years ago, today it is worth only $76 billion, almost one-tenth of its prior peak. The stock price has gone from a top of nearly $58 per share to a low of $6.61 and has recently climbed back to $8.76. GE has also cut their dividend dramatically, from 96 cents per share in 2017 to its current 1 penny per quarter, starting in December 2018.

The WSJ article highlights some of the errors and decisions which led to this dramatic downfall. GE was widely revered for its outstanding leadership and top executives, yet has suffered from many poor decisions and bad timing. If you are interested in management and business, I highly recommend reading this article. It is a real eye opener.

As I read the stunning details of GE’s demise and the many serious issues which they still face today, I thought about the lessons from the perspective of our financial advisory practice and some of our key investment philosophies.

We are strong advocates of broad diversification, across companies, sectors and geography. We generally do not believe in owning individual stocks as part of an investor’s core portfolio.  Declines as occurred in GE’s stock has occurred at other companies, and will happen to others in the future. This is why we advocate our philosophy of diversification.

One-time very successful companies can become stock market failures. And vice versa. There is no way to reliably predict which companies and stocks will be the most and least successful over the long term…say 5, 10, 20 years, let alone over months or a few years.

Sure, there are stocks which continue to do well and look like great investments, in hindsight. We feel that most investors would be better off owning broadly diversified funds, rather than trying to pick 10-20 stocks and concentrate their portfolio. The risk of a few stocks blowing up, such as what occurred at GE, is too great a financial risk for most people.

We must acknowledge that one of the downsides to our philosophy of broad diversification and asset class investing is that some of the funds that we recommend for our clients have owned GE in the past and a number of funds still own very small amounts of GE today.

This is the nature of asset class investing, which means that a mutual fund will own hundreds or thousands of stocks, based on the purpose or objective of that fund. The key is that rather than a stock like GE being 5 or 10 percent of your portfolio, a fund or ETF today may hold far less than 1% of GE in its portfolio. In this manner, your upside and downside of any one stock is limited.

While the WSJ’s reporting of GE’s past problems and future challenges is insightful, it should not be guidance for your investment decisions. The WSJ nor other financial media or Wall Street prognosticators did not predict the huge decline of GE in 2000. We cannot predict its future success or failure.

However, we feel that our strategy of broad diversification will minimize the impact of a single stock having a major negative impact on your financial future. We hope that brings good things to your life!


**Cite: “GE, Burned Out,” Wall Street Journal, print edition, page B1, December 15, 2018.(To view and have access to the article online, you must subscribe to WSJ or already have a WSJ account.)

Disclosure: GE stock is held in various funds that our clients may own. For illustrative purposes, as of 11/30/2018, GE is 0.105% of DFA US Core Equity 2 Portfolio, 0.281% of DFA US Large Company Portfolio, and 0.231% of DFA US Large Cap Value III. GE is held in additional mutual funds as well.

New Year’s Resolution for 2019 and every year

With the volatility that US and worldwide stock markets experienced during 2018, it is important to maintain your long-term asset allocation plan between stocks and fixed income.

Maintaining your asset allocation, and regularly rebalancing your portfolio, should be an annual New Year’s resolution, whether markets are going up or going down.

To maintain your asset allocation means investors should be buying stocks when markets have decreased, and incrementally selling stocks after significant market increases.

As stock markets went down in 2018, we have reviewed, and will continue to review, our clients’ portfolios to buy stocks, to rebalance their portfolios back to their planned asset allocation.

When stocks are declining, buying stocks may seem difficult. You cannot know if they will continue to fall further. Stocks may have dropped but we may still be in the midst of the decline. This is where discipline and having a long-term perspective can be beneficial.

By buying stocks to rebalance after a significant market drop, you are following the buy low, sell high strategy. This is where we as your advisor can add value to your long-term financial progress.

For example, if an investor had a $2 million portfolio that was allocated 60% to stocks and 40% to fixed income, their portfolio would be $1.2 million in stocks and $800,000 in fixed income.

If the stock portion of this hypothetical example declined 15%, then the stocks would be $1,020,000 and the fixed income allocation would still be $800,000, assuming no fixed income change.

The portfolio would now be worth a total of $1,820,000, so a 60% target allocation to stocks should be $1,092,000. To rebalance the portfolio would require selling $72,000 of fixed income and purchasing $72,000 of stocks to maintain the intended 60/40 asset allocation goal developed as part of the planning process.

If you are a client, we have designed a financial plan with you, which we call an Investment Policy Statement (IPS).

If you are not a client, do you have a financial plan? If not, maybe you should contact us and discuss why this is so important.

It’s important to remember that bear markets and down periods are a feature of the stock market. If we were to look back at every previous market decline, some investors would think it is an opportunity and other investors thought the light at the end of the tunnel was a truck coming the other way.

In each past instance, the truck coming the other way wasn’t the outcome. It’s likely that this is not the case now either. In other words, every past decline looks like an opportunity; every current decline feels like risk.


Resolve to rebalance as needed, or work with an advisor who does this for you.

Resolve to think long-term. Resolve to adhere to your long-term investment plan.