Opportunities to Invest

“The reality is that opportunities to invest in the market come along as often as taxi cabs in New York city.”

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Most Important Concept In Wealth Management

Most investors miss the most important concept in wealth management because they are laser focused on returns as the primary benchmark of success. This propensity to chase returns is magnified during periods when markets are shooting the lights out, as investors become acutely aware of how their portfolio is performing relative to whatever index is attracting the most attention at the time.

Under the emotional pressure of watching the markets rise, a nagging feeling starts to take hold of clients that drives a creeping dissatisfaction with their Advisor. During the tech bubble, it’s, “Why aren’t we keeping up with the Nasdaq?”. During the real estate bubble it was, “I can do way better than this flipping houses.” Now it’s, “Why don’t we load up on more dividend stocks?” Same refrain, different focus.

At times like this we like to spend a lot of time revisiting the core reasons that compelled our clients to hire an Advisor in the first place. For almost all of them, the core reason relates to their desire to reach one or more financial goals at some point in the future. Many are hoping to support children in university, and/or eventually retire with a comfortable lifestyle. Some clients are already drawing income from their portfolio, and are primarily concerned with ensuring that their portfolio doesn’t expire before they do.

Most investors imagine the wealth management process as a smooth ride from here to retirement. According to this illusory vision, investors unfailingly set aside exactly what they committed to put aside each year, and markets keeping up their end of the bargain by delivering the long-term average return year-in and year-out without exception. In reality of course, life sometimes gets in the way of savings, and the markets do NOT move in a straight line from A to B.

Fortunately, by examining the distribution of historical returns we can estimate the range of likely outcomes for portfolios around the long-term average return, or any other return estimate we wish to use. Once this range is known, we can determine the probability of a successful outcome – however we define success – within the range of possible outcomes. In this way, the wealth planning process becomes an exercise in risk management, but the risk is focused on the probability of reaching financial targets, rather than on the risk of short-term losses.

Along these lines, we try our best to keep our investors focused on these key tenets, which when taken together may represent the most important concept in wealth management:

1. Risk is measured as the probability that you won’t meet your financial goals.

2. Investing should have the exclusive objective of minimizing this risk.

Gestaltu

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Brace Yourselves

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Don’t Hate

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Broker Trainee Program

So an apology is due. It has been entirely too long since my last post, but there’s a good reason for the hiatus.

I was recently accepted into a Stock Broker Trainee Program, sponsored by Charles Schwab!!! I start on Monday.

That’s the good news. The other stuff that caused me to put WordPress on the back burner was to focus on getting as much of my school reimbursed by Amex as possible before I jump ship. This process is a pain, takes forever, and I needed to know that I wasn’t obligated to pay it back once I quit.
I did quit my job at Amex, which was tough. Oh, I also bought a house! And I am now just over halfway through my MBA program at Grand Canyon University (which is up almost 50% btw since I bought 40 shares back in March, $LOPE). Killed this Marketing Management course which wraps up this Wednesday.

Getting into the program was intense. I first had to apply online. My application was ignored. Then weeks later I get an email inviting me to a “Bridge Forum” to meet the company. I met the hiring manager for the Broker Trainee Program, as well as the recruiter, and got all the advice I needed to proceed. About a week later I got an email saying they received my application and then set up a time for a brief phone interview. After that brief (30-45min) phone interview, I was invited to take the SIFMA assessment – which was the hardest test I’ve ever taken in my life. Apparently I passed it because they then invited me to a face-to-face interview with two managers, which I prepared for the night before and nailed out of the park, if I don’t say so myself. Then they said I could formally apply, this meant 5 years of residence info, 5 years of past employer info, credit and criminal background checks, etc. which took about a week to process. All together, the whole process took about a month and a half from beginning to end.

Let me know if there’s anything else you want to know that I may be able to answer for you.

-Bill

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Berkshire Hathaway Annual Meeting 2013

The Berkshire Hathaway annual meeting — hosted by history’s greatest investor, Warren Buffett — is a private event open exclusively to shareholders and select media. Check back often for the best of Berkshire Weekend and our articles, videos, photos, tweets, and even a live blog during Buffett’s private Q&A session on Saturday, May 4th, from 9 a.m. ET to 5 p.m. ET.

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Berkshire Hathaway Q1 Earnings Announcement (BRK.A, BRK.B)

Berkshire Hathaway’s Q1 earnings are out. The company run by Warren Buffett earned $3.78 billion or $2,302 per share, up from $2.66 billion or $1,615 per share a year ago.

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A Financial Snapshot of the Average American

Averages are a funny thing. I remember a teacher’s example: A guy had his head in the oven and his feet in the refrigerator. When asked how he felt, he said, “On average, pretty good.”

Averages can be an odd measure of things. Remember that 2.5 kids statistic?

On the other hand, averages help us see the big picture and understand our world in a specific context – average weight, average exam grade, average temperature, etc.

Let’s take a look at the average American from a financial point of view. (Sources range from years 2010-2012.)

1. Average American House

Owning your home is a unique part of our culture – one of the big American dreams. Homeownership is a forced savings method because as you pay down a mortgage, you build up equity and wealth.

Americans at Home

2. Average American Income

The money we use to give, save, and spend originates from our income. Individual and household incomes can vary greatly according to where you live. In NE Kansas, where I grew up, the medium income of the county is $31,971 while the median income of the community where we recently lived in the Bay Area of California is $118,713.

According to a December 2012 survey, 4 in 10 Americans are living paycheck-to-paycheck while 8% do not have enough to cover basic essentials.

3. Average American Giving

Giving of our time, talent, and treasure is a big part of our household financial picture. Individual giving (that includes family trusts) makes up nearly 9 out of 10 dollars donated. Many charities could not operate without the manpower provided by volunteers.

Giving of Treasure

Giving of Time

4. Average American Savings

Personal savings rate of American households is around 3.7%. Many families have little or no emergency savings to help weather a significant medical expense or loss of a job. Building up an emergency fund needs to be a high priority for any family that wants to build a good financial foundation.

Emergency Funds

College Savings

A recent study by American Saves determined that many families would like to save for their children’s college expenses, but a majority do not follow through. Families in the survey expected only 32% of college expenses to be covered by savings or parents’ income, 32% by grants and scholarships, 16% by student loans, 7% by parents’ borrowing, and the remainder of 15% from student savings, relatives, and friends.

Retirement Savings

Many reports show a big divide between how Americans expect to live during their retirement years and how they are saving toward that goal. The traditional pension plan is disappearing and Americans are going to need to save toward retirement through a workplace 401(k)-type plan or an IRA. One half of workers state they will work past the traditional retirement age simply to have access to a health care plan.

5. Average American Spending

A majority of our household income is spent on the basics of life. Let’s look at how a household with an average of $63,685 of income spends their money according to the Bureau of Labor Statistics.

Housing Expenses

6. Average American Debt

Over the past forty years, Americans’ dealings with debt has increased. Previous generations only used credit for large purchases such as a home or automobile. Today, it seems like anything can be purchased on credit with no money down.

Student Loan Debt

A couple of decades ago, student loan debt was labeled as “good debt” because it helped you increase your lifetime earning potential. With the skyrocketing costs of college and difficulty with post-graduation employment, student loan debt is consuming a larger portion of the household budget.

How does this help you?

Averages are a funny thing. They can be more specialized by age, education, or where you live. An average house in rural Kansas costs much less than the average house in San Francisco. The average high school graduate makes less than the average college graduate. Averages can make us feel more comfortable with our situation or they can spur us into action.

Does knowing the average of something change your perspective? What financial habits keep you above average? Leave a comment!

Article By Cherie

Cherie is an accountant with a passion to teach others about personal finance.

http://christianpf.com/average-american-finances/

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9 Steps To Landing The Internship You Want

Nine Steps To Landing The Internship You Want

Nine Steps To Landing The Internship You Want

Internships.com CEO Robin Richards shared with us the steps you should take to boost your chances of landing the internship you want.

1. Assess your values, temperament, personality and interests.

Richards says that Internships.com and other sites offer free tools for completing this critical process – however, most students jump right into the internship search without a thoughtful assessment of who they are and what they want. A self-evaluation can lead to a better understanding of the career path you want, and the types of company cultures and environments that suit you best.

2. Find the internship that suits you best.

Richards suggests that you scope out internship sites with the greatest number of listings. Then, click around on the links to make sure they are active and up-to-date. Once you find a site that you trust, you can begin your search.

You have to first limit your search to locations that are practical and affordable. Once you’ve settled on realistic geographical locations, narrow the search further by choosing your areas of interest. A lot of companies will pop up, so you may have to refine your search by “paid” or “unpaid.”

Now you should be left with a list of companies that meet your criteria – but don’t trust that they are all a good match. You’ll need to research the firms, and look at size, industry, reputation, and history, among many other things to decide which ones best suit you.

3. Network.

Narrow your list down to two or three companies and start networking. “The best way to get a leg up is to reach out to personal contacts,” Richards says. “Look to friends, family, and friends of family for connections to the companies you’re interested in pursuing.”

Where? Facebook, LinkedIn and Twitter are good places to start.

4. Apply for the internship you want.

Compose a cover letter that addresses the job description and the company’s needs. “Cover letters are kind of an old school elegance that says you’re ready to join the work force,” Richards says. “In a cover letter, you want to show them that your education coupled with relevant experience lends itself to whatever job description they put forth.” If you don’t have relevant work experience, include any pertinent volunteer work, involvement in clubs, or other activities.

Always highlight leadership roles. If you can explain, with brevity, that you’re able to deliver a project without being told what to do every step of the way – and you have experience to back that sentiment – you should do so in a cover letter and on your résumé.

Try to find good, free help before you send off your cover letter and résumé—then submit it via the preferred method. “You’re too low on the totem pole to circumvent their path,” Richards says. “Do what they say to do!”

5. Prepare for the interview.

If the employer requests an interview, you’ll need to prepare. How should you dress? “Always overdress. It’s that simple,” Richards says. “If you walk in and it’s casual, someone might tell you that, but you should say, ‘I wasn’t sure, but I wanted to be respectful,’ and that will set the tone for who you are before you even sit down.” Richards says he’s interviewed candidates who looked like they hadn’t showered or were dressed inappropriately, and “they were out before they even opened their mouths,” he says.

If you’re dressed to impress, and you’ve already done your homework – then you’re ready to go. One way to ease your nerves (and to show you’re responsible) is to arrive five to ten minutes early.

6. Ask the right questions.

Once you’re in the hot seat you’ll want to set the tone. “The tone for all good interviews is that you’re interviewing them as much as they’re interviewing you. You should go in wanting to understand if this place is a good fit for you.” Richards compares companies to mentors. As a young professional, the places you intern will shape your future and provide you with knowledge and experience – so it’s important to ask them intelligent, forward looking questions.

Things not to ask: “How much will I make?” and, “How much will I have to work?” These questions say you don’t really want the job.

Something else to pay attention to during the interview: Body language. Look the interviewer in the eye, smile, sit up straight and respect personal space.

7. End the interview.

If you can get through all that, you’re almost in the clear. “Wrap up is very important,” Richards says. “You’ll want to ask for information about the process, what will happen next, and what the expected time frame is. This way, you’re planting the seed for the follow-up.”

8. Follow-up.

Go home and compose a hand-written thank you note to the interviewer that day. This will set you apart from other candidates, and you will be one of the 3% to 4% who make this classy move. “It’s a great way to distinguish yourself from the pack.” If you don’t hear from the employer within the time frame they gave you, wait two to three days and email them. If you really connected with the interviewer and they provided you with their phone number, you should call.

9. Deal with the job offer or rejection.

If you’re offered the job, respond promptly and professionally. “Give them an answer that day or the next morning,” Richards says. “It’s at this time that you should voice your questions or concerns. Don’t wait until you’re hired!”

If you’re faced with rejection, use it as an opportunity to reflect on your approach. “Ask yourself what you could have done better, if you prepared enough, if you dressed appropriately,” Richards says. “If you go through a reflection process, you’ll know how to better prepare next time.”

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This Market Rally Hates You and Everything You Stand For

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Yes you, The guy complaining about low volumes.

Yes you, The girl armed with her list of overbought stocks.

Yes you, The dude with a mean reversion strategy that never fails

Yes you, The chick who points out Amazon’s PE Ratio on and on.

Yes you, The Apple Fanboy who wonders: WTF won’t $AAPL go back up?

Yes you, The analyst pointing out money being concentrated into fewer and fewer names.

Yes you, The Day Trader who complains it’s only HFTs trading against each other.

Yes you, The Ackman’s of the world who go on TV and talk their short book.

Yes you, The piker who points out that this string of positive weeks can’t go on forever.

Yes you, The 401k career man who went to cash in March of 2009 and has been waiting for his precious pullback

Yes you, The Politicians in Washington who won’t get on board with our Dear Leader and his Federal Reserve and sing “Everything’s gonna be alright.”

Yes you, the junkie playing that biotech stock that’s stuck in a 5 cent trading range waiting on a court room to save you (you know who you are).

And yes to you Seany – the guy who is long volatility and gets kicked in the stomach on a near daily basis.

This market rally hates you and everything you stand for. So STFU and buy buy buy!!

 

NOTE, alternative title considered: “I’m wrong and if I childishly rant about it, maybe it’ll help”

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