Thanks for "Nothing" Dad!

I think it’s fair to say that Father’s Day is the ultimate participation award. There are certainly exceptions, but I suspect most fathers would agree that the 3rd Sunday of June each year is really just our trophy for showing up to play. Ask my kids who’s in charge at our house and they’ll laugh at such a silly question. Ask who’s next in command behind mom, and I’m sure my daughter gets the nod…she’s only 3. It’s the smart choice, as it’s painfully obvious she’ll always pull rank on me as long as she’s armed with those eyes and her mother’s smile. At least I know I’m a solid third in the pecking order as long as I continue to dominate driveway basketball games versus my sons. Even though they’ve realized dad is just another kid mom needs to keep tabs on, both of them have no choice but to respect me as the king of the court for now. That’s how it works on the blacktop boys. Winner stays, loser walks!

Sure, knowing pick-up basketball protocol isn’t going to do much for my boys in the long run just like teaching them how to burp the ABC’s won’t be of much help past the fourth grade. Same goes for convincing my daughter that girls shouldn't kiss boys until they’re married. It’s my crowning achievement as a parent up to this point, although I fully expect it to backfire on me much sooner than I’d like to think! But isn’t this the kind of thing that endears us most to our fathers? The sharing of life lessons, advice, and street smarts that dad collects throughout his life that any number of teachers couldn't pass along? Things like learning how to ride a bike, how to throw a baseball, or the right way to shake someone’s hand to tougher lessons about hard work, integrity, and honesty. There's a lot of truth behind an old saying that one father is worth more than a hundred schoolmasters. A lot of jokes too, but hopefully mixed in among all of dad's "less useful" lessons are the more meaningful ones that will stick with us forever.

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Women, It's Time to Get off the Fence

Gender income and leadership inequality continue to receive a lot of attention. The good news is that changes that could level these imbalances seem to be happening. Companies are beginning to recognize that adding women to leadership roles and management teams actually makes the organizations better. More women are being invited to the table, are "leaning in" and becoming a more powerful demographic. However, the pay gap is not the only financial challenge that women face. We also live longer and tend to take more career breaks. Therefore, in terms of managing our money, we can’t be content to do as well as men, we have to do better. Smart investing is crucial to financial security and independence. It also provides freedom to pursue opportunities and can prepare us for life events. Unfortunately, when it comes to investing, women are coming up short.

According to research done by Fidelity Investments, women generally are better savers than men, but they more often leave a larger chunk of their funds in cash. Cash might feel safe, but in the long-term, you will eventually lose out with inflation risk and near-zero returns on your money. Simply put, this can be an extremely costly mistake. So why are so many women sitting on the fence when it comes to investing? The two reasons most often cited - lack of time and lack of knowledge. This is not surprising. Many folks in our industry falsely portray investing as a complicated science that requires a PhD in economics and constant vigilance. By building up this seemingly overwhelming tasks in our minds, it makes it even easier to continue sitting on that fence. Having over twenty years of experience as a financial advisor, I am well aware of the poor job the industry has done speaking directly to women and catering to their specific needs.

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Automatic Rebalancing: It's All the (Road) Rage

We've all been there: stuck in congested stop-and-go traffic on the highway. You find yourself in a lane that's moving along pretty well, as compared to the others. You start thinking: should I stay in this lane for a while longer or change lanes while I'm ahead and before another lane gets its turn? While you are debating this with your spouse, you notice that guy a quarter-mile up ahead. He's weaving in and out of lanes, aggressively attempting to get ahead of the entire pack by changing whenever he sees an opportunity to possibly gain a car length. He's a high-frequency lane changer. You flag his car in your mind, and five minutes later: you slowly pass him.

In the investing world and in your portfolio, rebalancing an account too often can have costs too, just like that guy's driving. In the driving world, a freeway with very little traffic will allow you to change lanes almost any time, without the need to find your gap, check your blind spot, adjust your speed, etc. As the investing world has adopted lower commissions on many securities and lists of commission-free mutual funds and ETFs, the marketplace has made it easier to change lanes in your portfolio.

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Getting Started

This month, thousands of newly minted college graduates will begin the annual migration from the protected confines of their college campuses to the corridors of corporate America. For me, this strikes particularly close to home as one of my own daughters folds up her cap & gown and heads off to Atlanta to begin what I’m certain will be a promising professional career. Way to go honey, your mother and I are incredibly proud of what you’ve accomplished.

What follows here is more less an open letter to my daughter and her friends. While I’ll eventually need to come to terms with the fact you’re already capable of exercising thoughtful decisions as an independent adult, I’m still a parent, I’m still going to give advice, and occasionally I’m probably going to embarrass you. Really, I can’t help myself.

Within days of landing in your new office cubicles, you (along with the best and brightest graduates the country has produced) are going to have a life changing encounter that will unquestionably reverberate for the rest of your adult life. I’m not talking about an encounter arranged through eHarmony, or match.com, or even Tinder. What I’m talking about is the corporate intake encounter you and your peers are about to have with the representative from each of your respective human resource departments.

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X-Ray Vision

When I was a kid, the idea of owning a pair of X-Ray goggles that would allow me to see through closed doors and around corners was practically all consuming. After all, who wouldn't want a little advance notice to detect the alien space monsters that could easily be lurking just beyond our field of vision. Now that I'm an adult and my fear of inter-galactic space aliens has (somewhat) dissipated, it's been replaced by an even more terrifying phobia: I'm afraid of what will happen to my retirement security should Wall Street convulse in another series of unanticipated financial tremors. I don't know about you, but the fortuitous appearance of a set of X-Ray specs to help sidestep another financial sh*tstorm would be a welcome sight.

While I'm sufficiently hinged to appreciate the reality that X-Ray glasses capable of detecting imminent threats to my personal financial security are not likely to make an appearance anytime soon, there are tools every investor can employ to understand exactly how much risk is embedded in their investment accounts. Unlike years past when you had to have access to a Bloomberg terminal or know someone working at a large hedge fund, access to robust risk analysis applications is now well within the reach of most investors...provided you're savvy enough to ask the right questions. Not everyone is.

According to Aaron Klein, CEO of Riskalyze, an innovative software firm that helps advisors work with clients to discover their "Risk Number", nearly 80% of investors are completely unaware of how much risk is present in their investment holdings.

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Ghosts in the Machine:  The Eternal Life of Your Digital Assets

Have you ever thought about what happens to your Facebook account after you’re gone? It isn’t just idle speculation. With over 1.8 billion active monthly users on Facebook, elementary  statistics compel the realization that surely a few among us are on the brink of joining the ranks of the departed…probably some by the time you finish reading this post.

What about a Shutterfly account with all the cherished family photos, a LinkedIn account with your catalogue of professional contacts, or that Ancestry.com account where you spent nearly 2 years painstakingly documenting you and your kin really are lineal descendants of Geoffrey the 14th Archduke of Lower Saxony?  Got a little stash hidden away in a PayPal account? Who knows about it besides you? Maybe there are some Twitter accounts or online identities you’d actually prefer auto-destruct upon your demise because you posted a few too many flaming comments about the idiocy of the school board or the local road commission.

In a world where Venmo accounts can pay for triple lattes and Bitcoins are exchanged for luxury yachts, frequently overlooked items like virtual character identities for online games can also have surprising market value. Don't believe me? One such virtual character identity for the popular Game of War is currently listed at $1,705.48. Value it seems is in the eye of the beholder. And in this digital age, it’s gaining access to that value after your death that increasingly is becoming a point of contention.

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Why We Fail

 “The more emotional the event is the less sensible people are.”

-- Dr. Daniel Kahneman 2002 Nobel Prize Winner for Economics

Earlier this month, I had the pleasure of meeting a prospective client. My routine for a new ‘discovery’ engagement is to carry three items with me; a blank writing tablet, a pen, and an open mind. Listening and learning are my goals.

I often jump-start the conversation by inviting an answer to this question; “How can I be of good use to you today?” After a brief pause, this couple (early 60’s, professional, empty nest, retirement on the horizon) articulated their concerns about “how high” the stock market was and “how much they lost” in the financial crisis 9 years ago. That experience, combined with the volatility the stock market seems to present every day, has kept them anxious, fearful, and unable to reengage their investment program. For these folks, market volatility is a euphemism for “losing money”, a paralysis-producing perspective that is completely understandable. After all, sharp market declines can be unnerving; it is basic human nature.

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Punching Out Your Portfolio

Over the past few weeks, the Dow hit yet another new high of 21,000, the market matched a record 12 day streak of gains and Snap Inc. (NYSE: SNAP) went public with a near $30 billion IPO despite no one over the age of 30 really understanding what it is. Consider also that we just celebrated the 8th birthday of the bull market dating back to 2009 and it's understandable that many investors are feeling like this is all too good to be true. Perhaps we are due for a retreat. Perhaps not. After all, it would have been just as easy at any time over the last 8 years to cite reasons why the market couldn't keep going up. Remember how you felt when news broke about Brexit? How calm were you as U.S. Government debt was downgraded, as oil prices plunged towards $20 a barrel or as the bull market eclipsed the 5, then 6, then 7 year mark?

Want more "evidence?" My twitter feed recently featured a sponsored ad revealing Mike Tyson as the spokesperson for a new brokerage firm touting the benefits of 400x leverage and a message of trust. Yep, that Mike Tyson who was once on top of the sports world as the youngest ever Heavy Weight Champion of the World who’s better known these days as a bankrupted convicted felon with a taste for facial tattoos and other boxer’s ears. Predictably, the humorous retweets calling his endorsement of anything even remotely related to financial services as either a sign of the apocalypse or the ultimate proof that the market had run too far were endless.

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It's Lonely at the Bottom

As the U.S. stock market ascends to new heights and hogs all the attention, these days it's easy to forget how low interest rates have fallen and perhaps more importantly, why you should actually care! While falling interest rates were great for mortgage refinancing and those who bought 30-year treasury bonds in 1987, future opportunities to refinance a 30-year mortgage below 4% won't be common and good luck reinvesting the cash the Treasury is about to wire to your account at anything close to the rate you were getting. Not surprisingly, many investors are leaving the low yielding fixed income markets and piling more of their savings into stocks. It's enough to make anyone still methodically investing in bonds feel a bit lonely.

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Is Your Target Date Mutual Fund Aimed Squarely at Your Own Foot?

When they first debuted in the mid 90's, target date mutual funds (sometimes known as "lifecycle" funds) promised to make life easier for retirement plan participants. Use a few simple on-line tools to figure out how much to set aside from each paycheck, match your planned retirement year to the corresponding fund, and notify your plan administrator. Voila! Complex retirement calculus magically reduced to a simple 1-2-3 progression. Low fees, age-appropriate asset allocation, & one-stop shopping. Finally, a seemingly sensible short-cut to navigate the complex world of retirement planning.

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