E Trade Adaptive Portfolio Review - A Millennial Tale

Posted by Carlos Sera on Aug 23, 2016 12:34:35 PM

"How Investment Advisors Hurt Millennials and How Millennials Hurt Themselves"

As the father of four Millennials, I am angry at the blatant disregard Investment Advisors show towards Millennials.  The most egregious disregard is the recent advent of automated investing as a way of catering to the investment wants, not needs, of Millennials.  It is clever marketing but it is bad for the Millennial and bad for this country.  Anytime, you cater to a want and not a need you should probably be selling a luxury good.  But in this case you are selling a necessity.  Saving money for retirement is a necessity and when companies cater to a person’s wants instead of their needs they are only serving themselves. 

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Topics: Stocks and Bonds, millennials

An Idiotic Tale - The Idiot Son - 50% Stocks 50% Bonds

Posted by Carlos Sera on Aug 16, 2016 1:26:23 PM

This is one of my favorite tales because it involves my father, his friends and investments. In this tale I am the idiot son. I left Legg Mason in 1990 and started my own advisory firm. I no longer wanted to dish out conflicted advice as a commission compensated advisor and had to focus my energies on succeeding as a fee-driven advisor. For those that are unfamiliar with the 1990’s, they were a very good period for stock market returns.

I started managing my father’s money professionally in 1987 and have continued to this day. However, I was under the umbrella of a large firm until 1990. This gave my father a sense of security. He was apprehensive when I told him my plans for starting my own firm and though he didn’t say it our show it, I assumed that he also had some hesitancy about me managing his money on my own. He was 64 years old, he was going to place his trust in a 32 year old and the bulk of his money was going to some discount broker named Charles Schwab. I know he had to feel that way because many of my clients at Legg Mason were reluctant to transfer their portfolio and entrust me with their money under these new circumstances

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Financial Calculators - More Harm Than Good? A Draining Tale

Posted by Carlos Sera on Jun 20, 2016 10:46:33 AM

I was recently at lunch with one of my long-time clients and her recent college graduate grandson.  We of course were talking about money and no money conversation is complete without a discussion about rates of return.  The grandson brought up the topic of financial calculators and that he had been playing around with them.  He wanted to know if they were something of value. 

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Topics: Volatility (finance), Volatile Tales, volatility drain, financial calculator

Which Political Party is Better for the Stock Market? Democrats or Republicans?

Posted by Carl Sera on Apr 8, 2016 10:50:32 AM

Presidential Analysis

The November Presidential election will be one of firsts.  Should Hillary Clinton win she would become our first female President.  If Bernie Sanders were to win, he would be our first Socialist President.  If Donald Trump were to win, we would have our first Billionaire President and if Ted Cruz were to win, we would have our first President with Cuban heritage.  This leaves John Kasich as the only candidate that would not be one of firsts. 

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Topics: Stock market, politics

Are Target Dated Funds the Best Option?

Posted by Carlos Sera on Feb 26, 2016 12:14:29 PM

To determine if defaulting employees into Target Dated Funds or Glide Path Funds is a good thing, one must first examine the alternatives. An examination of the history of asset allocations by employees before Target Dated Funds were the default option tells us that it is.

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Topics: Articles, retirement

Retirement Planning: Target Dated Funds vs. Passive Index Funds

Posted by Carl Sera on Feb 22, 2016 9:23:22 AM

In addition to Target Dated Funds, many investors buy passive index funds for their 401k, 403b and IRA retirement plans.  They do this systematically out of every paycheck.  They have recently seen the three major indices fall by over 10% and many are asking what they should do during this market correction.  Many are asking questions such as which index will lose the least on the way down should the trend down continue and which ones will rally first if the trend reverses.

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Topics: Retirement Tales

Investment Strategy: INDICES Up vs. Down Markets

Posted by Carl Sera on Jan 27, 2016 2:58:29 PM

In addition to Target Dated Funds, many investors buy passive index funds for their 401k, 403b and IRA retirement plans.  They do this systematically out of every paycheck.  They have recently seen the three major indices fall by over 10 percent, leaving many to wonder what they should do during this market correction. 

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Topics: Articles, Stock market

Is Stock Market Volatility Here to Stay?

Posted by Carl Sera on Jan 15, 2016 3:07:41 PM
Is stock market volatility here to stay?  The answer is yes - absolutely yes.  You see, volatility is just a fancy term for uncertainty, and uncertainty will always be with us.  If the question were rephrased to say is high volatility here to stay then the answer is no - absolutely no.

Why is this? Stock market volatility, as measured by the VIX, is a mean reverting measure, which means that what goes up must come down, and what goes down must come up.  So with recent volatility levels in the mid-20’s, and the historical average volatility around 18, you can expect a drop.  When it will drop is anyone’s guess. 

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Topics: Articles, Stock market

What Is Tax Efficiency?

Posted by Carlos Sera on Jan 8, 2016 11:00:00 AM

Have you ever heard the phrase tax efficiency or tax efficient portfolio?  Whenever I hear it my muscles tighten up, I get a little nervous, I lean forward to hear better and prepare to be wowed.  Not long after, whatever the opposite of wowed is, I am.  Once I realize that nothing has changed on this topic since the advent of governments taxing people on their investments, I scold myself for allowing this topic to capture so much of my attention.  Nevertheless, I have never written a piece on this topic and thought I would share my thoughts.  I urge you to prepare for some wow.

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Topics: Articles, Taxes

The Financial Advice I Wish I'd Known Then

Posted by Carlos Sera on Jan 6, 2016 8:30:00 AM

One of my favorite musicians is Bob Seger. I saw him perform live while in college and he left a lasting impression. The first time I heard the song “Against the Wind” I was living in Seger’s hometown of Detroit, and the song only elevated his status. I think it is brilliant; containing one of the most poetic and philosophical lines of any song: “Wish I didn’t know now what I didn’t know then.”  As soon as I heard it, I knew it would be part of my permanent collection of things to ponder.  While he wrote it as mid-thirties musician reflecting on his teenage years, it is applicable at any age looking backwards.     

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Topics: finance, Behavioral Tales