Wednesday, June 3, 2015

The End - June 3

Hi everyone,

For those who have read the blog I wish to thank you. It is two months old now.

I hope it has been useful.

However there has been no feedback, questions or comments.

Obviously there are many services out there giving information. So I have decided to shut down as it is clear that few have interest.

I wish you all the best and good investing.

Friday, May 29, 2015

Is Gold a good Investment - The Pros and Cons - 31 May

A number of people have written asking about gold as an investment. I will present the pros and cons

Pros - By the World Gold Council

"Gold is a tangible asset which cannot be printed at will. As such, it protects against inflation and currency devaluations i.e. price of gold goes up if USD falls) . For example, in 1971, a family in the US could buy a house with US$25,000. Today, US$25,000 is not enough for a mortgage deposit. By contrast, 700 ounces of gold (the equivalent of US$25,000 in the 1970s) can buy a US$1 million property today. A growing body of research has shown that having a portion of savings in gold can improve purchasing power over the long term, especially as the real value of most major currencies declines.

Gold performs under pressure

In turbulent times, gold is resilient. The amount of available gold is constrained and cannot be expanded at will, as is the case for fiat currencies through expansionary monetary policies – especially in times of financial and economic crisis.  Additionally, unlike a stock, where the underlying company can go out of business, or a bond, where the issuer may default on a coupon or redemption payment, gold has no credit risk.

The long-term outlook for gold is strong

Demand for gold continues to outstrip supply. Jewellery and technology applications make up more than 50 per cent of demand, and most gold is bought in the world’s fastest-growing emerging markets. China and India account for more than half of all gold purchases, annually.  Newly-mined gold can only meet about two-thirds of current global demand. In addition, central banks are no longer net sellers of gold, so the rest of the demand is currently fulfilled with recycled gold. With demographic and economic trends predicting increasing wealth and expanded populations in the world’s two largest gold markets, gold demand has the potential to continue rising.
Globally, demand for gold softened a little in 2014, according to the World Gold Council, with jewelry and investment up slightly over 2013. Investors shied away, due to the previous year's surge in demand, according to a third-quarter review by the council.
These demand pressures might be expected to attract new supply, bringing gold prices down to Earth. But Holmes says the low-hanging fruit of gold mining already has been harvested, and environmental regulations have raised the cost of exploration, extraction and shipping.
"It's much more difficult to get that asset out of the ground," he says.

So Is Gold a good investment?

Gold like any investment is driven by what the economy is doing and how the world views the value of gold. About half the Gold is made into jewelry. 

In 2011, the price of gold peaked at $1,920 per ounce–in some cases its value superseded that of the consumer price index. If the US dollar were to crash, experts predict the price of gold would skyrocket, as it would be considered a stable investment. However, if gold took a value hit, the US dollar and the NASDAQ would likely rise.
The United States has the highest percent of global reserves, with 75%–8,133 tonnes. China, with its huge demand, has just 1.6% or 1,054 tonnes of gold.
As with all investments it may have a place in your retirement account but you need expert help not a guess at what is happening in the World or a rumor you heard. This is where your Registered Investment Adviser can help.

Saturday, May 23, 2015

How the Econmy Works - May 25 2015

Through the last five blogs I have tried to present how investing in mutual funds which carry high fees will lower you retirement account losing a big part of your retirement funds at a critical time in life.

I also have pointed out that you must be very careful who advises you on what to buy as many financial advisers are selling you what makes them the most money and not you.

Today I want to give you a simple understanding of how the economy works for investing and what is happening in Europe which affects markets and the value of your retirement portfolio.

First is a 30 minute video called How the Economy Works ( This is by Ray Dalio.

 Wikipedia describes Ray as follows "Ray Dalio (born August 1, 1949) is an American businessman and founder of the investment firm Bridgewater Associates. In 2012, Dalio appeared on the annual Time100 list of the 100 most influential people in the world. In 2011 and 2012 he was listed by Bloomberg Markets as one of the 50 Most Influential people. Institutional Investor’s Alpha ranked him No. 2 on their 2012 Rich List.] According to Forbes, he is the 30th richest person in America and the 69th richest person in the world with a net worth of $15.2 billion as of October 2014.

In 2013 Dalio began sharing his "investment secrets" and economic theories on YouTube via a 30 minute animated video which he narrates, called How The Economic Machine Works; the video has since been viewed over 1.5 million times, and has been translated and made available in Japanese, Chinese, Russian, Spanish, German, Italian and French. 
Ray has averages 20% gains for his clients at Bridgewater for over 20 years. He uses this as his model for investing.

The second video is 12 minutes by Bloomberg news is called "The European Debt Crisis Visualized"  This is also on You Tube at

These videos will give you a good insight to what is going on in the world.

As always let us know your comment and topics you would like addressed..


Saturday, May 16, 2015

Registered Investment Advisors - Bolg May 18, 2015

In a previous Blog we addressed the issues of using a Financial Adviser (broker).

A great illustration of this is on You Tube in a video called the "The Butcher vs the Dietician"

( I advise everyone to watch this a few times as it clearly shows what happens when you go to a Butcher (Financial Adviser).

Who are the "Dieticians". In the USA they are know as Fiduciaries. These are people who gave up getting paid by commissions and became "Registered Investment Advisers". These people are paid for financial advise and by law this removes and conflicts of interest.

These people get paid a fee. They get no kickbacks, commissions or payouts and anything they tell you about. therefore they have your best interest in mind. They will show you the best investments for your needs and how to get the lowest fees. Also they will find the most tax efficient investments for you. However check them out because just because they are registered doesn't mean they are the most knowledgeable.

In the USA you can find one by looking on the internet at

In other countries they may have different names but they are around.

Be sure the advisor is registered with the state or SEC as a registered investment advisor (RIA) or is an investment adviser representative (IAR)

Be sure they are paid on a percentage of your assets under management not for buying mutual funds and that this is the only fee they receive

Actions to take: Get a good Fiduciary to review you portfolio and show you ways to save money and grow you portfolio more rapidily.

As always send us your questions and comments

Monday, May 11, 2015


If you are watching your retirement account and trying to decide what to do, you need to pay attention to psychology of groups of people. People have a great tendency to do what others are doing.

Unfortunately this doesn't work well with investments. Every market that goes up sooner or later comes down and every market that goes down sooner or later goes up.

Many people put money in when markets are at the top or bottom and when it turns (which can happen quickly) they lose a lot of money. Instead of letting it ride and wait for a turn around they pull out to prevent more loses and so they lose out when the market turns.

This is why guys like Warren Buffet invest in stable companies for the long term. And as Warren says the number one rule of investing is don't lose money.

In particular the worst types of investors tend to be doctors, lawyers and other professionals who think there expertise in one are makes them good investors.

Our Financial advisers tell us to to spend wastefully and invest foolishly. many people don't buy when the markets have bottomed and the rewards can be high as they are afraid. They feel better when the markets are shooting up. However this is the riskiest time as sooner or later they fall.

How did the US Economy look in 2007 - great. As it plunged people lost a lot of money because they pulled out to avoid losses and then the markets went to all time highs.

The best long-term investors, like Warren Buffett, think the opposite of most investors, and have indicators to measure the herd’s fatal instincts.

What is the takeaway from this. If you are investing on your own take great care to look at market cycles and and don't depend on yourself to figure things out.

Look at what great investors like Ray Dalio and Warren Buffet are doing and emulate them or get a good Registered Investment Adviser (in the USA) and there are equivalents in most countries. These are people who get paid a set fee to advise you and are not getting commissions, and kickbacks on the products they sell.

I will speak more about these people in the next Blog.

Please send in comments and questions

Friday, May 1, 2015

Fees, Fees, Fees destroy a retirement 1 May 2015

To illustrate what we talked about in our last blog here is an exert from a report by Robert Hiltonsmith on fees

"Do you know how much you pay for your retirement plan? If you’re like many Americans saving for retirement in a 401(k)i , the answer is “no.” An AARP survey 1 found that 65 percent of 401(k) account-holders had no idea they were even paying fees, and 83 percent, or 5 out of every 6, lacked even basic knowledge about the many fees and expenses that everyone with a 401(k) pays. These include fees to cover the costs of advertising the plans and the companies who run them, fees to pay various investment managers of the funds in the plan, even fees to cover the costs of buying and selling the underlying stocks and bonds in which retirement accounts are invested. These fees, however, are taken “off the top” of investment returns or share prices—in other words, the rates of return and share prices reported to you in account statements and plan documents are post-fee. Because of this, retirement and bank account statements contain no evidence of these fees, and thus account holders generally have no inkling how much all of this costs them. Excessive 401(k) fees can take a surprisingly large bite out of the retirement savings of American families who are already struggling to save amidst long-stagnant wages and an idling economy. DÄ“mos has calculated that an “ordinary” American household (details provided later in this brief) will pay, on average, nearly $155,000 over the course of their lifetime in effective total fees. To put this in perspective, this household could have bought a house with the amount they paid in fees. This is a price that families already trying to weather the risks of the contemporary U.S. economy can scarce afford to pay. The country needs to implement one of the many more efficient retirement savings ideas that have been proposed by institutions and individuals across the political spectrum to give all Americans a reasonably-priced means to save for retirement.

A higher income worker making approximately $90,000 per year will lose upward of $277,000.

Read the complete report at

What to take from this: You need to find out what fees you are paying and why. Ask the your financial adviser for a complete list.

In the next Blog we will discuss ways to avoid these challenges.

 As usual please send us your comments and any topics you would like to discuss.

Monday, April 27, 2015

What is Your Retirement Plan? - Post 2

So what is your retirement plan? Do you have a pension, 401k, IRA, Roth or other?

Today Seniors have almost 4 trillion invested in 401k plans. Many of these plans are invested in mutual funds and other high-fee investments sold by Financial Advisers who sell the client on what produces the most fees and profit for themselves not for you.

This can be a disaster for your retirement savings. Ad in taxes and it is no wonder why people are afraid of their retirements not carrying them until their death.

Unfortunately, you are risking your money and having to decide what to invest in. You probably know little about investing.

Many factors are happening in real time such as volatile markets. Combine that with exorbitant fees and the tax man (who will take up to 50%) and the world can be a pretty scary place.

So how do most invest?

They use a financial adviser. He recommends how to invest there funds in there 401K and other investments.

Is this wise? Financial Advisers earn their money from commissions on what they sell. So like any good salesman they will sell you what pays them the most money as opposed to what makes you the most money.

Mutual funds also advertise whet the made. So let’s say that they made a 10% for the year. Is that what you get? No!!

Forbes Magazine did a study of the costs of mutual funds. They found that on average the following fees are subtracted:

"Cost Summary

The following summarizes the average quantifiable costs described. Adviser and soft dollar costs are excluded due to the large range in advisory fees and the difficulty of quantifying soft dollar costs. When working with a financial adviser, it is important to add the advisory fee to the mutual fund costs listed below for an accurate depiction of total potential costs.

Non-Taxable Account

Taxable Account
Expense Ratio .90%
Expense Ratio .90%
Transaction Costs 1.44%
Transaction Costs 1.44%
Cash Drag .83%
Cash Drag .83%
Tax Cost 1.00%
Total Costs 3.17%
Total Costs 4.17%

Commissions to salesman about .75%"

So out of 6%  you actually get either 2% 0r 2% depending on whether you have a Taxable or a Non-Taxable account. What if the fund had a year where they did only 5% or less (you can lose money?)

Action – I strongly advise you to contact you adviser and get a full list of fees for anything you are invested in. Demand it in writing. Then move to investments with mush lower fees

We will quantify precise numbers in the next blog post

Don’t be like the fellow in the cartoon below.

As usual please send us your comments and any topics you would like to discuss. 

Also realize I am writing this to give people information to help them keep the most money they can in in their pocket. At no time to we sell any financial products or get commissions for any recommendation. This blog will be updates every Monday.

Tuesday, April 21, 2015

Senior Finances – Simplified - Post 1

My name is Fred. I am a 66-year-old senior citizen. I was a senior executive in several large companies such as IBM and ITT. I still run several successful companies and that I would like to share my knowledge with others….as I have seen many that struggle with finances due to lack of Knowledge

At the age of about 50, I started looking at the company’s pension plans as well as the government programs. What I found has shocked. It takes a lot of hard work to try to understand how “OUR” money is invested and in most cases; we are not making much headway in growing out money to support our retirement. The years from 2008 – 2015 have seen a lot of investment accounts and 401k plans lose money (in many cases a lot of money). Many seniors who planned on retiring will now have to work another 5 to 10 years because of these problems.

Seniors need to understand their investments in simple language so they can stop losing money.

This blog will address in simple language how you are being taken for a ride on your investments and what you can do about it. I will give specific strategies to help you make and keep your money and steer your away from money holes. I get nothing out of it. I just want to help those that are unfamiliar with investments

We do not nor have we ever sold any financial investment products. The advice given is from years of research into my own accounts and gives practical tips in plain language so it can be easily understood. We have no vested interests

If there were topics, you would like me to address, please put them on the blog
This blog will be update weekly.

What are people worried about
These results are from Gallup's annual Economy and Personal Finance poll, conducted April 3-6, 2014.

They show the top financial concerns of in various age brackets

Please note that the number one fear is not having enough money for retirement.

I hope you will follow along with me in sharing 15 years of my own learning and research into the subject.
Speak to you next week