  |
Money Matters airs Thursday July 6, 2017
Traversing these markets- What to do and which way do we go?
Money Matters airs Thursday July 20th, 2017 at noon PST on KVMR and Moneymanagementradio.com where we will cover these summer markets and what to expect and MORE!
----------------------------------------------
Approved 201088
Need a better idea how to invest? Keep reading......
Investors usually tell me they hold a variety of assets which might include stocks, bonds and mutual fund in order to be diversified yet few can give me a specific reason for why they hold each investment. Somehow they believe holding a wide variety of assets is diversified, and while this is a partially true statement, the actual reason why this is true can be elusive.
Having clarity and focus in ones investing is tantamount to reaching financial goals. This means you have to be clear on why you own everything you own and how we reach that awareness is actually quite simple.
For instance, I own my shotgun not as an investment but for protection. I am investing in my safety and the safety of my family in case some bad guys arrive at my house late at night. I own my garden to give me food and own my car for mobility. I own my house for my family and I to inhabit yet many investors think of a house as place to accumulate retirement savings or invest for growth. While this might be true to some extent, during 2008/09 we discovered that perhaps that wasn’t such a good idea. Part of the reason for the housing bust was confusion on the part of investors on why we own our homes. Decades ago most people thought of home ownership as just that, a place to live. In the last decade however, the reason for owning a home morphed into an “investment” instead of a “necessity” and that’s where the trouble may have started.
The reason for holding money in a bank has also changed over the decades. When I was growing up, the banks paid me six percent interest on my savings. My Dad told me to save my money in the bank for the interest payments much like he did. Since banks now pay little interest, the reason for putting money in a savings account has changed. Now we put our money in a bank for safety, not for the interest. When investors complain to me they cannot make money in a savings account, I tell them that is not why we are there, at least it isn’t at this particular point in time. We have savings accounts and similar bank products for safety, not to make money. If we want to make money, we obviously must look elsewhere.
Many people hold stocks for growth. I do not. I hold stocks for their potential income as I usually don’t buy any stocks that don’t pay me money (dividends) to hold them. With the income they pay me, I may get the growth regardless of whether the market goes up or down. If the market does go up, I might do even better. If the market goes down, any payments I might receive takes some of the sting out. Keep in mind, dividends are not guaranteed and. having stocks that pay dividends does not ensure profit or protect against loss
Some investors might hold gold and silver coins in a bank safe deposit box for peace of mind against a possible currency collapse while others might hold gold stocks for speculation on the gold price.
Commodity funds may help guard against rising grocery bills while holding some Cd’s, Treasury bills or cash would tend to help preserve funds in a broad market sell off.
I could pay off my home mortgage, I don’t. I consider my mortgage as a way to help protect against inflation. (Inflation could allow me to pay off my mortgage with cheaper dollars) Others consider debt the devil’s own and avoid it all costs.
By detailing the reason you hold each asset, it may help clarify your portfolio goals and even cause you to perhaps alter its contents. Once you detail and carefully consider why you hold what you do, or at least ask the question, your investing plan might become that much clearer. The thought process of truly knowing why you place money where you do will go a long way in helping you reach your goals and allow you to better allocate your money where it may offer the maximum possible return, the possibility for growth and protection while providing clarity to your reasoning.
-----------------------------------------------------
Tired of guessing and wondering how your money is being managed and even if it is?
We have a definite STRATEGY. Let me explain it to you over coffee. It is that simple and no cost or obligation.
Email me at:
mcuniberti@cambridgesecure.com
I have some time in July and August.
