Post Equifax Data Breach Ideas

We are not claiming to be experts. We think you will find this a handy starting point. Clients: Most of you have all or some of your accounts held at the TD Ameritrade institutional custodian. Know that we get immediate around the clock notifications of money and securities moving in or out of your accounts. We are notified of new accounts, transfers and closed accounts. If you think that your data has been compromised and are concerned, you can call TD or us and ask for your accounts to be placed in “Loss Prevention”. That means that TD will flag your accounts into a heightened mode of scrutiny. This will also add an inconvenient layer of extra bureaucracy when you want to legitimately access your account. Are you suspicious that you data has been compromised and your identity has been stolen? Then you should call the credit bureaus and ask that they “freeze your credit”. This will prevent the person(s) who potentially stole your identity to purchase big ticket items in your name. Here the bureau numbers for your convenience. Equifax (CBI) (800) 685-1111 Experian (TRW) (888) 397-3742 Trans-Union (800) 916-8800 Paid Protection Services: What about paid protection services like LifeLock? We think these services are worthwhile. It’s best to protect yourself with preventative measures and then LifeLock will help if someone takes advantage despite your good practices. Importance of Passwords: There seems to be no shortage of hackers these days. It’s very important that every password is “strong” and is changed at some regular frequency. It’s easy to get lazy. I recommend that you calendar your password changes so...

401(k) Workshop Oct. 17 – Open for Flyer

We’re very excited to bring a very high quality 401(k) workshop to North County. Click here for the flyer. A 401(k) plan where a plan sponsor hires a registered investment advisor with specialized 401(k) knowledge is completely different than the typical 401(k) with a broker. Registered investment advisors have loyalty only to the plan and the plan sponsor. They do not accept commissions. Brokers have conflicts of interest  (commissions) with the record-keeper and/or mutual fund company. This makes it impossible for brokers to take on any fiduciary liability. It makes it impractical for them to lead efforts for more transparency and lower fees. Their investment knowledge is often misguided. Please RSVP to roadmap@oreillywa.com or call 760-504-6040. See you at Vista Chamber on Tuesday, Oct. 17, 11:30 for lunch & networking and session starts at 12:00 to 1:30...

Portfolio Performance, Market Behavior as of 6/30/2017 Posted Here

The quarter just ended one business day ago and already we have posted our 6/30/2017 Model Portfolio performance data found here. The quarterly market review is posted here. It quickly informs you what happened in last quarter and first 6 months of year as well as longer term. The last two pages of the quarterly market review reports on the relationship of stock market performance and interest rates. Most assume that the relationship is clear- guess again. In a week or two we’ll have our 401(k) numbers and will add them here. What happened in the last quarter and first 6 months in our portfolios. Well, steady goes the ship – boringly good.  The 100% stock portfolio is up about 8% for the year and just under 3% for quarter. Volatility is low. Some industry pundits are saying, “This is scary that it is not scary”. Their worry is that something will upset the apple cart and the market will get more volatile. My reaction, “”Of course, that will happen – it is NORMAL! And there’s nothing you can do about it – except try not to watch the market that closely!” Ok, ok, I will get off my soapbox! So what’s been happening with various asset classes in recent times? The “rest of the world” stock index that we show as a benchmark in our model data has been on a tear compared to its performance over the last 18 1/2 years. It was up 14.1% last six months and 5.8% last quarter. To enjoy that you have to own it which our clients do in the DFIEX...

What is the Greatest Opportunity to Improve 401k Plans Today?

What is the greatest opportunity to improve 401(k) plans today? We want as many employees as possible to get to higher account balances as soon as possible! Yep. It’s all about the money! Do you and your fellow employees deserve it? Absolutely you deserve it! A majority of participants allocate their money poorly resulting in less return each year versus what they could have had. That results in less compounding. Repeating that lower return year after year – with the all-important compounding effect – and participants are left with ⅓ to ½ of what they could have had! Ouch! Just a 1-3% less return each year on average is devastating to the final balance at retirement. So we need to improve the allocation of as many account owners as possible. How do we do that? Note, that by definition, 401(k) plan account owners have freedom to place or “allocate” their money in the plan options. Plans must offer “fund education” – but they are not required to offer “investment advice” – advice on how much to place in each fund for best results long term. What’s the solution? I’ll give you two: the band-aid (quick) enhancement and the permanent enhancement. Band-aid Enchancement: Hire a registered investment advisor become the ERISA Section 3(21) advisor to your current plan – who is licensed, willing and able to give investment advice. The investment advisor will help employees significantly improve the return versus employees left to their own devices. Most 401(k) plans have “shiny object funds” that at first glance sound good. An example is “Stable Value”. Stability sounds intriguing. What’s not to like? Well...

A Unique Way to Define Good Investing – Challenge the mainstream!

Over the years, the mainstream financial world has completely misinformed us and misguided us on what constitutes great investing. This is conventional thinking – there’s a far better way. They push the idea of active investing, the exciting idea of “placing bets” on when to buy what and when to sell it. The best way to invest is “own everything” as that way you own each big winner. Statistically proven market behaviors like small company stocks outperforming large company stocks can be employed by a slight over-weighting towards small company stocks. We call that “Evidence-Based Investing” since the strategy is backed by statistical proof or evidence. In the conventional view of investing pushed by the financial mainstream, it is expected that every year there will be capital losses. Enough “losers” are sold near the end of the year to offset capital gains with the goal of zero capital gains taxes. (Legally avoiding taxes is wonderful but not because your net gain each year is zero or less!) It has been common in my investment advisory practice to take on new clients with accumulated “capital loss carryover” from the past. In other words, their investing results have been so poor – that their gains have not overcame their losses. My clients have the opposite problem. After they have been on board for a few years – all their asset classes – their DFA funds – have increased in value. So when we re-balance their portfolio –  capital gains are generated with no capital losses available to offset them. That’s OK. In fact, that’s great! That should be your GOAL. If you’re paying capital gains taxes, it...

1st Quarter 2017 Market & Model Portfolio Report

The first quarter of 2017 was a good one for the market generally. The best performing asset classes were emerging markets at 11.4%, international at 7.9% and large USA (S&P500) at 6.1%. While small caps were in favor in emerging markets and international, they were not in favor in the USA – specifically small and value (Russell Value index -0.1%). The opposite, large/growth, usually a laggard, was best index in U.S. stocks at 8.9%. This swing is not unexpected after the small/value significant run-up in Q4 2016. Global real estate was up at 3.4% and US real estate was fractionally down -0.3% The O’Reilly Wealth Advisors 100% equity model was up 5.2% with the most conservative portfolio, 40% equity, came in at 2.6%, and the others lay in-between. The main value of looking at a quarter is to satisfy your curiosity, “What happened in the last three months?” Remember that a quarter is a “second” in market time and if you look at any quarter, you are bound to see “odd” market behaviors. In fact having the quarter results mirror long term expectations would be unusual! Investing is a long term proposition and there is a huge amount of statistical noise in stock market data. That’s why we focus in the on 18+ years of results, not 1, 3, 5 and 1o years. The 18 year data has a higher probability of representing the actual expectations of future performance.   See our market summary (16 pages) here and the model portfolio results (2 pages) here....