Your Q4 2017 Report is Here

The quarterly and annual market review is here! Click here. It’s 30 pages and examines the global markets from every angle. The first half is quarterly and second half is the annual. There is also a write-up on bitcoin halfway through. Our 2-page O’Reilly Wealth Advisors performance summary can be found here Here’s a quick 2017 market and O’Reilly Wealth Advisors portfolios update. Markets and our portfolios performed well in 2017. The “winner” for 2017 was markets outside the USA meaning non-US developed countries and emerging market countries. Over the last 20 years markets outside the USA have performed lower compared to the USA large and small stocks – and many shied away from this asset class. We have remained disciplined and our portfolios are exposed to the 27% return. (5% in Q4!)  Of the 27% return, 37% was attributable to emerging markets and 24% was international developed countries. Other investors lost out by avoiding this market segment due to past history. Next best was US large companies as represented by S&P 500, up about 22% (6.6% in Q4!). US small companies (Russell 2000) also had a great year at about 15% (3.3% in Q4.) O’Reilly Wealth Advisors’ most conservative portfolios (40% stock, 60% bonds) were up about 2.2% and 9% for the quarter and year respectively. Excellent results for conservative portfolios which enjoy less volatility at the expense of larger returns. Our most aggressive portfolios (meaning 100% stock, 0% bonds) enjoyed great returns of about 6% and 20% for the quarter and year respectively. The other models fell in between. Even the 100% stock portfolios enjoyed lower volatility than the indexes due to...

Hope for Your 401k Account Producing Higher *Relative* Returns

Most 401(k) account holders are not aware that they could be achieving higher relative returns. This is especially true in a positive stock market environment.  There’s the famous saying, “A rising tide lifts all boats.”  The problem is your boat may not be not rising as fast as it could and also falling faster than it should when markets shift to a “falling tide”. In other words, your return, relative to benchmarks, or compared to a prudently designed portfolio, might actually be quite low! We suggest thinking in terms of two steps. By the way – both steps are equally important and neither step is done very well. Step 1 is under your control. Step 2 requires you to step outside of your comfort zone. Remember, though, it is YOUR money. Step 1: Grab the highest returns within the limitations of your 401(k) plan. Back to the “Rising Tide” idea. In investing you want to get full participation in the global market – in all the “rising tides” that are occurring. You also want to “fall less” when the rising tide turns to a falling tide. Diversification and low fees are the keys to both desires. Your victories that lead to winning the investment battle are small and numerous. An extra 0.5% gain here, and only dropping 0.5% when others dropped 0.8%. Day in, day out, those little victories put you in the winners circle. Be sure to get help from a registered investment advisor (RIA), if your plan has one. You want to get the deepest stock exposure possible around the world. Highest diversification, lowest fund fees. Sometimes “do it for...

Your Q3 2017 Report is Here

We’re having a great year. Of course, that will change and the markets will inevitably go down. Our models are up about 6 to 13% for the year.  The world outside USA is strong at 21%. This asset class is overdue – it’s been depressed for quite some time. For the quarter, our models were up from about 2% to 5%. The rest of the world and small stocks were the winning asset classes at 6.2% and 5.7% for the quarter.  Specifically under the heading of rest of the world, Emerging Markets was up around 8%. See our Model summary and trends here. See our detailed Q3 Global Report here. Call us with...

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...

H.U.D. Reverse Mortgage Policy Change – Short Fuse!

If you wish to consider how your reverse mortgage would help you under current law versus the new law, you had better contact and meet with your reverse mortgage expert before Sept. 14. On August 29, the Federal office of Housing and Urban Development, which oversees the federal backing of reverse mortgages, announced changes in the reverse mortgage policy. I am not going to get into the technical aspects of the change. Many people are told that a reverse mortgage makes sense for them – and they sit on the sidelines waiting, thinking that they have no need to rush. Now is the time to at least have the meeting! If a reverse mortgage might make sense for you and if you or your spouse are age 62 or older – then you should meet with a reverse mortgage specialist ASAP. If you’re not sure – call us. The net result of the change – you may not be able to get as much out of your home after the change is made. So it is imperative to move now just to know your options – how this change impacts you. Timing? Working backwards, you need to be assigned a case number by Sept 29; you need a 7 day cooling off period, therefore you need to have met and have all your numbers run by Sept 21. However, mortgage professionals are likely to be overrun by this change. So meet with you mortgage professional by Sept 5-14. Reverse Mortgages: A great financial planning tool applied in the correct situations – often misunderstood. This blog is not intended to cover...