How are my Investments Doing? Use These Methods for Better Data

This is a common question we receive. Over the years, a frequent method I’ve observed investors use to answer this question is a simple rate of return, or SRR. But there are two other methods available, and for various reasons I’ll show below, they are usually more appropriate to use.

Simple Rate of Return (SRR)

While straightforward, it is ineffective in telling an investor the total picture. It neglects to take into account the impact of time (did it take 1 year or 9 to earn the return?), and does not adjust for the impact of what dollars were invested, and when. It is generally reported as a cumulative, single return percentage.

Internal Rate of Return (IRR) Read the rest of this entry »

Current Market Valuations, What Global Deleveraging Looks Like

Would you be surprised if I told you stocks had another slow patch this quarter? Not likely. For the third year in a row, the middle part of the year has meant most stocks have been hit by a recurring set of concerns.

Some have called this occurrence the “new normal”, referring to the new economic growth rates, interest rates, correlations of stock returns to each other and limitations on total investment returns. While there is no shortage of economists willing to foretell what will happen next, we believe it is far easier to understand where you are today and where we could go from here (and what will be necessary as a catalyst of change). The most significant contributors to this new normal are:  Read the rest of this entry »

How Quickly Markets Can Change

Just a few months ago, we were talking about the decline in credit rating of U.S. Treasury debt for the first time and worries of a recession “spreading” to the U.S. from the ongoing crisis in Europe. Its impact was volatile and pronounced, causing 2011 to be a year of flat to negative returns for most stock investors. This caught many off guard, in particular, because things seemed to be going well since the great recession that hit the world’s economies in 2008. It was an excellent reminder of the volatile nature of the financial markets, even when things are moving in the right direction. Read the rest of this entry »

Selecting Investments or an Investment Advisor

This is the fourth in a four part series designed to help you determine the best way to proceed with your previous employer’s company retirement plans, including 401(k)s, 403(b)s and more. Part 1 | 2 | 3 | 4

Whether or not you choose to keep your previous employer’s 401(k) where it’s at, roll it over to your current employer or move it to an IRA, you will still be responsible for its management and investment direction.  As discussed in the previous post, that can be a challenge if investing is not your specialty.  Don’t worry – we can help.

Our investment management service, Conflict Free Planning, ensures that a Financial Planner can help you identify the advantages and disadvantages to holding your investments in a employer retirement plan or an IRA. Read the rest of this entry »

Should I Rollover My Retirement Account(s) to an IRA?

This is the third in a four part series designed to help you determine the best way to proceed with your previous employer’s company retirement plans, including 401(k)s, 403(b)s and more. Part 1 | 2 | 3 | 4

Now that you understand at the pros and cons of leaving your 401(k), 403(b), or other employer sponsored retirement plan with a previous employer let’s take a look at another option, rolling over your retirement account(s) from your previous employer into an IRA.

The advantages of converting your retirement account(s) to an Individual Retirement Account (IRA) include:

1. Opening your IRA with a discount brokerage to receive much lower transaction costs.
2. More visibility of your current investments and more detailed record keeping.
3. The ability to invest in thousands of different securities instead of just selecting from a pre-selected list of 5-15 options. This allows you to create a specific portfolio designed to fit your unique needs, not just be lumped together with 100′s to millions of other investors.
4. In most cases much lower administration costs. In a self-directed IRA you may be able to greatly reduce your expenses by removing the extra administration fees present in your previous retirement account. Read the rest of this entry »

Should I Leave My 401(k) with My Previous Employer?

This is the second in a four part series designed to help you determine the best way to proceed with your previous employer’s company retirement plans, including 401(k)s, 403(b)s and more. Part 1 | 2 | 3 | 4

Are you one of the many people that still have company retirement plans (401(k)s, 403(b)s, etc.) held at your previous employer(s)?  As with all decisions we face, the decision to rollover a company retirement plan must be done with adequate information and disclosure so that you know in detail all of the advantages and disadvantages related to each possible choice.  With that in mind, lets discuss the pros and cons of keeping your retirement funds in your previous employer’s 401(k). Read the rest of this entry »

What Should I Do with My 401(k)?

This is the first in a four part series designed to help you determine the best way to proceed with your previous employer’s company retirement plans, including 401(k)s, 403(b)s and more. Part 1 | 2 | 3 | 4

What do you think about when you get a new job?

If you’re like most, you’re focused on what the new employer expects from you, learning your position, new processes and dozens of other details that come along with a new position.

This can be a very stressful time for any individual and although it’s the last thing anyone wants to think about, it’s important to remember your company retirement plan(s).  These include 401(k)s, 403(b)s, SIMPLE IRAs, Thrift Savings Plans and more.  If you’re not consciously thinking about your 401(k) or other employer sponsored plan it can be easy to think “I’ll get around to it later” and eventually forget about it all together. Read the rest of this entry »