5 guidelines for choosing a financial advisor - Vibrant Nation
By Lynn | January 12, 2010
5 guidelines for choosing a financial advisor - Vibrant Nation
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The move up
By Lynn | July 1, 2009
Well, it looks like all our 401ks are in much better shape than we were in March of this year! How did you fare this June end? Are you getting more secure about your retirement plans?
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How did we fare in the 1st Q of 2009?
By Lynn | May 4, 2009
Q1 Investment Review
- Lynn S. Evans, CFP
Well, it looks like we can take a breath of fresh spring air for a short while. Nothing too excessive. The road is still rocky and will continue to be for the next six months.
But here’s what happened in the last 90 days.
The stock market sank downward to another low on March 9. Since that time we have rallied considerably yet, the last quarter still will rank as the 5th worst quarter of stock market history. For the quarter, the stock market was down 11.7%. When added to the losses of all of 2008, we are south of 50% down. Should you celebrate? I would. It seems that with the strong market rise on March 10, the bear market can be declared dead. But hold on! As, there have been “fake out” rallies in the past. They are very rare, but it can happen.
In his most recent newsletter, Harry Clark, of Clark Capital Management says “as of April 3rd, the stock market has given its best performance over any four week period since 1933 with the S&P 500 advancing 24.5%”, and, “this advance has also been very broad …with the financial sector, the very worst performing sector of last year, leading the pack with a gain of 51%.”
We see the forest for the trees. Given the huge influx of capital thanks to Uncle Sam and his siblings, the banks are lending again. The interest rates are the lowest they have been since I have graced the planet, and the stock market is holding its own.
Traditionally, the stock market leads the economy by about six months. If that measure is true, we are poised for a turnaround in the economy by the end of this year, earlier if certain things fall into place.
I can’t say with certainty that this will not turn around and head south again, but I feel reasonably assured that the bottom has been found. The curve is not a deep V but a rounded U. It took us years to create this excess; it will take us years to climb out.
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WiserAdvsior names Lynn Evans to their approved list
By Lynn | May 4, 2009
12/09/2008
WiserAdvisor announces that Lynn Evans, CFP of Northeastern Financial Consultants, Inc. has been awarded admittance as a member of its directory of financial advisors.
Financial advisors are granted admission into WiserAdvisor (www.wiseradvisor.com) based on their credentials and qualifications. All members offer their services to investors with a fee rather than solely with commissions, allowing them to assist investors with a variety of different investment options. All members are also properly registered with the SEC, FINRA or other regulatory organizations.
Since 2003, WiserAdvisor has focused on taking much of the guesswork out of finding a qualified financial advisor or financial planner. This is done both through the stringent admittance guidelines, as well as through the information provided to investors about each member advisor. All members must complete an extensive profile outlining their services, qualifications and credentials, including their education background.
Because of the strict standards that a financial professional must meet in order to become a member, WiserAdvisor only admits a select few high-quality financial advisors and financial planners. More than 600,000 professionals can provide insurance and financial advice. Less than 1% have been granted membership into WiserAdvisor.
Thousands of investors use WiserAdvisor each year to find local financial advisors and planners, and trust that WiserAdvisor will help them find the right professionals to meet their unique needs.
About WiserAdvisor.com
WiserAdvisor is an online service that connects investors to local financial advisors and financial planners. It is an independent and free service provided to investors, allowing them to find local professionals who can help them build their portfolios, plan for retirement, manage their estates, or to help them with other investment issues. More information about WiserAdvisor and its services can be found at www.wiseradvisor.com.
About Northeastern Financial Consultants, Inc.
Lynn Evans, CFP is a financial advisor located in Clarks Summit, PA. Lynn has over 30 years experience working with local businesses and investors.
More information about Lynn can be found at http://www.wiseradvisor.com/advisor_profile_state~id~1815848.asp and at www.nefci.com
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New Wisdom for Retirement Planning
By Lynn | May 1, 2009
It used to be that you should subtract your age from 100 and that would tell you how much you should have in stocks, add about 1% in money market funds, put the remainder in bonds and you could live happily ever after. We all know now that is just rubbish.
Good idea, but as relevant as stocking up on plastic water jugs in case of an attack from Cuba. The plastic we now know is no good for you and Cuba is the least of our worries. So how do we update the adage and make it relevant?
Let’s look at what kind of spending you will need in retirement. First of all, you need to have some cash to pay for that donut hole in Medicare prescription coverage, and, any co-pays for other medical expenses. This assumes you already have the premium paid out of your available income. This extra expense money will not need to be there every month but it occurs mostly in the first quarter of each new year. So, you will need to have cash on hand for that.
Secondly, you may need cash to pay for gifts for birthdays, holidays, anniversaries, weddings, religious celebrations, births, deaths, etc. Know how much you will allocate and keep that figure in the cash account.
Beyond that, consider placing in an insured money market fund or other short-term investment, the money you will need for all your on-going living expenses, including insurance premiums which are best paid on an annual basis or as automatic deductions from your checking account.
In order to determine how much should be in this account, consider first doing a spending analysis (in some circles this is known as budgeting, but we won’t use that nasty term). Your expenses should be characterized as one of three types:
§ Fixed: these expenses are fixed in both amount and frequency, like an insurance premium or a mortgage or a home equity loan
§ Variable: these expenses are those you will have but will either fluctuate depending on the season (oil and gas in the winter, air conditioning in the summer) or will represent your personal choices (food, transportation, etc)
§ Discretionary: those that truly represent your lifestyle choices (vacations, subscriptions, personal care, pets)
Once you check out what you need to survive, see if you can cut it by at least 15%. That figure is what you would need to set aside in the second account, which is invested for the short-term in money market accounts and some in short-term CDs. (A copy of that expense worksheet is available at www.nefci.com) When you discover what that annual need is, you might want to take two years of those expenses and keep them in a short-term fund separate from your other investment accounts so that you can be assured the money will be there to pay your bills.
The third account, or accounts, will be those you invest for the long term so you will not “outlive your money”. These accounts need to be more aggressive by nature, since they will need to outpace inflation and add some real return to your portfolio. They will fluctuate and may cause some significant volatility in your asset values. That is to be expected and is something you want to happen. If they were stagnant or moved in a direct line upward you might ask if Bernie Madoff is involved!
Of course, if you have your entire portfolio professionally managed, the above may not be necessary. Determining what your living expenses are is a must, but to keep the separate accounts may be unnecessary. A static investment strategy will not be able to maneuver when the markets are as chaotic as they are now. A dynamic strategy which has a core component and a satellite type strategy which allows for investment in current opportunities can allow you to be in both places at the same time. This is not available for everyone especially if your investment portfolio is invested in 401ks only because you are restricted to the investment choices your employer selects. So maybe the “subtract your age from 100 and keep that much in stocks” might still hold!
In any event, the model we always relied on as a guide for retirement planning doesn’t hold anymore. It is time to review your strategy as well as your income needs and make the adjustments necessary to give you more hope of not outliving your money.
Topics: Retirement Income Planning, The New Retirementality | Comments Off
How Confident Are You About Your Retirement Prospects?
By Lynn | May 1, 2009
If you are like most Americans, the dream is just about dead. Retire? You must be kidding. My 401k has lost about 40% of what it was a year ago. I am using my savings account, whatever is left, to supplement my living expenses. There are no jobs for a person of my age. Life is not good.
I beg to differ.
Perhaps the 401ks are not what they used to be. Perhaps you are dipping into your savings to make ends meet. But the idea that there are no jobs for people over the age of 55 is pure lunacy.
The following chart depicts that same dour sentiment and never in the time they have been keeping this chart has the pessimism been so high. And why not? The sentiments in the previous paragraph are echoed around this country, actually, around the world.
I
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Worker Confidence in Having Enough Money to Live Comfortably Throughout Retirement, 1993–2009 |
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|
1993 |
1994 |
1999 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
|
Very confident |
18% |
20% |
22% |
24% |
25% |
24% |
27% |
18% |
13% |
|
Somewhat confident |
55% |
45% |
47% |
44% |
40% |
44% |
43% |
43% |
41% |
|
Not too confident |
19% |
17% |
21% |
18% |
17% |
17% |
19% |
21% |
22% |
|
Not at all confident |
6% |
17% |
9% |
13% |
17% |
14% |
10% |
16% |
22% |
|
Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc., 1993–2009 Retirement Confidence Surveys. |
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In my dear mother’s words, “out of everything bad comes something good.” And maybe it is time to consider that pessimism. As I have written in columns past, we seriously need to rethink what we call retirement. If our conventional definition implies a cessation of working for remuneration, then we will fail at this “retirement”. As so many people over the age of 62 can attest, “retirement” as just defined, is for the birds. Boredom, inertia, the onset of many illnesses, divorce, chemical addiction and other lovely life conditions result from the loss of purpose, the loss of social interaction, the loss of self-worth. Many men, especially, suffer serious bouts of depression post-retirement. This illness is brought on by the loss of identity. Think about it; when you are asked what you do, is there any value in saying “I’m retired”. Our society relegates those that retire to a state of uselessness, of mindless leisure, of a waiting room for the end of life. No one wants to admit to that. And we should not.
Instead, let’s redefine retirement as the third stage of life. A time for realizing those things you always wanted to do but had neither the time nor the inclination; those things you thought of as frivolous or silly. Like taking classes on Shakespeare, like learning how to redo your bathroom, or add a new addition to the house. Or learn sign language and volunteer at the local Boy’s/Girl’s Club.
Studies have shown that using the brain to learn new skills is a never-ending capability and actually stems the onset of dementia and Alzheimer’s.
The website, www.RetirementJobs.com is an excellent place to look for jobs in your own area. No promise they will be high paying jobs, but the more you can earn, the less your now gasping 401k has to generate in income. Or, with a job, you can reinvest your Required Minimum Distribution from your IRA (if you choose to take it this year). Every little bit helps.
And while you’re at it, take a good hard look at your expenses. Do you really need all the cable channels you signed up for? How about adding a Netflix subscription for about $9.00 per month and order as many DVDs as you can watch for that amount? Make sure you do all your errands on one day and figure it out geographically before you leave the house. Watch the paper for specials at the local grocery stores and buy in bulk, if it makes sense. Have a neighborhood swap party. You can swap your tools, clothing, and other used items and have what you need rather than have to run to the mall to buy a new one.
In short, the news is not necessarily as bad as it seems. At the very least, it would be a great time to work with a professional who can help you reposition your investment portfolio for maximum income and take a serious look at your expenses. Make sure you ask questions about what services they do offer. No need to sell everything and get into something far worse. Go to www.napfa.org and look for a professional in your area.
Topics: Retirement Income Planning, The New Retirementality | Comments Off
How confident are you about you about retirement?
By Lynn | April 20, 2009
Have you tried to figure out how you can afford to retire after this last quarter’s stock market plunge? Not to fear. Many people are in the same boat. All it takes is a willingness to REALLY look at your expenses and see where you can trim down. And don’t forget to look for a part-time job, not in something you hate to do but in something you would love to do. Consider part-time light secretarial work, some handyman jobs, some teachers’ aides, the current darling - call center phone work. Go to www.retirementjobs.com and check out what is happening in your area. Things can be different if you check your anxiety at the door. (Lest you think I am nuts, my investments have dwindled, too.)
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Lynn S Evans Featured On Radio
By Lynn | December 30, 2008
Here’s the recording of the radio interview I did with Laurie Cadden.
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When will the stock market take off?
By Lynn | December 29, 2008
That is indeed the $64,000 question! “When” is better than “if”! So the pundits are saying that the turnaround is expected after the second quarter of next year. Since we have been in the current recession at least for a year at this point, six months more ain’t that bad. But then again, no one knows for sure. If Obama does not instill confidence in the markets by the infamous 90 days into his presidency, then this take off point may not happen until much later. And of course, if external events occur, like another bombing or financial crisis, this could set us back again. In the more likely event that this economy starts moving, and the housing market begins to come back, we will see the stock market moving in the right direction. Cross your fingers and toes that this will happen sooner rather than later.
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Tax-Free Gifts of IRAs Restored
By Lynn | December 2, 2008
We all remember that momentous piece of legislation President Bush signed into law on October 3, 2008. This was the bill that allowed for the now infamous “bailout” which we have yet to see put into place.
But one of those sleepers contained in the bill, one of the “additions” Congress wanted in order to pass the legislation, was the restoration of the provision which did previously expire in December 2007, the IRA Charitable Rollover tax incentive.
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