Four of the Most Reliable Words in Investing, Coaching, and Parenting.

Patience, Discipline

“It’s tough to make predictions, especially about the future.” Yogi Berra

Armed with brainpower, insider information, and sophisticated tools, even the most powerful global institutions cannot outguess economic data and financial markets. One such institution, the U.S. Federal Reserve officially diverged from other central banks with a much anticipated December monetary policy  announcement, and Fed Head, Yellen, steadfastly exuded confidence in an ability to execute on central plans. While seemingly small now, this historic event does signal added change, uncertainty, and hypersensitivity to future news-flow.

Default risk, volatility and extreme downside in security prices were reintroduced in 2015. Well-intended 2016 forecasts are on the way to our inboxes, and these notes often serve only to confuse yesterday’s confident beliefs. Stocks, bonds, commodities, emerging markets, and currencies will continually jostle investors and prognosticators.

No crystal ball or “black-box” strategy guarantees consistent and successful market timing, so let us briefly examine four words able to more reliably trigger clearer thinking in times of added stress.

Patience, Discipline, Process and Customization have proven a helpful and mightily resilient decision-making framework throughout a career of investing, coaching, and parenting.

#1 Patience helps to promote less emotional decision-making. We have all been in that daunting place, a moment where reactions, words, and instructions are paramount to a more successful outcome. Take a mental moment or even physically remove yourself from a tough situation. Intentional breaths also enhance one’s ability to patiently respond when control is momentarily lost.

Quick Tip: Avoid an immediate investing decision if you have recently been exposed to the flashing of red and green price-change indicators.

#2 Discipline reinforces adherence to well-grounded investment strategies and financial plans. The temptation to impatiently chase the latest fad, change styles, or to abandon the “game plan” out of fear, often leads to instability more detrimental than whatever short-term deficit or problem exists.

Quick Tip: Avoid compromises or exceptions only made to make a decision work this time.

Fearful headlines and twitter feeds sell ads and keep people glued to screens, but fear does not make money in the stock market.

#3 Process translates into effective execution of less emotional disciplines. Successful investors, coaches, and parents rely on consistent process methods to evaluate reward-to-risk relationships. This ability is wired into survival–Is that a stick or a snake? Should we kick an extra point or go for two? What will tomorrow bring if the kids win the battle to stay up too late? Investors should define and document reward and risk targets to compare with current prices. Key stats and ratios can help to set the limited price you are willing to pay and the point at which a sale is appropriate for each holding. This preparation should be done prior to the potential constraints of euphoria or despondency.

Quick Tip: A scheduled routine to review financial plan health, asset, sector and security allocations, tax efficiency, all-in expenses, and risk-adjusted performance is important and helps to avoid random thoughts and decisions.

#4 Customization can produce more optimal bottom-lines over robotic or glide-path plans. Armed with patience, discipline, and a process for execution, the flexibility to adjust for the conditions on the field is critical. Hard-earned wealth is proactively built, so unique circumstances deserve collaboration and measured decisions. Simple strategies to achieve low cost, diversification, and risk management can be achieved while paying attention to the changing complexities of taxes, special requirements, and crazy markets.

Quick Tip: Be wise with model recommendations found in newsletters, popular media, or other widely distributed platforms. While often good advice on the surface, what is right for your neighbor is not always right for your family.

Happy New Year and Best Wishes for 2016!

It is tough to predict any 12 month period. This investing year is especially difficult with so many large players like China, the U.S. Federal Reserve, and the European Union attempting historic shifts alongside a daunting list of uncertainties. Besides turbulent markets, our basketball team is struggling, and we “welcome” our first teenager into the house. The written words of Patience, Discipline, Process and Customization will literally be turned to as reliable triggers to handle tough decisions (see pictured office whiteboard).


Michael loves to empower investors with his expertise in securities and economic analysis, goals-based wealth management solutions, and FinTech smart decision-support tools. While directly managing over $5 billion in growth and retirement assets; his proactive advice and software innovations have influenced thousands of fiduciary advisors to better their practices and service to clients. He enjoys spending time with his wife and three boys, competing in USTA tennis, and mentoring others to succeed.

Email |

Twitter | @MichaelHakerem


How’s Your Form: When Only A Few Will Know?

All Rights Reserved

One demonstration of character is how YOU go about YOUR business with just a few audience members. Perhaps the sole observer is the person you see reflected in the mirror.

The Xfinity Center, the indoor arena that serves as the home of the University of Maryland Terrapins, holds capacity crowds at nearly 18,000. Imagine the vibration as thousands of fans pile in to cheer, boo, and watch soon-to-be professional basketball players. Boom! Feel the chills and goosebumps on a made three-pointer or “And 1” play. Instant results, instant performance review, all recorded in history for the world to see…

You could hear a pin drop on a recent Sunday morning in College Park. A young player with hopes and dreams stepped up to the line for a technical foul shot. Just #3 and the referee. An opportunity to give less? An opportunity to make excuses? As parents, coaches, and business leaders, we are proud when a child, player, or corporate teammate strives for the perfect form. It is especially gratifying to witness hard work and effort with an awareness that the results and performance may go mostly unnoticed and fade away in time.

Some professionals will play to full arenas and receive national recognition while most of us have our best high-five moments to no cheers or big awards. Some professionals choose the easier way or take advantage of situations where the boss or clients “will never know the difference.” You know these folks, their timing for the right spotlight is impeccable. Meanwhile, most of us will often realize our best professional form on a Saturday morning in an empty office. Is it worth it?


The sweet sound of a swish of the net remains unmistakable–even if it is just YOU. “Yes,” that satisfied smile is worth it–that look in the mirror is worth it.

With Gratitude, Michael

Don’t Roll the Dice with Your Retirement

The costs of not implementing personalized advice will escalate so watch out for products and overly standardized solutions.


The S&P 500 has sustained an unusually high 15%+ annual pace of returns over the last three years. Still, U.S. retirement savings and pension plans fall short by multiples of trillions. Our lifestyle, investment returns, and retirement success are partly in the hands of competent and caring central bankers; unfortunately, they are in experimental territory! Despite hope for a “this time will be different” outcome, last night my wife and I experienced another demonstration of well-intended microeconomics gone awry–Family Monopoly Night. Will the global macro-economy have more success in its quest to provide stability for its growing and ageing citizenry? Let’s not assume a complacent path toward GO!

European emergency deals with Greece, signs of disinflation, and a litany of other mixed data points prove constant reminders of burdens resting on the shoulders of the world’s most powerful central banks. The March 18th U.S. Federal Open Market Committee (FOMC) meeting and the associated Summary of Economic Projections and press conference by Chair Yellen come with great anticipation for insights on paths for interest rates, inflation, and global growth.

How can any players evaluate
what is what, or who is on first?

Whether fiscally shaky countries, unstable companies loaded with high yield debt, or individuals afflicted with an addiction to self-dealing blowups, at some point global powers must allow fundamentally sound principals of reward and risk. So-called emergency measures of quantitative easing (QE), market manipulations, and data-spin have created illusions of great prosperity. Can market players truly evaluate the past and future quality of their investment portfolios? How do you prudently plan for future retirement cash flows? Will liquidity exist when massive amounts of investors make the same allocation decisions–see Energy sector? As certain as death and taxes, the FOMC will inevitably trigger a soundness test of our wealth management processes. It will test its own resolve, too.


Don’t try this at home or on
the global stage!

The primary focus of family game nights is to share equally in the seemingly easy task of promoting fun. To this end, all players are bribed with pleasantries and tasty snacks. Though often too soon, the more formidable Monopoly traders emerge and our micro-economy changes its character. We can now wheel and deal our way to a fortune even faster loading millions onto debit cards instead of cash! Unfortunate bubbles and bankruptcies loom, and we are unsure how this game will unfold. I survey the bubbling emotions of the table and decide to step-in as central banker and quickly implement a few minor tweaks to the rules as relied upon since 1935. Surely, a few rent-free passes around the board, lower mortgage rates and a special one-time QE program are acceptable as a fair trade-off for a prolonged cycle of family fun (and snacks).

monopoly credit cardsUnfortunately, emergency tweaks force a new set of incentive behaviors, and control quickly becomes a rear-view mirror phenomena. The artificial nature of our “new normal” game introduces an evolution of hypersensitivities. Prudent savers shed tears as interest payments and cash flows are severely strained. Formerly on economic life-support, a certain type of grin emerges on the face of wildly aggressive players as fair consequences remain suspended. Never extrapolate current circumstances!

No press conference, but…As the most powerful central banker in the house, I cannot reveal any lack of confidence in how this game may end.

Further details from my reign over family game night shall remain sealed in order to digest the facts as I plan to recall them and to avoid critique. Meanwhile, real life global central bankers, finance ministers, academics, and financial market participants are clearly articulating their own visions for currencies, growth, jobs, and policy options. In fact, seventeen central banks have clearly spoken in 2015 with monetary easing. Sweden slashed its main policy rate into negative territory! Economic battles may ensue as countries try to protect self-interests.

The S&P 500 stands at 2,100 and the
U.S. Ten Year Bond yields 2.14%.

Many managers of wealth agree that broad stock market valuations are elevated and economic cycles cannot be completely eradicated. Nearly seven years since the last U.S. recession, risks of negative asset returns and even lower interest rates are real. At the same time, life expectancy and years in retirement are extending. The EBRI estimates that “at-risk” early baby boomer shortfalls range from $71,299 for married couples to $104,821 for single women.

The costs of not implementing personalized advice will escalate so watch out for products and overly standardized solutions.

Market players put too much faith in the ability of humans (or machines for that matter) to legitimately map desired outcomes with high certainty. The well-intended programs and tools unleashed by global central bankers may produce more future risks than current rewards. Aided an abetted by political dysfunction, demographic trends, geopolitics and a multitude of unforeseen variables, it is impossible for anyone to predict an exact transition from policy-induced tweaks to a self-reliant global economy. Even Dr. Janet Yellen could not have predicted the outcome of our family game night, and this is precisely why it is such an instructive econometric tool!

Like it or not, we were all invited to this global Family Game Night, and an important test looms sometime in the future. No matter the status of your preparation or distance from retirement, take control of your security and freedom with a foundation of financial knowledge, trusted advisory relationships, and methods to review and verify your family’s unique circumstances.

  • Cover the bases of the continuous cycle of wealth management with discovery and understanding, financial and estate planning, strategy implementation, supervision and review.
  • Re-check your human and online advice platforms: Many investors are clearly paying too much and receiving too little OR paying too little and not receiving enough mission critical advice.
  • The National Association of Personal Financial Advisors (NAPFA) is a leading professional association of Fee-Only financial advisors:
  • The CFA Institute strives to lead the investment profession globally by promoting the highest standards of ethics, education, and professional excellence:
  • The Employee Benefit Research Institute produces non-partisan data on health, savings, and retirement issues:

I welcome your comments.

Email l

Twitter | @MichaelHakerem

Michael embodies client-stewardship in all his work and happens to be a passionate expert in securities analysis, asset allocation, economic analysis,
and wealth management solutions.

More than 275 million Monopoly games have been sold worldwide and are available in 111 countries and 43 languages. Your family and the U.S. Federal Reserve should invest in this classic econometric tool for a cost of less than $20. 

Sip Your Wall Street Carefully

Michael's Cup2

A great mentor required me to hand record daily and weekly prices of copper, oil, interest rates, currencies, money flow, sentiment, etc. from the Wall Street Journal & Barron’s onto a card stock grid. I know, I know…no automated download and this task was usually completed by 6:30 am. What an awesome way to get close to the data, market barometers, and the pulse of the world’s financial markets.

My LinkedIn Post on December 5th entitled An Ark, a Speedboat, a Tight Bathing Suit, outlines a thought process and framework for asset allocation and portfolio construction. The last paragraph read,

Thoroughly review all your taxable and tax-deferred accounts. Make sure you and the advisors who work on your family’s behalf have coordinated strategic (long-term) and tactical (short-term) estate, asset allocation, and margin-of-safety plans. The tides will inevitably change so do not wait to hear the thunder before the next big storm!

There are thunderous signals abound as prices of oil, copper, and money plummet. See below for a graph of the benchmark 10-Year U.S. Treasury Yield–dropping from 3% to well below 2%. If upward moving 401k plans and investment values have delayed urgency to this point, then the sheer velocity of recent change should cause an immediate review of your complete portfolio and unique circumstances. True, draw-downs of 10% in broader stock gauges are considered “normal” through the course of any given year; that is, a change in prices from some high point to a low point, before reversing upward again. Also true, professional and novice investors are clearly getting burned with dramatic moves taking place in specific sectors, asset classes, and investment vehicles. 

Sound investment strategies expect and withstand this level of two-sided volatility and, in many cases, a buy and hold strategy may make sense. Unfortunately, anecdotal evidence shows clear signs of misalignment and potential hidden dangers. For example, history-making low interest-rates have caused investor’s to demand and advisor’s to reach for a myriad of new products and solutions. Do you or your advisor clearly understand and appreciate the costs and risks in higher yielding MLPs, exchange-traded-products, and lower-rated bonds? Was publicity, slick marketing or a cool chart enough to place your hard earned wealth into a buy decision?

Wise from all points as investor, advisor, and chief investment officer, I can write with certainty that sometimes it just feels right to make changes, no matter how slight, to satisfy a behavioral need to feel more in control of the often uncontrollable. Stress levels are sure to rise in 2015–Investors at all levels will come to appreciate an emotional connection and plenty of great communication with peers and advisors!

10-Year Yields

Let me repeat some advice, do not count on your advisors’ portfolio review timetable or ability to proactively call you. Take the appropriate initiatives (this is not the same as panic) and be aware that various Wall Street incentives and potential conflicts of interest exist on Main Street and Your Street. Be an astute consumer of financial services and feel confident that you have a comprehensive understanding when it comes to fees, rationale of advice, allocation of time to your family, methods of implementation, risk assessment techniques, and so forth. Even good professionals get ensnared in poorly constructed advice business models, overly simplistic tools, and limited offerings. Yes, a so-called fiduciary relationship infers a certain standard of care. Still, a discretionary fee-based relationship is not a license of faith. Some advisors consider marketing fiduciary acts as a license to avoid more laborious and detailed work. Trust, but verify!

Difficult Discussions:

Investor Rights:

Uber, Cosby…A Crisis of Character

“When wealth is lost, nothing is lost; when health is lost, something is lost; when character is lost, all is lost.” -Billy Graham


When wealth is lost, nothing is lost; when health is lost, something is lost;
when character is lost, all is lost. Billy Graham

I just Googled “top corporate scandals” and about 2,300,000 Web results displayed in 0.46 seconds; in fact, Google has its own reported scandals of a personal and corporate nature. Substitute in words like sports and Hollywood and the numbers explode upward. Type “Uber scandal” or “Cosby scandal” and about 15,000,000 and 36,200,000 are retrieved. I would enter “political” into the search engine, but I do not wish to crash my laptop! As written and illustrated by study after study, scandals in the world, whether centered around sex, corruption, bribery, fraud, or other greed factors, have crucial negative impacts on lives young and old, as well as the global economy.

Yes, a cast of disgraced CEOs are forced to leave companies every year, often punished by personal ethical lapses in judgement. Perhaps a new trend of swift punishment for sports heroes gone bad is emerging. This category is especially troubling for many households as ESPN has a vastly larger audience than business television. Ikea’s sold horse-meatballs, Mark Hurd has love triangles, there is tragedy due to buildings with violated safety codes, espionage, battery against women and children. Wal-Mart said it spent $439 million in two years to investigate the possible payment of foreign bribes. The LOSS OF CHARACTER IS A HUGE RISK TO THE GLOBAL ECONOMY.

The world has a record 1.8 billion young people between the very impressionable ages of 10 and 24. A great deal of that population segment live in the developing world where character impactors revolve around even more serious issues like civil war, jihad, malnutrition, slavery, and rape.*

Main Street, Wall Street, Your Street…This is all to say that our children are exponentially exposed to the worst examples of character, and bad character is the most corruptive substance of our future growth and productivity.

Please put aside for a moment the over seven billion people in the world. What are the impacts of scandalous activity in your much smaller ecosystems? What is the economic and emotional impact of events taking place in your community, office, or in your home, at the kid’s school? Someone is watching…everyone is watching, reading, clicking. It is up to us, you and me, to lead by example.

Fours years ago, my little TarHeel lived a life’s dream shared by tens-of-thousands. Wearing his favorite #50, his Carolina blue eyes twinkled as he stood steps from his sports heroes, an opportunity to “broadcast” his love and admiration to the world. Today, the fast-paced digital world at his fingertips, he has officially passed into the key category of impressionable youth. Like drinking from a firehose, opportunities are plentiful for him to learn, live, and lead by example. Let’s show him the way!

Unfortunately, Uber and Cosby cannot just turn a switch or post “values” in the corporate foyer. I once read that people will change their behavior only if they see the new behavior as easy, rewarding and normal. That’s sad. A culture of character has patterns of accepted behavior, core beliefs and values that promote and reinforce what is flowing through the veins, handed down to the impressionable, and enriched through leadership. Character needs no political, religious, or cultural boundaries. Great News! I just Googled “good character” and about 924,000,000 results displayed in 0.32 seconds.

*See Newsweek’s, Are Children Better Off Today Than 25 Years Ago? Yes and No, New Report Says:

**For fellow TarHeel diehards, I love Adam Lucas’s writing and he forewarns, by the time you finish reading his latest column, you might feel differently about Gerald Henderson’s character.