Markets: Covering Our Eyes is a Bad Strategy

Reflated markets from 2009-2014 hid and created bad behaviors. It’s not too late to increase our odds for investment longevity. Many investors are paying too much and receiving little OR paying too little and not receiving enough practical guidance. Perhaps change is unnecessary; still, we need to build a statement of net worth, review cash and investment accounts, estimate new tax bills sooner than later, and prepare a written checklist of acceptable rewards and risks. The behavioral goal is to empower our brain to avoid emotional decision-making in case a real economic storm evolves.

China, Europe, Latin America, credit markets, global central banks, oil markets, currencies, geopolitics, and earnings will directly or indirectly IMPACT OUR retirement assets. Unfortunately, the very best and most vocal resources of the U.S. Federal Reserve, Wall Street, Econometric Models, Robots and Main Street Gurus cannot pinpoint an accurate outlook for 2016. So, let us instead improve cognitive functions with our eyes and an old fashioned pencil.

Let us focus on the more controllable aspects of wealth: saving, spending, and planning. Thus, we are REQUIRED to review, scrutinize, and reaffirm unique circumstances and financial plans. Is there alignment with the plans and fee structures executing on our family’s behalf? The goal is to IGNORE (mostly) the less controllable negatives of lower prices and scary headlines when confidence is reached in the answers to what, where, how, why, who, and how much!

As of this writing, the S&P 500 is slightly above last summer’s swoon to 1,860 from its previous high of nearly 2,135; however, this “normal” retreat disguises the extreme deterioration in markets across the globe. Hold on now…that information should not automatically steer us to buy, sell, or hold. However, it should signal relentless focus on our goals with a margin-of-safety!

20 Years Later…& Lots of Bad Markets

  • 7,500: Approximate number of days I have reviewed financial markets and portfolios as a professional advisor to advisors and private asset manager.
  • 250: Approximate number of days I pivoted from strategic plans to implement new well-reasoned plans.

Whether a professional or novice protector of hard earned wealth, we must address the suitability and reasonableness of expenses, leverage, complexity, liquidity, diversification, and risk management. It is our responsibility to proactively shield assets from the value erosion driven by emotional decision-making, unnecessary taxes, onerous inflation or deflation, and overly standardized or biased advice.

Covering our eyes is a bad strategy if change is necessary, and the only way to know is to look. Think strategically. Apply sound principles of investing, saving and spending. Avoid big directional bets. Also, see this recent Post with highlights on Patience, Discipline, Process, and Customization.

ABOUT THE AUTHOR:

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 | Michael@empoweredportfolios.com

Twitter | @MichaelHakerem

Fed Week: 3 P’s of Portfolio Management a Better Focus

Trifecta

Portfolio Management efforts can focus on more controllable and proactive themes like Protect, Prune and Plant. Countdown to the FOMC’s September 17th target rate decision is beyond our control and demands the perfect trifecta of outguessing Action, Reactions & Duration of Said Reactions. Good Luck!

When will the Federal Open Market Committee (FOMC) raise the target Federal Funds Rate and move the U.S. out of the zero interest rate policy (ZIRP) environment? The last tightening came in 2006, and based on recent Fed Funds futures prices and trading activity, the probability for a hike on Thursday has dropped from 50% to 25%. The likelihood rises to 74% for March 2016. Interest rates are the price of money which reflect supply/demand balances as well as inflation, credit, and other risks. Demographics, technology, structural unemployment, and muddle-through global demand will continue to deliver counter-punches to expectations for higher rates and inflation.

Bottom Line for Me: Deflationary counter-forces are powerful and Mr. Market will ultimately prove more powerful than what you see in the below Effective Fed Funds graph.

Whether it is former Treasury secretary, Larry Summers or The New York Times, smart people take polar opposite sides of the interest rate debate that will impact benchmark rates all along the curve (10-Year Treasury shown below). Stock markets throughout the world, as well as global currencies and capital flows, will be heavily influenced by the FOMC’s every word or lack of words. Let’s pretend you know the decision to hike is a foregone conclusion. Will the “market” react favorably or unfavorably? Okay, let’s pretend you rightly picked a 25 basis point increase and the market roars up as an indication the economy is strong enough to withstand the marking of a new interest rate regime. So what happens Friday or next month as investors, traders, speculators, and sovereigns digest the implication on their books? Can you pick the FOMC Trifecta?!

Advice: Spend more mind-share on the portfolio(s) you manage.

Similar to outguessing a room full of brilliant economists, forecasting the weather that impacts our future lawn and garden is fairly difficult. Still, here in North Carolina, we take more controllable and proactive actions in the fall to reduce soil compaction, save water, and enhance root growth in order to rejuvenate a lawn full of summer stress. Global portfolios have experienced summer stress with large losses experienced in numerous asset classes, geographies, market caps, sectors, credit grades, and investment style boxes. Sixty-five percent of the companies in the domestic S&P 500 have negative year-to-date price returns in 2015, and international currency translation is brutal with the strong dollar surge.

PROTECT. PRUNE. PLANT.

There are numerous proactive methods and techniques to pursue portfolio management/asset allocation goals that include less compacted correlations and exposures, savings of taxes, and enhanced future reward-to-risk opportunities. Here is a small sample with no FOMC Trifecta required!

Protect:

Cash is “King, Queen, Prince, and Princess” when uncertainty reigns, volatility and correlations rise, and markets are downright mean. Lots of methods to choose source of funds; however, an example is to quantify and rank reward-to-risk ratios for every holding/exposure and remove a percentage of those with the least favorable margin of safety. With a Growth-at-a-Reasonable-Price (GARP) investment philosophy, I like to rank valuation metrics such as PEG ratios and a proprietary view of estimated Price-to-Sales versus Profit Margins. Dry Powder is never a bad thing and so-called “Cost of Opportunity” is a protection risk I am willing to absorb.

In-depth analysis will look beyond simple stock, bond, cash, and security-level allocation modeling. I focus heavily on portfolio character, risk budgeting, and overall posturing; therefore, protective decision-making can shape a 100% invested portfolio.

Prune & Plant:

When a tide of losses hits 65% of the S&P 500, it is a superb opportunity to proactively harvest tax losses by swapping dollar for dollar into securities with equal reward-to-risk opportunity sets: This captures the economic losses which may be used to offset current gains or banked into carry-loss forwards. Of course, you can modify the type of exposure you have at the same time, but in this case the same amount of dollars remains exposed.
Note: Avoid Wash Sale Rules. 

Isolate and cull through the non-market/price related characteristics of your holdings and prune securities that have failed to meet fundamental or quantitative expectations over your tolerance of time. Perhaps, the business model is shaky, currency risk is too high, dividends are subject to change, the fund manager left, earnings estimates dropped, debt coverage breached your preferred ratio, valuation is too high, or liquidity, spreads, relative strength have weakened. It is rare for a portfolio to be blemish or disappointment free–just the laws of probability and no reflection on your security selection skills 🙂 

There will be no escaping the media and market’s desire to correctly pick the FOMC Trifecta in September, December, March…

Every investor and portfolio is unique so take more controllable and proactive actions that reflect your unique circumstances–In my experience, taking action (no matter how minute) is often worth the behavioral reward when market and events are highly volatile and uncertain.

ABOUT THE AUTHOR:

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 | Michael@empoweredportfolios.com

Twitter | @MichaelHakerem

Navigating The Global Market Selloff

Bull and Bear

Wealth is most often built through risk-taking, hard-work, blood, sweat, and tears, so never be passive about its management and preservation! My 90’s Bull and Bear artwork was unearthed this weekend from a dusty box. The old pic was an early career motivator to keep me focused on serving financial advisors and private clients no matter the market direction.

Always be PROACTIVE with the proper balance of capital appreciation and rewards as well as wealth preservation and risks.

A market sell-off swept Asian-Pacific stock markets Monday, led by China’s Shanghai Composite, which gave up 8.5%. Hong Kong’s Hang Seng Index dropped 5.2%, Japan’s Nikkei 225 lost 4.6%, Australia’s S&P/ASX 200 fell 4.1%, South Korea’s Kospi declined 2.5%, India’s Sensex was down 5.8%, and U.S. Dow Jones Industrials dropped over 1,000 points on the open. Market volatility, as witnessed by the widely followed VIX indices, had the greatest week to week percent increase on record. As expected, all kinds of assets start to correlate-downward.

This Post is not about fear or encouraging unnecessary action: It is also not about complacency or ignoring the world around us. Families deserve, require, and desire financial stewardship.

Three Things You Can Do Right Now

  1. Check Your Risk Attributes. Security-level modeling is fine; however, I suggest you heighten priority on portfolio-level characteristics like forward-looking valuation ratios (reward-to-risk, price-to-sales, PEG, Yield), draw-down metrics (return dispersion, Sharpe & Sortino, duration, value-at-risk, up/down capture), and sensitivities to varied economic scenarios (including disinflation & recession). Know where you stand — Is your portfolio suitable and aligned with expectations of the future (long and short-term)
  2. Cash is King, Queen, Prince & Princess. The appropriate “pruned” level is investor-centric; however, cash tends to be the simplest and most effective method to satisfy volatility reduction and emotional satisfaction. Why not target a security you never liked anyway, has above-average fees, or generally was not a complementary fit? The psychological impact of taking action (no matter how small) is often rewarding.
  3. Tax-Loss Swaps. In taxable accounts, when multitudes of securities experience large moves down, it makes a lot sense to capture paper losses, turn them into an economic benefit for the future (carry-loss forwards can even offset a little ordinary income) and immediately regain market exposure through another equally attractive security. This is one of the great proactive moves you can make in this market without attempting market timing or outguessing new moves from the People’s Bank of China.

A Few Pictures to Contemplate

1Fred Graph 8-25
The character of the world’s financial markets has changed as easily seen through market breadth, volatility, and sentiment; therefore, it is generally smart for investors to at least appreciate that expectations should adjust. The $4.4 trillion U.S. Federal Reserve balance sheet shown above is one anecdote that clearly illustrates the unusual and unprecedented nature of our economic world. For this reason, and even though I am a student of market history, I cannot accept advice like “this is just a normal and healthy pullback.” The world’s central banks have not a clue how to unwind this experimental game. See, Don’t Roll the Dice with Your Retirement.

2Fred Graph 8-25

The 2015 summer market selloff is blamed on a powerful U.S. dollar surge versus other currencies, plummeting commodity prices (led by oil), earnings and GDP slowdowns in China, Europe, Japan, and the United States. Incoming data is fairly mixed; however, the distribution of risks to global economic activity is still tilted to the downside with deflationary forces gaining momentum.

It only takes one snowflake to cause an unexpected avalanche.

3Fred Graph 8-25

Three More Points to Think About

  • Know Thy Messenger. As you seek guidance and read commentaries, watch for biases and conflicts. This is true whether listening to someone who is always talking market crashes or Armageddon, a strategist paid to keep you in their firm’s asset management products, or a salesperson disguised as an “advisor.”
  • Proactive Preparation, Reaction, and Communication. It may not be necessary to change your asset allocation, safety cash levels, or solid financial plan based on 2015 market dislocations. An allocation to “passive” and “cheaper” index investing has its place, too. Still, organization, scrutiny, and awareness of your portfolio’s expected rewards & risks, diversification, liquidity, credit, leverage (direct or indirect), and fees (on the statement and hidden) is important. How else will you know if a “reaction” is warranted? Whether an advisor(s) is present or an investor is self-reliant, other interested parties (like spouses and children) benefit from an increased level of awareness and communication: where we stand, the game plan, how we implement said plan, and the method of supervision/monitoring.
  • Focus on the More Controllable vs. Less Controllable. Most of us do well to place energy in estate and tax planning, social security strategies, and the fundamentals of diversification and risk management. Even if you 1) knew the exact outcome of potentially significant market moving events like the September Federal Reserve meeting or a surprise People’s Bank of China stock market intervention, you still have to 2) guess market reactions and then 3) the duration of those reactions. That’s a difficult trifecta!

In 1995, an early mentor required me to read and hand record daily levels of copper prices, 10-year bond rates, major currency levels, and about 70 other market inputs. I am not suggesting you watch that closely; however, a proactive approach with your hard-earned wealth is warranted!

ABOUT THE AUTHOR:

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 | Michael@empoweredportfolios.com

Twitter | @MichaelHakerem

5 Truths to Take Back the Wheel: Is Your Portfolio Driver-less?

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Steve Jurvetson via Flickr

Riding in the back of a Google robocar is probably thrilling! Now imagine your family, your business, and your hard-earned assets shaken side-to-side with sole reliance on a machine. Financial advice can often times focus on the rear-view mirror, drive the same speed for all passengers, and suffer from numerous blind spots when it comes to risk management.

Machines Can Break & Markets Can Bust Through the Cones

  • The #NYSE (New York Stock Exchange) was halted from 11:32 AM to after 3 PM on July 8th due to a computer error.
  • United Airlines issued a statement saying it suffered from “a network connectivity issue this morning” that grounded 4,900 flights worldwide.
  • The #ChinaMeltdown in equities has more than 50% of A-share listings halted for volatility. Since June 12, the Shanghai Composite has lost an unnerving 32%. The Shenzhen market, which has more tech companies and is often compared to America’s Nasdaq index, is down 41% over the same period.
  • Resolutions for #Greece have strong implications for the euro zone and contingency plans for larger neighboring countries. Importantly, what avalanche could this snowflake unleash?
  • Second-quarter earnings reporting season is set to ramp-up in a few weeks. Volatility and surprises are sure to come even as bottom-up operating earnings estimates for 2015 ($115.5 per S&P) have already dropped double-digits since the beginning of the year with an implied above-average multiple of 18X.

Take Back the Wheel or Hire An Experienced Driver

Global central banks, regulators, and governments are constantly manipulating the course and the rules of the road. Whether you are a fiduciary agent or an individual investor, please seek a powerful combination of smart decision-support tools and human wisdom to help navigate the potential bumpy environment ahead.

Radar Charts are a great method to easily visualize portfolio attributes. Below is a generic illustration I created in two minutes with Excel to view credit risk and interest rate sensitivity scores for different fixed-income groups. You could do the same for “Comfort-Score,” Forward Price-Earnings Ratios, Expected Yield, and other easily obtainable data items.

1) Rear-view mirror: Modern Portfolio Theory, historical standard deviations and 5-Year Betas are only useful starting points. Like a family budget or business proforma, portfolio stress testing and awareness should use a majority view through the windshield. You do not have to outguess the stock market or own a crystal ball on interest-rates, inflation, or economic growth to know what investments you own, why you own them, and the most likely sensitivities under different scenarios. Taken a step further, you can assign a probability structure like 50% confident interest rates stay the same and 25% each to interest-rates jump or interest rates retreat again.

2) Differentiation: Plan Scores and Probabilities of Success produced by finance software serve as great baseline assessments and help to facilitate deeper conversations. However, be wary of any tool, product, or advisor that claims an ability to properly and holistically gauge your comfort “speed” in just a few standardized questions. Your age, planned retirement date, and view that you “wish to make as much money as possible without experiencing a historical market drop” is rarely a view complete enough to evaluate your portfolio needs.

3) Risk Management: An experienced driver has proven techniques and disciplines to manage varied roads, traffic, and driving conditions. Here are five categories important for my family of passengers.

Seek Five Truths To Protect Your Hard Earned Money 

  1. Stewardship: A business culture based on a higher order of care that originates from a passion to serve and protect the long-term well-being of others. Even the trend of marketing “legal fiduciary” has gotten jaded when disclosures and conflicts are buried in the paperwork and the advice model still favors business-centric decisions. This is probably the most important and sometimes the most difficult to ascertain by those outside the financial services industry. Do your homework and start here!
  2. Integrated, Goals-Based Wealth Management: Builds collaborative long-term and shorter-term trading road maps on the foundations of a client’s unique and multifaceted goals, constraints, preferences, sensitivities, legacy holdings, financial wherewithal and emotional elements. How many other investors have the exact same portfolio as my family? 
  3. Proactive Asset Management: Defines “Style” as agile and flexible with an approach to evaluate rewards and risks. Will use passive & active strategies, strategic & tactical allocations, and quantitative & qualitative assessments where and when most suitable. Are my investments always an up-sized or downsized version of my previous holdings even when analysis reveals opportunities to target specific buys and sells that could improve my portfolio, tax situation, or risk profile?
  4. Humility: While considered an expert, the experienced driver is willing and able to admit mistakes or seek input from other seasoned professionals. Able to pivot unemotionally with the client’s financial interests taking precedence over the pride of the professional and the firm.
  5. Uses Technology to Implement Strategies–Not Sell Products: Faster, smarter, and prettier tools are available to empower clients and advisors throughout the four primary phases of wealth management (Discovery, Planning, Implementation, and Monitoring). Unfortunately, technology also enables product-steering, standardization, and mass distribution of advice. Slick reports, colorful pie charts, and mesmerizing statistics can also provide cover for lack of expertise and the effort put forth on your family’s behalf. Honestly, excluding the 24 hours before this review meeting, when was the last time you looked at my portfolio? Why does this tool always recommend your firm’s proprietary funds?

I welcome your thoughts in the comments section below. 

ABOUT THE AUTHOR:

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 | Michael@empoweredportfolios.com
Twitter | @MichaelHakerem

9 Bond Fund Risks To Evaluate

10-Year Yields last year

Now that’s price volatility! Government Agencies, Exchanges, Major Bond Investors, and Main Street Investors are again preparing for the long awaited upward shift in interest-rates and a potential collapse in bond market prices and liquidity. Deja Vu, right? Know your risk exposures and understand the location of your hard earned dollars!

The thought of bond market liquidity evaporating or double-digit drops in bond investments is unnerving enough; however, I am especially concerned where investors are exposed to two trends often seen in 401(k) plans, 529 College Savings Plans, Target Date Funds (TDF), and certain other ‘glidepath’ robotic advice formulas: 1) massive use of bond funds and exchange-traded funds (ETFs) in lieu of direct bond ownership and, 2) traditional advice of raising allocations to bonds as investors age or move closer to goal dates. As an illustration of size, Vanguard expects TDF adoption to hit 50 percent in 2015 and reach 63 percent of the 3.9 million participants enrolled in Vanguard-administered plans by 2018.

Fun Fact: Outstanding U.S. bond market debt
has grown from $31.7 trillion in 2007 to
$39.2 trillion in 1Q 2015. Source: SIFMA

No wise Advisor can assign certainty to the proximity nor consequences of this highly anticipated change in U.S. monetary policy. There are plenty of reasons to believe a Federal Reserve driven rate increase may be postponed beyond 2015due to deflationary forces such as weak global growth and employment, instability in Europe, Middle East, and Asia, shifting demographics, and the exponential price destabilizing impact of technology. However, Fed Chair Yellen seems determined to continue a stated gradual path to “normalcy,” and any move away from the 0-0.25% range in the Fed Funds target will be highly symbolic.

Suitable bond mutual funds and ETFs used in isolation or in combination with individual bond strategies can be very effective. Still, financial market participants may collectively induce higher interest-rate risks, so take heed of nine not-so-obvious risks to evaluate in your bond exposures.

  1. The “Bond” label is not always synonymous with conservatism or lower risk. For illustrative purposes, the opening graphic plots daily percent yields for the “risk-free” U.S. 10-Year Bond from 6/19/2014 to 6/19/2015. Price movement in this key benchmark rate is likely to experience historic volatility in the future. Other segments (high yield, municipal, emerging, mortgages) of the massive bond market are smaller and less liquid than Treasuries.
  2. Principal, maturity, and credit features are not guaranteed or insured–Many investors do not realize, understand or appreciate that bond funds can fall in price. Bond funds are not insured or guaranteed by FDIC, the U.S. Securities Investor Protection Corporation (SIPC), or by any other government agency, regardless of underlying holdings, or how a bond fund is purchased or sold—whether through a brokerage firm, bank, insurance agency, financial planning firm, registered investment advisor or directly.
  3. A net asset value (NAV) of fund shares is no guarantee. An ability to sell fund shares on any business day does not translate into the characteristics of “liquidity” in the sense of price and bid protection for underlying holdings. Funds make assumptions in their daily pricing matrices and actual future sales (especially forced) of holdings can receive prices much lower than modeled assumptions. Note: Closed-end bond funds trade at premium and discounts to underlying NAVs.
  4. Embedded leverage–The proverbial double-edged sword. Funds use yield enhancement strategies to try and boost returns and market their portfolios to attract or maintain investor dollars. This activity can translate into less obvious risks and the use of reverse repos, commitment agreements, and exposure to floating-rate credit lines with banks or bank syndicates should be noted too.
  5. Is the Fund 100% committed to owning actual bonds? Whether due to Fund size or purposeful strategy, additional counter-party and contract liquidity risks are introduced with the use of synthetic positions. Derivative contracts may also involve implied or economic leverage.
  6. Date & Data Matching on Fund Report Cards. Always check the “As of” date on top holdings, risk metrics, returns, credit weightings, and asset breakdowns. Look closely, and you may see inconsistency with the published report issue date–Are you sure you know what you own?
  7. Speaking of Holdings. Among other reasons, unprecedented low rates and high prices have forced some fund managers to reach for yield outside stated comfort zones or core competencies. For example, “conservative” funds with heavy exposures to potentially high risk Puerto Rico and Tobacco bonds.
  8. Metric Effectiveness. Listed durations are very popular and convenient numeric gauges of interest-rate sensitivity. Unfortunately, these generic stand-alone descriptions of price sensitivity can mislead investors due to straight-forward assumptions and limitations. Realized prices and actual market bid adjustments always trump mathematically derived estimates. Any assumed downside needs to consider the size of yield changes, yield volatility, and the new shape of the yield-curve. Most bond funds consist of hundreds or even thousands of bonds across a spectrum of maturities, sectors, credits, and bond features–so accurately portraying a full portfolio’s risk is more complex.
  9. Historical “average” returns, dispersion of said returns, and the degree of like movement with other assets should not be extrapolated. The chart below shows a clear example of unprecedented U.S. Central Bank activity beginning in 2008; whereby, the Federal Reserve increased the size of its balance sheet five‐fold from $900 billion to $4.5 trillion. Translation: Objects as seen in the seven year rear-view mirror are very distorted.

Key Rate Factor: Federal Reserve Activity

On June 17th, the FOMC reiterated that “The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term.”  In March 2015, 15 of 17 FOMC participants judged that the first increase in the target federal funds rate (now 0-0.25%) would occur in 2015 even though the same contributors expect inflation to be well below the 2% target with a central tendency at 0.6% to 0.8% in 2015.

Key Rate Factor: Inflation Expectations

Below is a representative graph of the Fed’s preferred inflation gauge, PCE Inflation—as measured by the percent change in the personal consumption expenditures (PCE) price index is headed downward. Graph retrieved from FRED, the excellent resource at the Federal Reserve Bank of St. Louis: https://research.stlouisfed.org/

It has been more than a decade since the Federal Reserve raised interest rates and nearly seven years since the fed funds rate was set near zero. Still not a forgone conclusion that a new rate regime starts in 2015, government agencies, exchanges, major bond investors, and private investors are again preparing for significant changes. So join them in preparing your mind and portfolios.

A choice not to lose can be a winning strategy, and prudent portfolio management always considers potential reward units versus potential risk units. Each investor and their trusted advisors should follow a continuous wealth management process of Discovery & Diagnostics, Planning, Implementation, and Supervision. As you work through the review steps, note that the “bond” label is not always synonymous with conservatism, low risk, or stability. Please evaluate your obvious and not-so-obvious risk exposures to bond funds and exchange-traded funds.

I welcome your thoughts in the comments section below. 

ABOUT THE AUTHOR:

Michael loves to empower investors with his expertise in securities and economic analysis, goals-based wealth management solutions, and FinTech smart decision-support tools. He has directly managed over $5 billion in growth and retirement assets, and his proactive advice has 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 l mdhakerem@gmail.com
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?

ZZZZZZZZzzziiiiiiiiiipppPPP.

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