Covered California Blog
Shargel & Co.
From Squared Away, a part of the Center for Retirement Research's Financial Security Project (FSP).
The average retirement age for Americans has risen steadily since the 1980s, according to a new study. So what are the economic and cultural forces that have left an entire generation of baby boomers financially unprepared – and unable – to retire?
No question asked of a stockbroker or financial advisor is a stupid question. A Boston University law professor has put together a deceptively simple list of questions investors can ask their investment professional. If the broker or advisor refuses to answer a question, then the investor has already learned something important about that person.
New parents: you have been warned. Mainstream media have rolled out one horror story after another about college graduates and their parents burdened with $40,000, $50,000, even $100,000 in student loans.
Applying to college – in the emotional fog of this exhilarating rite of passage, one thing is crystal clear. Parents and their college-bound teenagers should get serious about limiting their dependence on student loans, college-funding experts say. Squared Away asked them for their best tips on minimizing borrowing for an undergraduate degree.
Applying to college is an exhilarating rite of passage – and an expensive one that is throwing more and more American families and young adults into debt. Squared Away asked college-funding experts for their 10 best tips to minimize the total amount borrowed to pay for an undergraduate degree.
Since going live in May 2011, this blog has posted numerous articles on women's unique – and often more challenging – financial concerns. Women earn less, live longer, save less for retirement, and are more likely than men to take on the financial burdens associated with caring for children or elderly parents.
By permission of the Center for Retirement Research at Boston College
The Green Tenant Toolkit assists tenants and landlords in reaching their sustainability goals within commercial buildings. The objective is to enable and enhance partnerships with owners or managers, occupiers, and their agents to minimize operating costs, save water, manage energy, and reduce carbon emissions by identifying split incentives and offering best practice solutions.
The toolkit, which is based upon the recommendation of the Mayor's Task Force on Existing Commercial Buildings (City and County of San Francisco, December 2009), was developed by a diverse group of real estate and environmental professionals representing brokers, property management, large tenant groups, attorneys, electrical utilities, and design and construction experts - convened by the Business Council on Climate Change and SF Environment. The toolkit was designed for San Francisco buildings, but may be adapted for use in any location.
Frederick C. Hertz
Frederick Hertz is an attorney and mediator in Oakland, California, specializing
in formation and dissolution of same-sex partnerships, and co-author of
A Legal Guide for Lesbian and Gay Couples and Making It Legal: A Guide to
Same-Sex Marriage, Domestic Partnership and Civil Unions.
From Peter Philipp, CFA, CFP ® • Newport Advisory San Francisco
We're once again experiencing the kind of stock market volatility that puts investors on edge.
Here's a Quick Guide to Frequently Asked Questions:
What's Causing the Wild Market Swings?
A confluence of fears and events, it turns out. Here are 5 reasons for the wild ride:
1. Fear & Uncertainty -- Fear is driving much of the selling, mainly fear of more losses to come. A closely watched Wall Street fear gauge, the VIX Volatility Index, jumped 23% on Wednesday.
2. Double-Dip Worries -- There is a tug of war underway on Wall Street between those who think the economy is on the verge of falling back into recession and those who think it won't.
3. Europe Concerns -- The Eurozone debt crisis and concerns about the European banking system is weighing on investors.
4. Lack of Political Leadership -- After the debt-ceiling debacle in Washington and the inability of lawmakers to come up with solutions, people are losing faith in the ability of leaders to lead.
5. High-Frequency Trading -- With nearly 70% of stock trades now executed by so-called high-frequency traders using super-fast computers, the market's sharp moves are amplified.
Is this 2008 All Over Again?
No. In short, there is no liquidity crises and the fixed income markets continue to function normally. US corporations are in significantly better financial shape than 2008. For the second quarter, 80% of companies reported earnings that beat expectations. Corporate cash is at all time highs. For example, Apple reportedly has more cash than the US government and could easily buy Bank of America and still have $7 billion left over.
Even though we all feel beat up by economic events, the US consumer is also in better shape today than in 2008. Household savings have increased; leverage or borrowing is lower, so overall some hard-fought improvements in personal balance sheets. Unemployment among the one-third of Americans with the highest incomes is barely 4 percent. The flipside is that unemployment remains stubbornly high for lower-wage, less-educated workers.
Globally, economies are becoming less reliant on the US to drive growth. De-leveraging is a painful process for both governments and individuals. Emerging markets never had high levels of borrowing, so they are well-positioned to grow their economies in today's environment.
How Are We Responding to This?
While acknowledging the risks that the economic slowdown and the debt crisis pose, we believe that stocks, large-caps in particular, are badly oversold. Morningstar, an independent research firm, estimates that the S&P is now trading about 20% below the aggregate intrinsic value of its holdings. This sharp selloff is taking place against the backdrop of corporate earnings that have beaten expectations for 9+ quarters.
S&P's downgrade of the US creditworthiness may actually play out differently than people expect. Let's remember that when Canada's bonds were downgraded in 1996, its stock market gained 15% in the following 12 months. When Japan was downgraded in 1998, it stock market gained 25% over the next 12 months. Of course, past performance is no guarantee of future success. These events illustrate how often reality differs from the conventional wisdom.
What Should I Be Doing Right Now?
First of all, don't panic. Be prepared for continued volatility. Nothing surprises us – big moves up, down or sideways – or all in the same day. It is precisely because of the uncertainty that selling and running to cash is dangerous. At some point, we'll look back on this and be glad that its over – and that we didn't take any rash actions in the midst of it.
That's why the best action to make sure your investments are properly diversified, based on your current situation. If you have experienced a change in your income, expenses, living situation or if you anticipate major expenses that you haven't told us about, inform us so we can determine if your portfolio's current asset allocation is still appropriate for you.
As we said throughout the 2008 credit crisis, the time to invest is during periods of uncertainty, while prices are low. Like then, this is an opportunity to continue investing in your 401(k) and other accounts, while prices are low. We are continuing to monitor developments and are prepared to make changes if appropriate. As always, we'll keep you informed.
Finally, stay focused on the long term. Don't let the daily headlines scare you, and stay in touch with us anytime you're facing a financial decision.
As always, if you have any questions or concerns, I encourage you to call us at 415-677-9300. As financial professionals, we will do everything we can to help you through the challenges of the days and weeks ahead. We are eager to talk and to put all of this into the context of your financial situation, so please feel free to contact us.
For more information, please visit www.newportadvisorysf.com