Search Financial Planners - Find Investment Advisors

Blog posts from the first half of 2008:

June 7, 2008: New Website launches to help individuals find Investment Advisors and Financial Planners

A new website launched (ClaroConnect) to Find Investment Advisors and Financial Planners. The service is free for individuals to find financial professionals. There a investment advisors, financial planners, insurance reps, business benefit providers and business consultants. Individuals can determine what service they are looking for, and then screen the professionals by multiple criteria such as experience and languages spoken.

May 6, 2008: Don't Wait to start Retirement Savings! Find a Financial Planner or Investment Advisor now.

There are certain things in life which are okay to procrastinate, such as putting off a new diet for a few weeks. However, you can not delay your retirement savings! Why? Let's look at the following example.

Let's assume your goal is to have $1 million in retirement at age 65 and expect to earn 8% a year. A 25 year-old can invest just $286 a month for the next 40 years to reach that goal. However, the 45 year-old has to save $1,698 per month to catch up. The 45 year old is investing for half as long, but has to save a lot more than twice as much; they have to save over 5 times more for retirement! Why is that? Known as the magic of compound interest, money you save at a positive return grows at a faster and faster rate the longer you leave it alone to compound, as the money starts earning interest not just on your investment, but on the previous earnings.

The lesson is surely to start early, but if you're already past 45, don't give up and think it's too late! This is why you need to find a financial planner. With your planner, you will develop a financial plan that tells you what your options are. The financial plan will examine your income, spending, life expectancy, expected return and savings plan. The investment advisor or financial planner can then provide financial advice customized to your financial situation. Remember, the earlier the better! No matter what amount you can spare, it will earn more the sooner you start investing it. Each dollar will provide more retirement income, so find a financial planner or investment advisor today to get your financial plan and retirement planning on track.

February 5, 2008: Men and Women Invest Differently; What to do About it!

What are some of the differences between men and women when it comes to saving and investing? The most simplistic description would be that men are more aggressive investors, while women follow a more conservative financial plan. The differences are more apparent in looking at the details of those descriptions. Women tend to choose a more conservative asset allocation; meaning, their portfolios usually contain a higher amount of lower-return, lower-volatility investments such as bonds, cash, and large-cap stocks. Men's investment portfolios tend to have higher-return, but more risky investments such as aggressive stocks and options. In addition to this, men trade their portfolios more often than women do. Women outperform on this aspect, since trading is bad! All the financial research shows that the more trading someone does, the lower the return, both due to commission and trading costs, and the lower return of the quick trading strategies. This even applies to professional investors, studies show that the higher the turnover in mutual funds, the lower the return.

So, what should people do about their gender tendencies when it comes to investing? The biggest improvements can be made through investment education. A financial planner or investment advisor can discuss the historical problems with people's natural instincts and can show you opportunities to improve your financial plan. Better investment education can be especially helpful for women investors who may not be used to managing the family money. Women also need the education more, since they often outlive their husbands and must manage their finances on their own. Because of the longer life-span, women especially need to learn to shift more of their portfolio toward higher-return investments that will provide for a longer retirement. Men, on the other hand, must learn from the financial planner or investment advisor to stick to their financial plan and not trade too much. Even short-term events in the market, the economy, the price of oil, etc. shouldn't have a large impact on your investment plan or asset allocation. If you are investing for a goal of providing retirement income 30 years from now, why would you churn your portfolio because of something happening now that will be forgotten about in a few years?

For either men or women, the process of putting together a financial plan with an investment advisor is key. The investment planner can work with you to determine your investment goals, your risk tolerance and what the appropriate asset allocation should look like and starting a financial plan. After that, the hardest part is ignoring the male tendency to change the financial plan!

January 30, 2008: Baby-boomers experience a shift in investment strategy

As the first baby-boomer starts collecting Social Security this year, many people at or near retirement will find they need the help of a financial planner or investment advisor to help them with a major change in their investment strategy. Until now, many baby-boomers financial plan was a one-way road of save, save, save. Going forward, they will need to start shifting their investment plan to generate more income.

How do you do this? You really need to sit down with a financial advisor who can use a software tool to generate a financial plan that uses your inputs such as assets, spending and age to generate a plan showing how long your investments will last or what level of spending you can justify. They can also discuss the use of other tools such as annuities which will pay a guaranteed income for life, so that you can never run out of money. The old thinking was just shifting money from stocks to bonds. That doesn't work in a world where many 60 year-olds will live another 30 years! Financial planners can show today's retirees that they still need to invest for growth in order to outpace inflation, while at the same time, insuring against longevity by having some of your money in a guaranteed income for life.

There are many complicating factors at this stage. Your financial plan might show that you need to spend less in retirement or that you will be fine as long as there are no unexpected health or long-term care issues, thus prompting the need for an insurance review. You might find that your assets are not titled correctly, which may cause major estate planning and tax problems. At this critical period, you need the advice of a financial expert.