Back from Indianapolis

I'm back from a quick weekend trip to Indianapolis, where I taught a one-day Investment Planning review for CFP candidates. Indianapolis is a great town, but I learned that when visiting in the future, I should rent a car. The taxi service reminds me of Oklahoma City! Nevertheless, I found the students bright, articulate, and fun--even on a Saturday. They will be an asset to the financial planning profession.
Be Prosperous!
Peggy

Whassup with the Market?

I usually don't talk at great length about current stock market conditions, as I am not in the business of writing a "stock picking" blog. However, the current conditions suggest a few observations might be in order:
1. Why is this happening? I believe that the US market decline is absolutely a result of the European debt crisis with Greece and other nations.
2. What do currencies have to do with it? Currency movements have a funny effect on the stock market. Usually, a weak currency suggests better trading opportunities for the country, and the stock market improves. Of course, when the currency decline is due to a shock to the system, like what is happening to the Euro over Greece, the rapid decline leads to a drop in the stock market. Unfortunately, as the Euro declines right now, for any reason, the US Dollar is getting stronger. This causes less favorable trading conditions for the US, and causes the stock market to suffer somewhat. Add to that the additional shock of the European debt crisis on the heels of our 2008 debt debacle, and the US stock market is not happy right now.
Why is oil dropping? It ties back to currencies again. Due to the European crisis, the American dollar is strengthening against all the world currencies, including (wait for it) the Australian Dollar. The poor Aussies down under are caught up in a mess that really isn't their fault! There is a high correlation between the price of oil and the price of the Australian dollar, so as the Aussie dollar falls, so does the price of oil. This will likely continue until the Aussie dollar can strengthen, or the US dollar weakens a little. Talk about complicated!!!!!
What do we do now? I will not tell you what to do. I will tell you that this market has my full and undivided attention. I'm really trying to weigh all of the positive news out of US earnings and improving economic data against this European crisis. It's a close balance, and I haven't fully decided yet......
Be prosperous (in spite of this)!
Peggy

Home Repair Concerns

I live in Oklahoma, and houses near mine were badly damaged in last Monday's tornado outbreak. We were lucky--we lost a few shingles, a fence, and a mammoth tree ripped out by its roots. As we were standing outside not half an hour after the tornado, a guy in a pickup truck pulls up saying he could see the tree damage, and would we like to have him remove it. I said no, but my husband said, "What would it cost?" He tells us that for $1200, he will cut it up and drag it to the curb for the city to remove. We tell him we will think about it. He reminded us that he was a neighbor, just living a few streets over. I really wish I had thought to ask the address, as I don't actually believe it. By midweek, we had arranged to have the tree cut up and taken away for $500.

The first offer of "help" was by no means the last, and we were harassed for 48 hours by people we didn't know representing companies we had never heard of. Replace the roof, fix the roof, replace the fence, fix the fence, and my personal favorite--the young kid who showed up in 98 degree weather in black slacks, long-sleeved black shirt, and a black suede vest with a fleur de lis on the back. He offered to act as my "personal representative," and negotiate with the insurance company, the contractors, and even attorneys if necessary. He had asked my husband to sign a blank contract earlier in the day, and my husband said he deferred to me. This old boy was waiting for me on my driveway when I pulled up after work and started talking fast. I told him I understood my insurance policy and didn't need his help. When he pushed, I told him I was a financial planner, and REALLY didn't need his help. I guess I looked like I meant it because he got in his truck and drove away.

Your takeaway from this: Even when there has been a disaster, try to work with people you know. If you don't have a roofer chosen already, then talk to your friends, and use someone that already has a personal tie to someone you know. I'm not saying these guys weren't all honest, but it felt like I had landed at the midway in the carnival. When all I wanted to do was get my life back together, I had to fend them off. I noticed they were especially pushy with older people living on the street. Say no. If they don't leave, say no again, or walk inside. You're not being rude; you're protecting yourself.

Be prosperous!
Peggy

Am I Crazy Or What?

Thanks to all who gave me encouraging words on my goal of finishing my master's degree in financial analysis. (BTW, the first half of the capstone isn't quite done, but it's really, really close.) I'd like to explain to you why I'm doing this. I've been in college a long time, ultimately earning a Ph.D. in curriculum development in 1998. I've been a junior high English teacher, a university freshman composition instructor, and a corporate trainer. I entered the financial world in 2002, after a horrific experience when a broker lost much of my mother's IRA because she was not diversified out of technology during the dot.com bubble burst. I have worked since that time to increase my level of competency. Even though I was legal to "do business" after taking my Series 65 exam in 2003, I didn't believe I possessed the skill set necessary to really do the best job that I wanted to do. That's why I began by completing my CERTIFIED FINANCIAL PLANNER(TM) practitioner status, passing the 10-hour exam in March of 2005. However, I still felt uneasy with my skill set in portfolio management, so in August of 2007, I began working toward a master's in financial analysis. I will graduate this summer.
Now, I will admit that some of what I have learned I am not likely to use in my practice, but nearly everything I have learned has been in the media in one way or another. After the financial meltdown of 2007, complicated financial concepts and products have received national attention. At least I can explain what that means to my clients.
To me, this is what being a fiduciary means. I believe it is my duty to go the extra mile if it might help my clients. I'm extreme in this, I know, but I really believe it matters. I've given an additional four years of education toward it, after my Ph.D. I encourage you to work with a financial advisor who is willing to go the extra mile. I'm not the only one--I know several personally. It isn't a requirement to be legal in the field, but I believe it's the least we can do.
Be Prosperous!
Peggy

Apologies

I have been the world's worst blogger this week. As some of you may know, I am completing a Master's in Financial Analysis. I've finished my coursework, and now I'm working on the capstone. It takes a lot of time, and it's been a primary focus for me recently. I'm sorry--I'll try to provide you with something interesting next week!

Be Prosperous!
Peggy

Help Me Make This Better!

I'm one quarter finished with the 2010 blog, and I have been excited with the feedback I get from readers on Facebook, Twitter, and the blog, itself. However, I really want this blog to help you meet your financial goals and dreams for the "sort of" New Year! Please respond to any post you find helpful, and also let me know if I need to provide more information about a subject. Tell me if I left anything out, or if I didn't explain the background enough.

I have discovered that five blogs a week are more than I can keep manage! The goal for the rest of the year will be 2-3 per week. Should something propel me to national acclaim, maybe I can write more, and my staff can pick up the extra work!! Until that happens, two - three times a week keeps me busy.

Thanks for all your support, and I look forward to hearing from you!

Be prosperous!
Peggy

Financial Reform Limits

I was extremely disappointed that the financial reform bill dropped the mandatory fiduciary standard. Many leading minds, including Vanguard founder Jack Bogle, wanted the bill to include language that required all financial advisors (individuals who help clients with their portfolios) to act as a fiduciary. This means that they must always act in the client’s best interest. Investment Advisors, like my firm, already must hold this standard; however, the brokerage industry does not. This means that a stock broker does not have to uphold a fiduciary standard. Instead, he or she must maintain a “suitability” standard, which means that the investment choices must be suitable, but don’t have to be the “best” choice in the mind of the broker. I find this fact both amazing and appalling. I had no idea when I entered the industry that there were two standards!

Now, some brokers choose to act as fiduciaries, but it isn’t a mandate. And acting as a fiduciary doesn’t mean that I am not compensated for my work. If I went out of business, I believe it would not be in the best interest of my clients! But my fiduciary standard means that I am always trying to take care of my clients, keeping their expenses lower without sacrificing quality, and helping them maximize returns in their level of risk. Further, I try to provide financial planning, that ensures all areas of their financial lives have attention. Our industry needs fiduciary reform.

Be Prosperous!
Peggy