Note: TBB is on vacation. Until his return, this blog site will likely not have any of the usually legendary Buzz posts:-)
As many of you know by now, my other passion is Personal Finance. My initial thoughts about TBB was to combine my two passions, Money and Miles, and dispense such advice here to help people. I thought about calling it M&M blog (get it?) but quickly gave up on the idea. I decided to stick with the Travel Miles/Points focus as I did not want to mix up the two distinct areas. Well, I am on vacation, I have no guest blog pieces (think potential guest bloggers may be afraid of me not approving their work?) so I am in need for some filler material. So I made the executive decision to post here some work I did earlier in 2013 for some publication you may have heard of.
Leaving Banff Springs tomorrow, having a night at Holiday Inn Canmore before heading to Lake Louise. TBB is looking to go 12 for 12 on them hotel nights due to some development I will elaborate upon after it is…cleared:-)
Does gold belong in the average investor’s portfolio?
I believe you speculate in gold; you do not invest in it. Gold is only worth what another party is willing to pay for it. It pays no dividends and has no earnings. If you own actual gold bullion you need to store it somewhere and pay safekeeping fees. You hear a lot about gold in conjunction with doomsayers who have been predicting the end of the world ever since 1933 when the U.S. dollar went off the gold standard. They are in the fear-and-doom prediction business. It has been known to sell better than sex. The only problem is that the doomsayers have always been wrong.
We as wealth managers always have a few clients who sleep better at night knowing they have up to 5% invested in gold or other precious metals. Doing so in an ETF like the iShares Gold Trust (symbol GLD) is preferable.
Do you have advice, tricks, strategies to get people to not react precipitously to short-term events and market results?
Concentrate on what you can control and avoid watching CNBC or anything with a stock ticker or market pundit.
Investing is a marathon, not a sprint. I often remind clients that financial markets do regularly go down unexpectedly and the question is not if but when this will happen again. Anything is possible in the short term. We always take the long-term approach sticking to the financial plan we have in place and our spectacularly boring investment style: A low cost diversified portfolio consisting of broad based ETFs that is rebalanced at set intervals while being mindful of opportunities to save on taxes.
Ben Graham, the father of value investing, once said: “Individuals who cannot master their emotions are ill-suited to profit from the investment process.” In many ways, we are getting paid to help clients make sound financial decisions and keep them focused on the long term in a disciplined manner. Rebalancing at set intervals forces us to “buy low and sell high.”
We will always wage battles against the emotions of greed and fear.
This is why it is so important to know your client well. In the client screening process, I make it very clear that I am not a stock picker and my investment style is as exciting as watching paint dry. Some people need the excitement that comes from buying a stock and watching it. They need to have that feeling of being a player embracing their inner Warren Buffett. (Why does it always seem to be men who fall into this category?) I understand it. I am perfectly fine if they take up to 5% of their portfolio and go open a “mad money” account at E*Trade and trade it like the E*Trade baby. After a while, they give up.
Back on top!
And second again… at least today i feel better about it 🙂
Jeff, you should be happy with who/what you are. Not that there’s anything wrong with it!
Canadians tend to come second, just like in cc signing bonuses lol.
I did not know that TBB other passion for is personal finance. I am a pretty conservative investor now. I am just looking for 3 to 4% interest. Should I go for the index fund or go with dividend stocks? Most of my CDs would mature this year (5%). Thanks
All investors are looking for investments that are tax-free, safe, liquid with growth potential. Sadly, they do not exist:-)
Low interest rates have been terrorizing conservative investors living on income. No easy way out of this. We have a saying “Reaching for yield kills” 🙂
I had an answer to that question so I may post that as I am looking for filler material to keep up the daily posting…
The market is up because investors have been throwing their money into equities giving up on the miserable income generated by fixed income…If you join in now, you must be able to live with the consequences…At the end of the day, no one knows what the future holds. Personally, I prefer index funds than individual stocks.
The above is not investment advice and it is worth exactly how much you paid for it:-)
“The market is up” because Ben has been printing money. Money hasn’t been this cheap in a long time. P/E numbers aren’t attractive anymore. This bull market is just about over. Expect a market correction.
>>>>>>Expect a market correction
I know many who got burned waiting and have and are throwing in the towel. Which makes the market correction more likely. Which does not change the fact that market corrections will happen eventually. And will likely happen when we least expect them. Bottom line: Nobody knows WHEN they do come:-)
Thank you so much for taking the time to not only answer my question but explain things for me. I spent all my 20s, and most my 30s working about 55-65 hours per weeks. In my 40s now, I am mostly in 40 hours routine, still enjoy working, and not in any “FI” mood/talk… I am looking forward for your related “finance filler material.” Thanks again George.
@Nguyen: You are welcome, thanks for reading and taking the time to comment!
Work is underrated! More and more scientific studies show the beneficial effects of work on the body, mind and, most importantly, spirit! You add that to the fact that many people are just not in the position to retire (speaking financially) and that we all live longer and, in my humble opinion and idiotic futuristic prediction mode, we will soon see that people retiring (in a traditional sense) before age 75 as…abnormal!
Work engages the mind and keeps it running. The traditional retirement (to play golf every day) is going to be dead soon (besides, most who do that end up dead quickly after retiring). The whole meaning of retirement is being redefined presently. I actually prefer the term “rewirement”, sounds more cool!
Key is to find something you are passionate about…Maybe this is the meaning of life lol. Who knows, we are all searching:-)
I speculate on gold and silver all the time. I have been meaning to pick your brain about this. Its very tough as the price can turn on a dime. I find the best source for gold and silver is ebay. Then flipping it at a coin store. I love doing it because I can combine my two passions (numismatics and travel) and be successful in both. There’s nothing like holding a double Eagle in your hand. It’s a perfect mix of art and history.
I do not speculate, I invest with clear goals in mind and a plan which of course involves rebalancing the portfolio at set intervals. If you go through history you will not find many successful speculators; last time I checked there was no Speculator Hall of Fame you know:-)
You do what works for you. If it works for you, don’t publicize the deal because the bloggers will kill that deal too lol (kidding).
Speculators think differently. Just not my cup of tea….We are all different. Just like in the miles/points game we all have different goals and different ways of redeeming for “value”.
Good luck. I love history too…and travel of course!
I have always encouraged my kids to invest by dollar cost averaging into low cost (Vanguard) index mutual funds. But for myself I was raised on the books written by Peter Lynch. Always looking for that next great thing or trend and invest in it before the mutual fund managers run up the price. Case in point, Starbucks IPO put my 3 boys thru college and is still going strong 5 stock splits later. But it is like Vegas and there are alot of stinkers for every 10 bagger.
I think your kids will do just fine:-)
I was raised on the Peter Lynch books too. After college I was going to research the crap out of some obscure little stock and make it my first 10 bagger. Well, I invested $500 to buy 500 shares of this drug store F&M chain. I loved shopping there, my student friends loved shopping there, it appeared busy every time I went in there, financials looked bad but not hopeless, market just did not love and it was (to me) the classic value play to buy something so hated and give it time. Well, my $500 came to a big zilch. You can’t imagine how that influences your career you know:-) After dabbling in some funds and getting surprised when a manager bombed (they all do sooner rather than later), well, you learn pretty quickly that perhaps this is not the right way to go about investing. And then you become an active proponent (haha) of passive investment management. Vanguard and Bogle all the way, Keeping it simple, it’s way underrated:-)
But I hear you perfectly. Some still want THAT feeling! A huge part of the investment marketplace invests gazillions to get you to KEEP believing this. And it works because it is…human nature to want the feeling of having scored a 10bagger. Studies show the effect on the brain is much stronger than drugs!
Did you catch the new opportunity for Hyatt elites to manufacture spend in international waters (if you need it spelled out for you, read through the comments)?
http://boardingarea.com/viewfromthewing/2013/07/27/new-royal-caribbean-cruise-line-benefits-for-hyatt-elites-and-credit-card-holders/
As an experienced investor, what you say about investing us pretty correct. I can tell u that Travel & Investing do not mix. I’ve done it and can be stressful cause I’m constantly monitoring my positions and my travel/enjoyment goes down. . Buying Sim data card in each country or hunting for wifi can be a pain. But one of my rewards is Visa inc going fr iPo $60 to $190. I also sell out of the money covered calls on Visa that always expire for 5% addl income. Keep churning those Credit cards guys!! Lol. Visa makes $$ on those fees.
The “opportunity” involves a cruise…Did a cruise once, all paid by Capital One Venture Rewards points…no desire to do another one in the near future.
I love VISA too and I will do my best to keep on churning as long as they allow it:-)
As I’ve mentioned before, many of us are in this hobby to save money and I see lots of overlap between travel hacking and geting more for your money. Just make sure Matt doesn’t send his thugs at you for invading his turf; they know their hooligans in his home country.
Oh yeah, some of their hooligans are quite scary. Maybe this is why Matt escaped that glorious island.
A lot of personal finance advice is really simple. People will likely get tired of it after a while. It has nothing to do with the drivel you read and watch on CNBC, etc. A lot of what we financial planners do is, really, behavior modification. Nothing to do with the market indices or the latest Jim Cramer rant.
For a one man band like me, I think it makes sense to narrowly focus the content. I told Matt about his dual focus and, to me, it just does not feel right. But it appears to be working for him, so all the best. Maybe I am wrong. I never got that marketing appeal stuff down.
I am just taking this opportunity of my vacation to throw some of this stuff out to see the reaction…
There is time to turn this baby into M&M (Money & Miles) after all, haha.
F hotel at BanffSprings: 2 nights in a nice suite that retailed for $768/night, two full buffet breakfasts for 3, 45 minute manicure session for Mrs, use of hotel BMW bikes. Got out of $12 resort fee. Final Invoice just had the two $25 self-parking charges. Used $50 in gift cards (from burning points in F Visa accounts and I still have $325 in gift cards left for next F in Lake Louise!) Just used about $30 in cash for tips. Unique experience in an amazing location…Other than that, way too much stuffiness. At checkout, it was this family with a 12 year old in a suit and a bow tie AND black hat. His mother nearby I swear had more makeup than Tammie Baker (crap, why did I remember here???)…I am sure the kid grew up with his own butler lol.
George, I think adding personal finance will set you apart from other bloggers and hope you will do just that. Your comments will be more helpful asking and answering personal finance questions and not commenting on something you are never going to change. Our children NEED personal finance advice .
Hmm, thanks for the comment Rick. I struggled with this issue and I still intend not to mix the two because I am not convinced the two mix for ME. The branding on the personal finance advice concerns a target market who can afford me and I can tell you the FT travel hacking people are NOT my target market, they are so cheap, sorry frugal 🙂
At the same time, keeping both going at the same speed I am doing right now is clearly unsustainable too.
Adding that will certainly help with the content of course…
So, at some point I need to make a decision. Until then I will look for more bears. We saw a bear for the second day in a row today, how lucky is that???
There is absolutely no doubt at all that our children have a severe need for personal finance advice, we agree 100% there!
I couldn’t agree more with the fact that investing is all about long term goals and less of making short term profits. This principle applies to most investment classes, including gold.
With gold apreciating at about 8% over the last month, it makes it really hard to not invest into it.