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Lauren's Blog

Lauren’s blog covers topics that impact your finances, your family, and your future. Is there a topic you’d like Lauren to tackle? We’d love your suggestions and feedback.

In Your Best Interest: Our Winter 2018 Newsletter

Click here to view the full newsletter, including recent news, important dates, financial tips & tools, and more.


If we looked only at the numbers, 2017 was golden. The stock market hit an incredible 71 new highs this year (no, that is not a typo!) and closed the year up 21% on average. The S&P index gained 19%, the Dow Jones index of 30 stocks gained 25%, and the tech-heavy NASDAQ gained 28%. For investors, it was a year to celebrate. 


There was lots of other good news as well. Congress tried—and failed—to repeal the ACA, ensuring continued healthcare access for millions of Americans. If anything, the publicity around the repeal helped increase enrollment, with December enrollment breaking records and beating all expectations. The labor market added 2 million new jobs, the Federal Reserve raised interest rates three times during the year (a sign of a strong economy), GDP increased to an annual growth rate of 3.2%, and demand for new housing remained strong.

On the less favorable side, the US trade deficit increased (something that will only get worse under the new tax plan) and inflation rates remained below the Federal Reserve’s target rate of 2%. Today, there seems to be one question on everyone’s lips: How long will this market last? 

By now, most of us have invested our funds in the market. And as the numbers continue to climb, it’s easy to fall into the trap of trying to “play the market.” Instead, I urge you to stick to your long-term flight plan and accept that the market cycle will work through any volatility. Strong corporate profits, low interest rates, and positive investor sentiment provide good tailwinds, although rich valuations could provide a headwind. In this environment, your best option is to invest strategically and focus on your personal balance sheet, paying close attention to your cash and debts. Be sure you have cash reserves to insulate you from being a forced seller in a down market, and reduce your debt and other fixed obligations. Doing so will put you in position to face the future with confidence—no matter which way the winds blow in the year ahead. 


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In Your Best Interest: Our Fall 2017 Newsletter

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Thinking back over the quarter— and the entire year to date—I feel… breathless. Amid the whirlwind of global events, at least the economic and market news remains a bright spot, so let’s start the quarter review with some good news: 

In Q3, equity markets experienced gains, fueled by a late-August rally that pushed security prices upward. As the quarter came to an end, the benchmark indexes continued to rise. The Nasdaq and the Russell 2000 posted gains of more than 5.0%, followed closely by the Global Dow and the Dow. The S&P 500 trailed the other indexes listed here, yet still managed to increase by almost 4.0% since the end of Q2.

In September, the Federal Open Market Committee (FOMC) decided to hold the benchmark interest rate between 1 and 1.25% while setting expectations for an increase next quarter. The Fed noted that the labor market is continuing to strengthen, economic activity has been rising, job gains have remained solid, and unemployment rates are low. At the same time, household spending has expanded moderately, growth in business fixed investment has picked up, and inflation is running below 2%. 

In the rest of the news, the world is a mess. Donald Trump remains in the White House amid an accelerating Russia investigation, a frightening standoff with North Korea, and another failed attempt by Republicans to repeal the ACA. The Equifax data breach and the company’s inadequate response had everyone scrambling to secure their personal information. Protesters clashed in Charlottesville, Colin Kaepernick triggered a national debate, terrorist attacks escalated across Europe, and the US witnessed another mass shooting. Nature, too, was ill-tempered, with hurricanes devastating the Southern US, Cuba, Puerto Rico, and other regions; earthquakes in Mexico killing hundreds, and flooding causing record deaths around the globe. It’s been a year for the record books, and not in a good way. 

As we enter the final three months of 2017, it’s important to stay focused on what truly matters: love, health, and happiness. Know that our team will be doing our part by continuing to monitor your plan and your portfolio closely. For your part, do what you can to focus on what you can control… and to finally, hopefully, catch your breath.

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In Your Best Interest: Our Summer 2017 Newsletter

Click here to view the full newsletter, including recent news, important dates, financial tips & tools, and more.



“Global Stocks Post Strongest First Half in Years, Worry Investors.” That Wall Street Journal headline from the last day of Q2 caused more than a few investors (perhaps you included) to ponder “what’s next?” 

As we closed out the first half of the year, most indices were continuing to rise at a pace we haven’t seen since 2009. Despite certain political and global events that would have dampened investor exuberance in “the old days,” investors have been nothing but enthusiastic, and the economic data has certainly supported that fervor. Tumbling oil prices have driven down energy prices and inflation. The housing market seems to be gaining steam. And while growth in the GDP, inflation, and consumer spending has slowed, they are still showing modest increases. All of that, plus expected tax cuts, strong corporate balance sheets, and central bank support, seems to have outweighed any negative news and buoyed both the US and Global indices. The result: the Dow, NASDAQ, and S&P 500 are up 8.03%, 14.07%, and 8.24% respectively; and the Global Dow is up 9.54%. That strong economy spurred The Federal Reserve Bank to raise the Federal Funds rate another 1/4 point. 

So what can investors do to assuage their worries about the future? Jason Zweig’s interview with Peter L. Bernstein offers some answers. In the interview (which took place years before the Great Recession) Zweig asks: How can investors avoid being shocked, or at least reduce the risk of overreacting to a surprise? Bernstein responded with this wisdom: 

“Understanding that we do not know the future is such a simple statement, but it’s so important,” he said. “Survival is the only road to riches… I view diversification not only as a survival strategy but as an aggressive strategy because the next windfall might come from a surprising place. I want to make sure I’m exposed to it. Somebody once said that if you’re comfortable with everything you own, you’re not diversified.” 

Berstein then posed this question to investors: “Can you manage yourself in a bubble, and can you manage yourself on the other side?” 

I’m happy to say that our approach is consistent with Bernstein’s Yoda-like guidance. We continue to actively diversify our client portfolios, reallocating fixed income with international and global bonds, inflation-protected securities, and real estate. “Survival is the only road to riches.” And while no one knows what the future holds, we promise not to overreact—no matter what surprises come our way. ~

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When risk is a good thing, embrace it!

When risk is a good thing, embrace it!

Risk. It’s a word that makes most of us feel uncomfortable—at best. Even if you’ve been blessed with an appetite for adventure, when it comes to taking risks with money, you may find your stomach feeling a bit queasy. While I can’t recommend skydiving or cliff jumping (especially for my retired clients!) taking the right amount of risk with your money isn’t a bad thing. In fact, it’s often the best way to help grow your assets to meet your retirement goals.

Anne is one of my favorite examples of a smart risk-taker. She loves (and I mean loves!) Las Vegas. She loves pitting the thrill of victory against the agony of defeat—even when it is her money at stake. And yet, despite her penchant for slot machines, she’s clearly not much of a true thrill-seeker. She has had the same gambling budget since the first day she walked into a casino over 30 years ago, and she’s never lost more than she can afford to lose. “I started with $100 of ‘play money’ in my wallet, and I promised myself I’d never let myself dip below my $20 reserve,” she says with a smile. And she does have something to smile about. Over the years, Anne has won (and lost) thousands of dollars, just playing the slots. “For me, it’s my favorite form of entertainment,” she says. “It’s a ‘safe’ risk that makes my adrenalin go crazy!”

A ‘safe’ risk. What an interesting term.

The dictionary definition of risk—“exposure to danger, harm, or loss”—sends a pretty clear message that risk is something we should avoid if at all possible. And yet, as counterintuitive as it may sound, when it comes to investing, risk is the one thing that drives reward. In fact, in a capitalist economy like ours, investors are paid to take risk. It’s that simple. Every time you invest in a company you are, in essence, assuming ownership of that company and are entitled to the rewards that owners receive. When earnings grow, you reap the rewards. If the company fails, your investment will fail as well. That’s the risk.

In skydiving, the risk is pretty clear—particularly if your parachute doesn’t open! In investing, risk is a bit more complicated. To understand why investment risk is something to embrace, let’s look at the three basic kinds of risk:

  • Credit risk. When a bank loans money to a borrower, there is a risk that the borrower may default on the loan. If that happens, the bank loses the principal of the loan, and the interest associated with it. That’s credit risk. Your own credit rating dictates your ability to borrow money and the interest you pay, and the same is true for bonds. Lower-yield Treasury bonds are “safer,” so they pay less than high-yield or “junk” bonds. That means that, as a bond investor, when you take more risk by lending to less credit-worthy borrowers, you get paid more interest.  
  • Term risk.When you buy a bond or CD, you are lending money for a fixed period. When the bond is due, your money is repaid. When you lend money for a few days, that’s a short term. When you lend money for ten years, that’s clearly a longer term. Long-term is riskier than short-term because you don’t expect the borrower’s situation to change in a month, but in 10 years? Anything can happen. That’s term risk. That is why a one-month CD pays far less interest than a five-year CD. So, term risk is another way investors get paid more to take on more risk.
  • Equity risk.Every time you hold stock in a company, you accept the risks of ownership. As an owner, you are paid a share of earnings, and the value of each share increases with company growth. Because of the risk of ownership, investors are paid an equity risk premium to bear uncertainty, price fluctuations, bear markets, business failures, and other perils. Earning the equity risk premium is how investors get paid more for owning stocks.

As an investor, by definition, you must be willing to take some level of risk to reap the rewards. Whether you take on credit risk, term risk, equity risk, or a combination of all three, risk creates value. While risk and reward may not be a perfect relationship, if you add time and discipline to the equation, it’s nearly perfect. It’s what capitalism is all about, and it’s what gives every investor (including you!) the opportunity to leverage assets for continued growth.

Of course, just like Anne and her slot machines, the smartest way to play is to know how much risk you can accept. If you’re a younger investor with years of saving ahead of you, you have time on your side. You can breeze through a bear market, happily buying up equities at sale prices, and waiting for the inevitable bull market to come your way decades from now. If you’re already retired, you may still have years ahead to enjoy growth, but you’ll need a strategy to meet your changing income needs. Whatever your life stage, remember that risk is your friend. Unless you’re skydiving, in which case I can only recommend that you check that parachute just one more time before you jump!

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Is “retirement” the only answer? Take time to rethink the possibilities

Is “retirement” the only answer? Take time to rethink the possibilities

As a financial advisor, you would think I’ve seen a million definitions of retirement. What’s surprising to me is that I haven’t! In fact, not all, but certainly most of the people I work with tend to see retirement as an absolute goal and an endpoint. That’s why I’ve made it one of my primary goals to break that definition wide open and help every client rethink their possibilities.

At 52, Leslie is well into a very successful and lucrative career in aerospace. When we sat down for her financial review last summer, she hit me with the question almost before I’d said hello: “When can I retire?” I was taken aback for a moment. The last time we’d talked, she’d seemed satisfied with her job, and she was bursting with excitement about a new project she was working on at the time. “You’re only 52 Leslie,” I said (with just a little envy!). “What’s the urgency?”

She slumped back in her chair, and every part of her seemed to collapse. “I’m just so tired of it all. The corporate craziness. The fighting for each new project. The hamster wheel. I love the actual work, but I don’t know how much longer I can stand the process I have to go through to roll up my sleeves and just do my job.” Anyone who has ever worked in the corporate world can commiserate. But I’ve known Leslie for years, and she looked and sounded like she was truly at the end of her rope. Suddenly what I expected to be a pretty eventless review meeting was carrying much more weight.

The first thing I did was look at the numbers, and they looked pretty good—so good, in fact, that my calculations showed that Leslie could realistically retire in just two years, at age 54. For many, that would be a dream come true, but I knew that for someone like her, it could be a recipe for discontent, if not downright disaster. So I started asking some important questions. I didn’t focus on budgets or savings or future expenses. What I wanted to explore was what she wanted the next 50 years —or even the next 10—to look like. Here are just a few of the questions I asked:

If you aren’t going to an office every day, what do you see yourself doing—every day?

Do you see yourself living in the same place you are today? Do you have a dream destination?

How do you socialize? Are most of your friends work colleagues, or do you have other circles of friends? What about extended family? When and where do you get together?

What activities do you do outside of work? Is there anything you do that might become a second career?

Are you active in any charitable work? Do you volunteer?

You seem to love what you do. Is there a way to transfer your skills to another organization? Would you be interested in teaching?

If not, will you be happy not doing the work you’ve been passionate about for years?

Is there something else you love that could replace that passion?

If you could have chosen a different career, what would it have been? Is there anything you’ve always wanted to explore but never had the time to pursue?

As we sat sipping our coffees and chatting, I didn’t maneuver Leslie’s thinking; I just worked with her to paint her picture of her future. Her frustration at the office had prevented her from looking beyond her “day job.” At first, this type of “playing” wasn’t easy. Toying with the ideas felt like breaking out of a well-sealed box. But once she got there, we were suddenly onto something! “I’ve always wanted to write,” she confessed. “Not a novel or anything like that. Not fiction. But I’ve never seen a textbook that clearly explains the concepts we use every day in aerospace engineering. It’s this vacancy of information that would be so valuable for anyone entering the field.”

As soon as the words were out, everything about her seemed to change. She was literally on the edge of her seat, her eyes were bright with excitement, and her voice was as happy and clear as the last time we’d met when she had gushed about that old project. What a transformation.

It’s been a year since that meeting. On the surface, not much has changed. Leslie is still working at her job in aerospace. She’s still frustrated with corporate politics and the battle for projects. Yet her outlook has changed dramatically. She is planning to leave her job next year, and she’s headed for anything but a traditional retirement. After our talk, she began to research the process of writing a textbook. She shopped around a proposal to multiple publishers, and one has already expressed interest in her book. It’s a long, multi-year process from proposal to publication, but Leslie is well on her way to making her “retirement” dream come true.

No matter how near or far retirement is for you, I invite you to take a good look at yourself—your goals, your passions, your dreams—and rethink how you envision living your own retirement. And no matter what size your nest egg may be when the time comes, I hope you make choices that bring the most thrilling opportunities to life.

Want some guidance exploring your definition of retirement?  This email address is being protected from spambots. You need JavaScript enabled to view it.  to schedule a time to chat. As always, I’m here to help!

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Celebrate Retirement Planning Week: Create a “freedom fund”

Have you noticed that every day or week is dedicated to something? It was Siblings Day last weekend. There's National Doughnut Day (a fundraiser for the Salvation Army), National Hot Sauce Day (January 22), and yesterday was Scrabble Day. Among all the frivolity, there are some worthwhile campaigns, including National Retirement Planning Week, which began this past Monday.

The attention on retirement planning begs this question: Does retirement planning need an "awareness week"? Absolutely! While no one needs to be made more aware of doughnuts, anything that gets people to pay attention to something that will help them live a better life is worthwhile. As a survivor myself, I hope Breast Cancer Awareness Month pushes women to get that mammogram they’ve been putting off. As a financial advisor, I hope Retirement Planning Week pushes you to take a serious look at where you are today—and where you need to be when it comes to funding your future income. At the same time, I’d like to make a unique push for redefining retirement planning as most people think of it today.

When I first met Katherine ten years ago, she was enjoying a fantastic career at a large, global company. She was traveling the world, entertaining, and a living a high-end, high-cost lifestyle that included a sizable mortgage. She came to me to start planning for retirement. The challenge: she was already in her mid-50s. And while she was earning a bundle, she had almost nothing stashed away to support her once those big paychecks stopped coming in. The first time we met, I suggested we rethink her approach; rather than “saving for retirement”, I recommended she start building a “freedom fund” for the future. Katherine loved the idea. She looked at it like a credit card payment that had to be paid in full each month, and she was religious about her contributions.

Five years later, calamity struck. The company she’d been with for the bulk of her career went bankrupt and laid off 80% of its employees, including Katherine. At the same time, she was hit with a frivolous lawsuit and had to spend thousands of dollars to defend herself in court. Luckily, her freedom fund was at the ready. She was able to pay herself each month while she figured out her next career move, and she paid her legal fees without having to take on any debt. Within 12 months, she had reestablished her career—this time as an independent consultant—and was once again growing her freedom fund. She’s not looking to retire any time soon, but she’s paying off that debt to herself now so she can focus on enjoying life when the time comes.

At 65, Katherine is redefining “retirement.” Like many her age, she’s continuing to earn, but she stopped looking for a “job” the day she walked out the door of her last one. Katherine is part of the growing gig economy. While much of the coverage about this new way of working focuses on millennials, many pre- and post-retirees have jumped on the lucrative bandwagon of taking on a portfolio of work to bolster their income, and possibly delay retirement completely. For many, the Great Recession brought an unplanned early end to their careers, and they found themselves overqualified and, frankly, over the hill when looking for a new job. Like ‘Cassie’ in the classic musical A Chorus Line, they found they couldn’t take a step back from being a star to being just another player—no matter how much they wanted to be. They took a new approach to working and turned the job economy on its head. From consulting gigs to driving for Uber to freelancing, older workers are finding new ways to make ends meet and completely rethink how they view life after 65.

When it comes to retirement planning, there are two sides of the equation: what you spend, and what you have coming in. To have resources you’ll need, start your freedom fund today. Or take a fresh look at how you’re funding the plan you already have. If continuing to work after 65 is appealing, consider joining your peers in the growing gig economy. It can be a great way to stay mentally and physically active while keeping some income rolling in the door.

However you define retirement, realize that it’s a complex balancing act—emotionally, physically, and financially—that you should start thinking about long before you receive that gold watch. To make the most of it, view your retirement income as a debt you owe yourself, and pay it in full every month. By the time you do decide to stop working once and for all, you’ll be truly debt free, and the last thing you’ll need to worry about is retirement income. How’s that for retirement planning awareness?

Need help creating your retirement “freedom fund”?  This email address is being protected from spambots. You need JavaScript enabled to view it.  today to schedule a time to chat. As always, I’m here to help.


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Closing the financial gender gap

There’s a downside to specializing in financial planning for women. While I take great pride in the fact that I spend much of my time helping women build financial confidence and create stronger financial futures, my job can get seriously frustrating. Why? Because no matter how much the gender gap is mentioned in political speeches, and no matter how wrong we know the disparity is, it doesn’t seem to be going away any time soon. According to the American Association of University Women’s recent report “The Simple Truth About the Gender Pay Gap,” women earn an average of 79 cents to the dollar compared to men. Women of color and older women fare even worse. In other words, 79 cents is the best-case scenario, and it’s a pretty bad starting point.

When it comes to saving, this earnings gap is magnified. With lower earnings, women have 20% less discretionary income available for saving. Less savings means women are less prepared for retirement, less able to retire as early as men do, and often have less retirement income even when they do stop working. The result: a shorter, less comfortable retirement. It’s no wonder women tend to suffer from “bag lady syndrome,” that less-than-pleasant term for the fear of ending up penniless and homeless. And while it may sound extreme, this fear is very real for far too many women.

Of course, the gender gap isn’t the only dynamic at play here. Women—particularly baby boomers and older—were raised with the idea that a solid financial “plan” meant finding a reliable man to provide financial support, and maybe getting a teaching credential just in case. To find a husband, women often spend their limited resources on presentation (clothes, makeup, hair, nails, and more) in hopes of attracting their financial security blanket. While younger women may scoff at the idea, in reality, the myth that men are some sort of financial guardian for women is still alive and well. Perhaps even worse, women tend to hand over the financial reins to their male partners, often hiding their heads in the sand when in comes to money. It’s a dangerous way of thinking. It taints our relationship with money, including our ability to be financial grown-ups and a full economic partner. It inhibits our financial confidence, and it limits our ability to take charge of our financial health and close the gender gap once and for all. 

My client Lydia is a great example. When her husband Jim died seven years ago, figuring out how to transfer assets and how to invest the money was the last thing she wanted to deal with. Jim had always handled the money, and she felt lost in this “whole new world” of financial planning. Jim’s stockbroker offered to help by rolling Jim’s annuity into a new one. When Lydia signed the agreement, she didn’t understand the surrender charges on the new annuity or even what she was signing. The broker played the role of helping the grieving widow well while he captured a hefty commission for himself. Lydia came to me when she sensed she’d been betrayed. Luckily, we were able to unwind the transaction, and since then she’s become educated and financially empowered. I only wish she—and many women like her—had never been in the situation in the first place.

Whether a woman is married, divorced, widowed, or single, I believe half the battle in closing the gender gap is changing our attitudes about money. The gender pay gap has barely budged in more than a decade, so it’s likely to be with us for some time, but here are six ways we women can do our part to help change the game:

  1. Be financially self sufficient in your marriage or any relationship.
    I can’t tell you how many women I’ve worked with who “trusted” their partners to do right by them and were bitterly disappointed. Take equal responsibility for your financial health. Remember: building your financial future isn’t anyone else’s job. It’s not your husband’s job. It’s not your advisor’s job. It’s yours.

  2. If the bottom line goal is to create wealth, make erasing debt your #1 priority.
    If bringing home 21 cents less then men for every dollar you earn makes you mad, consider this: If you have $5,000 in credit card debt, you could be paying as much as 40 cents more on every dollar you spend. Consumer debt compounds negatively, drags on your wealth, and strips away your ability to “outsave” men. Do everything you can to eliminate the debt you have today, and be realistic about spending to be sure it doesn’t creep back up in the future.

  3. Invest in yourself.
    Make financial choices that increase your earning power. Learn new skills. Get your MBA. Earn a professional certification. (Note: “Investing” in Botox, designer handbags, and little dogs are not part of this plan!)

  4. Invest early and often to take advantage of compounding.
    The more your money has time to grow on its own, the more wealth you’ll have to fund your retirement. Start as soon as possible and increase the amount you invest and save each year. If you get a raise, save half of it and spend the rest. 

  5. Getting divorced? Hold on to assets that generate long-term wealth.
    While you may feel emotionally attached to your home, a house is not an investment asset. Focus on retirement funds and other savings vehicles that can produce income 20 years down the road.

  6. Maximize your Social Security benefits.
    With lower earnings, it may be tempting to start claiming Social Security as soon as you're eligible, but delaying your claim just eight years from age 62 to 70 can increase the value of your benefit by as much as 76%. For women, that pay raise can do wonders in helping support a longer lifespan.

I hope the gender pay gap will someday become a thing of the past. Until that happens, make it your mission to change the things you can control. Get educated about financial planning, take responsibility for your financial future, and be sure you’re on track for a long, happy, healthy retirement.

Need help with taking charge of your finances? Let’s schedule a time to sit down and explore where you are today and how to plan for tomorrow. As always, I’m here to help.

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In Your Best Interest: Our Q4 2015 Newsletter

Click here to view the full newsletter, including recent news, important dates, financial tips & tools, and more.

Market Highlights: Q4 2015

The Force Awakens” was the theme in 2015—on the big screen and in real life. Just as the characters in Star Wars were forced to face their old rivals, global conflicts increased around the globe and the market reacted. Economic stress in Greece and China, falling oil prices, and terrorist attacks in Paris and San Bernardino, CA, impacted equity markets worldwide.

Of all the stock indexes, only the NASDAQ posted a gain for 2015. The S&P 500 index of large US companies ended with the first down year since 2008 while smaller and riskier US companies lost 5.7%. Developed international companies were down 3.3% despite a strong Q4, commodity-dependent Emerging Markets lost 17% for the year as oil prices reached an 11 year low, and bonds prices fell in the quarter as Treasury yields increased. 

When you look at your year-end statement, you may see that portfolio values trailed the Dow and the S&P 500. The reason? A diversified portfolio includes non-correlated assetsstocks that go up or down at different times—including energy and commodity stocks that fell due to low oil prices. Americans are smiling at the gas pump, but their portfolios are feeling the hit. Bonds investors were also disappointed as higher quality, short-term instruments that often provide defense against lower stock prices delivered less-than-expected yields.

Clearly it’s good to be an investor when you stay disciplined and stay the course. Despite the flat numbers, the three- and seven-year annualized returns of the S&P 500 were 12.7% and 12.4%, respectively, and the MSCI EAFE delivered 2.3% and 4.7% in the same timeframe. And remember, while the price of equities declined in 2015, you did not lose value. To restate Benjamin Graham’s advice to Warren Buffett, “Price is what you pay, value is what you get.”

On another positive note, at the end of December, the Federal Open Market Committee raised interest rates .25% for the first time since 2006. The increase reflects the Fed’s view that the US economy is strengthening, and their decision was based on positive economic data: unemployment ended the year at 5.0%, GDP growth slowed to 2.0%, and inflation remained below the Fed’s 2.0% target.

So what will 2016 hold? The only thing we can predict with any degree of certainty is that the US will have a new President. Bull market or bear market, no one knows. Investors should certainly expect continued volatility in equity prices, but as I’ve said time and again, the market is always headed in one direction: up. Our strategy is a disciplined approach to capital markets—staying diversified, keeping costs low, managing taxes, and rebalancing when needed—and we will continue to work with you to align your investment approach with your life goals, whatever they may be.

There’s no doubt the world is changing at a record pace, and it may feel like your life and goals are changing just as fast. The Force has indeed awakened, but we’re always here to help…no matter what the universe throws our way in the future.


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Beyond the headlines, it’s an up market

b2ap3_thumbnail_Klein_Advisors_Blog.jpgIf you’ve been anywhere but on a desert island this past week (and I can only hope that’s precisely where you’ve been!) you know it’s been a wild week for the market, and a wild week of headlines focused on Greece, Puerto Rico, and the resulting market volatility. “Greece’s Debt Crisis Sends Stocks Falling Around the Globe,” announced the New York Times. “Greece debt talks: EU chief feels 'betrayed',” according to the BBC. CNBC stated, “Stocks ignored Greece, now pay the price.” On Puerto Rico, the New York Times headline read, “Puerto Rico’s Governor Says Island’s Debts Are ‘Not Payable’” alongside The Wall Street Journal’s story, “Puerto Rico Releases Report Calling For Concessions From Creditors: Report’s release sends some Puerto Rico bonds to record lows.” Clearly the world—and the markets—are reacting.

But should you?

While there were a ton of alarm bells going off in the media Monday, the news that struck me the most was CNN Money announcing the “worst day for Dow in 2015.” It seemed to hit the core of my thinking…or at least to beg the question, “What does that even mean?” I’m an investment advisor, and I can tell you this: for long-term, prudent, and informed investors, it shouldn’t mean a darned thing. 


I’m seeing something very interesting happening right now that shows my clients and other educated individuals are rising above the“cycle of investor emotions” that’s so common. When the market is up, people pay attention and get excited about the opportunity. When it’s down, they get nervous or scared and want to run the other way. What’s fascinating right now is that, despite the recent volatility, everyone seems to be talking about investing again—in my office and everywhere else I look. The fear of the recession seems to be over. Yes, the potential Greek and Puerto Rican defaults are concerns that create uncertainty around the global financial system. But they shouldn’t be casting doubt on how good companies and the economy are valued.

When it comes to investing, it’s important to remember that we’re investing in the economy in general—and in the strong companies that support the economy. Looking around me today, I see many very tangible indicators of that strong economy. Everyone I know seems to be headed to Europe this summer. New cars are everywhere. ”For sale” signs seem to turn into “sold” signs overnight. And it’s not just my own perception. Car sales are the highest they’ve been since 2001. Housing starts spiked more than 20% last month—the biggest increase since 2007. In reality, the US economy is going strong. And the fact that millennials have finally outnumbered baby boomersfor the first time in history can only help sustain the momentum. More than 80 million millennials are exploding the population, and they’re buying everything. Houses. Cars. Computers. Washing machines. Dinners out. You name it, the single biggest generation in history is buying it today or planning to buy it tomorrow.

Yes, the headlines are right.

Greece and Puerto Rico default fears wreaked havoc on the markets this week. But beyond the headlines, when you invest for the long term, the trend is always up. Way up.


So, if you can, forget about Greece (except perhaps as a vacation destination). The market has been anticipating this default for years, so this “news” shouldn’t be a driver over the long term. Forget about Puerto Rico…that default has been assumed for a very long time (one reason why our bond funds don’t hold any Puerto Rican debt). Forget about the media (except for infotainment), forget about the headlines, and focus on the economy. Less than five months ago, the headlines were shouting the news that the S&P 500 hit a new highand clients were coming to me ready to invest—or re-invest—in the market. The informed investor rises above the cycle of investor emotions and continues to stay the course. Today, the market has settled down, though all bets are off if Greece does actually default this week or next. No matter how the markets react to the situation, my advice is to remember Warren Buffet’s words of wisdom: "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."


Does the stronger economy have you excited about investing again? Contact me any time to discuss what today’s market may mean for your own long-term investment strategy.


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Lessons from Dad


With Father’s Day just around the corner, I’ve been thinking about my own Dad and how he influenced my life. Was he a good financial role model? Did he teach me lessons I still value? And how much of a role did those lessons play in making me who I am today?

Harold Sachs was born in 1920, so he was young enough during the Great Depression that he didn’t have money worries of his own, though I’m sure he witnessed the strife of the era. But I know from hearing the family stories that even as a child he was everyone’s favorite. He was an energetic, athletic, and happy-go-lucky young man. He and my mother married young (after he died, I learned my parents had actually eloped—not the story I’d been told growing up!). He attended Georgia Tech, but enlisted to fight in the war before he graduated. When he returned from overseas, he immediately got a job as an engineer at the Port Authority of New York (I have a mental image of him working away at a drafting board, sleeves rolled up, planning the NY subway system), but it was not the career he’d hoped for; he’d done the math and figured out that even if he saved every penny of his earnings, he’d never be a wealthy man and the family steward he wanted to be.

When his own father suffered a stroke and died, Dad was happy to go into the family business as the owner of M&S Tavern in Paterson, New Jersey. An ambitious man (to say the least), Dad didn’t stop there. He was committed to building his wealth, and he saw opportunity in the post-war housing shortage. He began buying up neighboring properties as quickly as he could, subdividing them into smaller rental units to meet the demand for housing. And he did anything and everything to earn more money and make his money work for him. As the owner of the tavern, he put his accounting skills to work, filling out tax returns for his customers—factory workers who turned to him for help. I remember boiling eggs in our family kitchen so he could sell them at the bar. With that money and more, Dad even bought a local bakery. I remember him getting up at 4 a.m. to make dough, running the bakery in the mornings, napping in the afternoons, and then heading to the tavern for the ‘late shift.’ He was always full of energy, and he was always on the lookout for the next opportunity. At the same time, he longed for the often unrecognized freedom that came with working for someone else. “Never work in your own business,” he told me. “It’s much better to work for someone else and let them go home with the headaches!”

Dad also loved the stock market. When we ate breakfast together, he would read the paper and tell me all about the market. Together we’d pretend to pick stocks (do you remember American Can, US Steel, and National Cash Register?), and then we’d watch our fantasy fortunes grow. When Dad invested with real money, he learned along the way, selling some winners and holding some losers. He did his research, tracked what worked and what didn’t, and he knew, like Warren Buffett, that owning great companies was the key to building wealth. By the end of his life, he’d realized his dream of becoming wealthy. It was a long, circuitous route, but he got there.

Not long before he died, we were talking about his business ventures. At the time, I had just hit the 15-year mark in a corporate finance position, and I was definitely coming home with headaches. I reminded him of the advice he’d given me years ago about the value of working for someone else. He laughed. “Not once you’re an executive LJ. Once you’re the boss, you come home with the headaches anyway!”

Looking back, I have to wonder how many of us learned key financial lessons from our parents at a time in their lives when they were still learning themselves. Many of the behaviors our parents imprint on us happen when we’re very young. Which means, of course, that we’re learning from parents who still have much to learn themselves. If I hadn’t sat down with my Dad that afternoon, would I have gotten that perspective of an older, wiser father? Would I have had the courage to open my own business a few years later, or would I have continued to feel obligated to hold down a position working for someone else? It’s funny how those childhood lessons stick with us over time.

b2ap3_thumbnail_Lauren_Klein_blog.jpgYears after my Dad had died and I had opened the doors to Klein Financial Advisors, my Uncle Joe said to me, “Your father would have lovedthat you’re in this business. He would have loved that you help people invest in stocks and make their money work for them.” I guess those breakfasts poring over the stock sheets taught me more than how to build a fantasy fortune. Wh

ether he intended to or not, my father taught me the potential of investing, the drive to build a business, and the importance of being passionate about what you do every day. If he were still around today, I wonder what other lessons would be in store—financial or otherwise.

If your own father is still living and you have the chance to call or visit on Father’s Day, you may want to talk about the lessons he’s taught you over the years. And if age has given him some new perspectives, you may end up learning some brand new lessons from your older but wiser Dad.

Has your father been a financial role model? Were the lessons you learned valuable? Email me your thoughts. I’d love to hear them!





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Your summer to-do list: take a vacation


As I was en route home from last week’s trip to Bonaire, a Caribbean island off the coast of Venezuela, I stumbled across Time magazine’s article, “Save the American Vacation.” It’s not a new topic. This time last year, USA Today ran a story on countries with the most vacation days, leading with this unfortunate fact:

“The United States is the only developed country in the world without a single legally required paid vacation day or holiday. By law, every country in the European Union has at least four work weeks of paid vacation.”

And we’re not only behind the EU when it comes to vacation. We’re behind every industrialized nation:


Clearly, America has bred a culture of non-vacation. And my own family was living proof. My dad was a business owner, so vacationing just wasn’t something we did when I was growing up. Sure, I went away to summer camp, but we didn’t plan getaways as a family. As a result, it took me until late in my adult life to finally begin to understand the importance of not only setting aside the time and money to take a vacation, but also how to actually benefit from the time I spend away from the office.

Last October, for the first time in a decade, I took a real vacation on my own. I went diving on the island of Bali, and I remember feeling uptight nearly the whole time. I wasn’t able to turn off the constant vigilance and attention to detail that dominates my business-owner brain. If the internet at the hotel was down, I felt panicky. If plans fell through, I felt like I’d failed. I stayed focused on the next item on the agenda and what I was “missing” at home. It wasn’t until the very last day of the trip that I felt able to exhale and take in where I was, who I was with, and the sheer experience of what I was doing.

Earlier this year, I was diving in Palau with a wonderful dive master named Eddie. Before each dive, Eddie would say, “Remember, diving is not swimming. Look up. Look down. Look around. And most importantly, have fun.” It seems basic, yet most beginning divers are so focused on a destination—on the agenda—that they forget that the reason for being there isn’t to achieve, but to simply let go. We spend most of our lives striving to do more, in school, at work, even in our social lives. But vacation is perhaps the one time we can truly forget about doing and just accept what happens day to day, moment to moment.

So how do we get there?

The Time article focuses on the need to take time for vacation, but clearly no government policy is going to help make that happen. Just like planning for retirement, it’s up to each of us as individuals to actually make it happen, and that takes planning—for both time and money.

Decades ago, back when people actually walked into the bank building to make a deposit and we all had “passbooks” for our accounts, Vacation Clubs were popular. Basically a layaway plan for the holidays, some community banks and credit unions still offer this simple way to budget every month to prepay for your time off. According to surveys by Visa, AAA, and Money Magazine, most Americans spend about $1,600 on vacation (I’m guessing that number is higher in Southern California). By saving just a little over $30 a week all year in a dedicated account, you could easily have at least the bulk of a vacation paid for. Then it’s a matter of planning the actual time to get away, which for many of us is the biggest challenge of all. But by planning now, you will not only set yourself up for success, but you may also be able to completely let go once you do get there. The benefits? There are lots of studies that show regular vacations help reduce stress, increase creativity, and strengthen family relationships. No wonder all those other countries make it a top priority!

Need help planning a summer vacation? I’m no travel agent, but I’m happy to help determine a budget for this year and start planning for the future. And, of course, if you’re interested in hearing about my favorite diving spots, I’ll be glad to share.


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All written content on this site is for information purposes only. Opinions expressed herein are solely those of Lauren S. Klein, President, Klein Financial Advisors, Inc. Material presented is believed to be from reliable sources and we make no representations as to its accuracy or completeness. Read More >