Fee-Only Financial Advisers Who Aren’t

September 21, 2013 — Sam H. Fawaz

Today’s (Saturday September 21, 2013) Wall Street Journal contains an article entitled ” ‘Fee-Only’ Financial Advisers Who Don’t Charge Fees Alone” written by award-winning writer Jason Zweig, better known as “The Intelligent Investor.” Jason acts as beacon to guide investors towards the better practices of saving and investing and warns them of the tricks and traps.

In this article, Jason points out that “You might think a “fee-only” financial adviser will never charge you commissions or other sales charges that could induce him to favor selling you something that is better for him than for you. Think again.”

Through his research, he found that many advisors who hold themselves out as “fee-only” indeed earn commissions, kickbacks, trails or other hidden compensation even though they might not sell you a product that generates one. He found that numerous advisors (661) that were Certified Financial Planners (TM) and worked for large Wall Street brokerage firms such as Morgan Stanley, UBS, RBC, Wells Fargo, J.P. Morgan Chase, Bank of America Merrill Lynch, Raymond James and Ameriprise Financial also listed themselves as fee-only advisors on the CFP (r) website. By definition, based on the nature of the firms that they work for, they cannot designate themselves as fee-only advisors or planners.

Many people also confuse fee-only with fee-based. They are definitely not the same. Fee-based means that the advisor can earn both fees for services as well as other commissions or kickbacks for selling investment, insurance or other financial products.

NAPFA, the National Association of Personal Financial Advisors (the de facto fee-only organization of planners and advisors found at napfa.org), the Financial Planning Association and the Certified Financial Planner board of standards are currently working on more clearly defining the “fee-only” standard and urging members to update their profiles and re-assert that they meet the more clearly-defined standard. I applaud this effort.

I wish to reassure our clients, prospects and friends that our firm, YDream Financial Services, takes a very serious and crystal clear stance on meeting the fee-only definition. Fee-only planners, like us, are compensated solely by fees paid by our clients and we do not accept commissions or compensation of any kind from any source. We also don’t earn any money or consideration from trails, referrals or markups. We have zero incentive to recommend any financial products and don’t accept anything (except perhaps trinkets from wholesalers or fund companies worth $5 or less handed out at conferences) that influences our recommendations. Our custodian, Charles Schwab does not reimburse or compensate us for any trade commissions or for the use of any particular financial products that they offer.

As a fiduciary, we take our responsibility to put your interests first and we endeavor do that in every recommendation or transaction that we initiate on your behalf. Finally, any conflicts of interest that our compensation approach might present are clearly discussed and disclosed with our clients and prospects prior to implementing the recommendation or moving forward with the engagement.

You can find the Wall Street Journal Article here http://goo.gl/23Oy3B. It’s worth the short read. If the link requires a log in or subscription to the Wall Street Journal Online, I suggest typing the title of the article above into your favorite search engine then click on the search hit that it finds.

Posted in Fee-only, General, investing, markets. Tags: , , , , . 1 Comment »

Your Returns Versus the Market

September 2, 2013 — Sam H. Fawaz

One of the most misleading statistics in the financial world is the return data we are routinely given by the financial media, telling us how much investors made in the markets and in individual stocks or mutual funds over some time period.  In fact, your returns are almost guaranteed to be different from whatever the markets and the funds you’ve invested in have gotten.

How is this possible?  Start with cash flows.  We are told that the S&P 500 has delivered a compounded return of about 7.8% from 1992 through 2011, which sounds pretty positive until you realize that this return would only be available to somebody who invested all his or her money at the beginning of 1992 and didn’t move that money around at all for the next twenty years.  If you invested systematically, the same amount every month, as most of us do, then you would have earned a 3.2% compounded return.  Why?  A lot of your money would have been exposed to the 2008 downturn, and not much of it would have enjoyed the dramatic run-up in stocks from 1992 to 2000.

In addition, there is the difference–only now getting attention from analysts–between investor returns and investment returns.  Human nature drives investors to sell their stocks and move to the sidelines after their portfolios have been hammered–which is often the worst possible time to sell.  And it drives people to start increasing their equity allocations toward the peak of bull markets when they perceive that everybody else is getting rich.  That means less of their money tends to be exposed to stocks when the market turns from bearish to bullish, and more is exposed when markets switch from bullish to bearish.

Understand also that owning a diversified portfolio means that only a portion of your investments are exposed to stocks. Assets such as cash, bonds, real estate, commodities and other non-stock investments all have returns that are inherently different than stocks, making overall portfolio return comparisons an “apples to oranges” one.

This would be bad enough, but people also switch their mutual fund and stock holdings.  When a great fund hits a rough patch, there’s a tendency to sell that dog and buy a fund that whose recent returns have been scorching hot.  Many times the underperforming fund will reverse course, while the hot fund will cool off.  The Morningstar organization now calculates, for every fund it follows, the difference between the returns of the mutual fund and the average returns of the investors in fund, and the differences can be astonishing.  Overall, according to Morningstar statistics and an annual report compiled by the Dalbar organization, investor returns have historically been about half of what the markets and funds are reporting.

And then there’s the tax bite.  Some mutual funds invest more tax-efficiently than others, and generate less ordinary income.  Beyond that, if a fund is sitting on significant losses when you invest, you get to ride out its gains without having the tax impact distributed to your 1040.  If the fund is sitting on large gains when you buy in, you could find yourself paying taxes on gains even if the fund loses money.

Sources:

http://www.forbes.com/sites/financialfinesse/2012/06/20/why-your-investment-returns-could-be-lower-than-you-think/

http://www.thesunsfinancialdiary.com/investing/understanding-ms-total-return-and-investor-return/

http://corporate.morningstar.com/cf/documents/MethodologyDocuments/FactSheets/InvestorReturns.pdf

My thanks to Inside Information publisher Bob Veres for his contribution to this post.

Posted in General, investing, markets, retirement. Tags: , , , , . 1 Comment »

Handle Asset Location With Care

August 18, 2013 — Sam H. Fawaz

An old question has become new again.  You have tax-deferred accounts like IRAs and Roth IRAs, and you have accounts that pay taxes every year on the income they receive.  Where do you put different types of assets? 

The answer is that you want to put the most tax-inefficient investments inside the tax-deferred accounts.  The most notoriously tax-inefficient investments, historically, have been bond funds, commodities futures funds and real estate investment trusts (REITs), which all generate ordinary income that can be taxed at 39.6% plus the 3.8% Medicare tax for higher-income taxpayers.  The Roth IRA, which shelters all future returns from taxes of any sort, can be a great place for mutual funds that invest in small cap stocks, since they tend to have high turnover and historically have provided the highest gains.  

In taxable accounts, you might put growth stocks which, if you hold them for more than a year, will have their price appreciation taxed at a maximum rate of 20% (or 23.8% with the Medicare surtax).  Of course, you can choose to hold individual securities for much longer periods, which gives you tax deferral on its own–and, if the stocks are held until death, the heirs get a step-up in basis, which basically means any rise in value is never taxed.  Municipal bonds which qualify for an exemption from federal taxes are also good candidates for the taxable portion of your investment accounts. 

What makes this debate new again?   Higher ordinary income tax rates, and potentially higher capital gains tax rates (up from 15% to 23.8% for tax filers who have to pay the new Medicare surtax) have introduced some gray areas, as have the historically low rates on bonds.  When bonds were delivering upwards of 10% on the investment dollar, putting them in an IRA was a no-brainer.  But what if you’re cautious about rising rates, and you’ve shortened maturities in a yield-starved market, so your return is closer to 1%?   Suddenly, these funds are no longer a huge tax concern. 

At the same time, REITs offer tax benefits like depreciation, which becomes more valuable at higher ordinary income rates.  And persons in retirement may see their tax rates fall from above 39% down to 15%, which decreases the benefits of astute asset location, and might raise the value of rebalancing each year across all accounts. 

Another consideration for retirees is the mandatory withdrawals they have to take from their IRA account after they reach age 70 1/2.  If the IRA is holding all the income-generating investments, then systematically liquidating those holdings means creating a higher exposure to stocks and a generally more volatile portfolio as you age–which may be the opposite of what is desired.

Saving taxes through asset location strategies is one of those rare opportunities to get additional dollars without taking additional risk–but a mindless focus on taxes without looking at the bigger picture can result in unintended consequences.  The rules of thumb need to be informed by your tax bracket and other aspects of your individual circumstances–with an eye on the ever-changing tax and interest rates that Congress and the markets throw at us. 

Source:

http://www.financial-planning.com/fp_issues/43_8/asset-allocation-rules-2685905-1.html?zkPrintable=1&nopagination=1

 

 

 Many thanks to Bob Veres, publisher of Inside Information for his help writing this blog post.

 

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The Rollercoaster Effect

June 23, 2013 — Sam H. Fawaz

There are two kinds of investor in this world.  One type pays close attention to the daily (and sometimes hourly) flood of information, looking for a reason (any reason) to jump in or out of the markets.  The other kind of investor is in for the long haul, and recognizes that the markets are going to experience dips and turns.  If these people are particularly wise, they know that the dips and turns are the best friend of the steady, long-term investor, because as you put money into the markets, as you re-balance your portfolio, you gain a little extra return from the occasional opportunities to buy at bargain prices.

Last week, the investment markets made an unusually sharp turn on the roller coaster, and showed us once again the sometimes-comical fallacy of quick trading.  See if you can follow the logic of the events that led to last week’s selloff.  Federal Reserve Board Chairman Ben Bernanke and the Federal Open Market Committee issued a statement saying that the U.S. economy is improving faster than the Fed’s economists expected.  Therefore (the statement went on to say) if there was continued improvement, the Fed would scale back its QE3 (quantitative easing) program of buying Treasury and mortgage-backed securities on the open market, and ease back on stimulating the economy and keeping interest rates low.

Everybody knows that the Fed will eventually have to phase out its QE3 market interventions, and that this would be based on the strength of the economy, so this announcement should not have stunned the investing public.  Nothing in the statement suggested that the Fed had any immediate plans to stop buying altogether; only ease it back as it became less necessary.  The statement said that this hypothetical easing might possibly take place as early as this Fall, and only if the unemployment rate falls faster than expected.  At the same time, the Fed’s economists issued an economic forecast that was more optimistic than the previous one.

The result?  There was panic in the streets–or, at least, on Wall Street, where this bullish economic report seems to have caused the S&P 500 to lose 1.4% of its valueon Wednesday and another 2.5% on Thursday.

In addition–and here’s where it gets a little weird–stocks also fell sharply in Shanghai and across Europe, and oil futures fell dramatically.  How, exactly, are these investments impacted by QE3?

The only explanation for last week’s panic selloff is that thousands of media junkie investors must have listened to “we plan to ease back on QE3 when we believe the economy is back on its feet again,” and heard: “the Fed is about to end its QE3 stimulus!”

It’s possible that the investors who sold everything they owned on Wednesday  throughFriday will pile back in this week, but it’s just as likely that the panic will feed on itself for a while until sanity is restored.  If stocks were valued daily based on pure logic, on the real underlying value of the enterprises they represent, then the trajectory of the markets would be a long smooth upward slope for decades, as businesses, in aggregate, expanded, moved into new markets, and slowly, over time, boosted sales and profits.  The roller-coaster effect that we actually experience is created by the emotions of the market participants, who value their stocks at one price on Wednesday, and very different prices on Thursday and Friday.

The long-term investor has to ask: did any individual company in my investment portfolio become suddenly less valuable in two days?  Did ALL of their enterprise values in aggregate become less valuable within 48 hours–and at the same time, did Chinese and European stocks and oil also suddenly become less valuable?  Phrased this way, the only possible answer is: no.  And if that’s your answer, then you have to assume that eventually, people will eventually be willing to pay the real underlying value of the stocks in the market, and the last couple of days will be just one more exciting example of meaningless white noise.

With all that said, it’s prudent to be cautious about going “all in” on this pullback in the market and to perhaps take some hard-earned partial profits on positions you’ve been holding. In our clients’ portfolios, we’ve upped our hedges and taken partial profits on short-term positions, but are still holding the majority of our equities and bonds.

With the action in the markets last week, we officially have the beginnings of a downtrend, but that can be very short-lived in this QE environment, so we remain on our toes. Be sure to consult with your advisor if you’re uncomfortable with your holdings or have trouble sleeping at night because of your positions. Nothing in this message should be construed as investment advice or suggestions to buy or sell any security.

If you have any questions or comments, please don’t hesitate to contact us or post them here. We are a fee-only fiduciary financial planning and investment advisory firm that always puts your interests first.

Have a great week!

Sam

Sam H. Fawaz CFP™, CPA
Registered Investment Adivsor Representative
NAPFA Registered Fee-only Advisor
Financial Planning Asssociation Member
(734) 447-5305
(615) 395-2010
http://www.ydfs.com

TheMoneyGeek thanks Bob Veres, publisher of Inside Information for his help with writing this guest post.

Posted in General, investing, markets, retirement. Tags: , , . Leave a Comment »

The Value of Education

May 19, 2013 — Sam H. Fawaz

Now that college graduation exercises are upon us, you are no doubt hearing reports that young people matriculating from this or that prestigious alma mater are having trouble finding jobs.  The easy conclusion seems to be that a college degree doesn’t matter very much anymore in the new economy.  But that, of course, is a short-term view; younger people have fewer job-related skills than people who have been employed for a few years, so they generally have trouble getting that first job no matter what their education level.

You can see this in the first chart below; older workers, who have presumably more experience in the workplace, tend to have lower unemployment rates than their younger competition.  A recession like 2008-2009 simply reinforced a long-term pattern; it made the jobs situation worse for everybody.  Today’s difficult job market continues to allow employers to put a premium on experience.

Longer-term, however, a college degree does seem to confer huge advantages for getting employment.  Consider the most recent jobless statistics, broken down by education level:

Jobless rate for persons who have not earned a high school degree:  11.6%

Jobless rate for high school graduates with no college training: 7.4%

Jobless rate for persons with some college training or an associate degree: 6.4%

Jobless rate for persons who have earned a bachelor’s degree or higher: 3.9%

Longer-term, as you can see from the second chart below, people who are educated at every level tend to be less likely to be unemployed than those with lower educational attainment.  The better-educated also tend to earn higher incomes over their lifetimes–the most recent statistics compiled by the Pew Research Center suggests that the average high school graduate with no further education will earn about $770,000 over a 40-year worklife, compared with $1.4 million for a worker with a bachelor’s degree.

Image

Parents reading this article, and graduates who are paying off enormous student loans, are no doubt wondering whether Pew was able to factor in the upfront costs of getting the college degree, plus the opportunity cost of four years (or more) spent on campus rather than in the workforce.  Even when these considerable costs are factored in, the net gain for a student who graduated from an in-state four-year public university is about $550,000 over a person’s worklife.  The third chart shows the various disparities in yearly earnings at different ages; you can see that at age 25, the differences are not huge, but over time, college education begins to create significant income separation.

Image

Bottom line?  Ignore the gloomy reports of college graduates having trouble finding work. This has always been a problem, admittedly made worse by today’s weak job market, but not an indictment of the value of a college education.  Education, as George Washington Carver once remarked, is still the golden key that unlocks the doors of opportunity.

Sources:

http://www.pewresearch.org/daily-number/the-monetary-value-of-a-college-education/

http://www.pewsocialtrends.org/2011/05/15/is-college-worth-it/6/#chapter-5-the-monetary-value-of-a-college-education?src=prc-number

TheMoneyGeek thanks Bob Veres, publisher of Inside Information for this guest post.

Posted in College Planning, General. Tags: , , . Leave a Comment »

Hey Windows 8, Where Do I Start?

September 30, 2012 — Sam H. Fawaz

For as long as I can remember, Microsoft’s releases of operating systems (OS) have been primarily designed around the personal computer environment.  Shortly after release, Microsoft then “shoe-horns” the OS into other devices such as smart phones, earlier versions of tablet PC’s and personal digital assistants.  As a result, users’ biggest complaints in the past have been slow or sluggish responsiveness, poor user interface design and incompatibility of the OS with small devices and screens.

Now with Windows 8 scheduled for an official release date of October 26 2012, about three years after the release of Windows 7, Microsoft (MS) has turned the “one size fits all” OS paradigm into the “lowest common denominator” paradigm.  That is to say, it’s almost as if MS has taken the interface, first introduced in the failed Zune music player, then refined for the Windows Smart Phone 7, and has scaled it up for the PC and modern tablet environment.

In this article, I’ll give you the highlights of my experience working with the new OS over the past couple of month and my thoughts on them.  In many respects, Windows 8 builds on Windows 7 with a few user interface changes, feature enhancements and under the hood upgrades.  In addition, I found that compatibility of hardware devices and software with Windows 7 carried over to Windows 8 with few exceptions.

Installation & Initial Impressions

The release to manufacture (RTM) version of Windows 8, a 3.5 GB DVD ISO image, downloaded to my Lenovo ThinkPad W500 notebook without any issues. After burning the image to an installation DVD, I was ready for the install.

The Windows 8 install routine follows the same script as Windows 7.  The installation wizard asked very few questions and proceeded to install Windows 7 without a hitch.  In fact, the only real choice to make during installation is whether to upgrade the existing operating system (assuming one exists) or to perform a fresh install.

In my case, the laptop I was using had two hard drives installed; one with Windows 7 running on it and another empty hard drive. In the majority of cases, I highly recommend backing up your computer and data, testing the backup, and then doing a fresh install (which reformats the hard drive and overwrites the old operating system).  This process, while more time consuming and labor intensive, ensures that your install goes more smoothly and your computer won’t be slowed down with old remnants and “trash” files, hidden malware, and a bloated registry from your previous Windows installation.  Obviously this means reinstalling all of your applications, finding your software keys, and re-registering the applications, so be ready for that.

For a fresh install, the entire process took about 20 minutes, even on my older hardware.  If the installation fails on your hardware, it’s more than likely a hardware or driver compatibility issue. Sometimes merely re-starting the install process after failure gets it to work.

After the installation and reboot were complete, and since I still had Windows 7 installed on the secondary drive, a Windows dual-boot menu came up allowing me to choose Windows 7 or Windows 8. If you do a fresh install over your existing operating system, you won’t have this choice. I chose Windows 8.

One of the new features of Windows 8 is a universal “network” login. While in the past each PC user had a local account to log onto each PC he or she owned, MS now understands that users have multiple devices (laptop, desktop, tablet, smart-phone) and would prefer not to have to create separate logins, internet favorites, desktop settings, etc. for each device.  This is akin to having a “network” or domain controller at the office monitoring and granting access to employee PC’s.  While this is optional, I highly recommend it since it also integrates your social networking accounts and Microsoft store access with the operating system.

By having users create a Microsoft “cloud” user account, using either a Hotmail or MSN e-mail address (or your own primary 3rd party e-mail address), Microsoft can store these settings in the cloud for use with any device you log into with that e-mail address.  That way, every device you log into will look, work and feel the same no matter where you are.  Of course, that means Microsoft can sell you apps and other devices in their digital “ecosystem”, not unlike Apple’s approach to locking you into their digital ecosystem.  It also means that you get 7 GB of online SkyDrive storage free for use to store and share documents and other files.  SkyDrive aware applications can conveniently take advantage of this storage (e.g., Office 2013)

Once you set up your user account, first-time setup asks you which WiFi network you want to connect to (assuming one is nearby) and what settings you want to use for Microsoft updates (i.e., automatic, ask, download then ask.)  New in Windows 8, you can choose your color scheme and background “tattoo” for your working environment (which of course can be changed anytime).  After a few seconds, the new Windows 8 “Metro” interface appears with a background picture of the infamous Seattle space needle. This is where the fun starts!

Before I continue describing my experience, I should mention that at one point shortly after installing Windows 8 (and a few applications), the system inexplicably crashed badly and couldn’t be recovered. Even the repair facility on the Windows 8 install disc was unable to recover the system. Worse, the Windows 7 partition would not boot up either, even though the data contained therein was intact. Only a full installation, this time without the Windows 7 drive in place (my choice), would get me up and running again.  Perhaps this was a hardware issue or an issue with this RTM version; I may never know. But suffice to say, in the future, I will not attempt another dual boot install of Windows 8 with another computer, lest it render both OS’s unusable (thankfully my data was still safe, but I still have to reinstall Windows 7 to get that partition running again).

User Unfriendly Interface?

Even though Windows 8 is not officially released, the new Metro interface (start screen) has already generated a considerable amount of controversy and, let’s just say, outright hatred.  Booting up to the start screen brings you to a tablet or smart-phone style interface with live “tiles” for pre-installed applications (apps) like maps, internet explorer, mail, games, store, music, camera, video, etc.  These apps update the desktop automatically (think gadgets) with information like the weather, incoming mail, social network updates, etc.  Double clicking one of the tiles launches the full-screen app.  Install an application of your own and a launch tile is created for you on the desktop.  But gone in Metro are the comfy and familiar task bar and Start button we’re all accustomed to.  In my opinion, the graphical interface is far inferior to that found in Apple’s OS and seemed a bit like child’s play.  The tiles themselves seemed to be low resolution and quite plain.

From here, things get a little nebulous.  Click on an app tile and it’s quite unclear what you need to do to close the app, launch another one, bring up the app menu, or simply get back to the start screen. I really hope that Microsoft ships the OS with a start-up tutorial for new Windows 8 users to demonstrate how to navigate the OS.  Without something like that, you’re just plain lost.  The first time I rebooted the computer, I had my desktop bitmap background displayed with no clue how to bring up the log in screen (hint: press any key!)

In Microsoft’s effort to create a single operating system intended for use with a keyboard and mouse as well as with finger swipes, they have created needless complexity and confusion for the user.  While I pride myself on digging deep under the hood in every operating system I unwrap, I felt somewhat lost and dumbfounded with my non-touch laptop screen when trying to navigate the OS.  Click up, right-click, click down, click right, click left, double-click, triple click; I tried everything to try and learn how to navigate the interface. Frustrated doesn’t begin to describe how I felt until I figured things out.

The fact is, without some help from the web, I wouldn’t have figured out how to navigate the interface.  By accident, I discovered that pressing the Windows key brought up the traditional Window 7 like task bar and interface (but still no Start button.) Pressing it again takes you back to the Metro interface.  Talk about feeling dumb.

To save you some time and frustration, here’s a little cheat sheet: The upper and lower edges of your screen are reserved for application menus and functionality.  The right and left edges of your screen are reserved for the operating system functionality. You move your mouse (or finger on a tablet) to the screen edges to bring up and use the selections that appear.

Moving your cursor to the upper left-hand corner brings up the thumbnails of all the running applications and a thumbnail of the start desktop.  Moving your cursor to the upper right-hand corner brings up the Windows 8 palate of buttons (called charms): search, share, start, devices and settings.  I won’t take the time to describe them since their name and clicking on each of them makes their functionality obvious.

Launch a traditional (non-Metro) application like MS-Word and you find yourself in the familiar desktop world, a la Windows 7. Launch a Windows 8 compatible application and you’re in the Metro world. At times, it felt like each of these two types of apps were on separate islands, if not like being on a dual boot system with two disparate operating systems. Figuring out how to get from one app to another took some guessing. Fortunately, the Alt-Tab and Windows-Tab key combinations still work. Nonetheless, it definitely takes some getting used to.

Though I didn’t have a touch-screen system to test it, Windows 8 is optimized for touch-screen PCs and tablets.  With the success of the iPhone and other tablet devices, having these capabilities built-in will make the user experience much more pleasant and interactive. Microsoft has made great strides in this area.

New Features and Enhancements

Like all previous iterations of Windows, Microsoft touts the security, performance and resource enhancements brought about by a new “architecture” in Windows 8.  Each version seems to always promise to use less memory, employ processors more efficiently, and need less disk space.  The disk space claims had better be true since solid-state drives (which I don’t have except on my iPad) are somewhat space constrained and quite expensive in the short term.  In addition, to be a truly mobile operating system, it would have to be truly memory and processor efficient. The new trusted boot is supposed to prevent malware from loading before the operating system, thereby making it more secure.

Windows 8 touts much faster start-up time. Is it faster than Windows 7? Yes it is. Is it much faster? No, not in my opinion, at least not on my laptop.

Windows 8 also claims to have longer battery life and faster graphics and text rendering. In my limited testing, I wasn’t able to validate these claims (especially since I don’t have a test work bench). I can however attest to the fact that I was able to connect and reconnect to Wi-Fi networks faster.

Windows 8 comes with the new Internet Explorer 10 as a Metro type application.  The menu and URL bar are moved to the bottom and Microsoft claims that it’s not only faster than previous versions, it has far better support for HTML5 standards.  Using IE 10 is like having a “clean full sheet” view, something that took some getting used to. But I found that I really liked how it looked and felt.  Nonetheless, the first application I installed on Windows 8 was Firefox (and of course my favorite app, RoboForm).

For some reason I’m unable to explain, I was not able to fully test the multi-monitor support touted in Windows 8.  Among Windows 8’s features for handling multiple monitors is the new ability to adjust and set the location of the task bar.  In my case, Windows 8 simply refused to recognize my 30” monitor (perhaps an incompatible driver). But if you’re using multiple monitors, setting the location of the task bar is a nice and long overdue enhancement.

As mentioned above, many apps ship pre-installed on Windows 8 with access to thousands more in the Microsoft app store.  If you’ve ever used a tablet PC or smart phone, you know exactly what I’m talking about.  One annoying aspect of apps are their minimalist approach to giving help and user options.  You often waste time hunting for a button, a menu, something to help you do what you need to do.  Sometimes too little of a good thing (options) is just as bad as too much of it.

My Experience, Comments & Editions

In day-to-day use, there was not much about Windows 8 that struck me as being radically different than Windows 7.  The speed and performance were similar as were the application and hardware compatibilities.  Most hardware manufacturers won’t have to rush out new compatible Windows 8 drivers, but some will.  Since the old Windows registry unfortunately lives on with Windows 8, backwards compatibility is assured, but so are the legacy issues, performance and problems inherent with it.

One important decision you’ll have to make is whether to trust your PC security (anti-virus, malware, firewall, spam, etc.) to Microsoft’s built-in capabilities and forgo a third party security suite or ante up for one. There’s no guarantee that your existing Windows 7 security suite will be compatible with Windows 8, so you may have to upgrade to a newer version. My decision is easy: let the security experts take care of my PC security, so I’ll spring for a third party compatible application.

As for my overall impression, Windows 8 strikes me as the next trouble spot for Microsoft a la Windows Vista.  The Metro interface will be discussed ad nausea and I suspect will continue to be bashed in the media.  In general, while I am happy with the Windows 8 upgrade, I don’t feel compelled, as I did with Windows 7, to rush out and upgrade my Windows 7 PC’s. However, if you’re ordering a new PC soon, then I highly recommend one with a touch screen. For that, Windows 8 is a must have.

As of this writing, Microsoft has announced four editions of Windows 8 with varying feature sets (e.g., Windows 8, Pro, Enterprise, and RT) with pricing from $14.99 (for Windows 7 computers purchased after June 1, 2012) to $39.99. For more details on the various editions, feature comparisons and upgrade paths, check out http://en.wikipedia.org/wiki/Windows_8_editions.

Windows 8 runs on any hardware that can run Windows 7. It will also be able to run any programs that run under Windows 7, unless you opt for a Windows RT tablet, which will only run new-style (Metro) Windows 8 apps.

After using Windows 8 for a period of time, it became readily apparent why Windows 8 upgrade pricing is so inexpensive: Microsoft expects users to make a lot of purchases from the Microsoft store. Towards that end, the store is somewhat “in your face” more often than you might like.

Like Windows 7, I once again expect a very slow and cautious corporate approach to upgrading to Windows 8, with many companies waiting until the first service pack is released before committing to deployment.  While the operating system is more secure, I don’t see many compelling corporate features to cause many companies to rush into upgrading.  Windows 7 is simply good enough.

Because of the learning curve involved, and because there is currently no option to disable the Metro interface, I suspect that many IT departments will shelve this upgrade until Microsoft is pressured enough to make the Metro interface optional and bring back the Start button and traditional Win 7 interface as the default. I’m not sure that’ll happen, but a slow corporate OS upgrade cycle might convince Microsoft to do so.

If you’ve been playing with the consumer preview or RTM versions of Windows 8, I would love to hear your feedback or questions.

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Bond Market Outlook: Points to Ponder

June 6, 2012 — Sam H. Fawaz

During the past decade, many long-term fundamentals of investing have been turned upside down and one example is the performance of U.S. stocks compared with bonds. Over longer time periods, such as 20 or 30 years, stocks exhibited higher average annual returns along with greater volatility.1 Bonds, in contrast, presented lower long-term returns along with fewer ups and downs.

But the 10-year period ending December 31, 2011, has shown the opposite, with the average annual return of investment-grade bonds exceeding stocks by a margin of 5.8% compared with 2.9%.1 No one knows for sure whether the recent outperformance of bonds will continue, but events currently present in the U.S. economy are causing observers to question the outlook in the years ahead.

Interest Rates The Federal Reserve has maintained the federal funds rate between 0.0% and 0.25% with the goal of stimulating the economy. Given how low short-term interest rates are, it is likely that they will turn upward at some point, which would present challenges for bondholders. Historically, higher interest rates have caused the prices of existing bonds to fall as investors have pursued newly issued bonds paying higher rates. This scenario presents the potential for losses for existing bondholders.

Inflation During 2011, inflation averaged 3.2%, close to the historical average of 2.9%.2 But if inflation were to increase even higher, an investor would lose money on a bond with a yield lower than the rate of inflation. Some observers believe that if the U.S. economy begins generating stronger growth, inflation could once again spike upward.

Federal Spending Sizeable federal deficits are almost old news as the government looks for ways to stimulate the country’s economic engines. While economic growth is a laudable objective, outsized federal spending may impact the financial markets. If the federal government is forced to pay higher interest rates to entice investors to fund the debt, this action could lead to higher interest rates on other types of bonds as well in response to investor demand.

Bonds can help investors balance a portfolio weighted to stock funds or other assets. When making decisions about investments, it is important to weigh both the benefits and the risks associated with bonds and any other assets that you own.

Source/Disclaimer:

1Sources: Standard & Poor’s; Barclays Capital. Stocks are represented by the Standard & Poor’s 500 Index, bonds by the Barclays Aggregate Bond Index, volatility by standard deviation. Results are for the 30-year period ending December 31, 2011. You cannot invest directly in an index. Past performance does not guarantee future results. Investing in stocks involves risks, including loss of principal. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and are subject to availability and change in price.

2Source: U.S. Bureau of Labor Statistics. Inflation is represented by the Consumer Price Index. Historical average is for the period between 1926 and 2011.

June 2012 — This column is provided through the Financial Planning Association, the membership organization for the financial planning community, and is brought to you by YDream Financial Services,a local member of FPA.

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Hooked on the iPad

December 17, 2011 — Sam H. Fawaz

Most people who know me quickly realize that my tolerance for electronic gadgets that don’t work properly or don’t justify their hefty cost is pretty low. I still use a Palm 680 Smartphone and hold onto my computers much longer than their useful life. Shiny and new aren’t on my top requirement list as much as utility, durability and value are.

Store return policies appear at the top of my list when considering a vendor for a new electronic gadget, and restocking fees are definitely my enemy. So when I purchased my first tablet PC to try out, based on all the positive feedback and reviews, the generous return policy at Target (90 days) was just the ticket to figure out whether a tablet would fit into my computing life. As it turned out, I didn’t need the return policy and the Apple iPad 2 goes with me nearly everywhere I go.

While tons of ink has been spilled about the tablet space and the iPad, I wanted to share my thoughts and experience of living with an iPad for over four months. Despite owning two desktop computers, two laptops and a smartphone, I find myself going back to the iPad time and time again whenever I need a totally portable and light device on-the-go.

Several models of the iPad are available. They differ by color (black or white-I chose white), memory size (16 GB, 32 GB or 64 GB) and wireless capability (Wi-Fi or cellular). For my own purposes, I chose the 64 GB version to ensure that I never run out of storage space, given that the iPad has no on-board expansion capabilities. While many might question the need for this much memory, I know that it can be quickly filled up with documents, e-books, music and video. I took the approach that you can never have too much space; just like with computer hard drives, you always manage to fill them up at some point, especially with so many apps available these days.

Some may argue that with the Apple iCloud (and other online storage services), the online storage and backup facility recently launched, more than a nominal amount of local storage is no longer necessary. My response is that, while Wi-Fi and cellular data reception may be ubiquitous, it’s when you really need that video or document that you find yourself with an online connection that’s unavailable, too slow or unreliable. Internet access hasn’t, in my opinion, reached the reliability or overall availability as much as say, electricity.

This brings me to my next choice: Wi-Fi or cellular internet access. I’ll say up front, I’m too budget-minded when it comes to paying for even more internet access (via cellular) when I’m already paying for it twice: once on my smart phone and once at home (after all I am a financial planner). I just couldn’t see spending another $30 or more monthly for an additional plan that I would use only where Wi-Fi is not available. Also, if I were to “spring” for another wireless connection, I’d go for one of the portable cellular Wi-Fi routing devices that can make internet access available for more than one device (à la the Verizon MiFi). This way I’m not limiting my cellular internet access to one device; I could also use it with my laptops.

In my experience, cellular access on my iPad would have been handy at times where Wi-Fi was not available for my iPad, but those instances have been only a few. Also, keep in mind that, even when only Wi-Fi is available, it may not be free (airports, airplanes, etc.) And obviously a cellular data modem can’t be used on an airplane.

For someone who has used an iPhone or iPod Touch, getting used to the multi-touch screen and iOS interface is second nature. For someone like me, who never owned either, learning the navigation of the interface and various finger gestures was very simple and intuitive. Within minutes I became comfortable opening and navigating applications, though it took some getting used to. Being so PC and Windows centric, this was also my first experience with an Apple computing device (other than an iPod of course).

Since I’m well versed in using iTunes software, the synchronization interface for the iPad with your computer, getting started setting up the iPad was relatively easy. While I was anxious to sync, view and listen to my music and videos on the iPad, I really viewed the primary purpose of the iPad as an e-reader and lightweight e-mail and internet browsing device. Everyone knows about the hundreds of thousands of “apps” available for the iPad, and I was curious which ones I would gravitate towards or incorporate into my daily life.

An online Apple account is essential if you plan to use iCloud, download apps or buy anything from the iTunes store. Anyone who has purchased music or media from Apple already has an account. If not, setting one up is easy and free; even if you never purchase a thing from Apple, and are only interested in the free apps, you’ll need an online Apple account.

During set-up, the iPad asks if you wish to establish a 4 digit passcode to protect your iPad and contents. I can unequivocally say that you must do this immediately and set a short time-out for it. It will help protect your device and data from unauthorized access and spying eyes, and will not allow use until after you input the passcode. You can even set the maximum number of failed attempts to unlock the iPad, after which it will erase all the data from the device as a safety precaution.

One of the first apps that came “standard” on the iPad was “Find iPhone”. This allows you to remotely track down your device via GPS should it become lost or stolen. I set this up right away just in case this happened. Although a clever thief can likely find a way around it, it’s a second line of defense (after the passcode) to retrieve or wipe your data should the iPad fall into the wrong hands. And as I get a bit older, it may even help me find my device around the house in case I misplace it like my keys.

Without any USB ports or memory card slots, one wonders how you get data back and forth to the device. As alluded to above, the iCloud can act as a data hub to shuttle files and documents to the iPad. In addition, e-mail and internet attachments (most commonly PDF’s) are opened and displayed without any extra effort, using the preinstalled iBook application.

Speaking of e-mail, setting up an internet e-mail account (in my case Google’s Gmail) was straightforward and effortless. The iPad uses the IMAP protocol to sync messages with the server and makes e-mail processing a breeze. Tapping out short e-mails with the on-screen keyboard became easier over time, though I splurged on a $99 Logitech Bluetooth keyboard/cover combo device. The keyboard doubles as a hard screen cover when not in use. The keyboard, while a bit small, is much easier to type on than the virtual screen keyboard and makes short work of typing longer documents or e-mails. The keyboard/cover also doubles as an iPad stand turning the iPad into a mini convertible notebook.

Internet browsing using the Safari browser worked flawlessly, though Internet Explorer or Firefox users may take some time to get used to Safari. Of course, as many iPad users learn quickly, Apple does not run the ubiquitous Adobe Flash applications or videos. Over time, this has become less of an issue as more and more video content is being converted to HTML 5.0. While the majority of web videos are in Flash, a large portion of YouTube and other web video content is available in HTML 5.0.

So once I had mastered the e-mail, internet, e-reader and video playback capabilities, it was time to explore the available apps that would make me more productive on my iPad. Regular readers of my columns know that the most useful app on my computer is RoboForm, my form filling and password management software of choice. RoboForm is available for the iPad, though the form filling capabilities are all but muted in this early version. It really acts as a lookup repository for web sites, ID’s and passwords, which is what I really need when on I’m on the road. RoboForm syncs online with RoboForm To Go for those signed up ($19 annually), so your ID’s and passwords are always up-to-date.

I also like the idea of being able to remote control my PC’s with my iPad, so I bought and downloaded the LogMeIn Ignition iPad app to be able to remote control my PC’s ($30). While the iPad screen is a bit small to display my 30-inch screen at home, the app performed flawlessly to remote control and access my home PC. It takes a little getting used to, that is, using the finger gestures to navigate, but this works fairly well. There are no extra fees for this access beyond the fees you may pay for the LogMeIn services (they have free and paid plans).

Reading books, newspapers and magazines on the iPad is a pleasure and a great convenience. I converted my Wall Street Journal, Barron’s, Business Week and Investor’s Business Daily paper subscriptions to electronic ones and I’ll never go back to ink stained fingers. I’ve also had an electronic PC Magazine subscription ever since they ceased their print edition, so I now get that “pushed” to my iPad on the day of release. Any further renewals of magazine subscriptions will be electronic to help reduce magazine clutter creep at home. I know my wife appreciates it and can’t wait for this to happen.

The calendar, contacts, notes and reminders (to-do) can all sync with Outlook or Google Apps. While I still use Commence RM as my favorite personal information manager, I can sync Commence with Outlook or Google Apps and therefore my personal information is available to me on my iPad. And with the iCloud, once I move to a “current decade” smartphone like the iPhone, I’ll find that information there as well. Using the Mint app, I can keep track of my spending, credit card bills and budgets. I also downloaded the Microsoft OneNote app to sync with my online and desktop OneNote databases, a very handy and quite useful app.

I used iCloud to back up the iPad and it worked on the first try without a hitch. Though the allotted free space is limited to 5 GB, you can buy additional space for a fee. All of your Apple purchased content and media is stored for free and doesn’t count against your paid and free space. Be aware that, for a limited time, box.net offers 50 GB of free space to anyone who downloads their free iPad cloud storage app.

Battery life of the iPad is about 8-12 hours, so you can work with it all day long without carrying a charger. My only disappointment with charging the iPad is that my laptops’ and desktops’ USB ports were not powerful enough to charge this iPad. This seems like a device flaw or “bug” to me. Even an iPod charger was not powerful enough, which was a curiosity.

I spent several days (not consecutive) trying to use the iPad as my primary and only computing device, but never made it through the day. That’s because, even with the accessory keyboard, I found it cramped and a bit tiring to work on for hours at a time. For conference note taking, the iPad was quite handy and lightweight to carry around all day long. Given that iOS is an Apple operating system, many PC based apps (such as Commence RM and Microsoft Office applications) won’t work on the iPad. Obviously, running a robust database application or tax compliance software is currently out of the question, until someone “ports” their apps to the iPad. So I won’t be selling my laptops anytime soon.

I found surprisingly very little to complain about when it came to the iPad. Obviously the price of the iPad, just like other Apple products, is at a premium to other tablets, but I believe that this will change very soon as competition heats up. When it came to some Adobe Flash based web sites, obviously it was disappointing not to be able to call them up on the iPad.

When some applications continuously crashed for apparently no reason, I had to uninstall then reinstall them to fix the problem. Unlike a Microsoft Windows application which displays a cryptic error message when it crashes, when an iOS application crashes, it merely closes without prior notice or message. But the recovery is quite elegant and rarely caused a reboot of the iPad.

Without a cover or protective film, the iPad can easily slip out of one’s hand and fall to the ground. I used and recommend a Zagg brand clear film cover on the front and back to protect the screen and improve the grip.

With Android based tablets hitting the market in droves in the next year, the next act for the iPad will be to stay one step ahead. Apple’s share of the tablet market has already taken a hit, and unless Apple enhances the next iPad with new features not found on the other less expensive tablets, the iPad will become one of many others competing for consumers’ attention and dollars. The design, simplicity and elegance of the iPad set it apart; only time will tell whether buyers will continue to pay a premium for it. For me, the bar is set high, so competitors will need to really show their mettle to get me to switch. I’m hooked. I’d be delighted to hear your feedback and useful applications that you can’t live without.

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What’s Going on in the Markets-August 4, 2011

August 4, 2011 — Sam H. Fawaz

I probably don’t have to re-hash for you what’s been happening in the markets over the past couple of weeks as we’ve suffered what feels like the worst decline in the markets since they recovered in March 2009. The media does a pretty good job of instilling fear and I don’t expect the newspaper headlines to be happy ones on Friday morning. So let me give you my take on what’s going on and what I’m expecting.

Coming into this week amid the uncertainty over the passage of the debt ceiling vote in Congress, we had already endured about seven days of selling in the markets that seemed to pick up steam on Monday. The euphoria on Sunday evening over a possible debt deal in Congress was over within minutes of Monday’s market open and the selling began in earnest. So what gives? If a deal was such a good thing, why did the markets sell off on the news and passage of the increase in the debt ceiling?

In reality, the significance of the debt ceiling vote was elevated by the media, and while it added to market anxiety, many were actually more concerned about the signs of slowing in the economy. The usual concerns over jobs, housing, spending and overall goverment regulation of business have been weighing on consumer and business confidence for a few months now. Downward revisions in the gross domestic product for past and future quarters haven’t help encourage companies to hire or spend on capital improvements. Once the focus was taken off the debt ceiling issue, the economic concerns were brought to the forefront.

Another Recession Already?
You’ll hear talk in the media about whether we’re heading for another recession this year, whether we’re already in a new recession or whether the recession never ended. As for the last two assertions, the economic statistics simply don’t support the notion that we’re in a recession. As for whether we’re heading for another recession in 2011, so far, the economic statistics don’t support that either (though some unfortunate members of the unemployed or those under water on their mortgages may not agree.) While we’re seeing a slowing of economic output, hiring and capital spending, we have not seen any evidence of negative or no growth. Could we see one in 2012? Anything’s possible, but no one can predict this; not even me.

My take on all this is that while the recovery has been anemic, I don’t believe that we’re heading for a recession this year. While I’m no economist, the Japan earthquake, Eurorpean and U.S. debt “crises” and other weather related factors have really thrown 2011 for an economic loop. When you consider that fiscal stimulus takes 18-24 months to make it out of the capital markets into capital spending, we may just be experiencing a temporary slowdown in growth.

As an example, commercial traders of lumber futures deny a slowdown in demand, and that usually doesn’t happen if a recession is around the corner. Corporate profits are at record highs (thanks to a dearth of hiring) and many are raising estimates of earnings for the next quarter. Credit is cheap and readily available, and companies are buying other companies and their own stock back at record levels. With the Federal Reserve on the side of the consumer, you’d be hard pressed to bed against them. So I believe that reports of an impending recession may be a bit exaggerated.

So What Happened Today?
To be honest, I came into my office today fully expecting an “up” day in the markets since we finally “bounced” yesterday. All technical indicators pointed to a severely “oversold” market (a market where selling is exhausted in the short term) that we were ready to bounce higher. In fact, I had prepared and positioned for it.

But overnight, Japan intervened in the capital markets to stem the seemingly unstoppable rise in the value of the Yen (which adversely affects their exports) right after Switzerland lowered their short-term interest rates to near zero yesterday (just like the United States). In addition, brewing concerns over Italian and other European debt problems were not helped by ambiguous comments made by the head of the European Central Bank on how they are dealing with their crisis. Suffice to say, with a 400,000 print in the weekly unemployment figures reported today, we were down from the start and never looked back.

As so often happens on a day when everyone starts to sell, the selling feeds upon itself and others join in. While we didn’t see any moments of panic, the selling was steady and relentless all day. What started out with gold and silver making highs in the morning ended the day with both at their lows.

Why? I believe it was because of forced selling and margin calls. When margin account balances need to be replenished, the most liquid of assets (like gold, silver and even Apple Stock) get sold off to cover the margin. So while there is nothing fundamentally wrong with many stocks and funds, they get sold along with everything else to raise cash for margin calls and for mutual fund shareholder requests for liquidations.

So Now What?
Despite the intense selling over the past couple of weeks, the S&P 500 is only 10% from the highs this year, just right in correction territory. You may recall that the markets corrected 16% last summer, and that’s never fun. Many then were predicting a double-dip recession around the corner and a return to a bear market. Neither of those happened; instead we moved up 30% to new highs in May. While past performance is no guaranteee of future results, I still don’t see any impending techincal signs that we are entering into a new bear market phase right now. If I did, I would be taking appropriate action. However, though this could change on any particular day, I believe this bull market still deserves the benefit of the doubt.

At the moment, as alluded to above, the market is extremely oversold and should bounce over the next few days. After that, it’s anyone’s guess what might happen, but I suspect that the remainder of the summer and into early fall will remain choppy, volatile and “lean” with a negative bias. While I expect more short-term downside, I don’t think panic selling is the right response now. While you may choose to cull some profitable positions, it may already be too late to sell most. As always, you should check with your financial advisor (or us) about the right course of action for your portfolio. Remember, no one can guess how high or low a market can go.

To be certain, I was not expecting the kind of response that we got from the market this week. But I could not foresee the actions and responses from central banks around the world either.

For our client portfolios, I’ve been keeping a good portion of investable funds in cash and had liquidated some positions ahead of this decline. Of course, I wish I had liquidated more, but alas, my crystal ball is still in the shop.

I’ve been wanting to put on some hedges via inverse ETF’s for some time now. But those funds are “too hot to handle” right now and with an oversold bounce overdue, they would only compound losses in the short term. Other hedges are also way too expensive right now as volatility is at 52 week highs. I usually like to wait for a bounce in the markets before putting on hedges, but the only bounce we got yesterday was a bit tepid and shorter than expected. I will look to put them on as soon as market conditions allow. If the selling continues in the short term as I expect, then I’ll look to lighten up other positions as appropriate as well.

On Friday, we’ll get the monthly jobs report for July, which is widely expected to be lousy and show a continued unemployment rate of 9.2%. Any selling that transpires in the morning will more likely result from margin call covering rather than a reaction the jobs number (or if we get more bad news overnight from Europe).

Please be sure to contact me if you have any questions or concerns about the markets. I’ll be happy to help, but please don’t take action based on the contents of this message. It’s not my intent to render actionable financial advice to anyone pursuant to investment advisor restrictions and regulations.

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How to Choose a Financial Advisor

March 31, 2011 — Sam H. Fawaz

You know the importance of saving for retirement, but do you have the time and know-how to accomplish your financial goals? In an increasingly busy world, it’s possible that keeping close tabs on your investment accounts isn’t exactly realistic.

Seeking the help of financial professionals has become more important to investors according to a recent survey conducted by Harris Interactive on behalf of TD Ameritrade Holding Corporation, as nearly one quarter (22 percent) of investors report relying more on a professional investment advisor following the recession.

Even if you have a good handle on your investments, you may find that hiring a financial advisor — who can put the time and energy into making sure you and your family plan for a secure financial future — may be a worthwhile investment. By hiring an independent registered investment advisor — commonly referred to as an RIA — you can make sure your investments are managed on a full-time basis by a professional advisor, while still having control.

Of course deciding to put someone in charge of your hard-earned money is not a process to be taken lightly.  Our preferred custodian, TD Ameritrade,  and we offer these tips to consider as you choose an independent financial advisor or RIA:

* Just as it is wise to do research on the background of anyone who would take care of your children, you should investigate the person or company you enlist to handle your money. The Securities and Exchange Commission, Inc. (www.adviserinfo.sec.gov), Financial Industry Regulatory Authority (www.finra.org), Certified Financial Planner Board of Standards (www.cfp.net), National Association of Personal Financial Advisors (findanadvisor.napfa.org/Home.aspx), and Financial Planning Association (http://www.fpanet.org/PlannerSearch/PlannerSearch.aspx), as well as your own state securities agency all collect background information on financial professionals that can be accessed through their websites. Use these sites to make sure the advisors you are considering haven’t faced disciplinary action for dishonest practices and are in good standing with regulators.

* Know the difference between working with an independent RIA and a stock broker, or other financial services provider. Independent RIAs, for example, are bound by law to act in their clients’ best interest. Brokers, on the other hand, are held to a “suitability” standard, meaning the advice they give must be suitable to that client’s situation. If you are looking for objective, comprehensive money management, you might want to consider an RIA.

* While RIAs are required by law to act in your best interest, there are other ways that you can ensure they will do what is best for you. One is to ask how they are compensated. Fee-only compensation generally minimizes conflicts of interest and means that your advisor is paid only for the management services and advice he or she offers, and only by you, not by investment product providers. When an advisor is paid on commission, there’s a greater chance he or she will make choices with your money that serve not only your interests, but their own as well. That’s not to say that advisors do not work fairly under this model, but potential conflicts of interest are something to consider as you choose an advisor.

* When looking for referrals from friends or relatives, the most valuable referrals may come from those in similar situations. It’s also a good idea to ask potential advisors if they specialize in working with certain types of clients and choose one that fits your unique profile.

* A third party custodian should also handle all your deposits, to ensure checks and balances. An independent custodian like TD Ameritrade can help ensure the safety and security of your assets, and will provide you with a clear, concise statement every month. A duplicate monthly statement is also sent to your advisor. Make sure this is also a legitimate and upstanding business.

Working with a trusted independent fee-only RIA can help you realize your financial goals, while allowing you to spend less time worrying about and managing your investments. If you need help and would like to talk to a fee-only planner with no sales pressure, cost  or obligation, please visit our web site at http://www.ydfs.com or call YDream Financial Services, Inc. at (615) 395-2010 or (734) 447-5305.

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