May 31, 2017
How to set a Financial Goal; Should I use a roth or a traditional

Should I Use a ROTH IRA or a Traditional IRA?

It’s an age-old question when it comes to retirement accounts. Should I use a ROTH or a Traditional IRA? Both are great vehicles to prepare for retirement. However, neither are ALWAYS a perfect fit for everyone. Let me break them down a little further to help you understand the differences and when you might want to choose one over the other. What is the difference? First, you need to know what each account does and how it shelters your money. ROTH IRA’s are the accounts that you place after-tax dollars in. So for example, if you put $5,000 in a ROTH, you’ll get the earnings from that tax-free later in life. Since the money was initially taxed before being placed in the account, it is set up to shield those gains from taxes. Essentially it’s tax-free money for retirement. A Traditional IRA works the exact opposite. The money placed within these types of accounts are pre-tax dollars. Therefore, you’re getting a tax break up front. When you file your taxes, you’ll often get a tax deduction because you chose to fund a Traditional IRA. However, once you begin to withdrawal that money in retirement, the earning from it are fair […]
May 19, 2017
Warren Buffet's take on modern portfolio theory

Warren Buffet’s take on Modern Portfolio Theory

When it comes to investing, the first name that pops into your mind is likely Warren Buffett. Most consider him to be the greatest investor in the world. While he definitely turns many investments into profit, he isn’t a genie with a crystal ball. He’s a shrewd businessman that knows how to work the market to his advantage. So what is Warren Buffet’s take on Modern Portfolio Theory? Modern Portfolio Theory or MPT is built on the theory that the markets are efficient. The premises is to build a portfolio that is comprised of various asset classes and different sectors. Then over time, you rebalance the portfolio as necessary. So how closely does his strategy for investing align with Modern Portfolio Theory? Not much at all really. Buffett is far from a typical investor though. He’s a billionaire for one. When he invests in a company, he often ends up with a seat on the board. Therefore his investments benefit from his managerial skills. How many board seats have your investments landed you? With so many investors in the world, it’s certainly not inconceivable to think that some are going to outperform the market every year. Warren Buffet happens to be one of those that […]
May 18, 2017
when will the bear come out of hibernation

When Will the Bear Come Out of Hibernation?

Despite the turmoil out of Washington, the bull market is still climbing as of midday. Over the last few years, we’ve seen everything from Brexit, to rising interest rates and nothing seems to be slowing things down too much. Stocks continue to trade at a higher rate and perform in an overall positive manner, even reaching all-time highs. So the question most are asking is, when will the bear come out of hibernation? Is the party over? With the firing of FBI director, James Comey and the latest news of President Trump disclosing classified information to the Russians, we’ve seen a slight drop. However, even by the afternoon today, stocks began to regain, and nothing indicates things are about to spiral downward—at least not immediately. There are obvious concerns that stock prices “as quite high relative to standard measures.” However, is appears at the moment stocks will keep climbing at a slower rate at the very least. How should I prep my portfolio? Whether stocks continue up or drop here and there, the key is to stay the course and expect volatility.That’s how the market works. Focus on your long-term goals and not your short-term gains. If retirement is just around the corner, maybe it’s time to pull back […]
May 12, 2017

Timing the Market: Why it Does NOT Work

Often a new client, as we are designing their portfolio plan (Investment Policy Statement), may assume we should buy when the market is doing well; and sell when the market isn’t doing so hot. This process is called “Timing the Market.” Timing the market doesn’t work. It’s a nightmare scenario that will cost you thousands of dollars. As a CERTIFIED FINANCIAL PLANNER™ that works in the industry day in and day out, I cannot reiterate this point enough. TIMING THE MARKET DOES NOT WORK! We at Heritage Investors just don’t time the market. We don’t have crystal balls telling us when the market is going to be high or low. Here’s why TIMING THE MARKET DOES NOT WORK! Many people assume financial professionals are privy to a magic formula that will yield greater results than others. They tend to think, we know how to make more money buying and selling at market peaks and valleys. However, the market has a mind of its own. It’s anybody’s guess on what it will look like from opening to closing bell. It’s our belief that a well-balanced portfolio designed to match a client’s risk tolerance is the best solution for their desired returns. Our job is to […]