How I See It (Part 1)…

Predictions For 2021 – Part 1

I don’t have a crystal ball, but being well into my 4th decade of helping people navigate the financial world, I like to think I have a good feel for what might be coming down the road.

We all know the pandemic will mitigate and end in the coming months, but what will be left it its wake?  And what is the new normal?  Let’s discuss some of what we might see and encounter.

As the economy fully reopens and people stop sheltering, there will be changes.  Some will be more temporary and some will be permanent.

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In The Beginning…

One of the projects I undertook over the past few weeks, was to redesign this blog.  I had never liked the design that was originally imbedded with our website and two years ago I decided to use a separate host.  I picked a template and configured it – at least as best I could.  To be generous, it sucked.  After a while, I just stopped posting – frankly, I was a bit embarrassed by it and it was way too distracting. Fixing it is one of those things that just never got to the top of the to do list. Until now.

I have been writing Financial In$ight for three decades.  It morphed from a monthly printed and mailed newsletter to a blog.  Communicating with our clients and followers is important.  The financial world is a big place and I cherish the opportunity to make it a bit smaller.  I needed to solve this problem.

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Three Weeks

CNBC is usually playing in the background on a TV in my office.  In addition to hard news, financial and otherwise, they have and endless stream of talking heads and commentators, both their own and outside guests, throwing opinion and predictions at the audience.

Last week the equity markets were particularly volatile, so I was paying a bit more attention.  At one point on a sharply down day, they put on a guest who told us that he was predicting the S&P 500 Index would finish the year higher than where it was as he was speaking.  He seemed very sure of himself.  Continue reading

In The Blink Of An Eye

This month marks 30 years ago that I started my own firm.  At the time, I was working at a local Financial Planning firm that was actually pretty progressive for that era.

When I had started there some two years earlier, one of my colleagues, Jacquie, took me under her wing and taught me much about employee benefits.  That became an important career skill for me.  Jacquie had left the firm in the spring of 1988 for another endeavor.  Like many breakups I guess there were bad feelings between her and the firm’s ownership.   She was very involved in a local business association and they sponsored a running race that September to benefit a charity.  I was a runner (I still am) and I ran in the race.  I saw Jacquie at the race and spent some time catching up with her. Continue reading

A Sad Day

I read Newsday and some other newspapers on my phone every day.  It’s a Long Island, NY paper if you’re not familiar.  Yesterday I opened the app to the headline page.  One of them  said “Tree cutter dies after fall”.  It’s not the kind of story I will usually open or read but for some reason I did.  I glanced at the story and a name jumped off the page, Erik Halvorsen.

In my 20’s and 30’s I was an avid basketball player and often played at a park with great competition some 15 miles from my home.  During that time I also coached HS basketball so I would find a spot on my team for a younger kid if he played hard.  Erik was one of those kids.  As a bonus he was also the nicest most polite kid.

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Brexit Or Bubble?

Once a month I play poker with some friends.  One of the things a poker player always looks for is a “Tell” in the other players.  A Tell if you don’t know is a change in behavior by another player that gives clues in their assessment of their own cards.  If I have a good idea of the strength of your hand I can bet accordingly and hopefully improve my odds and results.

You may ask how this relates to your investment portfolio or financial plan especially if you don’t play poker.  Let me explain… Continue reading

It’s Important To Choose The Right Trustee

When you create a trust, selection of the Trustee should be as important as the language contained in the trust.  While some Founders select corporate Trustees, especially with large complex trusts, most select a family member.  Selecting the wrong person can create chaos at best and harm the beneficiary’s interests at worst.  There are three attributes you should be seeking.

The Trustee needs to be Honest and Trustworthy and able to execute a Fiduciary Duty to the beneficiary.  Is the candidate able to put others interests above their own? Continue reading

Will Someone Arbitrage The Powerball Lottery?

The estimated value of tonight’s Powerball Lottery currently stands at $1.5 Billion if the winner takes a 20 year payout.  A lump sum would generate an estimated $930 Million.  That exceeds the cost of buying every single ticket.

There are 295 million combinations and each game costs $2.   Therefore, if someone wanted to guarantee they would be a winner, the cost would be $590 Million.  That means if such a person was the sole winner, their profit would be $340 Million, a gross return of 58%. Continue reading

Competition Is Good

Yesterday the New York Stock Exchange (NYSE) experienced a technical “glitch”, and all trading was halted for a few hours.  Yet to the average investor, this was a non-event.  Had this happened a decade or more ago, this would have been a major disruption, as it would have brought a large part of the US financial system to a complete stop.  But in the last decade, stocks and other instruments that once traded on only one exchange now trade on multiple exchanges.  Stocks traded all day as if nothing had happened.  That the NYSE has lost its monopoly on trading shares listed there clearly benefited the overwhelming majority of us.  Yes, competing exchanges have created some issues that are anti- consumer, such as order flow payments, but on the whole, competition is a good thing.  The shutdown cost the NYSE money and prestige.  They will now have even more incentive to make sure their systems work properly.

The Bottom Line:  Competition improves the breed.

–Michael Ross, CFP®