039: Who Can You Trust With Your Money?

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STOYM144On the program:

  • Who can you trust?
  • Janet Yellen and the Federal Reserve
  • Answers to listener emails

Straight talk on your money

And now it’s time for straight talk on your money with charges Sachs. On the program today who can you trust? How the announcement from Janet Yellen and the federal reserve affects you, and answers to listeners e-mails. Good afternoon and welcome to straight talk on your money a part of the wall street business network. I’m certified financial planner Charles Sachs and this is a show that educates you on how to best handle some of the most difficult financial issues you face so that you can spend less time worrying about your finances and more time enjoying your lives. We are the resource for honest and straightforward answers to your questions about your money and you can reach us live in the studio today at 844-475-2663. Or on the web at wealthwellplanned.com.

I want to set the stage for those of you out there who have not been listening to our show. Maybe you are catching it for the first time, maybe you are leaving work early on a drive somewhere between visiting a client.

It was about 20 years ago that I got involved in handling finance for my mother. My mother who was a high school teacher had some medical issues and basically it was me or my brother who had to step up and get a handle on what was going on. I remember it was like yesterday me and my brother went down to the Dade county school system office of retirement; they gave us a big stack of forms and said you have this option or that option, or that option and it was really up to us to struggle through and try to figure out how to optimize and take advantage of whatever retirement benefits she had built up during a 28 year career and to make sure that we didn’t make a mistake because with a lot of these things there was no do-over. If you picked it you went with it. So I spent a lot of time working on it and from that I really liked it.

What I found out, and really my message is, things are very complex out there. Most individuals will not have the time and energy and capacity to make great decisions on their own, and if they rely on the outside “experts” the advisors, the planners, whoever else is out there, then they are not getting a compare and contrast shake, they are not getting the straight talk, the straight answers on some of these issues out there for a variety of reasons.

So the purpose of our show is not only to educate you about those issues, but to give you and give you a fighting chance for you to be able to make those decisions on your own. I bring this up because I spent some time on a telephone call with a reporter from Reuters who was doing a story and the story related to trusts and basically the idea from the reporter was how can someone know and how can they developed the trust when they are dealing with a financial adviser or a financial planner or what not. And so we probably talked for 30 minutes and I want to share a little bit of that conversation with you.

Let’s me be so bold to say that trust, per se, is not as big an issue as people make it out to be. Number two, it is one of those illusive characteristics you don’t know about, you can’t prove, and you may trust until you don’t trust anymore. By that I mean Bernie Madoff was trusted and well-respected in the investment community for 20, 30 years and everyone trusted him until at such a point in time he proved that he was not trustworthy. This concept of trust I think it very, very dangerous, the most dangerous in my opinion. If someone has that word trust in their name or if they say you can trust me, because I don’t know about you, but I get very uncomfortable anytime someone suggests that I can trust them by the just saying that.

So let’s peel back the onion a little bit and talk about this thing called trust. Let’s separate the word into two different things. Sometimes we talk about a legal instrument called a trust – a document that an estate planning attorney drafts for you. Other times you hear banks use the term trust -northern trust Bessemer Trust and the like. In other words it’s a function where the bank is acting as your trustee to hold the dollars and to manage those assets for you. We are not talking about those parts of the word. We are talking about can you trust someone or not. So let’s take the example of an adviser out there and let’s sort of a compare and contrast to a Bernie Madoff advisor.

The question is can we trust them? Well how are you going to prove that; it may be 30 years before you find out if you can or you can’t. Aside from that, let’s talk about the things that we can do. It’s the old saying your parents told you, “trust but verify”. If it gave you a hundred or a thousand or ten thousand dollars in cash I think you would probably count that out; not that you didn’t trust me bur maybe I made a mistake. I hope when you go to the bank and they peel off 7 or 8,000 – maybe you are buying a used car – I’m going to count that out. It’s not that I don’t trust them not to cheat me, they may have made a mistake, it’s called verifying, there is absolutely nothing wrong with that. So let’s talk about verifying an advisor. And so if you are dealing with an advisor here is how very quickly you can distinguish and not get yourselves into a Bernie Madoff situation with these few, easy steps.

1. Who Is Holding The Money?

Are you writing the check directly to XYZ advisor as people did to Bernie Madoff? He took the check and directly deposited into his account, directly had control of the money. Absolute red flag. When I deal with clients they don’t even bring a check into my office. I happen to be with Charles Schwab but it could be a Schwab or Fidelity or a Pershing or any one of those institution that manage trillions of assets as a custodian. I never touch the money and select a safety issue dealt with right there. That’s number one.

I don’t know if you saw this story a while back about a financial advisor. She was a financial advisor with Merrill lynch which is owned by bank of America. And she had investment accounts with the people and everything was fine and then for some reason she asked or more to the point her clients wrote checks to persons other than Merrill lynch. I think to her brother or her brother-in-law her sister, to a separate account! And guess what, those dollars disappeared. Red flag! Anytime anyone is asking you to write the check for somewhere else other than a custodian that is holding the money, absolutely red flag.

Aside from that, once you have done that correctly, what’s happening with your money? Probably more to the point with Bernie Madoff, nobody had an understanding of what he was doing with their money. It was some kind of trading, arbitrage strategy that nobody understood they just liked the Madoff returns that they saw. So let’s say it’s me as you’re advisor. You don’t know me from anyone. Can we trust Charles, can we not trust Charles? We hear him on the radio, what does that mean? It doesn’t mean anything. If Charles says write the check to me personally, big red flag. If Charles says I don’t touch money I am not set up from a regulatory point of view to take money from you even when it’s made out to Charles Schwab, here is an envelope, here is your account number. You can send it to them or you can walk into the branch that they have in Coral Gables or downtown Miami and hand them your money, that’s fine. I don’t deal with money, that’s a good thing.

Now that you know the money is in your account, what’s happening with your money? A basic understanding of how your money is being invested is the most important thing for you to be able to protect you and your money. And this will keep you out of trouble if you have an understanding of how your money is being invested, whether you are doing it, whether it’s in your 401k or if they have hired someone to invest it. The most important thing is for you to understand how your money is being invested.

Program break

(Welcome back to straight talk on your money. Before the break we were talking about trust. Can you identify it in advance? How do you figure out whether you can trust someone or not? More to the point, it’s trust but verify. Verify what they are doing. We talked about a big red flag whenever you are writing checks directly to someone a company an entity that they control versus sending it to a custodian, any one of those large institutions which holds trillions of dollars of assets on behalf of people. So that’s very important to do.

And after that probably most important, and this is where the Bernie Madoff folks got into trouble, they had no concept of what he was doing with the dollars. Even inside the industry we couldn’t understand what he was doing. He was trading or some arbitrage, he was buying this and selling that; it did not make a whole lot of sense and it would never provide the performance or return streams that he was suggesting. No surprise when people who knew Bernie Madoff and went to play golf with him — he always had a consistently decent golf score because he made it all up just as he made up those returns, it just wouldn’t happen.

So what do you need to know? You know there is a lot of ways and we are going to talk later in the show about investing, but if you’ve heard our show before it’s very simple and straightforward to position a portfolio. It’s a complete and utter waste of time in my opinion to have your heads down in individual stock analysis. It does not matter whether you buy coke or Pepsi, or if you buy Wal-Mart or different things that are out there. It’s important that you have a globally diversified portfolio. In other words the idea is rather than picking and choosing, owning the entire market. By that I mean any company that’s publicly traded and you can buy stock in the entire market over time you will do just fine. A gentleman by the name of Warren Buffett, we have all heard of, recommended this strategy. He basically says you could put half your money in a bond fund put the other part in an S&P 500, the top 500 companies, go play golf for the rest of the year and you would do better than most that are out there. Warren Buffett bet I believe it’s $1 million to several hedge fund managers that over a 10 year period that those hedge fund managers, after fees and expenses, would not do any better than the overall S&P. 500. Whether they can or not the point is really for the average investor out there the message is a simple one.

You don’t hear that message out there much because the wall street as an entity is transaction-based, they want you to buy and sell, they want to hire fund managers that want to knock the lights out and to do a little bit better; doesn’t matter if they take on additional risks, they eke out a little better return than the overall market, money flows into them and they know it and then they get paid a lot of money. If those guys do not hit the ball out of the park they lose the money, lose the bonuses and lose their jobs. You don’t have to take those risks; it’s a very simple and straightforward portfolio.

2. What Is The Strategy?

Where is your money going? Is somebody buying individual stocks, or are they buying mutual funds? Are they buying exchange traded funds? And if so, that’s fine. Then what? What are they doing? Are they buying them and sending them are they holding them? Are they trading? Are the strategic? Are they tactical? What’s going on? And I would suggest that if it’s anything that’s moved markedly from a strategic long-term focus of having a portion of your money in the stock market globally diversified between large companies, small companies, some us, a little bit of international at a low cost would be great, which means the passive index approach, which means not paying an additional 1% per year off the assets to hire a manager to outperform the market, which a research suggests is highly unlikely if not impossible over a 10 to 20 year period.

We all can pick up money magazine and we can see the top funds last year. Almost by definition, and there are academic studies that track the winners in any one year seen repeated over a five-year period. They are lucky if they are just average but many times it’s actually worse and there are some market reasons for that. Let’s say you and I were fund managers and we knocked the socks off. We doubled the S&P 500, we are on the front page of money magazine, everybody starts to send you money so now your fund is five or 10 times the size it was before. Well guess what? Do you know how difficult it is to continue the record at this size of 5 to 10 times? It’s extremely difficult and that’s why by sheer mathematics they underperform after years of over performance with all of the money flowing in.

So the answer is you can be in that game if you want to but you don’t have to. More to the point and what we are talking about is aside from the strategy, do you understand it? What is this person doing for you? How are they investing your money? And does it make a rational sense? By that I mean if we look at the last 200 years return of the U.S. market its average, a little under 10%. On inflation-adjusted basis a little under 7%. On a real basis. A real basis means this is your return after inflation.

Sometimes clients come to my office and they say I am very conservative. My real goal is capital appreciation and I turned to the client and I say this to client, let me ask you, imagine it’s 10 years from today and I say to you Mr. Client I’ve got some really good news for you. Ten years ago when you gave me the million dollars to invest the good news is I still have the million dollars. I protected your capital. So capital protection, that’s not what people want. They want at least inflation protection and you want a return above inflation protection which means it can’t just be sitting in a cd or money markets and you can’t really put all your money in bonds if you want to eke out a reasonable return after inflation because history shows that a very, very small return and depending on your tax bracket you could actually be having negative return. In other words you get some physical dollars back, you wind up sharing them with the government after everything after fees, expenses, taxes, net, net, you are actually going in the wrong direction. You physically have more dollars but they are worth less so your buying or purchasing power has diminished. If you keep doing that over 20, 30 or 40 years you’re going to be in the poor house real quick.

Now if you’re some of those people out there and I meet them quite a bit, you have a lot of dollars but you don’t spend a lot, they can absolutely afford to do that. They don’t need to take on any risk to grow their dollars. They can actually even have their dollars diminished over time. A discussion can ensue as to whether or not that makes any sense, but the point is that most of us want a gross return and most of us require it because as you know we have talked about the chance that you or your spouse has a one in two will live to age 92, one in four to age 96.

Station break

Welcome back to the program. Now I want to talk a little bit about how the announcement about Janet Yellen to head the Federal Reserve will affect you. There are fed watchers the federal reserve routinely talks and they are the ones who have the power to change the federal reserve and the monetary rates such that everything else is based on. They can increase those rates, they can lower those rates, those rates affect the economy in a variety of different ways. Banks require lenders to borrow at a higher interest rate; bonds are based on some of these rates and basically it’s a measure that single-handedly one of the tools in the shed of the federal reserve to be able to control monetary policy which means things can be more or less expensive when you are a borrower or a lender. So everyone knows we had basically historically all-time low rates. All you need to see is your banker, cd or brokerage account paying money to 01 of 1%. You are lucky in a money market to eke out .8 of 1% and if you loan your money for one or two or five years to a bank through a cd FDIC insured maybe 1.5 1.6, somewhere around those numbers. You can go to a bankrate.com and you can see on a national basis some of those numbers, those rates. And so the point is the Federal Reserve has the leverage to be able to control them.

How does that affect you? In a way it does, in a way it doesn’t. The moral of this story is it’s nowhere as important as some of the fed watchers make out and talk about because if you’re not doing the day-to-day trading, the in and out of buying and selling of bonds, it’s somewhat nonsensical. Supposedly yesterday in the press release Janet Yellen said some things that the market did not like, the market was off a little bit yesterday but how do you know that for sure? What’s the test? If we’re doing a scientific experiment had she not spoken the market would have been down easily the same hundred and 20 points as well. So we don’t know really if that factor, among all the other factors that cause to the day-to-day movements in the stock market mattered or not.

There are some issues and some facts here, eventually interest rates will go up and so if you have a bond that you loaned to a corporation or government and it’s staying at 3% and interest rates go up such that that municipality or cooperation lends money at three and a half or 4% your bond by definition is worth less. Nobody would want to pay the same hundred dollars you to 10 want to your bond for let’s say as an example when they can buy a brand-new bond paying them for percent on an annual basis.

However if you hold individual bonds as many of you do and if you use an approach called in other bonds where the maturity dates are not heard from one to 2 to 5 etc. In other words every year bonds are maturing meaning they’re paying you for this value back, you are buying new bonds each and every year, if you think about that whether rates are going off or down they are greatly diminished as far as overall impact because every year you’re buying or selling. Let’s say rates were very very high and you had bonds paying you quite a bit as people did a while back the problem is once that bond matures your paid the face value and you have to go to the market and replace it.

The bad news is when bonds are declining as they have done for so many years the new bonds you buy doesn’t pay as much. Similarly if we’re going to be in a rising rate environment, the bonds that you are retiring, the good news is that you can buy a new bond that will pay more. So a lot of people out there are trying to scare you the rates are going up, the rates are going down and you’re “losing money” when in fact proper design in building out that bond portfolio, a laddered portfolio and understanding your pieces negates both on the upside and on the down side. You can always lock in the bonds with the highest rates cause if they are declining as we have seen in the past 30 years — because you know some people as I have they would always say back in the day I had a bond that paid eight o and so there is an issue r 10 or 12 or 14%. The reason they were paying that is inflation was very high as well and so there is an issue but at the end of the day the real purchasing power that they’re getting from these moves up and down with those bond yields many times.

So the point is after all is said and done, strategic long-term investor not only is it not impactful there is nothing actionable that you need to do when the federal reserve comes out and you try to play a guessing game on when they’re going to be raising rates are not raising rates. Obviously if you’re managing a portfolio or you have someone looking after it it’s an input that they are working with but it’s a very small part of that.

I got an e-mail and this was from Nicole along these same lines. She’s talking about bonds. And Nicola is asking, what about bonds, are they still safe and what about the rising interest rate.

Bonds when you talk about safety, getting your dollars back, is one of the safest investments out there depending on whom you lend your money to. Imagine you have two neighbors. One is very trustworthy and has a good job and thereby has a very good credit rating meaning you can extend them credit and the likelihood of you getting your money back is very, very good. And maybe your neighbor says give me $100 and I promise to pay you back and I will put up as collateral something of value maybe he has some gold or real estate or something so that if you don’t get your money back you can get something. Bonds are very good risk and return but you may not get paid a lot. Your other neighbor on the street says, you can give me $100. My credit is a little shaky these days, but I promise to pay you back. You know I don’t really have any assets to secure you. If you make that loan you would demand a higher return on your money.

Nicole, bonds come in all flavors. They are rated by the agencies that are out there. They are rated from triple a – very good- all the way to what they called high yield or junk bonds and anywhere in between. So there is no one safe or not safe stock, no one safe or not safe bond per se. One has to do some analysis and so really, when you step back its building out on the fixed side of your portfolio the bonds that you want to have are in there. As far as the interest rates are rising, we did talk about that; it is an issue and aside from them are rising or not rising there has been a lot of research that suggests that it may not make sense to go out tremendously long in other words any additional interest you may pick up the difference between a 15 and a 30 year commitment on the bond, number one, may be marginal and number two, may add a lot of volatility to it.

Listener Questions:

Welcome back. Before the break we were talking about bonds some of them can be very safe some of them are little more risky. There are many, many bonds that are out there so one has to do their homework and build that portfolio out appropriately, not only from a credit quality point of view but also from an interest rate sensitivity point of view. Nicole thanks very much for that e-mail.

Benjamin on bit coin.

I actually did another interview this week on bit coin and not sure where but that interview should be come out shortly. So here is my opinion on bit coin. Right now you hear so many different sources out there that talk about whether or not the us currency, the greenback, is stable or not and how you should buy gold or something else and whatnot. So that’s the engine for the U.S. economy. Then here is this made-up thing on the computer and we’ve just learned that the half the minimum it has disappeared, stolen because it’s electronic.

If you talk about the U.S. economy it started way back when when it was either gold or silver certificates that backed up the U.S. was on the gold standard. In other words you take this green piece of paper somewhere and they would give you the equivalent in gold or silver. About in the 1970s we came off the gold standard and now this green piece of paper is backed up by the full faith of the us economy which, although still has its many many issues, still seems to be the strongest economy right now on the planet although eventually we be replaced by others out there namely china although that is still down the road. But the answer is most of us feel somewhat comfortable that there are dollars in our pocket right now that can be exchanged for goods and services. We all know that when we go to the store we see a bit of price creep so whatever you’re buying is a little more expensive because of inflation. Also a little bit of inflation is actually very good for an economy because there is otherwise deflation which is very dangerous. Depreciation means there is fear to buy the house or the car because a little further down the road there is going to be less money so nothing ever happens, it is a downward spiral.

A little bit of inflation is a good lubricant for the overall economy. The point is why would someone speculate with this other thing out there? Let’s take this another step further. The ruble, the wan, the franc, any of the other major currencies out there, do we really want to be currency traders? Do we want to be buying and selling and doing currency exchange? Certainly banks do that and they have to do that for clients, or there are specialized people who trade that for a living. I believe that you and me would have our heads handed to us if we were speculating if the us dollar would go up or down versus the other currencies like the Japanese yen. Why would we possibly want to be in that business? And therefore why would we want to be speculating on any currency? Let alone some currency that we don’t know and the story hasn’t been played out yet whether or not it should be worth a lot of money or be worthless or in between — this thing called bit coin.

I put this in the category of currency speculation. There is no need for you to go there and speculate with that unless you are in fact doing some other kind of currency trading and you see this as a vehicle to do that. I would suggest highly that that would be a complete waste of time, but there are people out there that would try and do that so that’s great. My view is that this is similar to gambling whether it’s in Las Vegas or Atlantic City. It is great to go out and spend five or $10 or $500 or $1000, your limit. It’s not so good when you start dipping into credit or borrowing and you know all you start losing your car your house your family over gambling debts. So it’s the same thing there. So the problem with those things they can be so enticing and one doesn’t know when to walk away from the table and there’s a good chance that you can get completely wiped out. So Benjamin that’s my take on the bit coin out there. I wish you great success with that.

I really make a distinction between investing and the other things I would call speculating. Investing- my definition of investing is when you have a better than average chance, in other words the odds are in your favor for a positive outcome. What would that be? Simply put so that what if we were investing for our future 20s 30 or 40 years from now, we would put a portion of our money in the us economy because while we’ve seen the economy go up and go down over the 200 year average it’s gone up about 9% a year and so if you look at up years versus down years you’re vastly well rewarded for being a long-term investor in the us economy up until this point.

The problem with predicting the future is that it’s so hard to do and we don’t know if it will come and you don’t know news stories that break predicate what things happen over the short-term but the long-term is people in the united states and on a global basis will continue to buy products and services from global companies many of which are us-based. They’ll increase in market share, they will increase in paying out their dividends and invariably their stock prices being the owner of those companies increase as well.

speculating — speculating is going down to the dog track, the horse track doing some gambling. Even if you’re gambling on a sports team. That definition does not hold up in investing because the odds are not in your favor. Let’s just say the team so they are or someone equally ranked and there are sports gamblers that make their living putting bets on them. You only have a 50-50 chance, a flip of the coin. That to me is not investing because your chance of winning is the same as losing and doing that over time is not going to get you where you need to be. That’s gambling, that’s speculating, that’s entertaining, that’s not investing. Investing in your future is having that probability, that greater chance of success and failure over a long period of time.

You’re listening to straight talk on your money don’t turn the dial to be back right after this.

Station break

Station Ashley on Roth IRAs

Welcome back to straight talk on your money. We were dealing with some listener’s e-mails and we have one from Ashley. Ashlee says she actually saw our show that was on cbs4 about two weeks ago. She is asking about the best way for her to save for her future. And so if you saw that story or you would like to see that story if you go to or website wealthwellplanned.com to the right you will see a link, it could be the greatest gift ever it’s a TV story that ran about three minutes and that link will take you to the story where you can watch it. It will take you to an article that will talk about it as well. What’s that suggesting is that parents or grandparents can give the greatest gift by setting their child or grandchild to have a tax-free savings account for their retirement. The only issue is they have to have earned income for themselves or if they’re married their spouse should have earned income up to the amount they are putting in which is $5500 if they’re under 50 and an extra thousand dollars if you’re over 50 that year. You can put that in there. It’s a special container called the rot individual retirement arrangements that allows one to never have to pay taxes on the gains as long as you follow those rules which are you have to have that in for at least five years to be able to start taking that out when you reach age 59 1/2. And there are some exemptions for you to take some money out without having to pay a penalty for first-time homebuyers and some other things but it should really be viewed as a place to put away some dollars in the debate over time.

What we left out and what we did not have a lot of time to talk about is okay you have up the Roth IRA, you have put the money in it, then what? And really that’s the answer and that’s something we help clients with, we manage their accounts for them, they can come into our office and pay and hourly fee and we will say to them based on what we heard from you this is what we recommend. You go out and do and they can go out and do that on their own. For the small accounts with the IRA accounts it really doesn’t pay for us to set them up. We’ve done those for friends and family and for relatives of times that we’ve had. If you have a question about those you can give us a call were willing to talk to you and make a decision about whether or not it’s something we can actually do for you or just to steer you in the right direction. You can always give us a call at our office which is 8 – 444 – planner or you can reach us here locally at 305-444-1610. So thanks so much for that e-mail Ashley.

George – Is the Stock Market Overvalued?

Another one from George that came in. Is the stock market overvalued? I am afraid that the moment I invest the market will crash. What should I do? I am young but my experience has been that the markets have been very unstable. I have seen them go up and down and up and down and so I can’t make heads or tails from this.

So George, you know it’s been very remarkable these last 15 years in the stock market and you’re exactly right. If you look at ups and downs we had in our markets, ever since the late 1990s they’ve been going up over 30% a year. In 97, 98 and 99, 2000 was a big crash they went down, then went back up, down and up, down and up. One of the things is George with markets you are buying that volatility. If there wasn’t volatility you wouldn’t be get the returns. Money in the money market doesn’t have that volatility but it doesn’t have that return.

So those businesses have an economic basis; the good ones do well, the bad ones go out of business. That’s why our approach is not to pick and choose the 1 or 2 or 3 or 5 or 10 or 20 in your portfolio, but to buy them, the whole kintable. The whole US economy as an example, we would then add a little focus on maybe larger companies or smaller companies. We buy some international companies, the entire bucket so that your portfolio likely will have little slices of 10000 companies. So we are removing or minimizing the individual company risk. So then all you need to have is the overall systematic returns from these portfolios which we see overtime can go up and go down without a doubt, but the point is, and what we try to tell people is to realize a few things:

  1. You probably shouldn’t be putting all your money in the stock market in the equity bucket.
  2. It should be longer term money for at least 5 years or longer. In this case George, if you are in your 20’s, we are looking to start putting some of this money for a long, long time. Nobody likes volatility but I would suggest as long as you are not having to sell and take it out at that point in time, that you should look forward to it particularly if you are putting more dollars to work. By that I mean you could be buying on opportunities when things are lower.

So if you have and are putting those dollars in and they go down, and by the way George to your point, that I say this almost word for word which you said in your email, I want my clients to understand I can’t control markets; that over a long periods of time we are going to eke out the overall return in the market, but we have no idea what’s going to happen in the short-term. Imagine if you put your money in the market, the day before the September 11, when those markets finally open up they will be down quite a bit.

So what I try to tell my new clients is almost by definition, the moment you put your money in, imagine that market going in half and maybe being there for several years and can you live through that and if you can’t, if you are going to sell out when its down and if you need that money then it shouldn’t be in there. However, the flip side is, if there is a portion of your money that is at least 5-year money that understanding the moment single handedly you put your dollars in, the market is going to caved in and be down like that and not only is that, you are not going to take your money out but you are going to nibble and put additional dollars in that you either have on the sideline that you are earning, that you are getting from selling a business etc. and you will take advantage of these prices that are down, then the market is for you.

So George let me come back to that, is it over valued? Based on what I have seen, it’s fairly valued it’s not way, way undervalued, it’s not way, way over valued. When we looked at some of the measurements that we have it’s no way near where we were back when there were market tops back in year 2000 or even back in 2007 so it’s fairly valued. More to the point, you are putting in dollars, time and time again when you are working with those dollars that are important to do, so the answer in my opinion it’s not overvalued.

Your point of being afraid is a point well taken and it’s something that you have to visualize. If you put your dollars in and understanding that the moment you put them in there may be an issue and you need to get comfortable with it and if you are, you will be okay. If you don’t have the stomach for that maybe it’s an all or nothing, maybe it’s only a portion of your dollars that you can put in through the market and maybe tip toe in and by that I mean maybe just a small amount. Maybe you’ve got whatever you’ve got, a 15 % would go on to the market and maybe not even all of it right now. So you will have to figure that out. It’s something that we spend a lot of time on what we call the Behavioral Aspect of Investing. Being able to get through the psychology of understanding that we don’t know what the future will be, we can’t make absolutely every move the best move in the world but hope overall can we construct a strategic plan to get your dollars invested in the market that will work out for you.

We’re coming up on a break, you’re listening to Straight Talk On Your Money. We’ll be back right after this.

Program Break

Welcome back to Straight Talk on Your Money. Okay, so we’ve got about 2 minutes left in this show, we want to make an announcement for those of you who have been listening to us, in about two weeks we are going to be moving to the 4:30 slot on the same Thursday so look for us if you will, we hope you‘ll continue to tune in. You can always catch webcastes or some of our previous shows on the radio at wealthwellplanned.com, that’s wealthwellplanned.com and you can always reach us in the office that is 8444-planner. So just to recap we talk about the trust but verify; very important that you understand where your money is being held from a custodial point of view and what’s actually happening to that. The single most important things in my opinion is to do, because the elusive trust is one of those things that you may not know until it’s too late. If you look at all the people out there, that a lot of the scams out there, if you ask all the people they say that I trust them, I trust them and look what it got them. So not only trust, do verification and if you smell something, if you smell anything that’s not right and if you are asked to email money into a particular place and account that’s not a custodial account.

If it’s a strategy that (a) sounds too good to be true or (b) you don’t understand, learn to understand it, and if you can’t get your head around it go somewhere else. We are always here, available to talk to people. Our listeners that are out there, if you’ve got anything out there that you have questions on gives us a call at our office, we’ll talk to you over the phone; we’ll sit down with and give you a free consultation. We’ll give you the straight talk and we’ll get you on the right track. Remember our number 8-444-planner. Thanks again for tuning in for another episode of Straight Talk on Your Money.

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