First, the effects of divesting GE Capital on making earnings higher quality, whatever that is suppose to mean. Don’t all of us want high quality earning? Wasn’t the whole point of financial engineering to create profit from clever ideas being brought to light? Beware of management that once touted a new era only to treat it like a bad employee they have to fire. Back in 2007 Jeffery Immelt wrote in his letter to investors that “our financial services businesses should do well in a year like 2008.” By the time he wrote the his letter for the 2014 annual report we are told that GE Capital returns are “below GE’s cost of capital.” Read between the lines and you get a sense that the sales pitch went from a growth story to how much they can return to shareholders. GE makes a fortune, but in the end buying a stock at too high a valuation won’t save you. One thing that hasn’t changed since Immelt took over is the constant references to being leaner. The stock price has certainly reduced its size over the years…
What a week! On one hand we have JPMorgan Chase JPM +1.72% reporting decent earnings and analysts trying to convince us banks will have a good year. Then there is GoPro, the current whipping boy of hot small cap growth stocks (always a miserable asset class) dropping like a chute off Kachina Peak. [Okay, I’m thinking about skiing this weekend and always hoping for a decent close on Friday so I can forget my worries until Monday.] We all need to put these headlines into perspective or run the risk of spending our free time freaking out or, much worse, making an emotion-based decision in our portfolio.
This week I spent a lot of time in meetings discussing income and cash flow plans for a few clients retiring this month. One husband asked me if they should reschedule due to the market dropping. My response was simple: The only number I care about is the close. Then I reminded them that they will be retired for 30 or more years and to fret about today is useless. So, how do I reconcile those two statements? On one hand the close is important, but then we really don’t care longer term? Both are true!…
It’s 2016! Yay! You’ve resolved to lose weight, eat better, save more, watch less TV – the list goes on. But how about this: I resolve “Less Doing and More Being”.
Evidently, based on research from numerous places over the past few years including Cornell University, San Francisco University, Eventbrite and WebMD, the happiness achieved from spending money on an experience versus buying a material thing is longer lasting and more fulfilling. Why? One reason is that people are prone to buyer’s remorse or comparisons with material goods. Also, objects tend to deteriorate with time whereas an experience can create a lasting memory. After all, most people would agree they are more the sum of their experiences than the sum of their possessions.
Another interesting aspect is that people adapt faster to things that don’t change. In other words, if you spend your money on a new vehicle, then by the end of a year or so, it is still the same vehicle (more or less). However, each vacation you take is different than the one before! We can feel warm and happy reliving and relishing old memories whereas physical objects tend to leave us a little cold.
Now as a financial advisor I am torn between embracing this idea and advising against it. Material purchases make more financial sense (in general). Think of it as money spent on fulfilling a need versus a want. You need a new washing machine, but you want to go to the beach.
The other side of me looks around and sees hundreds of people daily and weekly, with heads down, staring at a smart phone, lost to the art of conversation, creating ‘experiences’ via 140 character tweets, or snapchats that self destruct after 1 to 10 seconds, or post’s that most of the world will forget about before the digital ink even dries. At least Andy Warhol gave us a whole 15 minutes of fame. I’m not sure what he would think about the “fame gratification” people strive for these days, as in the number of likes they get from a post?
The bottom line for me is to just stop doing this year. Every chance you get, sit wherever you are and just BE there. Make a mental record of the sights, the sounds, the smells. Build a library of experiences that (according to researchers) create for you a longer lasting and greater happiness and well being. Here’s to a gratifying 2016!
Tracy Ann Miller, CFP®
CEO and Chief Portfolio Officer
Albuquerque financial expert and Chief Investment Officer of Portfolio Wealth Advisors, Lee Munson, was invited by Varney & Co. to discuss the major earnings this week. “I love to get back to New York and talk shop with the crew at Fox Business. This was a Friday, the weather was great in the city, and my kids loved that I got to talk about Star Wars as they relate to Disney earnings,” said Munson after the interview. While New Mexico is his home Munson enjoys the occasional trip to Manhattan to give his opinions in person. “Nothing beats being live on the soundstage to feel the energy and excitement of live TV. Just remember that this is still entertainment and shouldn’t be confused with the long term investing we do for client’s.” While Munson has an eye to his client’s financial goals, he still likes to talk about current market topics. “It’s a great chance to discuss the topic of the day, but then include a little long term thinking people don’t always get from the typical market commentator.” For more information about how Lee helps client’s plan for retirement and spend more time on the mountain, email him at Lee@PortfolioLLC.com.
Here are Lee Munson’s comments about his appearance on Yahoo Finance this week. “Anytime I get back to New York City I love to sit down and talk with Yahoo Finance about what I’m really passionate about. This week the new federal budget was signed with a surprise announcement about Social Security filing strategies. This was huge.” If you want to learn more about how the new changes to the law will affect your retirement income, contact Lee Munson at Lee@PortfolioLLC.com
We asked Lee to tell us a little bit about his interview with Liz Claman on Countdown to the Closing Bell, a Fox Business program on October 23, 2015.
“I’ve been doing interviews with Liz for a while. I started with her show After the Bell. One of the producers called me up and said Liz had a spot to talk about individual stock picks next Friday, would I be interested in joining her. Of course I said yes. While, in general I don’t buy individual stocks from my clients, I do have new clients transfer in securities that they bought elsewhere. What I decided would be the most fun is to pretend that a client just brought me stocks like Amazon, Microsoft, Pandora, and imagine me giving them some advice on what to do. This worked out great. We brought a lot of energy to the segment and for those out there that might find themselves over their head or realize maybe they don’t want to be individual stock pickers, I gave some great advice on how to reduce positions and replace them with low-cost exchange traded funds or index funds. For that, I’m grateful for the opportunity and hope to do it again soon.”
If you want more information about Lee Munson and how he can help you spend more time in the mountain, contact him at email@example.com.
Albuquerque financial expert and Chief Investment Officer of Portfolio Wealth Advisors, Lee Munson, was asked by Finance Editor in Chief, Andy Sewer, to discuss the top issues this week on Yahoo Finance’s Midday Movers. “This is a great web-based show on the most popular financial website in the country. We get to discuss the topics people are interested, and have the time to get beyond a soundbite usually found on cable TV. The bottom line is that you get time to develop an idea with no commercials cutting you off.” Munson also commented “Andy knows the topics I want to hit and creates the environment to make compelling content.” If you would like to talk to Lee about your financial situation and learn how to spend more time on the mountain, contact him at Lee@PortfolioLLC.com.
Albuquerque Financial expert and chief investment officer of portfolio asset management, Lee Munson, was asked his opinion on the biggest month in four years while on the Fox Business’s Varney & Co. on October 30, 2015. Here are Lee’s post interview thoughts:
“When I was asked by the producers to share my thoughts on what was turning out to be the biggest month in four years of course I jumped at the opportunity. Stuart is a great host and knows the market better than anyone else. You’ve got to remember this guy started the CNN News Division back in 1980. He got an award for his incredible reporting for the crash of 1987. Anytime there is a historic milestone in the market there’s no place I’d rather be than on his show talking about it. One of the things that I wanted to point out as he kept asking me about the market’s big rise was liquidity. Let’s face it, on October 30; small caps were not advancing in the same way as large cap securities. Now for those that don’t know what that means let me put it in plain English. If small caps aren’t leading the rally that means we don’t have enough liquidity to go into those smaller names. Liquidity is like electricity; it’s a thing that keeps the market lights on. Anytime, you see signs of less liquidity by virtue of slower relative momentum in small cap asset classes money managers like me that run globally diversified portfolios start to get a little leery and we might do things like sell stock versus bonds in a perceived bull run to meet our client’s cash flow needs. We also will be a little bit more hesitant about putting new money in the market especially if clients just send you fresh cash. Overall you need to get your money invested, but on that particular day we just wanted to wait a few days to make sure there wasn’t a shoe that was about ready to be dropped, but hey it was Friday. We all had a lot of fun and I cracked a few jokes with Stuart right at the end.”
If you have more information about how Lee Munson can help you spend more time on the mountain and get the cash flow you want to live a great lifestyle, contact him at Lee@PortfolioLLC.com.