Your parents had brokers selling them a “hot stock” over the phone, because they didn’t have access to information. Then came the Internet.
Investments are never an afterthought at Bone Fide Wealth, but we recognize how the changing investment landscape has commoditized this piece of your financial life. You have access to products and services that remove some of the guesswork from investing, and with increasing regulations and public scrutiny of investment managers, you are more protected than ever.
But many of our clients are too busy changing the world to DIY their investment strategies. For that reason, Bone Fide Wealth provides cost-effective, fee-only investment services designed to save you time, while upholding our fiduciary obligation to you. We apply the following disciplined practices when it comes to long-term investing:
- Strict diversification and asset allocation according to historical risk-adjusted models
- Passive, over active, investments for the most efficient and well-covered areas of the market
- The use of low-cost exchange traded funds (ETFs) and mutual funds when appropriate
- Periodic rebalancing and professional oversight
- A transparent fee-only structure
We all couldn’t get in on the Facebook IPO, but Bone Fide Wealth’s practical investment approach, coupled with financial planning, could help you make better decisions with your money and reach your financial goals.
The Importance of Investing
Investing is more than figuring out where our generation should put its savings and what kind of returns you can get on your portfolio. Simply becoming investors in the first place has proven to be a difficult task, so to succeed in a financial landscape that’s vastly different than any other generation’s, the relationship between Millennials and money must be different as well.
I can’t think of a better way to further capture our firm’s approach to investing then by providing an excerpt from our book, The Millennial Money Fix:
People think investments make them rich. That’s why they love them; why folks the media, like Jim Cramer, can scream at millions of viewers on television almost every day; why moviegoers clamor The Wolf of Wall Street and The Big Short, despite their portrayal of how awful investments can be when manipulated for greed; and why Amazon once had 123,984 search results it its books department for one single word: investments. It’s all about glamour, the risk, and the sizzle when you get them right – and the things you can buy when you do.
Okay, okay, that’s enough. Time to cool off.
I may sound like a grandpa to my young clients, calling in with their first load of cash looking to triple their earnings. But I don’t care. Investments make up just one area of personal finance. And like we discussed earlier, you need to earn the right to invest by first prioritize your goals, mastering your cash flow, and establishing the safety net of a cash reserve that’s appropriate in size to where you are in life. If you’ve followed along and met those benchmarks, then we can talk about investments.
Investing tests the relationship between risk and reward. People invest to grow their money at a faster rate than placing it in the bank. Some consider it “putting your money to work.”
This means that if you are willing to risk losing money by committing it to something that could generate income or profit, you might be rewarded for that risk in the form of greater income or profit.
Let’s touch on the differences between investing on your own and investing with a professional. I make a living helping individuals invest toward their goals. Most of my clients trust our firm to mange their money in a way that puts their interests above everything else. But I’m not going to tell you that you can’t do this yourself. Of course you can. Many people do, and perhaps they are going to save money doing so. You can take the lessons in this chapter, along with an unlimited number of online resources (Investopedia.com is my favorite) and execute an investment strategy that works.
I can tell you that most of my clients are too busy working toward their goals to do as good of a job as we can do for them. Their time too valuable and too precious to be spent perfecting an asset allocation model or mulling through the tens of thousands of funds that exist to create the optimal investment portfolio. They must find value in working with a professional to help them make the best decisions, because they can reinvest that time into work or their personal lives. What it comes down to is, what is your time worth to you?
Ready to work with us?
Millennial Money Blog and Investing Posts
- You missed it - I am old enough to remember the last time you could earn more than 5% interest on your cash. Prior to the Great Recession, instruments such as CDs, money-market funds, and Treasury bills actually yielded returns above zero. That was more than 14 years ago–a significant span of time for investors to forget the sensation[...]
- Another trip to the moon - Cryptocurrency is known for its ever-evolving landscape, and sure enough, a fresh coin has emerged to capture the attention of enthusiasts and skeptics alike. Pepe, the newest and hottest “meme coin” boasts a market cap of more than 750 million dollars at the time of publishing this post…
- Growth Stories - In the investment world, it is said that all big companies started out as small companies. From Microsoft to Amazon, every mega-cap today was once a micro-cap, and you can bet that there were critics. “It’s too expensive!” they’d cry. “No one will buy that!” they’d laugh. “It makes no sense!” they’d scream. But year[...]
- The Opportunity Portfolio - On Thursday I was invited to close out the hour on The Claman Countdown by weighing in on the markets and discussing some of my favorite stonks. While this was not my first time appearing on live TV, it was the first time I was asked to give my opinion on individual companies. You can[...]
- How The Sausage Is Made - Last week, Charles Schwab announced it would offer commission free trading across its brokerage platform. Within what seemed like minutes, TD Ameritrade matched the offer with zero commission trading of their own. Since their *groundbreaking* announcements, there has been no shortage of news articles and blog posts about them and their impact on the financial services[...]
- Apples and Honey Badger - This week is Rosh Hashanah and during Rosh Hashanah we eat apples and honey to symbolize a sweet new year ahead. So, in the spirit of getting back to celebrating all the things, I will keep this week’s post short and, well, sweet. There’s almost no escaping the news surrounding Trump’s impeachment inquiry. Regardless of your[...]
- Being Tactical - Just a few months ago, my firm launched its first tactical portfolio. It’s a straightforward, rules-based market timing model a la Meb Faber’s Ivy Portfolio. While it’s not for all of our clients, it’s a great way to provide additional value in an increasingly commoditized area of financial services. I do believe traditional active management[...]
- Press Your Luck - My favorite game show growing up was Press Your Luck. You might know it as the one where contestants scream, “BIG MONEY! NO WHAMMY! STOP!” as tiles randomly light up the parameter of a giant prize board aptly called, the “Big Board”. Contestants would both literally and symbolically *press their luck* by pushing a handheld[...]
- It’s Correlated - In investing, correlation tells us how an asset or portfolio moves in relationship to another asset or portfolio on a scale of +1.0 to -1.0. For example, over the last ten years, investment grade bonds have had a correlation of -0.06 relative to U.S. stocks (S&P 500). Meaning, if U.S. stocks went up by 1.0%,[...]
- Three Ways to Invest - Investing is now a commodity. If you think differently, you’re in denial. Take a look around, the market is flooded with investment products and platforms capable of getting you properly invested for little to no cost at all. It’s true. You can own a fully diversified portfolio of mutual funds for free. Obviously, not everyone[...]
Asset allocation programs do not assure a profit or protect against loss in declining markets. No program can guarantee that any objective or goal will be achieved. Diversification does not assure profit or protect against loss in declining markets and diversification cannot guarantee that any objective or goal will be achieved.