Wednesday, September 18, 2013

Members of the Same Financial Success Team



September is already well upon us and it finally seems that the heat wave is starting to subside, thank goodness. We are quite spoiled though, since we only have a few weeks of hot weather. Syria and other world political issues have been heating up too, while real estate has started to cool down a bit lately. We will continue to endure, enjoy and sometimes suffer the cycles of economic, political and human experience. It is important to remember the simple but true saying, "This too shall pass." Another helpful thing is to remember to celebrate and enjoy the harvest when things go well, the patience to endure and accept what we cannot change, and the wisdom to know the difference (I took some liberty here with an ancient Sanskrit Poem). 

As we navigate through some interesting and challenging times ahead regarding the US budget crisis, Federal Reserve decisions and their attending inflation and interest rate implications, and foreign political and military decisions which will affect us all, I wish you peace of mind and success in your endeavors. We work together to make the most of any situation we are presented with as members of the same financial success team. As always, our doors and phones are open to you!

This is a personal blog and is for informational purposes only. This information is not intended to be a substitute for specific individualized tax, legal or financial planning advice as individual situations will vary. For specific advice about your situation, please consult with a lawyer or financial professional. 

Thursday, August 1, 2013

A Great Opportunity to Still Refinance or Buy Your Ideal Home for Retirement


It seems this year is really flying by at a rapid pace, which means that we must all be having a lot of fun! I sincerely hope you are enjoying good health, success in your endeavors and peace of mind in your life. I am the luckiest advisor anywhere because I have the nicest clients ever!

Just a few brief comments on the last month’s record-breaking rise in interest rates. As you know, we have all been enjoying the opportunity of multiple refinances on the way down to the historic low mortgage rates of late, and I have been preaching the importance of refinancing and getting all the money possible at these levels. 

Well, in one fell swoop of the tongue, Bernanke managed to virtually torpedo the bond market and cause interest rates to rise more in one week than in any other in mortgage history. We experienced a full one percent rise in rates in a week’s time, followed by a ¼% improvement temporarily. This reduced the amount that can be financed by the same payment to most buyers by $50,000, and put a cool hold on the super-hot real estate market of the prior 12 months in San Diego and elsewhere. The multiple bids on a home within hours or days of its listing, and the willingness to substantially overpay on the asking prices just to get the home, slowed way down and virtually disappeared. That does not mean that housing and appreciation is dead, just considerably reduced and stabilized again.  

Lest anyone feel too badly, we must remember that these current mortgage rates in the low to middle 4% range are still historically low, and present a great opportunity to still refinance or buy your ideal home for retirement before the rates rise more and inflation truly kicks in, which it ultimately must and will, in my opinion.

The broad financial markets and the 2nd Quarter were not particularly good ones. Fortunately, we had a banner 1st Quarter, and a good July to date to offset it, putting us still in good shape year-to-date. We must count our financial blessings overall and enjoy this current strong market while it lasts. To be sure, it has lasted longer than I thought it might before a correction of substance, though we did have a pullback since I last expressed my concerns. 

Once again, true diversification, temperance and balance are the rules of the day at Heritage and have proven our best defense in times of challenge and have still allowed for excellent long-term results overall for our conservative client base.

This is a personal blog and is for informational purposes only. This information is not intended to be a substitute for specific individualized tax, legal or financial planning advice as individual situations will vary. For specific advice about your situation, please consult with a lawyer or financial professional. 

Wednesday, May 22, 2013

On Borrowed Time at these All-time Market Highs


My greatest hope is that the younger generations have been taught and thereby have learned what made this great country of ours great. I fear their general ease and prosperity and the attack on the fundamental moral values and founding constitutional principals they have had to endure in the classrooms might become a real challenge for them and our country in the future. May we all do everything we can to teach our children and grandchildren the basics of right and wrong, and the enduring  principals of goodness and morality, and be examples of the same in our daily living and in the way we participate and vote to keep our freedoms and the greatness of this country intact. I am still very grateful for all we enjoy and am hopeful for our future, and realize that we cannot change the world directly, but we can enjoy the wonders and our loved ones around us and do whatever is in our power to make a positive difference in our own lives and the sphere of influence we each enjoy.

I have truly enjoyed the high level of success in the financial markets and accounts we have all experienced lately. If only this trend were permanent life would be very easy and prosperity would be easy. Sometimes we get to enjoy these above-average results without stress and market worries, and sometimes we have to work very hard to protect capital and returns from financial and market challenges in order to protect and achieve positive returns. Because we never know for sure when the markets will shift and to what degree of severity, we have continued to implement our tried and proven methodology of broad asset allocation, true diversification, best of class managers, and re-balancing as we move along. Even volatility and temporary declines can be useful and productive overall with these tools and strategies being in place. I have felt for a time lately that we are on borrowed time at these all-time market highs, and am glad we have installed “safe zones” and non-correlated alternatives in our holdings. Patience and perspective will again be needed in the future as markets shift and times become turbulent as they do at different stages of the market cycles. The important thing is to work to achieve a steady and calm mind of contentment and work in harmony to meet whatever challenges come with hope, resolve and consistent efforts to improve our financial picture at every juncture.

This is a personal blog and is for informational purposes only. This information is not intended to be a substitute for specific individualized tax, legal or financial planning advice as individual situations will vary. For specific advice about your situation, please consult with a lawyer or financial professional.