What Holiday…the Economy is HORRIBLE!!!

by Mike Carignan, CRPC

I am a very reluctant shopper so it’s not going to be overly surprising to hear that I still have some last-minute Holiday shopping to do. I have been reading the newspaper articles and watching the financial news networks consistently over the last month, so I’ve been bombarded with the news that the economy is still floundering and there is no end in sight for the horrible conditions. I have also been watching the markets and continue to see them recover as normal, which seems a little strange if the doom and gloom is accurate. Then I was utterly shocked yesterday afternoon.

I decided to head over to the St. John’s Town Center to grab lunch and maybe pick up a gift card from the Apple store. WOW! Big mistake for someone who doesn’t especially like crowded shopping centers. Driving over, the roads were crowded, but I figured “The economy is struggling so no one is actually going to be in the stores buying. I’ll just pop in pay for the card and leave”

Now let’s fast forward through the next 20 minutes it took to get from the door to the checkout clerk to pay for the little plastic card sitting on the counter. The store was packed!

Now am I saying that the economy is completely recovered based on visiting one Apple store? No.

What I am saying is that keeping the longer term trend of ups and downs in mind and recognizing the overall market cycle is better than dwelling on the remaining turbulence in the market. The Holidays are about remembering the preceeding year both good and bad but, most importantly,  celebrating the good with Family and Friends. Be happy in the fact that the markets and the economy continue to improve, even if it’s a little slower than in the past.

So here’s the best advice I can give for a Happy Holiday Season…Turn off the News and spend some quality time with someone important!

 

This blog is for informational purposes only.  This is neither an offer to purchase nor sell any securities.  All investing involves the potential of loss – including invested principal.  Indices quoted are general barometers of security price movement.  You cannot invest directly in an index.  All information is obtained from sources deemed reliable but not guaranteed.  Past performance is not a guarantee of future performance.  No tax or legal advice is given nor intended.

Investment advisory services provided by PARAGON Wealth Strategies, LLC, a registered investment advisor. 

10245 Centurion Pkwy. N. Ste 105, Jacksonville FL 32256   (904) 861-0093

Dubai issue signals a healthier market

By Jon Castle, CFP^®, ChFC^®

Over Thanksgiving Weekend, credit problems in Dubai shook the financial markets throughout the world. Apparently, real estate development companies got over their heads a bit and now can’t make the payments on their outstanding debt.

 Sound familiar? In this instance, the UAE (United Arab Emirates) took the stance that while they would not “bailout” any failing companies, they would, in fact, back the banks holding the paper. The US stock market dipped about 1.5% overall on the fears of yet another credit blowup – possibly igniting the much-feared “double dip” recession that some pundits have indicated is just around the corner.

However, the markets returned to healthy behavior soon after, recovering some of the losses and turning positive again today – Monday following Black Friday. In my experience, a market’s health is often measured by its ability to shake off bad news – and assimilate both good and bad news into measurable movements, up and down. In this case, given the size of Dubai’s economy, as well as the measured response from all concerned, it would appear that the financial markets are functioning normally again – highly efficient, and in most cases – random.

To your financial health!

This blog is for informational purposes only.  This is neither an offer to purchase nor sell any securities.  All investing involves the potential of loss – including invested principal.  Indices quoted are general barometers of security price movement.  You cannot invest directly in an index.  All information is obtained from sources deemed reliable but not guaranteed.  Past performance is not a guarantee of future performance.  No tax or legal advice is given nor intended.

Investment advisory services provided by PARAGON Wealth Strategies, LLC, a registered investment advisor. 

10245 Centurion Pkwy. N. Ste 105, Jacksonville FL 32256   (904) 861-0093

What Health Care Debate?

by Mike Carignan, CRPC

Recently, if you’ve been watching any form of the news, you’ve seen the ongoing debate over health care reform.  Now, I am not about to comment on which side is right or wrong, because with this debate it’s not just right or left…it seems to be a full perimeter. Even the individual parties can’t seem to agree amongst themselves.

Now, however, with the passage of the health care reform bill this last weekend many people are thinking that health care insurance isn’t going to be a concern in the future. “Now I’ll be able to get coverage regardless of previous conditions or employment status,” some may be thinking. That may be the case in the future, but not yet.

My point is going to be much simpler than the overall healthcare debate. I am addressing the here and now and one of the biggest health care concerns if you are thinking about retiring early. MAKE SURE YOU HAVE HEALTH CARE INSURANCE!

I hope that was clear enough.

We see clients, frequently, that have put a great deal of thought into where they will spend their retirement, how much money they’ll need for the vacations or the second home, but don’t plan for where they will get health insurance. Many clients take for granted the ability to qualify for individual health insurance, especially if they have been working for a large corporation with group benefits.

Some clients have the ability to continue their health care insurance benefits after leaving a long-term employer, but more often we see a need for individual health care coverage if they are retiring earlier than age 63 1/2. What questions then need to be answered if you are thinking about retiring early?

1. Will I be able to continue my group health care coverage?

2. If not, then will I get coverage from a private insurer? (We often suggest clients to go through underwriting before actually retiring to make sure.)

3. How much will it cost until Medicare?

4. Does that cost affect when I can start my retirement?

If you haven’t answered these questions then you are taking a HUGE risk in retiring before you have covered this significant risk factor of a secure retirement. Planning ahead for the potential risks in retirement is the best way to live a stress free and happy retirement.

 

This blog is for informational purposes only.  This is neither an offer to purchase nor sell any securities.  All investing involves the potential of loss – including invested principal.  Indices quoted are general barometers of security price movement.  You cannot invest directly in an index.  All information is obtained from sources deemed reliable but not guaranteed.  Past performance is not a guarantee of future performance.  No tax or legal advice is given nor intended.

Investment advisory services provided by PARAGON Wealth Strategies, LLC, a registered investment advisor. 

10245 Centurion Pkwy. N. Ste 105, Jacksonville FL 32256   (904) 861-0093

The ‘Live Big’ Philosophy

 By Michelle Ash, CFP^®, CDFA™

I came across an article this weekend in a magazine for financial professionals* that talked about the philosophy of “Living Big”. In this time of economic turmoil and constant speculation by the media about whether our recession is truly ending or not, the phrase “live big” may not seem to resonate soundly. But the Living Big philosophy is not necessarily what its name might initially imply.

The Living Big philosophy is one that advocates living “big” on a frugal budget. It emphasizes ways to live one’s life that involve little (or no) money, but are likely to lead to fulfillment. Here are some sample items from the Live Big List:

- Start a gratitude journal and write down five things every day that you’re grateful for.
- Get Skype or MagicJack and call friends located all over the world.
- Have a book swap party
- Join Netflix and watch hundreds of movies
- Make a hobby of finding free weekend activities and planning outings with family friends.
- Discover a new park and go for a hike.

These are just a sampling of ideas; you can likely think of many more.

The gratitude journal struck a real chord with me. It’s so easy to complain and to be frustrated by seemingly trivial things. And yet, when I really think about it, the average American lives at a higher standard of living than probably 95% of the people on the rest of the planet. Most of us have food in our bellies, a roof over our heads, comfortable clothes on our backs, and more opportunity for fulfilling life experiences than most other humans ever have the opportunity for.

So the point of it all, ultimately, is this: money is certainly important, but not as important as living life to the fullest and appreciating the precious things that money can’t buy.

I hope each of you finds ways to “live big”. I’d love to hear your suggestions!

* – “Fulfilling Frugality” by Raymond Fazzi; Financial Advisor Magazine, October 2009

This blog is for informational purposes only.  This is neither an offer to purchase nor sell any securities.  All investing involves the potential of loss – including invested principal.  Indices quoted are general barometers of security price movement.  You cannot invest directly in an index.  All information is obtained from sources deemed reliable but not guaranteed.  Past performance is not a guarantee of future performance.  No tax or legal advice is given nor intended.

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP^(R), CERTIFIED FINANCIAL PLANNER^(tm) and federally registered CFP (with flame logo) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

Investment advisory services provided by PARAGON Wealth Strategies, LLC, a registered investment advisor. 

10245 Centurion Pkwy. N. Ste 105, Jacksonville FL 32256   (904) 861-0093

YABBUTS: “Yeah, but…”

By Jon Castle, CFP^®, ChFC^®

I got up this morning and turned on one of  the financial pornography channels as usual.  I won’t say which one it was, but, as a financial advisor and wealth manager, I usually begin my day with the financial news shows so I can have an idea of what is going on in the world of finance before I show up for work.

All I can say is… What Drama Queens!  I have never seen a bunch of highly intelligent, highly educated people whining and crying and “oh, the sky is falling” as I have today.  They had one guest host on there who had the unmitigated gall to suggest that our economy is slowly recovering, and that things were getting better – and that is why the stock market is up 60% since March and will continue to rise, with corrections and breaks over time, as is normal - and you would have thought that this person just committed some sort of blasphemy and should be burned at the stake!

YABBUTS.

“Yeah, but… the market dropped so much.” 

“Yeah, but… unemployment is down and how can the economy get better until unemployment is fixed?” 

“Yeah, but… the government stimulus packages are just about over and that put in a false bottom and now we will fall off the edge of the universe as we know it!” 

“Yeah, but the consumer remembers the recession and that will have an effect on what people buy going forward… ie, nothing, ever ever ever again”

“Yeah, but the dollar is weak and getting weaker.  No one really knows what that means… but is sounds scary so we better harp on it for a while… inspite of the fact it could totally reverse the trade gap and end outsourcing of jobs to other countries… we better monger up some fear cuz a weak dollar sounds… um… unpatriotic.   Doesn’t it?”

I have not heard so much Chicken Little since last October and honestly, it turned my stomach.   It reminds me of these fear-mongering authors who write a new financial gloom and doom book every 5 years or so, just to cash in on the conspiracy theorist market who will buy their books.

One would think that such learned gloomy economists would stop and realize that some economic indicators are “leading indicators” and some economic indicators are “lagging indicators.” 

Leading indicators (ie – indicators which PREDICT the direction of the economy) are things like stock markets, interest rates, bank portfolios, and corporate earnings predictions.  So, for example, if the stock market has reversed course and headed sharply up over a period of several months, along with very low interest rates, bank portfolios that are not overextended in loans, and companies currently reporting low earnings but predicting better earnings next quarter – those are forward-looking events and would tend to suggest better days are around the corner.  Oddly enough – that is just about ALL the economic data that is out there right now.

Lagging indicators, on the other hand – such as commodity and home prices, inventories, and unemployment – basically tell us where we HAVE BEEN – not where we are going.  So, if businesses have been laying people off, or home prices have fallen significantly, these indicators are primarily a symptom of economic conditions, not necessarily predictors of where we are going in the future.  Thus, they are known as lagging indicators, as they LAG the real economy.  They may get worse – but they do NOT PREDICT the direction of the economy – the leading indicators do.  Thus the term:  LEADING.

Again, I am amazed at how supposedly learned economists can think that unemployment somehow drives the stock market.  How can a lagging indicator possibly drive a forward-looking indicator?  People invest for the future, not the past.

Which brings us to the crux of the issue:  Lack of faith.  There is so much Chicken Littling and YABBUTTING… by these supposedly learned economists and professors, whom I’m convinced live their lives in tiny little rooms doing nothing but armchair-generaling and writing about other people’s actions, that they are missing the truly wondrous events literally unfolding before our eyes. 

Most economic growth is created when mankind, whereever he or she may be – creates something new out of necessity or invention, or adapts previously unused techniques or technology to increase productivity – or starts a new business or idea because they don’t have a job – and, in doing so, creates new jobs and opportunities for society as a whole.

What new and previously unthought of inventions will be released next year? 

Did you know that there is a company that is releasing a mind-controlled video game – before Christmas of this year?!  Whether or not it makes any money – can you imagine the applications of this type of technology? 

Did you know they are building spaceships to replace the “aging space shuttle fleet?”  I remember when the space shuttle was new!

Did you know that the world’s total knowledge base doubles an estimated every three years?  TOTAL!  Wow.  That boggles the mind.

Did you know that the major drug companies, according to Time Magazine, are spending $600,000 per day to support healthcare reform?  Someone, somewhere must think its pretty good for somebody’s business for it to go thru – and that will likely mean JOBS and economic growth.

Whether it will or not, who knows.  Not you.  Not me.  The free markets will decide.  Either way – humanity – and America – will survive.  Betting against humanity has been a bad bet for thousands of years now, and I’m not ready to start anytime soon.

And these perma-bear economists sit in their office… looking at yesterday’s data… yeah, but… yeah, but…  yeah, but…

Get a real job!  Better yet – start up a business and give someone else one!

This blog is for informational purposes only.  This is neither an offer to purchase nor sell any securities.  All investing involves the potential of loss – including invested principal.  Indices quoted are general barometers of security price movement.  You cannot invest directly in an index.  All information is obtained from sources deemed reliable but not guaranteed.  Past performance is not a guarantee of future performance.  No tax or legal advice is given nor intended.

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP^(R), CERTIFIED FINANCIAL PLANNER^(tm) and federally registered CFP (with flame logo) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

Investment advisory services provided by PARAGON Wealth Strategies, LLC, a registered investment advisor. 

10245 Centurion Pkwy. N. Ste 105, Jacksonville FL 32256   (904) 861-0093

www.WealthGuards.com

Senate Committee to examine 401k target-date funds

By Michelle Ash, CFP^®, CDFA™

 

If you have an employer sponsored retirement plan, such as a 401(k) or a 403(b), you have likely seen “target-date” funds amongst your investment choices. These are funds which state a date, such as 2010 or 2020 as the “target date” for retirement.  The idea behind these funds is that they are appropriately balanced with an equity and fixed income mixture that is appropriate for someone that is that number of years away from retirement.  Over time, the funds automatically become more conservative as the individual draws closer to retirement. The idea is to put the risk tolerance and investment management with these funds on autopilot.

But the Senate Committee on Aging will begin examination this month of the fees, risks, and potential conflicts of interest associated with these funds.

A recent analysis by BrightScope of the investment options in nearly 13,000 plans found that the expenses charged by target-date funds are significantly higher than those charged by other funds on plan’s core investment menus.(1)  Because these funds are now the default investment option of most plans, meaning investors are placed into them automatically if they don’t select other investment choices, this may put some workers at a disadvantage. 

Target-date funds also have no benchmark for comparison. So, who’s to say what the appropriate blend for a target date 2010 fund would be? Consequently, returns from these funds have varied widely over recent years; sometimes causing investors who thought their money was invested relatively safely since they were close to retirement, to experience significant losses.

Our hope is that the Senate Committee’s examination will provide standards for these funds so that, like any other type of fund out there, an investor can ultimately determine for themselves if the fund is truly appropriate for their situation in terms of risk, cost, and personal best interest.

 

(1)  Source: “Companies take reins of workers’ 401k’s”, http://articles.moneycentral.msn.com, 10/21/09

This blog is for informational purposes only.  This is neither an offer to purchase nor sell any securities.  All investing involves the potential of loss – including invested principal.  Indices quoted are general barometers of security price movement.  You cannot invest directly in an index.  All information is obtained from sources deemed reliable but not guaranteed.  Past performance is not a guarantee of future performance.  No tax or legal advice is given nor intended.

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP^(R), CERTIFIED FINANCIAL PLANNER^(tm) and federally registered CFP (with flame logo) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

Investment advisory services provided by PARAGON Wealth Strategies, LLC, a registered investment advisor. 

10245 Centurion Pkwy. N. Ste 105, Jacksonville FL 32256   (904) 861-0093

www.WealthGuards.com

Is it Time to Market Time?

by Mike Carignan, CRPC

I was watching one of the many financial media/disinformation sources this morning and they were talking about the fact that the S&P 500 has had 6 days closing up. This is the most successive up days in the last 2 years. The follow-up question is one that we hear a lot…”Is it time to get back into the market?” Well, let’s think about the last year and where we are.

Last October the market “melted down”.   The media had a field day and was constantly bombarding us with the doom and gloom of the day.  It seemed every day there was some new revelation or calamity befalling the market that was going to cause the end of investing as we know it.  What followed was a mass exodus of money from equity and corporate bond investments into government debt and cash.  Many investors finally “had enough” in late February when the S&P 500 broke through 750 and lost another 70+ points…and they’ve been sitting on the sidelines since.

What have they missed?  Since the March low the S&P 500 has rocketed a whopping 400 points from 676 to 1076 as of 10/12/09. That’s a 59.2% increase.

This is a great illustration of why market timing is so dangerous. It gives us a rational for giving in to our worst fears, selling when everyone else is panicked and then waiting for the other shoe to drop while the market rebounds strongly.

The moral of the story…decide if you want to invest for the long term result or for the thrill of the gamble.

 

This blog is for informational purposes only.  This is neither an offer to purchase nor sell any securities.  All investing involves the potential of loss – including invested principal.  Indices quoted are general barometers of security price movement.  You cannot invest directly in an index.  All information is obtained from sources deemed reliable but not guaranteed.  Past performance is not a guarantee of future performance.  No tax or legal advice is given nor intended.

Investment advisory services provided by PARAGON Wealth Strategies, LLC, a registered investment advisor. 

10245 Centurion Pkwy. N. Ste 105, Jacksonville FL 32256   (904) 861-0093

www.WealthGuards.com

Investment Myths and Realities

By Jon Castle, CFP^®, ChFC^®

Myth:  A story made up to explain a phenomenon beyond the science of the day. 

 

As human beings, we all have a tendency to want to believe in myths, legends, or heroes of some sort.  Something about the idea that another person can accomplish superhuman feats strikes an adventurous chord in our breasts.  Imagine what it must have been like to hear stories of the great Babe Ruth, Audy Murphy, Wyatt Earp, and others – back when all we knew of someone or something was what we heard from other people or what we read in books – before television and the internet and a swarm of expose’- hungry media exposed the frailties and failings of even great men and women as soon as they came into the public eye!  Even today, we look for myths and legends and heroes – there is just something romantic and exciting about believing in heroes… and the Loch Ness Monster and Sasquatch and Santa Claus…

 

I think the fact that we want to believe in myths has a tendency to work against us as investors – causing us to act on beliefs and rules of thumb that often are not true.  Sadly, these actions may be more damaging to our financial futures than we realize.  In this article, I am going to briefly examine 3 of the most common investment myths, discuss the investment truths that academic research has discovered, and discuss our role as financial coaches for our clients as we pursue these financial truths together.

 

MYTH # 1:  Investment advisors (including mutual fund managers) can add value by exercising “superior skill” in stock selection.  Unfortunately, this is generally FALSE.  According to Morningstar, most money managers do NOT beat their index.  This is not because they aren’t smart or because they don’t work hard, but rather because today’s markets are so efficient that all known information – plus the probabilities of all known outcomes for a company or a stock – are continuously factored in to the price of the stock at any given time.  Rare is the man who can out-think the collective intelligence of millions of investors and consistently identify underpriced securities so as to beat the market.  As a result – depending upon the asset class – anywhere from 60-90% of money managers underperform their benchmarks.

 

MYTH # 2:  Finding money managers with a great track record  is a reliable method of figuring out which funds will do well in the future.  This too is FALSE.  Unfortunately, according to Morningstar and Baird Research, getting a 4th or 5th “star” rating is often the kiss of death for a mutual fund or money manager.  88% of all mutual funds that were rated a “top” fund (ie awarded their 4th or 5th star) went on to perform below average in the next 10 years.  66% of “top” funds actually performed in the bottom quarter of their peers during the next 10 years!  So picking the managers with the best past performance or the highest “star” rating actually gives us nearly a 90% chance of owning the poorest performers, not the best performers.

 

MYTH # 3:  Money managers – including investment advisors – are able to utilize market timing to effectively predict up and down markets.  Oh, how I wish this were true.  Unfortunately, it just isn’t.  If the loss of trillions of dollars in the markets during 2008 isn’t convincing enough that market conditions are often unpredictible and even the wisest of money managers do not effectively time the market – consider this:  If you had invested directly in the S&P500 (which you can’t – but suppose you could) from January 1, 1989 to December 31, 2008 – you would have achieved a long-term rate of return of 8.43%. In this scenario, $10,000 would have grown to over $50,000.  However – out of those 5040 trading days – if you missed only the best 5 market days – your return dropped to 6.27%, and your pot shrinks to $33,700.  If you missed only 20 of the best days, your return is now a paltry 2.58% and your $10,000 grows to only $16,600.  Consider the math on this – you could be right 99.6% of the time – and have done better in a savings account!1  The fact that the best days usually followed on the heels of the worst days – makes timing the market even more difficult.  To date – no one has ever been able to successfully and consistently time the market – ever.  Yet every day, financial talk show hosts ask their ‘expert’ guests, “So… what will the market do next?”

 

This discussion begs the question, “OK, if all these myths are false – then how ARE we supposed to make investment decisions?” 

 

Beginning soon, PARAGON will begin an exciting series of investor education events - fun, engaging events for our clients and their guests where we examine the most common investor pitfalls, discover the determinants of investor success, and offer the opportunity for all who would like to be a part of this journey to come along for the ride. We will examine each of these myths – and many more – and spell out exactly the steps an investor needs to take in order to shift their personal experience of money and investing from a scarcity mode – characterized by worry and frustration – to an abundance mode – characterized by clarity, focus, and hope for a bright financial future! 

1  Source:  Chartsource, Standard & Poors Financial Communications.  The S&P 500 is an unmanaged index that is generally considered representative of the U.S. stock market.  Past performance is not a guarantee of future events.

This blog is for informational purposes only.  This is neither an offer to purchase nor sell any securities.  All investing involves the potential of loss – including invested principal.  Indices quoted are general barometers of security price movement.  You cannot invest directly in an index.  All information is obtained from sources deemed reliable but not guaranteed.  Past performance is not a guarantee of future performance.  No tax or legal advice is given nor intended.

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP^(R), CERTIFIED FINANCIAL PLANNER^(tm) and federally registered CFP (with flame logo) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

Investment advisory services provided by PARAGON Wealth Strategies, LLC, a registered investment advisor. 

10245 Centurion Pkwy. N. Ste 105, Jacksonville FL 32256   (904) 861-0093

www.WealthGuards.com

A drop in the market?

By Jon Castle, CFP^®, ChFC^®

Well, it appears that the market euphoria that has driven the major stock indices is about to end for a while.  Not that anyone can foresee the future with any accuracy, but it sort of… feels like the market needs to take a bit of a breather.  After about 15 years or so of managing money and surfing the ebbs and flows of the market, you sort of get a feel for it, I suppose.

Actually, a correction at this point makes sense.  The S&P 500 index had a good run from early July – 167 points from the start of its run at 872 and then finishing up with a high of 1039 last week.  A 19% sprint in only 6 weeks or so makes for a good pausing point here as kids go back to school and Labor Day is just around the corner.

It wouldn’t surprise me a bit if the market didn’t bleed off about 10% or so over the next several weeks… from looking at the charts, it seems like a nice place for it to rest would be about 950 on the S&P – or about 8750 or so on the DOW – by the end of September or early October.  That would put it within a few weeks of being ready for a nice Santa Clause rally into December and maybe even January.

Not that it matters much for sensible investors, though.  Historically, markets trend generally upwards coming out of the latter part of a recession, so the fact that the markets give returns in spurts and lumps is just part of the game.   At this point, we’ve recommended that portfolios be repositioned back to the investor’s natural risk tolerance – a core baseline, if you will.  With a little overweights here and there to take advantage of a cyclical recovery, of course.

Now to control the emotions as the market corrects a bit… that’s always the hard part.  But at least Labor Day means a three-day weekend!

I wonder if we can rename “Labor Day” into “Golf Day?”

 

This blog is for informational purposes only.  This is neither an offer to purchase nor sell any securities.  All investing involves the potential of loss – including invested principal.  Indices quoted are general barometers of security price movement.  You cannot invest directly in an index.  All information is obtained from sources deemed reliable but not guaranteed.  Past performance is not a guarantee of future performance.  No tax or legal advice is given nor intended.

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP^(R), CERTIFIED FINANCIAL PLANNER^(tm) and federally registered CFP (with flame logo) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

Investment advisory services provided by PARAGON Wealth Strategies, LLC, a registered investment advisor. 

10245 Centurion Pkwy. N. Ste 105, Jacksonville FL 32256   (904) 861-0093

www.WealthGuards.com

We All Like Getting Paid…Right?

By Mike Carignan, CRPC

After an equity market roller coaster ride, like we saw in 2008 and early 2009, many investors are wondering “where is the next hot dot?”  The more they watch the financial media the greater the urge to jump into the ocean of investments and try to snag one of the very few stocks that they’ll be able to ride high and make a fortune.  Of course, hearing this in the news is it’s exciting, but will it get them where they want to go?  Most investors forget, or just don’t know about the power of the dividend.

If our investor wants to get some good consistent growth of his capital, getting paid along they way may be a great way to get a boost.  If our investor takes $10,000 buys a non-dividend paying stock instead of a 5% dividend paying stock he needs that non-dividend stock to grow 50% more over a 10 year period to sacrifice those dividends.  Even down markets are a little easier to bear when you’re getting paid along the way.

A long term outlook and good consistent disciplined investing are more likely to provide a good return over time than chasing the “hot dot”.  Just think of the tortoise and the hare…the hare had an exciting start but the tortoise won in the end.

This blog is for informational purposes only.  This is neither an offer to purchase nor sell any securities.  All investing involves the potential of loss – including invested principal.  Indices quoted are general barometers of security price movement.  You cannot invest directly in an index.  All information is obtained from sources deemed reliable but not guaranteed.  Past performance is not a guarantee of future performance.  No tax or legal advice is given nor intended.

Investment advisory services provided by PARAGON Wealth Strategies, LLC, a registered investment advisor. 

10245 Centurion Pkwy. N. Ste 105, Jacksonville FL 32256   (904) 861-0093

www.WealthGuards.com