All posts by Rob H

Smart Investing- It’s for Everyone!

Smart investing requires discipline and due diligence. Understanding the current economic conditions, technology trends gives you an edge and could catapult you into prosperity. Setting aside money, investing in the best stocks, ETFs, and funds that match your goals/objectives, and leaving it put for the long run; that’s smart investing.

If you love researching stocks and making fast trades in search of short-term profits, fine. It’s fun. I just don’t recommend doing it with more than 10 percent of your money.

The key to smart investing is to have an objective and to contribute regularly. It doesn’t matter how much you invest as long as you do. Generally, you want to start early to allow the money to compound over time.
Investing involves risks since it’s based on speculations and assumptions. But if you have a plan, common sense and time, it could make you financially independent. Make sure you assess your portfolio annually. Conduct the necessary adjustments to align it with current market conditions and trends.
A smart investor is a well informed investor. He is proactively involved in re-balancing his portfolio according to his financial goals and investment objectives.

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May the new year bring you happiness and prosperity. Happy investing!!

Buckle-up…More Stock market volatility ahead

The stock market volatility has been very erratic this year. What used to be an investment arena has now turned into a global Casino.  If you have been avoiding checking the performance of your portfolio, let me put you at ease: you are not alone!Stock Market Volatility
You might be asking yourself why are we seeing such volatility?? There are numerous reasons and factors for those crazy swings. Let me start by saying that the average investor is not causing this ruckus; the average investor is caught in the cross fire between the huge fund managers and high frequency traders, i. e. price manipulators. In other words, the shear volume of trades are being generate by HFTs- the exact figure is difficult to ascertain, but several financial analysts have said that some 70% of American stock trades are high frequency trading.

The other contributing factors are geopolitical in nature. Since the globalization era, things affecting one nation now have direct links across global economies. The complex interaction of trade, capital, information, and technology is leading to a new global convergence, for better and for worse- Countries are more connected than ever.Geopolitical

 IMF Managing Director Christine Lagarde says: “… while the IMF is making progress at mapping global financial risks and the links between the financial sector and the real economy, the biggest challenge is persuading national policymakers to take a global perspective.”
How is the World Connected into a Global Economy?- this article talks about the evolution and mechanics of world inter-connectivity.  Great read, it paints the picture!
Monetary policies have been putting a lot of pressure on the direction of the economy.  The question is not whether the Feds will raise rates, the question is when? This uncertainty is weighing heavily on investors’ mind. Signs such as inflation, job growth, dollar strength are the leading indicators for that rate hike.  Many see this hike as early as December, others believe it could be in March.
cashSo, how does that affect your portfolio?? It all depends on your investment strategy; short, intermediate or long term. In today’s chaos, I highly suggest you remain long- if you have been hurt by this stock market volatility, don’t panic, stay the course. On the other hand, if you have profits take some off the table, and hold 30-40% in cash. Investing in well known, fundamentally sound companies is the best hedge against the house casino!  If you are uncomfortable hand picking those stocks, I encourage you to look into ETFs. Unlike mutual funds, they provide better liquidity, lower fees, and more diversity.
If you want to learn more about ETFs, Dave Nadig has a well written article- follow this link–> ETFs.
In summary, I highly recommend you analyze your portfolio and make the necessary adjustments to ensure it’s aligned with your long term investment goal and strategy. Also, it’s a good idea to hold a cash position until all this chaos settles down.
Happy investing!


Start taking retirement planning seriously

Why You Should Take Retirement Planning Seriously?? While everyone knows that they need to save for the future, there’s a widely known anonymous quote : “some people spend more time planning a two-week vacation than their own retirement”.  This reinforces the fact that many people do not take financial planning seriously enough to start early.  As a result, many individuals do not have enough money saved up to retire or run the risk of outliving their nest egg.  In today’s economic conditions, going back to work may not be an available option.retirement4

Starting the planning process early helps build a solid foundation for later in life when the time comes to transition from work to a more relaxed lifestyle.  This is especially true for individuals who would like to retire early.  Starting the retirement savings process early also opens up more investment opportunities that can earn a higher return.  It also enables the saving account to grow at a faster rate.  Starting later in life may require a lot of catching up.  People may then feel the need to make aggressive investments to compensate for lost time, which can be extremely risky.

retirement1Quick checklist:
– 401k: employer retirement plan, non-taxable.
– IRA: retirement account, non-taxable.
– CD: time deposit savings account.



The key to planning for retirement is another well-known quote that states: “prior planning prevents poor performance”.  The sooner you start this process, the sooner you will be financially prepared for the future. Take retirement planning seriously; it’s never too early to begin planning for retirement.


Helpful article:
How The Social Security Retirement Planner Can Help You Now

2015 Financial Outlook- bumpy ride ahead?

What to expect in 2015-2015-money-1
The crazy and volatile swings that we endured in 2014 will be
a normal occurrence this year as well. With geopolitical unrest still looming over, frail economic conditions in Europe, madness in the Middle East, and sluggish emerging market growth, expect to see similar swings again. On a positive note, the S&P 500 did have a fabulous run in 2014 – rewarding patient investors with double digit returns – just shy of 12%.

Oil, Oil, Oil….
oil-pricesLet us expand on some facts – Crude oil prices reached all time lows
few months ago, but have now formed some resistance around $48/barrel. What started out as a political propaganda to crush Russia for invading their friendly neighbors and ISIS for the brutal onslaught on their own people, quickly morphed into a game of chicken between Saudi and U.S.
U.S. is now considered the number one oil producer in the world, and that doesn’t bode well for the Saudis. For that reason they are playing the price war to crush the U.S. shale industry and to deplete other OPEC supplies..
Some believe we have reached bottom, others are skeptical and feel we could be in the 30’s. This boom in US shale along with significant slow down in demand have created a great imbalance. Oil rigs are now starting to come offline to offset this influx of refined oil – but not nearly as enough.  The immediate concern to consider is storing the access supplies.

Oil prices will continue to fluctuate, and global uncertainties will dictate the slope and direction of those fluctuations. If you are interested in investing in the oil/refinery industry, the it is wise to take positions in fundamentally sound companies that offer decent yield returns suck as Chevron, Exxon, British Petroleum, Total – not only do they pay healthy dividends, but they are somewhat immune to huge swings in crude prices, better leverage, and can weather the storm if things get dicey. Look in the refinery sector to do complement those positions. CVR Energy Inc., Western Refining Inc. to name a couple.

While everyone likes to speculate, I resort to common sense and known facts.
1- Production levels are unchanged (Saudi refuses to reduce throughput)oil-pipes
2- Global demands are low (thanks to alternative fuel/energy)
3- Supplies are reaching maximum capacity  (we will soon have trouble finding storage)
If those factors are not resolved, expect turbulent times ahead.
This chaos may take some time to unfold – It is a cyclical industry and things will play out eventually.  If you’re a long term investors, there’s no need to worry.

Let us switch our focus to other factors that will play a major role in the 2015 financial outlook.

Monetary Policies
The central bank of the United States is the ‘FED’. FED stands for Federal Reserve System
but this is also referred to as the Federal Reserve for short. Although the FED is an
independent government institution, the American central bank is owned by a number of
large banks and therefore not by the state.
Federal Funds Rate ( the interest rate at which banks and other depository institutionsrate-increase
lend money to each other, usually on an overnight basis) has been at 0.25 for 5 years – sine Dec 2008.
Analysts are anticipating a gradual tightening; a rise in interest rate is expected but no one is sure of the timing. The FEDs have been hinting but they remain dovish at taking action – acting too soon could destabilize this fragile economy.
Paul R. from CNN Money, wrote a lovely article that gives great insights on the effects of rate hikes (full article)

Investing Ideas: Favor the financial sector such as regional banks, consumer discretionary (retails, autos, etc.,), real estate, home building, construction, raw materials, etc,.. Certificate of Deposit (CD) is another form or investment that benefits from rising interest rates. Proceed with caution when investing into rate-sensitive sectors, such as Fixed income, REITs, Utilities.
Investopedia has a nice article regarding this topic – click HERE to read full article

Dollar Index
dollar-euroLet’s talk about the Elephant in the room that no one is addressing: the strength in the US dollar. Due to weak global conditions, troubled European economy, slow growth in the Chinese & Emerging markets. U.S. became a safe haven for investors from all corners of the world. The dollar has been gaining a lot of momentum against other currencies – Europe in particular. They are going through the similar turmoil we faced when our market collapsed in 2009. The European Central Bank (ECB) have been dragging their feet in terms of quantitative easing, but finally committed to €60 billion/mo, starting this month to stimulate their sluggish economy.

Investing ideas: It might sound aggressive but there are bargains in the European multinational sector (Nestle, Sanofi, Total, Telfonica, BNP Paribas, France Telecom, Siemens, Deutsche Telekom, Bayer, etc,.).
If you prefer to let the monetary easing play out first, that’s a wise move. Also consider investing opportunities in Japan.

Although the unemployment rate is steadily declining, most believe the economy haven’t createdneed-job
enough jobs, and the data is not sufficient to start taking victory laps. “The latest jobs numbers released today by the U.S. Bureau of Labor Statistics indicate further steps are necessary to boost employment demand, which is still not close to the level that will generate healthy wage growth. Although the U.S. economy added 295,000 jobs in February, wages grew by only 2.0 percent over the past year according to the new BLS data.” writes Ben Zipperer. His well written article also talks about wage increase and strength in the labor market. Read full article HERE
Currently, we inched our way down to 5.5% – according to the Bureau of Labor Statistics. – a long way from 9-10% unemployment.

2015-financial-goalsThe 2015 financial outlook might be worrisome, but many indicators are pointing to a strong economy; those factors could determine if   we are on stable footing or turmoils are ahead. Things to watch in the upcoming months are corporate earnings, crude oil stability, retailers, job reports, and FEDs monetary tone and sentiment on the economy
Remember, it all begins with understanding your goals and investment objectives. A diversified portfolio has been proven to be the best approach in a world of uncertainties. Financial planning is crucial and must be discussed with a professional financial advisor who seeks your best investment needs and interests.

Until next time, happy investing!!

Prepared for another economic downturn?

Economic downturn- Have you set your financial goals today? What are you waiting for? There are several factors you should consider to be alarming: 1) economy still looks volatile, 2) the Feds are continuing the tapering by  reducing Bond buyback to $40 billion per month, 3) emerging markets still on slow footing- major uncertainties about Chinese economy.

There are talks from new Fed chairwoman Janet Yellen wanting to kick start inflation…Economic Downturn Yellen gave her first indication of her views on the issue. “Most measures of wage increase are running at very low levels,” she said.  Yellen went on to provide insight into her thinking on how high is too high for wages. “In fact, with the productivity growth we have and 2 percent inflation, one would probably expect to see, on an ongoing basis, something between—perhaps 3 and 4 percent wage inflation would be normal.”
Click here for the full report from CNBC‘s senior economics reporter, Steve Liesman (follow him @steveliesman)

Here are ways to shield yourself from the economic downturn and minimize the monetary affects on your future strategy.:
1- Review and analyze your budget,
2- Cut and control your spending
3- Increase contribution to your savings account.

Take control of your financial well being: 5 Essential Steps to being Financially Stronger.
Take action! Especially during an economic downturn.

Make it a great day!

Why invest even during shaky economic condition

So why should you invest during shaky economic conditions??  Because your financial strategy should be defined for the long term – that’s the simple answer.  Those blips in the economy will be insignificant 5 years from now.  With the current sprawling globalization, the world is getting smaller.  Events and headlines from across the globe have a more significant impact on the economy because countries are more interconnected than ever before.  While the ebb and flow of these dynamic events can bring about uncertainty, it is important for investors to remember not to panic or make impulsive decisions.
Patience is a virtue.  Invest

It is important to keep focused on the long-term horizon and not be swayed by the vagaries of near-term market and economic fluctuations.  As the old adage says, “This too shall pass.”  The mixed messages do not eliminate the need to save for the future.

The goal of every investor should be to weather the storm of short-term volatility and continue to invest to meet future demands.  This includes financing for important life events, such as purchasing a home, funding a college tuition plan and meeting the fiscal demands of retirement.
Savers should review their investment allocation strategies to ensure that funds are being applied where they will earn the greatest returns.  A down market may also be the best time to add to a portfolio to be in a better position to take advantage of any subsequent swings higher.  Investors should seek the advice of a professional financial planner who can help guide them and provide insights on where to invest during periods of uncertainty.

Saving Tip of the week!!

New addition to our blog: Weekly financial tips that will help you budget, save, invest, and manage your finances

This week’s saving tip:LED_bulbs-1
Changing your old incandescent light bulbs to LEDs (light emitting diodes) saves energy and is environmentally friendly – also lowers your monthly electric bill.
Yes, the initial costs to install all those light fixtures around the house is substantial at first, but over the long run it will translate into savings.

The highly efficient LED light bulb consumes a fraction of the electricity burned by conventional incandescent bulbs, yet it emits a soft, natural-looking light.  LED lamps have a lifespan and electrical efficiency that is several times better than incandescent lamps, and significantly better than most fluorescent lamps

LED_bulbsLEDs can be purchased at Home Depot or Lowe’s. Make a difference, start saving now!

Click Here for a full review on best LED Bulbs (courtesy CNET)

Take control of your personal savings in 3 easy steps

Interest rates and prices fluctuate in response to headlines about national and global events that affect the economy.  To gain control over personal finances, individuals must take proactive steps to navigate in these volatile times.

Step#1:  [highlight]Create a monthly budget[/highlight].  This topic was discussed in my previous blog post; click here to read full article.  A budget is a plan for how to allocate income to meet expenses for a designated month.  By understanding your spending patterns you can achieve better control over your income.

Step#2:  [highlight]Start a retirement savings account[/highlight] – this may be a 401(k) or IRA.  Take full advantage of employer’s matching funds.  Seek expert advice and guidance as needed from a financial adviser or an estate-planning professional.

Step#3:  [highlight]Start an emergency fund[/highlight].  Save 3-4 months of living expenses in a form of a savings account, money market fund or short-term certificates of deposit (CDs).

A certificate of deposit (CD) is a time deposit, a financial product commonly sold in the United States by banks, thrift institutions, and credit unions.  CDs are similar to savings accounts in that they are insured and thus virtually risk-free; they are “money in the bank”.  In the US, CDs are insured by the Federal Deposit Insurance Corporation (FDIC) for banks and by the National Credit Union Administration (NCUA) for credit unions.  They are different from savings accounts in that the CD has a specific, fixed term (often monthly, three months, six months, or one to five years), and, usually, a fixed interest rate.  It is intended that the CD be held until maturity, at which time the money may be withdrawn together with the accrued interest.
I recommend the CD option if you don’t think you will be needing the money in the short term.  Remember, this is just like a savings account, so treat it as such.  This liquid reserve will serve as a temporary shield in the event of a job loss or other unforeseen interruption in earnings.  You can check CD rates at or do a quick Google search.

savingsTake advantage of special offers on regularly purchased items.  Also, it may be advantageous to refinance a mortgage and other loans at a lower rate- the possible savings from lower interest rates is significant.  Use any net savings to fund the emergency and retirement accounts.  Individuals should also utilize all financial tools that are available to them. These include direct payroll deposit, automatic transfers to investment accounts, overdraft protection and online bill pay.  These programs can save time as well as simplify personal financial management in today’s shifting economic climate.

Don’t be a victim to the geopolitical games and global uncertainties.
Be in control of your personal savings and your financial well being.

How can creating a budget save you money?

A dynamic budget supporting the best effort for individuals to save is the critical path to financial success. In everyday life, saving is becoming harder and harder to do; often overlooked.  Families are experiencing the reality of price increases and beyond what they can historically afford.  Thus making saving less attainable and more like a catch-up process.  Creating a budget can help alleviate broad concerns of living from paycheck to paycheck, and the uncertainties of today’s economic conditions.Creating a Budget

A monthly budget is a plan for how you will allocate income to meet your expenses for a designated month. Some think of budgets as spending constraints, but budgets are better described as spending plans. If you budget correctly you will be able to spend money on things you enjoy without worrying about meeting other financial obligations, going into credit card debt, overdrawing your accounts.

GasPrices-1All indicators are pointing to a rocky 2014. Here are the facts:
The costs of living have been on a steady climb- The CPI index has increased by 1.5% over the past 12 months.  Rising agriculture prices are being passed onto consumers, crude oil price manipulations are driving gas hikes at the pump – a slight interruption at the refineries or a hiccup in supplies has given the Oil companies a ‘carte blanche’ to hike prices at will.  Now that they have pacified us with $4 per gallon. their next target is $5/gal. Those prices are here to stay; so get used to it or start looking at a cost efficient means of transportation.  Apparently the American people are no match to the deep pockets of Oil companies and their hired goons: the lobbyists.

Globalization is the bi-product of evolution, in turn, there are a slew of uncontrollable metrics and situations stemming from all around the World.  The Europeans are our close neighbors, and their economy troubles or any political unrest can directly impact us here.  Although we can’t control what goes on over there… GasPipes-Ukrainebut we sure have control over what’s going on in our lives.  By steadily adhering to your budget and making progress on your savings’ plan, you will eventually form a peace in mind that you, your children and loved ones will be protected. Your hard earned income will be safe from glitches, tyranny, market collapse, or corruption unrelated to our country.

By understanding your spending patterns you can achieve better control over your income.  Consider the necessities first, then work your way down to the must haves – not omitting activities that promotes quality of living. Going to the movies with the family once a week, not only brings joy but builds a great bond.  Such activities contribute to life long memories and are the building blocks for every healthy family.

budget-1Setting a budget allows you to examine your spending at a detailed level and helps you understand where your money is going!  Start by listing all your expenses one by one.  We must make tough choices to hedge against a stormy economic environment.  The secret is to plan for a worst-case scenario, then make spending decisions on money made available by better financial navigation during the year.  Be proactive and take action today.  Allow your hard earned income to work for you.  If you can’t save today, then try saving tomorrow, or the next day.  Excuses are for the unprepared.

Click HERE for some online budgeting tools.  There are numerous budgeting mobile applications depending on your operating system: 1) For iOS click HERE. 2) For Android, click HERE.  Those are just examples, other applications might suit your needs better than the ones provided in my links.

Read more on how creating a budget HERE can save you money.  Make it a great day.

The illusive American Dream… what happened?

I would like to share an article with you that I wrote back in September 2012… most of those issues haven’t changed or improved (but I have made minor updates!)

Has the American dream become a real nightmare…??

It’s clear that our Nation has an addiction to gas guzzling vehicles, fast food, credit cards, lattes, energy drinks, reality TV, the sense of entitlement, instant gratification, social media outlets, …
A government that is infested of crooked politicians.
A downgraded economy that is in the tank, flirting with a double dip recession.
A national debt north of $17.566 Trillion.
Unemployment rate of 6.7% (12.8 million Americans are jobless).
An administration on a spending spree.
A middle class shrinking and burdened by this mountain of debt; watched their nest egg shrink by 40% since ’07 (made some recovery in 2013).

Society that is mesmerized by celebrities and sports figures; their lives, gossips and nonsense.
Ineffective Federal Reserve – that think printing more money is the solution.
Greedy Wall Street CEOs, roaming around Congress asking for favors.
Corrupt banking systems that got bailed out by the taxpayers; now making hand over first in profits.
Unethical Pharmaceutical giants, gouging consumers with high drug prices.
Social security system that is running out of money.

Big government that thinks it knows best, with huge spending appetite – telling us how to live our lives.American Dream-broke
Failed and costly healthcare system.
Rising cost of living ($3.50 for a gallon of milk, $4 for a bag of chips).
Small businesses getting crushed by China/India/Brasil (the tide is now slowly turning).
Oil companies pocketing $billions of our hard earned money, gouging us at the pump.

What happened to the fundamental American principles?? Family values??
Aren’t we all tired of the status quo?? of being pacified with empty promises?? Aren’t we all frustrated of gas at $4/gallon?? Hikes in the cost of living?? Saddled by this national debt??  I could go on and on…

Here are ways we can make this American Dream a reality again:
Let us invest in teachers, scientists, engineers… not in rockstars, basketball thugs..
Let us Invest in small businesses, factories, clean energy (wind, solar & natural gas).
Let us cut our addiction on oil and get rid of our dependency on the middle east.
Let us regulate wall street and restrict shorting the market (which bets against economical growth and more on greed), and high frequency trading schemes.
Let us focus on exporting more, importing less.
Let us cut taxes on businesses, and bring back jobs to our country, grow our GDP, regulate wall street, shrink unemployment, stop waging wars and meddling in other countries, strengthen our middle class, reduce the deficit and balance our budget, invest in education, explore our natural resources….

Let us start a revolution.AmericanProsperityWhat say you?!!
Rob H