Archives For Investing

Have you played? Likely you have tossed a frisbee around on the beach, but have you run up and down the field catching an Ulta-Star Disc? If so, then you’ve played Ultimate Frisbee. If you’ve never heard of it, check it out!

This game is not for the faint of heart. I’ve played pickup games, club team at Auburn University, and several summer and winter leagues.

I’ve also been an investor for several years and have noticed that investing is like learning how to play Ultimate Frisbee. Ultimate in 10 Simple Rules.

10 Ways Investing is Like Ultimate Frisbee

  1. The Field– You’ve got to know where the field is and what the dimensions of the field are. In investing, the field is the stock market and the disc is the vehicle you’ll use to invest (stocks, bonds, mutual funds…etc).
  2. Initiate Play- To begin playing, throw the disc! With investing it’s better to start sooner than later as soon as you’re out of debt and have an emergency fund, but don’t ever invest in something you don’t understand first. Make sure to find an advisor you can trust.
  3. Scoring- First one to 10 wins! When you invest, plan on a set period and keep with it, Remember you’re in it for at least 5 years and possibly till retirement.
  4. Movement of the Disc- Once the disc starts flying, no telling where it will land. With your investments, they’ll likely be some volatile times. Just remember this is part of the game.
  5. Change of Possession- I have to confess that I did drop the frisbee sometimes. When you start out investing, you’ll drop the disc too. You’ll make mistakes with what advisors to choose and investments to make, but cheer up! You’ll learn and do better next time. But, don’t drop too much or you’ll have to run laps.
  6. Substitutions- No subs once play has started. Once you begin investing, don’t stop. Investing is for 5 years or more, not for short term gains.
  7. Non-Contact- No tackling each other on the field! Stay in contact with your advisor and ask them questions if you need help. If they don’t stay in touch with you, it might be time to find a new advisor/broker.
  8. Fouls- It isn’t worth winning if you have to cheat. That said, don’t try to cheat with your investments and forthcoming earnings on your taxes. If it feels dirty, it probably is.
  9. Self-Officiating- This game has no referees. You have to be a student of the game and continue reading books by great investors like Warren Buffett. Don’t hand the keys over to your advisor or your 401K. Make sure to look at your quarterly statements and read about what’s going on with your nest egg or Porsche fund.
  10. Spirit of the Game- Ultimate Frisbee doesn’t have referees, since everyone is supposed to play nice and be honest. In the end having fun and  playing tomorrow is more important than arguing in the moment. With investing, play for the long term and remember that your faith and family are ultimately more important than money.
Follow me on Twitter. Better yet buy an extra ultra star 175g disc to support the blog. 

(Photo by Rob)

Can you find a financial advisor you can trust?

Investing for retirement is important, but do you need a broker to do that? How can you find someone you can trust? So how do you choose someone to help you invest your money? Should you do it yourself or should you pay someone to help you?  How is that person paid?   By commission or by flat fee?  Are they a Fiduciary or a salesperson?  These are all important questions to find out, so let’s dive in.

You could invest for yourself through many companies now, but not all mutual funds and investment vehicles are going to be available to you.  The advantage of investing online are the low fees, but you are going to be on your own for investing advice and what funds and mixture of funds to choose from.

If you want a professional to assist you (I use a professional for the majority of our investing), then you want someone who has the heart of a teacher. You want a person who will advise you and not talk down to you condescendingly to you if you don’t understand some financial term.

If you are a couple, then BOTH of you need to feel comfortable with the person or firm.  If your wife has an odd feeling about that guy, then just choose another.  We went through 3 before we found one we both agreed on. Never invest in a financial product that you don’t understand.

So how do you find someone?  You can ask your friends for referrals or you go through referral systems. We used our local investing ELP from Dave Ramsey. *We now use an online provider for investing [Why I switched Mutual Fund Families].  You could look for CFP or CFA’s. If you are looking for a fee only adviser/broker then look here. You should ask how they get paid, by commissions or fee?  Are those fees negotiable? Do you have to have a minimum $ amount to start investing with them? We started from scratch and our broker didn’t require any minimums.  Ours does get a commission, but the percent decreases as our amount increases.

Something else when interviewing your investing professional is to look them and their firm up on IAPD and FINRA BrokerCheck to see their qualifications (Series 7 or 63) and history of filings and complaints with the Securities Exchange Commission (SEC).

Hope this helps and enjoy the process!

(Photo by thinkpanama)

Don’t Buy Gold

Brent Pittman —  05/19/2010

Investing in gold is a hot topic these days.  Do you realize when the ads for gold come on?  It’s late a night, just after the commercial for a knife that has a laser beam for $19.99.  Why don’t they advertise during popular sitcoms?  Because they have a better chance of catching down and depressed people late at night!  A recent article on Bloomberg.com argues that gold is not a good bet against inflation

However, gold’s record as an inflation hedge is more mixed over the long-term. Because gold fell from 1980 to 2001, the metal’s total appreciation from 1972 to 2001 was just 336.5 percent. That barely beats inflation over those 29 years of 323.7 percent, and is way behind the 2,466 percent return of the broad Standard & Poor’s 500-stock index if dividends are included.

If you want a good hedge against inflation then why not buy and own a house that is easier to sell than gold?  Over the long run Gold barely beats inflation.  See Chart.  In 1910 gold was worth $18.92, as of today it is worth $1210.00 an ounce.  While this seems impressive, but over the long-term with inflation added, see what gold does.  An article by Motley Fool shows some research:

According to University of Pennsylvania finance professor Jeremy Siegel in his seminal book Stocks for the Long Run, here’s what a dollar invested in various things would have grown to, from 1802 to 2001. (Amounts have been adjusted for inflation.)
  • Stocks: $599,605
  • Bonds: $952
  • Bills: $304
  • Gold: $0.98

So do you still want to invest in Gold?  I recently heard a personal story about a man who called into one of those late night gold commercials and bought a large amount of gold.  A few nervous and scary days later the gold prices plummeted and he sold it all, resulting in a $20,000 loss.  This is not something that I personally want to be involved in based on the history of gold.

Sure you could get rich day trading gold or stocks, but I prefer to sleep well at night and not lose my shirt (like most day traders)  So go ahead you gold bugs, keep on buying…I hope you are able to  sleep tonight.