Archive for October, 2009

Why Women?

Published October 25, 2009 Financial advice Leave a Comment

By Douglas Goldstein, CFP®

I am frequently asked why I run seminars on women in investing. Why should one’s gender affect investment choices?

The tendencies of women to prolong entering the paid workforce until their children are older, the frequency with which women are the primary caretakers of family members, and the lower glass ceiling for women all mean that women require specific attention in financial planning.

Older Women
I meet with many widows who have no idea how to handle their finances since their spouse was always the one who handled the money. Older women sometimes need to learn the basics of finance and encouraged to take the reins of their financial life.

The fact that women traditionally live longer than men means that allowances need to be made for additional cash flow after their husband’s pensions end. Also, additional funds may need to be earmarked for extra years of health care. While we live in a country with socialized medicine, long-term nursing facilities can really squeeze one’s wallet.

Middle-Aged Women
Women who return to the work force after taking time off to raise their families have fewer years to accumulate pension savings. This means that their pensions may be inadequate to cover their retirement expenses. Working women need to allocate additional savings to supplement anticipated pensions.

And even if a woman is working and has pension and savings accounts, she may have more expenses than her male colleagues. If a woman CEO travels to a conference, her company may pay her expenses. But who will pay for the extra hours the nanny needs to work in her absence, or the cost of taking along a nursing baby plus babysitter? Working mothers have hidden costs of work which need to be taken into account in their financial plan.

Younger Women
A young woman’s asset allocation may have the flexibility of being more aggressive. Now is the time to develop solid saving habits and a strong foundation in personal financial responsibility.

At all stages of life, including marriage and divorce, a woman faces unique financial needs. Show the women in your life that you care for them by encouraging them to plan.

Douglas Goldstein, CFP®, is the director of Profile Investment Services. He is a licensed financial professional both in the U.S. and Israel. He offers securities through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, NFA, SIFMA. Accounts carried

Do You Invest Like You Drive?

Published October 25, 2009 Finance , Financial advice , Israel , Money management , aliya Leave a Comment

By Douglas Goldstein, CFP®

When Ron, the instructor at Maslulim’s advanced driving course (www.maslulim.co.il), introduced the idea that drivers normally follow their instincts, he said that such reactions are usually wrong. He stressed that training can help refine your actions to prevent a crisis. This concept also applies in investing.

When should I slam on the brakes?
Maslulim teaches that in the face of danger, you should slam on the brakes with full force, even if you’re afraid to do so. Today’s advanced ABS braking systems allow you to control the car even as you come skidding to a halt. But with stocks, it’s different. While it may be instinctive to pull the brakes when faced with a crashing market, selling in a panic may not be your best move.

What is even better than slamming on the brakes is looking ahead and foreseeing the danger. Create a financial plan and/or rebalance your portfolio as needed. Then hopefully you won’t need to battle the urge to sell when the market crashes.

The Maslulim instructor also pointed out that your side mirrors should tilt out further than they are normally set. This allows you a wider perspective on the cars coming up beside you, providing a better a sense of what is about to happen. Knowledge is empowering, but when it comes to both driving and investing, past performance can’t predict the future. While yesterday your neighbor stopped at the red light, you can’t assume he’ll stop today, so be prepared for all alternatives. Similarly, past investing history can’t predict future returns, so plan for different scenarios.

Maslulim’s course made me a better driver, and I strongly encourage all drivers … even if you’ve been driving for decades … to sign up now. You’ll be amazed at how much you will learn, and how much fun you can have. After all, not crashing your car is a good investment decision. After you’ve fine-tuned your driving, fine-tune your investment portfolio. If you feel you’re not driving your investments well enough, you can also take a course or speak to a professional financial adviser to get you back on track.

Douglas Goldstein, CFP®, is the director of Profile Investment Services. He is a licensed financial professional both in the U.S. and Israel. He offers securities through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, NFA, SIFMA. Accounts carried by National Financial Services LLC. Member NYSE/SIPC, a Fidelity Investments company. His book is available in bookstores, on the web, or can be ordered at: www.profile-financial.com (02) 624-2788 or (03) 524-0942.

Make a Wish on Your Birthday Cake…Not on Your Financial Plan

Published October 11, 2009 Finance , Financial advice , Israel , Money management , aliya Leave a Comment

By Douglas Goldstein, CFP®

Don’t make financial decisions based on what you wish will happen. After all, you wouldn’t neglect your savings plan in favor of purchasing a lottery ticket on the eve of your retirement. Hoping for high returns or never-ending real-estate booms can overshadow the reality of today’s economy.

Instead, base your expectations on solid research. Before buying a product, ask yourself if it sounds reasonable. If something sounds too good to be true, chances are it’s a scam. I’m amazed at how often, post-Bernie Madoff, I’ve met with people who have told me that they gave a sum of money to a friend/relative/organization to invest, don’t receive monthly statements, and are unsure about how their money is faring. When I draw the comparison between their “safe” investment and the recent Ponzi scheme, I’m told, “But this is different – I’ve known the guy for the longest time.”

After you invest, make sure you review your monthly statements and stay abreast of your finances. Ignorance is not bliss. While you shouldn’t lose sleep over every market movement (after all, volatility is the natural state of the market), don’t file your statements without reading them. Financial firms like green (both money and trees); they wouldn’t send you mail if it wasn’t important. Legal requirements obligate the firms to send out reports for the investor’s benefit. Even if you’re invested for the long term, it behooves you to look at your trade confirmations and monthly statements carefully.

Everyone wishes that their investments would constantly increase in value. However, closing your eyes, blowing out the candle, and making a wish won’t help your bottom line as much as doing due diligence, proper diversification, and risk control. Turn to a financial adviser for help, but realize that at the end of the day, your financial adviser is just that – your adviser. Unless you’ve given him discretionary powers, the final decision of any investment is up to you. Make a well-educated decision, not a wish.

Douglas Goldstein, CFP®, is the director of Profile Investment Services. He is a licensed financial professional both in the U.S. and Israel. He offers securities through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, NFA and SIFMA. Accounts carried by National Financial Services LLC. Member NYSE/SIPC, a Fidelity Investments company. His book is available in bookstores, on the web, or can be ordered at: www.profile-financial.com (02) 624-2788 or (03) 524-0942.