Essentialism (Book Summary)  (Sloww.com, by Kyle Kowalski)

I just finished the audiobook titled Essentialism, authored by Greg McKeown.  I recommend it to anyone who wants to get a better grip on their time and is looking to simplify things in their life.  Are you feeling stretched too thin?  Or, are you often feeling “busy” but not necessarily feeling “productive”?  Then this book is for you (if you don’t have time to listen/read the entire book, the link above has a good cliff notes version of it).  A simple example of what the book discusses is the dilemma when you are moving and have to pack up your closet.  You might go through the decision of what clothes to keep, and what clothes to part ways with (donate, toss, etc).  It’s not always an easy decision (“man, I really love this expensive shirt that I wore to a party 3 years ago that is a little tight on me now”) but going through the conscious process and making decisions like this can clear the path for you and free up time (and space in your closet!) that you never thought was imaginable.  This book does an awesome job of emphasizing ways to do more, by doing less.  I often see people who use being “BUSY” as some kind of measure of how important they are.  PLEASE.  I say cut through the fluff, stop bragging about how busy you are, and do the things in life that provide meaning and help you reach the goals you set to accomplish.  Last year I made the decision to cut that B-word out of my vocabulary (the one mentioned above, that rhymes with dizzy) and would encourage others to try it too…you might also realize it is an extremely over-used word!

Fiduciary Investment Advisers May Add More Than 6% In Value (Forbes, by contributor Robert Lawton)

It’s pretty neat to stumble across articles that make a case for the value that I potentially add to a client scenario.  The figure that Vanguard had come up in previous studies was 3% value, but I will take this new research suggesting my value may be in fact DOUBLE that!  First I should explain a little more about what these studies involves. Research shows that financial advisors, if doing things like providing ongoing tax advice, reducing cost of investments, and executing investment rebalancing, can add more than 3% to a client via a combination of lower fees, tax savings, market timing, etc.  I consider the 3% value to be the minimum that all advisors in my industry should be providing, unless they are asleep at the wheel.  Most advisors charge 1-2% fee, so if they provide 3% back in value… it more than pays for itself.  So to see the value be estimated to be 4% or even 6%, is pretty cool.  This latest study uses the term “fiduciary”, which is a buzzword used alot these days and probably warrants a future blog post of it’s own, is a commitment by Certified Financial Planners (like myself) that we commit to.  A “fiduciary” is really a standard which requires advisors to put their client’s interest in front of their own.  In other words – do what’s best for the client, in all circumstances.  Sounds pretty simple, but over my years in the business I can say that a significant percentage of people in my industry do not adhere to this principle. Some will simply provide a solution that is reasonably adequate for a client, and there also may be conflicts of interest at play. For now, I will take the research presented in this article and grin when I read the last sentence: “Why would anyone ever purchase investment advice from an advisor who isn’t a fiduciary?”

S&P 500 and Nasdaq Close at Record Highs (Time.com, by the Associated Press)

I am not sharing anything new here, in fact the media has been blasting it all week long… but now that we are “officially” in the longest bull market of all time I wanted to chime in.  The oft-followed SP500 is now up 7 out of the last 8 weeks and just reached a new high once again.  I wish I can say I have something to do with this, but I don’t!  The market will do what the market wants to do, and I always tell clients we can only control how much risk we take on. But I do remember the bottom, or where I was when the market began this historic rise… back in early 2009.  I was on the 12th floor of my previous firm’s office in Fort Lauderdale with 40ish other advisors, who were all going through this similar oh crap – what is happening with this market? moment. The SP500 had just dropped from a 1,500 level to below 1000 in a short period of time.  Then it dropped below 900, and then below 800.  It certainly did not feel good and it was scary, even for the best and brightest and most optimistic people in the business.  There was talk that the market would continue lower, and people telling investors to GET OUT NOW!  Well, as tough as it was at the time… the best advice was really to stay disciplined.  Stay invested. Take advantage of the pullbacks. Dollar cost average more money in. I specifically recall having those discussions with clients, and remember in March 2009 putting some client’s money to work that, at the time, I was not sure how if the timing was good.  Despite knowing that dollar cost averaging works, at the time…nothing FELT right.  It was a delicate time…and these were TOUGH conversations to have with clients.  Most were not confident enough – and if I watched CNBC all day long too – I couldn’t blame them! But here we are 9 years later, and I look back at those moments (and specifically the investments that I darn near timed perfectly) with a smile.  Not that I know what the markets will do next – no one does – but often times discipline and patience proves to be a cure-all for long term investors.  Seeing the SP500 approach 3000 was not something most people thought possible just 9 short years ago. But we’ll take it!

I hope you enjoyed my thoughts!