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  • The Fiscal Cliff and Long Term Investments

    Wednesday, November 28, 2012

    If it bleeds it leads! That supposedly is an old adage of the news reporting profession. I donít know if hard-nosed newspaper editors ever did actually say that to fledgling reporters any place other than in a film noir movie script but it does symbolize a true human tendency. We pay attention to negatives.

    Why we do it, I donít know. Disasters and crime, personal scandals of celebrities, politicians and the powerful are hot topics. Weather reporters breathlessly (and endlessly during my favorite TV programs) train their radar on every wind that shows the slightest circular motion during every thunderstorm that blows through regardless of how mild. And we watch.

    Itís the same with financial news. You still occasionally see an investment person on television today bragging about how they predicated the stock market crash of 1987! Cable TV hosts, authors of magazine articles and investment newsletter writers thrive on highlighting negatives because it gets your attention and helps them sell the commercials, ads and newsletter subscriptions from which they make their living.

    Today we hear about the fiscal cliff approaching with the New Year, the sovereign debt crises in Europe, the declining U.S. dollar, geo-political upheavals abounding, the greater regulatory burden being put on business, and the ups and downs of the stock markets which appear to be of greater magnitude than before. This gloomy haze of negative news and focus on the short term makes it easy to lose sight of the long range reasons to be invested in the stock market.

    Most of the financial news media is geared towards short term trading otherwise, why would you need to watch every day?  If you own a local dry cleaning business or florist shop you donít pay much attention to how much you could sell your business for on any given day. Your focus is on taking care of your customers so you can increase sales and profits and continue to pay yourself an income that rises over the years. If you do that, the market price of the business will also increase over time.

    For most people, investing in stocks should be the same. Stocks represent businesses that you own a piece of. Selection of good businesses that take care of their customers and have rising sales, profits, and dividends (income to the owners) should be the primary concerns. Day-to-day or quarter-to-quarter fluctuations are generally insignificant in the long run. This doesnít mean you donít keep an eye on value or change investments from time to time just try to focus more on your long term objectives.

    There are many, many companies in the U.S. and elsewhere that have survived depressions, recessions, world wars, socialist governments, and other adversities while paying a cash dividend every year for 50, 60, or 100 years or more. They followed the short term ups and downs of the market but generally are worth much more today.

    A business-owner approach to investing with a long term focus may make you lose interest in most of the financial news. Maybe thatís a good way to go aheadÖlive a better life.

     

    This post is written by David Riggs, Vice President and Trust Investment Officer of MutualWealth Management Group.

  • Is It Time to Call in the Professionals?

    Tuesday, March 6, 2012

    I donít know about you, but for me, cars have become way too complicated. When I headed off to Indiana State University for my freshman year it was in a five-year old, used Ford Maverick. I really liked that car. It was bright green with a vinyl, black and white checkered bench seat in the front (which made it easier for snuggling with my girlfriend and eventual wife).

    It had a 3-speed on-the-steering-column manual-shift transmission. Every once in a while the shifter would get stuck making it impossible to move out of second gear. The solution was simple: hold down the clutch, coast to the side of the road, turn off the engine, get out, open the hood, reach in and jerk on one of the bars connecting the shifter to the transmission. This got the stick unstuck and allowed me drive on shifting through all three gears.

    That was something I figured out on my own with just an 8th grade shop class knowledge of cars. There was plenty of room under that hood. I could set a tool box in there and actually change spark plugs myself.

    Now I donít know if the Ford Iím driving today even has spark plugs. If it does, Iíd never be able to locate them in the tightly packed jumble of components under the hood let alone get my hands in far enough to put a tool on them. The transmission in my current car is both manual and automatic! How in the world does that work? If something got stuck, Iíd have to call the auto club. 

    I suppose I could learn how to work on my car but I think my life is better spending that time with my family, working in the community, and doing my job.

    There are times in our lives when itís better for us to turn to professionals. Just like me hiring a mechanic when I have car trouble, if you need legal work done, you see a lawyer; if youíre really sick, you call a doctor; and if your tax return is complicated, you hire an accountant. If youíre at a point in your life where it takes too much time, energy and special knowledge to manage your investments yourself, you should call MutualWealth Management Group.

    For most of us that time comes when we have to take full control of a retirement plan from an employer and that time may come well before you retire. When you change jobs you may have a retirement account at your old employer that probably should be rolled over to an Individual Retirement Account. Some people have retirement accounts scattered among several former employers.

    There are plenty of other situations when you should call us for professional investment help such as when you sell a business or property, inherit money, change marital status, receive a large legal or insurance settlement, or (donít laugh because it happens) win big in the lottery or at the casino.

    MutualWealth manages investments for people in personal accounts, retirement accounts, and trust accounts. Our fee is based on the value of your account; we are never paid commissions for ďsellingĒ investments. The only thing we sell is ongoing service based on your individual needs. So if youíre at the side of the road in your financial life and you donít know which bar under the hood to jerk, call MutualWealth Management Group.


    David Riggs is Vice President and Trust Investment Officer with MutualWealth Management Group.

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