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A Message about Risk in Investing

The following is a story that was related to me by another financial planner. The message is quite remarkable – and important for all of us to understand. A dentist, age 53, had sold his practice and partially retired. When we reviewed his portfolio, which amounted to approximately two million dollars, it became apparent that he had strong feelings regarding protection of capital. The entire two million dollars was invested in a combination of CD’s, money market funds, and short-term US government bonds.

Should You Worry About the Dow?

The last few weeks have shown that the market is certainly volatile. Once at a peak of over 17,000 the market has pulled back to just over 16,000. While this certainly makes for news (notice how I didn’t say interesting news) I wanted to give our readers a little perspective on why I (nor they) shouldn’t care.

Should You Have Gold in Your Portfolio?

We had a great question come in by request this week that we address the question of whether folks should have gold in their portfolios. Gold can be included under the umbrella of a larger asset class known as commodities. Think of commodities as items used to make or produce other items – such as gold is used to produce jewelry, circuitry and coinage, while timber is used to make lumber and paper, while coal is used to make electricity and disappoint not-so-good kids on Christmas morning (sorry, couldn’t resist). Getting back to gold, the reason an investor may want to consider it as part of their portfolio is because gold is correlated differently from the stock market. Simply put; its pricing moves differently relative to the stock market. This does not mean I’m recommending investors buy gold. Here’s why. Imagine a lump of gold sitting on your kitchen table. […]