Adams Financial Concepts

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  • Adams Financial Concepts,  Current Events,  Super Cycle,  The Investment Industry

    WHAT TO KNOW ABOUT THIS MARKET SELLOFF

    “History doesn’t repeat itself, but it often rhymes”. I believe there are lessons to be learned from a previous time when the market, during a good economic time, plunged to the worst down day percentagewise in market history. It was the first time that the market plunge spread internationally to the world’s stock markets. There are lessons to be learned from Black Monday back on October 19, 1987. On that day, the market plunged down over 22%! Black Monday is remembered as the worst market drop in history, but it was October 20, 1987 that had the potential to collapse the entire financial system. There is an old saying: “for…

  • 401ks,  Adams Financial Concepts,  Financial Planning,  Return on Investment

    Why Do Financial Plans Fail?

    You have likely heard of Financial Planning, and you may even be using it yourself for retirement planning, building net worth, providing for education, etc. Although it has become a very popular way to design portfolios, I believe that traditional Financial Planning has five specific fatal flaws: Plans do not adequately provide a margin of safety for black swan events. Plans use averages which work well during normal times but are not geared to deliver a margin of safety for times like the Great Recession of 2007-2009 or the high inflation times of the 1970s. Plans use probability models which are not reflective of actual market probability. Probabilities are calculated…

  • Adams Financial Concepts,  Current Events,  Return on Investment,  The Investment Industry

    What Is Factor Investing?

    The latest fad in investing is “Factor Investing”, according to the August edition of Financial Adviser Magazine. Like a bad fad diet, these investment methods come around every few years (factor investing dates back to the 1970s[1]) and claim to have found a method for stock picking that will win every time. Factor investing relies on five genuine factors which are, according to academics, Value, Quality, Momentum, Size, and Volatility. When it comes to understanding investment methodologies, I find it helpful to imagine them along a line: I am an active investor. Does this top-down investment methodology work? I don’t think so; as an active investor with a bottoms-up approach,…

  • Adams Financial Concepts,  Return on Investment

    Indices

    Have you heard the story of the Baltimore Stockbroker? It goes… one day, you receive a letter in the mail from a stockbroker, personally addressed to you, predicting that next month a certain stock will go down. You keep an eye on that stock, and it does indeed go down. You receive another personal letter from the stockbroker, predicting that another stock will go up next month. Curious now, you watch that stock over the next month and lo and behold, it does indeed go up! And month after month for ten months, this same stockbroker sends you letters accurately predicting the ups and downs of stocks. At the end,…

  • Adams Financial Concepts,  Current Events,  Mile High View

    How Will This Bull Market End?

    How will it end? Will it end in another Great Recession? Will it end with a bout of high inflation? Or will it just continue on and never end? The Great Depression of the 1930s, like the First Great Depression of the 1830s and the long-lasting Depression of the 1870s to early 1900s, was credit-related. During those economically stressful times, bank runs became panics. When a bank was in trouble, individual depositors, fearing the loss of their money, would rush to the banks to demand their money back. When the panic affected only one bank, that institution could sometimes borrow cash from other banks or sell their loans to raise…

  • Adams Financial Concepts

    There’s More to Life than Money

    Music Matters! We often underestimate the importance of exposing high school students to the fine arts – particularly music. Which is why, when school districts are forced to stretch their budget, it is art and music classes which are cut first. When my children were growing up, we lived in a privileged neighborhood. If there was a shortage of funding at school, the parents would gather and write checks to cover the shortfall. But most communities across the US cannot do the same. In the Wellpinit School district, not only can parents not afford to cover any shortfall, but fully 100% of students are on subsidized or free lunches. It…

  • 401ks,  Adams Financial Concepts,  Current Events,  Return on Investment

    A Shocking New Trend

    Last fall, CNN opened an article with the story of Jeff Regan, who received a phone call informing him that his 94-year-old aunt was being evicted from her home in an assisted living facility. The next day, he received legal notice of the eviction.[1] If the number one fear of most people is outliving their money, this is validation. Studies are showing evictions top the list of assisted living grievances. If you google “assisted living evictions” you will find lists of “How to Evict a Resident” and “How to Write the Letter of Eviction – including templates” and “How to Take the Legal Steps to Evict Residents”. It is becoming…

  • Adams Financial Concepts

    Who Is an Adams Financial Concepts Client?

    I believe an Adams Financial Concepts’ client is someone who wants success. What does success mean for my clients? It means wealth. My clients want to win and beat the market. Regardless of whether they own their own businesses, have grown through a company, or inherited their wealth, they aren’t the average performer. They want their investments to do more than perform at market value. Charles Ellis wrote a book called Winning the Loser’s Game in which the premise is 85 to 90 percent of money managers underperform the market over the long-term. Thus, he concludes clients need to lower their expectations and recognize they’ll have less than market returns.…

  • Adams Financial Concepts

    Visionary or Dumb Luck?

    Last Friday was my first broadcast of About Money on KKOL 1300 am. This show focuses on giving you a close analysis of current, past, and future market trends. Together we will continue to meet successful business owners, talk to industry experts, and discuss different investment tactics and regulations. I am a firm believer in strategic investing over tactical. Why? Because tactical investing is like predicting the weather. Is it going to snow? Yes. When, is the question, and I don’t have the answer. The buy low and sell high intent of tactical investing is attractive. In reality, tactical investing typically leads to buying high and selling low. Tactical investors often miss…

  • Adams Financial Concepts,  Mile High View

    Two Qualities of a Successful Business

    What sets businesses apart? Why do some succeed and some fail, especially during economic down turns? As an investor, these are extremely important questions. Understanding them is the key to making decisions about where and how to invest. To answer these questions, I’ve been doing a series on About Money. Each week I’ve been joined by a different CEO or President from a company which survived the Great Recession and is now flourishing. I believe all of these companies demonstrate qualities which distinguish them from their competitors: People – These companies recognize the value of their own staff and customers. Putting people first ensures consistently great service is provided. Inventive – These…