• Adams Financial Concepts,  Current Events,  Financial Planning,  Mile High View,  Return on Investment,  The Investment Industry

    Higher Returns

    I believe that higher returns do not mean higher risk. Let me say it again: I believe that higher returns do not mean higher risk. Albert Einstein stated: “No matter how, where or when or by whom measured the speed of light in a vacuum is constant.” That sums up the scientific method. There are no exceptions. NONE! If someone were to find an exception, the whole theory is invalid. Since Irving Fisher in the 1920s, economists have been trying to find the theories and laws that govern the stock market. The “Efficient Market Curve” has been proposed and is generally accepted as rational and logical. It is the concept…

  • Adams Financial Concepts,  COVID-19,  Current Events,  The Investment Industry

    Four Truths No Matter Who Wins the Election

    There are dozens of pundits and talking heads making claims about what happens to the stock market depending upon who wins the 2020 Presidential Election. Some claims are outrageous. Some claims are fantasy. Some claims are straight-up weird. So, what should investors make of all this? Here are four truths I believe will hold no matter who wins the election. 1. The stock markets have done well under both Democrat and Republican Presidents. I realize some of the presidential terms have been eight years and, in the case of Presidents Ford and Trump, less than four years in length. But the point is this: stock markets have done well under…

  • Adams Financial Concepts,  Financial Planning,  Return on Investment,  The Investment Industry

    Cutting Your Taxes In Half or More

    Choosing the right portfolio structure can reduce your taxes by 50% or more. That is a hidden benefit of building tax efficient portfolios. My passion is to create and maintain wealth for our clients, and one way to do so is pick superior stocks to get superior returns. In addition to that, at AFC our focus is to build wealth in ways which also keep taxes low. Ordinary income rates are almost twice of what long-term capital gain rates are for those in the higher tax brackets. A portfolio that moves in and out of stocks over a shorter-term time frame will generate short-term gains which result in marginal tax…

  • Adams Financial Concepts,  COVID-19,  Current Events,  The Investment Industry

    Why the Market Drop?

    You’ve heard the expression “The market is telling us … [fill in the blank]”. The reality is that the market cannot talk, cannot do a ZOOM meeting, cannot send us an email. It is not the market talking, it is the investors – human investors and  computer algorithms. To understand why this market drop I believe it begins with the process. When you buy a stock, you buy it with the expectation that it will rise in value. When you sell short a stock, you sell with the expectation the stock price will sink. Financial companies and institutions hire analysts whose job is to forecast future revenues and income. They…

  • Adams Financial Concepts,  COVID-19,  Current Events,  Financial Planning,  Mile High View,  Return on Investment,  The Investment Industry

    Is It Luck or Skill?

    Doesn’t it make you feel comfortable to live in an orderly and predictable world? Isn’t that especially true when it comes to investments? Haven’t you heard that the markets do not like uncertainty? But isn’t it also true that the only constant in the world is change? In spite of that, our human brains have evolved to downplay the role of luck in our lives. That is why most investors like a financial plan that lays out the next 20 or 30 or 40 years of our financial lives. There in black and white, or more probably in a rainbow of colors, is the map of our financial future. It…

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

    Is Your Money Being “Stolen”?

    Hypothetically, say you had a brokerage account worth $5 million, and when you got your statement you saw that the financial advisor had taken $3 million out of your account and transferred it to his. How would you feel? Would you just accept it because the financial advisor is so personable and nice, almost like a friend? Would you send in more money? Would you ask for an updated financial plan to see how you could live on $2 million? Then, suppose the financial advisor met with you, said you were right on track to meet your long-term goals, and then he removed another 70%? How would you feel? What…

  • Adams Financial Concepts,  Financial Planning,  Return on Investment,  The Investment Industry

    Good News – Bad News – Good News

    This is a good news-bad news case study. I was a fairly new stock broker in 1987 (that is what they called us before we became “Financial Advisors”). I opened an account  or a retired postman who had his pension but had also saved $216,000 for retirement. The client decided to split his $216,000 between me and a broker at another major brokerage house. He had never married and had no children. In the months that followed, I would suggest each time we talked that he consolidate the monies with me. I am pretty certain the other broker was suggesting he be given the total as well. With little traction,…

  • Adams Financial Concepts,  Financial Planning,  Return on Investment,  The Investment Industry

    The Amazing Power of Compound Interest

    Albert Einstein called it the Eighth Wonder of the World. He elaborated saying: “He who understands it, earns it; he who doesn’t, pays it.” Einstein was referring to compound interest. A little bit makes a big difference. You wouldn’t think the difference between 5% and 10% over 25 years would be that much, but if you invest $100,000 at 5% for 25 years you will have a nice, tidy sum of $ 338,635. Doesn’t that sound pretty nice? Most financial plans are geared for that type of return. But what would it be if that $100,000 grew at 10% over those 25 years? Before you read on, take a guess…

  • 401ks,  Adams Financial Concepts,  COVID-19,  Current Events,  Financial Planning,  Return on Investment,  The Investment Industry

    Are You Ready?

    Did you know the standard railroad gauge in the U.S. is 4 feet 8 ½ inches? Do you know why it is such an odd measure? Railroads in the United States were built by British expatriates who designed them the same way that rail lines were built in England. Engineers in Britain based the width of their railroads on the spacing of tramways which had preceded railroads. They built the trams with the same jigs and tools used for building wagons. The wagons were built to that width so they would fit the road ruts in medieval England which were based on road ruts in Imperial Rome, which were in…

  • Adams Financial Concepts,  COVID-19,  Current Events,  Financial Planning,  Return on Investment,  The Investment Industry

    The Economy: BC to AC

    It’s time to talk about BC to AC. That is, “Before Coronavirus” to “After Confinement”. The Economist calls it “the 90% economy”.[1] But first, let me take you back in time to give you an example of what may well be in store for some companies in the future. There was a junior clerk at Rochester Savings Bank in 1878 who decided to take a trip to Santo Domingo in the Dominican Republic. This young man wanted to record his trip by photographing it, however, the camera in 1878 was huge, required a tripod to hold perfectly steady, and the picture was recorded on a heave plate that had to…