• 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…

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

    When Is the Best Time to Sell?

    When is the time to sell and liquidate portfolios? Most advisors, according to a recent study by Howard Schneider of Practical Perspectives[1], says most advisors have seen little impact from the stay at home orders and they perceive the market will return to normal in six months. I have considerable concern. Yes, I am staying the course today and am optimistic that we will be back to normal by the end of this year. But I am not blindly staying the course. Usually, I try to accomplish at least five tasks every day. On March 12th, I spent the entire day on one task and that was to determine when…

  • Adams Financial Concepts,  COVID-19,  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…

  • 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,…