• 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,  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,…

  • 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…

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    Why Do Financial Plans Fail?

    You have likely heard of Financial Planning, and you may even be using it yourself to prepare for retirement. Although it has become a very popular way to create portfolios, I have come to believe that traditional Financial Planning has four specific flaws that may be fatal. Since realizing how risky Financial Planning was, I have begun creating portfolios which have a higher return and create a margin of safety (or a substantial windfall of extra savings above and beyond what is nominally necessary for comfortable retirement) to mitigate what I believe are significant risks as the market changes with new technology and industries. Our view is that traditional Financial…

  • 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…