FYI: I will link the interviews early Saturday Morning.
Happy Thanksgiving,
Ted
November 25, 2015
Dear WEALTHTRACK Subscriber,
I just had lunch with an old friend and former journalist colleague who has spent most of his professional career in China. He explained that current Chinese leadership under President Xi Jinping is the most repressive in his decades of experience there. Journalists are being rounded up by the hundreds, business executives are being interrogated, party leaders are being investigated and jailed. All of this is under the guise of fighting corruption, which according to my friend is rampant in China, but it is also a convenient strategy to consolidate power which Xi is doing domestically and internationally. How this will all end is anyone’s guess. We will explore the climate for investing in China next month.
We have so much to be grateful for, living in this great country where we can work, worship, travel, speak and read as we please. As it turns out being grateful can be beneficial in its own right, as this article from the New York Times explains.
This week is the start of Public Television's holiday pledge season, so over the next two weeks we are revisiting some shows on the topic viewers request most – financing retirement! A recurring theme on WEALTHTRACK over the years has been how individual investors sabotage themselves over time. One way they do that is by chasing hot performance, buying high and then selling low when the investments cool off during market declines.
Investors also hurt themselves by not paying sufficient attention to investment costs. An often overlooked strategy to get the most out of your investments is tax efficiency. T. Rowe Price recently published some research on what a huge difference tax efficiency can make to a portfolio’s total return over time, and offered some strategies to take advantage of it. It’s helpful information, so I wanted to share it with you. You’ll find the report here.
Expenses matter. As one of this week’s guests, famed Financial Thought Leader Burton Malkiel tells us: “One thing I am absolutely sure about is the lower the fee… the more there’s going to be for me as the investor.”
Luckily there are products available to help us avoid both mistakes - and more are being created every day. Index funds are already a huge hit with investors and their popularity is growing by leaps and bounds.
Another development to counteract destructive investor behavior is in its early stages. It’s automatic investing. We have seen it in target date funds. Some advisors use software that does it in portfolios. And we are now seeing the next generation, with so called “robo-advisors”. This summer, Barron’s did a cover story on it called “The New Face of Financial Advice” and highlighted four robo portfolio services: Betterment launched in 2010, Wealthfront launched in 2011, and two recent entries, Charles Schwab Intelligent Portfolios and a hybrid, Vanguard Personal Advisor Services, which requires the involvement of a human financial advisor to provide what Vanguard calls “behavioral coaching” to prevent clients from making those bad market timing decisions.
This week we are highlighting another service that also combines low cost investing, automatic rebalancing and the human touch. It’s called Rebalance IRA and there are two major reasons I am focusing on it. It has two legendary financial thought leaders on its investment committee, with impeccable credentials, whom I have had the privilege of interviewing over the years. They both help develop, oversee and set policies for the portfolios offered to Rebalance IRA clients.
One of them, Charles Ellis has been a highly respected investment consultant to pensions, endowments and governments for decades. He is the author of numerous investment books including the classic “Winning the Losers Game” and “The Elements of Investing”, co-authored with his good friend and fellow financial legend, Burton Malkiel.
Professor Malkiel is also on the investment committee and is one of our guests this week. Malkiel is an emeritus Princeton University economics professor and author of the classic, “A Random Walk Down Wall Street,” now in its 11th edition.
We’ll also be joined by Mitch Tuchman, Managing Director and Co-Founder of Rebalance IRA which he launched in 2013. Rebalance IRA is a low-cost, investment advisory service for accounts of $100,000 on up. As its name indicates, it is specifically for retirement accounts and it automatically rebalances their portfolios. It currently has nearly $300 million under management.
Before that Tuchman founded MarketRiders, the first online investment advisory service for do-it-yourselfers. It now oversees about $4 billion in accounts.
For many years, Tuchman had been a technology entrepreneur and consultant to numerous Silicon Valley companies.
Malkiel and Tuchman will explain why they have teamed up to offer retirement portfolios of low-cost index funds.
If you miss the show due to pledge programming this week, you can always watch it on our website. We also have an EXTRA interview with Tuchman available exclusively online. As always, we welcome your feedback on everything we do.
Thank you so much for taking time out of your busy schedule to spend it with us. Have a very Happy Thanksgiving, a great weekend and make the week ahead a profitable and productive one.
Best Regards,
Consuelo
