Financial Fortress Radio May 23 2010 with Richard Jordan
Financial Fortress 5-23-10
Welcome to Financial Fortress radio. This is Pat Dougher. Richard Jordan is with me and we are talking about the five reasons that self investors fail or why professional investors win. I know that there are a lot of us out there that are trying to do well, we are trying to do our best with everything we’ve got but we just miss it. We’ve had our opportunities to succeed and we just haven’t put the pieces in the puzzle in the right way. Richard what can we do?
Richard: In short, hire a pro.
Pat: Well, I believe that. I know there are some real keys that are stumbling blocks of the average investor out there. What are some of those?
Richard: Well and it’s not just the average investor, it’s very smart people that I run into, engineers, CPAs, highly educated people that try to manage their own investments. And quite frequently when I analyze their results over the past several years, I see five things that cause them to fail frequently. And the first of these, and it all has to do with behavioral economics. I read a lot of about this and it’s all about the psychology of the investor. Duke has a department that studied this for over 30 years and a lot of the major financial universities like Chicago, and Wharton, and Stanford all have departments in this area. And conformational bias is probably the biggest one I ran into. Confirmational bias is kind of a funny thing and that is we look for information that confirms our decisions are genius. And we tend to avoid reading or looking at the information, even in our own files that confirms that we’ve made some mistakes. And I’ll give you an example. I had an investor that came into my office this last week, engineer, smart guy, smart guy, lots of patents and told me he had averaged between 5% and 6% on inflation protected bonds in the last five years. So, I said “That sounds kind of high to me. I’m going to pull the data on that and compare to your files and let’s just take a look at the real data.” And what I found was, there was one six months period when they paid in that range, and that’s the period he remembered. He was a genius for six months out of the five years but the actual rate of return that he average over the last five years was 2.56%, literally half of that. And he was in denial about those other periods that were mediocre and poor. And the fact he said he was ready to roll over some that were about to expire into some more TIPS because they had been so successful. I said “You know what the current rate is?” and he said “Oh yeah, it’s always about 5%.” I pulled it up off the treasury website, 1.74%.
Patrick: Is that all? 1.74%.
Richard: 1.74%. But hey it’s inflation protected.
Patrick: Right. Now that’s an interesting situation because a lot of the things that I’m hearing is that deflation could be our biggest thing to fight off in the near future, the next couple years possibly is that…?
Richard: Exactly. This guy was living in the 80s when we had rapid inflation. We have had high inflation since the 80s, the early 80s. It’s been over 25 years.
Patrick: Paul Volker was, when he started his close down, that was like the end of the 70s. So, it’s been a long time.
Richard: So that’s about when he started saving. So that’s what he was remembering, is that at the beginning of his investment period, that’s what hit him the most. And now he’s trying to protect against it 25 years later. Here’s a report straight out of the Dow Jones website “Europe’s debt woes and signs of an anemic recovery in the US job market have stoked worries of deflation on Thursday…” this last week …” reducing the appeal of US Treasury Inflation-Protected Securities.” I swear this guy was in my office on Wednesday telling me how wonderful TIPS were. “This week’s weaker-than-expected US inflation data galvanized the view that inflation will not be an economic threat…” for a long time. “The risk is skewed towards deflation right now” says Demitri Dilis, fixed income strategist at BMO Capital Markets in Chicago. “The spread between US 10-year TIPS and regular 10-year Treasury notes is down to 1.92%” The ten-year breakevens is actually at 1.87%, so what this says is your advantage is .05% over regular bonds. Does that sound like a real winning strategy to you?
Patrick: Well, isn’t there a downside risk as well, that a lot of people are totally stepping over?
Richard: It’s deflation. They’re not guarding against deflation.
Patrick: So if we start to have deflation, what will that mean and how will it manifest in the economy?
Richard: It’s going to manifest itself in falling prices. And as a result of that, the falling prices mean that the only things that you’re going to be able to make money on are things outside of the bond market.
Patrick: Right. Now I know that we are seeing the falling prices in a lot of things and a lot of us would think that falling prices, you mean like on commodities and goods like that. But really, we’re seeing it first on things like, in real estate in that area as well?
Richard: Absolutely.
Patrick: What are some other things that we should be watching for in that arena?
Richard: Another thing that we see quite frequently with self investors is status quo bias. And this is the tendency for an investor to avoid making changes. He had a strategy that worked in the 90s when we had the best bull market that we probably had in 75 years and they think that strategy is going to come back for some strange reason and work again.
Patrick: Where would they even get the ideas of something like that?
Richard: Well, again, most people get their information off of the mass media. And the mass media is controlled by people who write for a living. They are not professional investors. Their job is to produce 600 words and stuff it into a newspaper column or maybe 1200 to 2000 words and stuff it into a magazine article once every week or once every month. They are not experts. They might be good at math, they might be good at what worked in the past, and we see that a lot in the local news writing here in Dallas. We’ve got a guy here that says you can just lay on the couch and reallocate your portfolio once a year and beat all the mutual funds out there. I mean it’s just nonsense.
Patrick: Well, aren’t they also getting their information from the brokerage industry and such?
Richard: Of course. The brokerage industry is driven by commissions, along with the commission sales industry. So if you go to a seminar or you walk into someone’s office and the answer to everything that you have for a financial problem is either all annuities or all mutual funds, those are both the highest commission products in the financial services industry. Whoops I forgot one, life settlements. So these are guys whose interests are primarily their own first, and yours second. And the SEC allows this because they’ve created a special category of advisor in 1940 and the SEC believes that your father or grandfather told you about this. But really the top 5% of advisors belong to this category, which we do, that are used by the wealthy or the smart investors, and it’s called a Registered Investment Advisor. The confusion comes in, in that 95% of these registered advisors also carry brokerage licenses, so that operate every day with a conflict of interest.
Pat: Well I was concerned about that too, because it would seem that registered investment advisors are the people that folks should be working with, why aren’t there more registered investment advisors?
Richard: Well, it’s pretty simple, you don’t get rich fast. It’s a steady job of building clients and adding clients through references and testimonials, that’s primarily how we add clients. And you don’t get paid the big commissions to manage accounts. People that sell mutual funds get paid five times as highly up front in the first year, or annuities, than the people that are registered investment advisors. And let’s face it, America is all about success, instant gratification, me, me, me first, right?
Pat: That’s exactly right.
Richard: That’s the nature of what’s going on in the financial services industry and why people consistently lose money when they do use the wrong kind of professional advice.
Pat: Well, I know that you’ve got a couple of workshops coming up.
Richard: We do.
Pat: Tell us about those.
Richard: We’ll be at Southlake Timarron Country Club for the next two Wednesdays, May 26 and June 2 at 6:30 PM. I give you time to get home and change clothes and zip over there. We’ll feed you after the seminar. We are going to cover about five topics really fast, about how the wealthy invest differently, and they don’t invest out of fear and greed. They invest logically and rationally by using professional advisors.
Pat: I know that, having been through that workshop, I was really stunned at how it isn’t a sales pitch. It really is all about giving you good information so that people can make good decisions. One of the ways that you can get registered for that is to call the registration number which is 972-325-1700.
Richard: That’s correct.
Pat: And what do they need to give him a call?
Richard: We’ll send them a confirmation letter if they’ll be kind enough to leave their name, address and phone number.
Pat: Very good. Now I know that a lot of people may also have questions for you directly.
Richard: Absolutely. Please call my trading desk directly at 972-758-4484 and just know that if it’s during the trading day up until about three o’clock, I maybe with a client or busy operating a trade so if that’s the case, just know that I’ll get back to you after three. Just leave a message.
Pat: 972-758-4484. The one thing I was curious about is that you said something about trading. You actually don’t do a lot of actual transactional type things, trading and things like that, I mean I know you’re more of a long-term guy aren’t you?
Richard: Most of my clients want to invest in something for at least a year so that they only pay capital gains tax rates. That’s part of the strategies we create for them.
Pat: So it’s 972-758-4484, that’s 972-758-4484. And then to register for the workshop it’s 972-325-1700, that’s 972-325-1700. Register for the workshop coming up the next two Wednesdays, that’s the 26th and June 2. We’ve got so much more of a show to talk about exactly how the wise investors win. We’ll be right back.
Pat: And welcome back To Financial Fortress Radio. We’re so thankful that you’re listening. We have so much information to give and I know a lot of people might be wondering “Can I call this guy?” and the answer is yes. Just call 866-660-5759 if you’re outside the DFW area; inside the DFW area it’s metro 972-299-5759 and get your questions answered. When you get into the financial services industry, so to speak, when you get into that arena, it gets as clear as mud. There’s just so many options, and so many ways to miss it and really fail. And of course we’ve covered some of that, what are some of the reasons why self investors fail. Richard, what are some of the other things that you’ve seen that keep people from success in investing?
Richard: well, the primary thing is that they invest on emotions. Emotions are based on the way you feel, instead of the way you think and we in best on formulas. We make decisions without the emotion. We take the emotion out of it. It’s a lot easier for me to make decisions when it’s not my money, using quantitative analysis. We’ve got strategies that automatically adjust to moving market conditions on a regular basis and they are designed to create positive market beating returns that beat the indexes whether it’s a bull or bear market. Pat, do you think it’s a bull or bear market after this last three weeks?
Pat: (laughing) You’re asking the wrong person. I sit there and go bull and bear; they are two animals in the woods. But I do understand the difference, bull up trending, bear down trending and I have to admit personally, it’s as clear as mud. I look out there into that arena and I don’t know. What do you think?
Richard: Well, I think for most people, it’s pretty scary right now. Because let’s just look at the top 10 stories from this last week and see if you can make sense on whether we’ve got an uptrend or a downtrend. First “initial jobless claims jump by 25,000″ secondly “housing starts were up 5.8%” but permits plunged 11.5%. “The European union finance ministers weigh tougher budget enforcement standards” but they haven’t actually created them yet. The nuclear option is back on the table for Sweden. Remember Sweden. They are kind of like Switzerland, you know, peace loving.
Pat: Stay out of everything. Neutral on it all. Just hold the money.
Richard: That’s it, right. The Senate passed sweeping reforms of big bank regulations and it’s going to make a big difference in a lot of the ways that reporting gets done, and a lot of the things that big banks can get involved in. For instance, one of the top four banks, 80% of their profits in the last year were from getting involved in the markets and involving those subprime mortgage bonds, of course that failed and nearly drove 50 or 100 banks to failure, large banks throughout the world. So, they’re not going to be able to get involved in that anymore and still ask the FDIC for support. The fund industry reform is long overdue, but Congress didn’t bother to pass any reforms about the mutual fund industry, where 80% of the gains go to the mutual fund managers, only 20% go to the investors, who are taking 100% of the risk with 100% of the capital. And while we’re at it, mortgage rates fell to the lowest levels this year. Usually, that doesn’t happen until the winter. What does that tell you about the housing industry? The iPad is a runaway success. The China US deal on their currency reform may be in the final round but nobody is willing to bet which way that’s going to go. The default rate hit a record high on loans in foreclosure.
Pat: Wow.
Richard: How about that?
Pat: That’s like I said. Making a decision on that, you can flip a coin. That’s emotionless.
Richard: That’s right. But there are statistical ways to analyze the data and determine where you need to be. And there are ways to hedge your bets without getting involved in options. And we know those ways and we are able to produce superior returns for our clients by doing that.
Pat: Well I know that you have also done a great deal of research on every one of the tools that you use, whether it’s people or information, or the funds that you use, they are typically for a different breed of investor. So, I know that when it comes to some of the funds that I hear you use, they’ve actually done very well in the last 5, 10 even 15 years.
Richard: Correct. There are funds out there that actually are designed to create returns in a bear market, in a down market if you will.
Pat: So what are some of the other things that you are seeing, fallacies that people miss?
Richard: Well a lot of people got scared of the market in ‘08 and there is a theory back in the 80s and 90s that when stocks go up, bonds go down and when stocks go down, bonds go up. So they’ve automatically moved most of their money in the last 18 months into the bond funds or into bonds directly. And guess what? Bond rates are controlled mostly by the government.
Pat: Okay…
Richard: And the government is doing what right now?
Pat: Overspending its income.
Richard: overspending like crazy, so sooner or later they’re going to have to do what?
Pat: Well, you would think print money…
Richard: And… raise rates.
Pat: Right.
Richard: And when they raise rates, the bonds you are holding are going to drop like a rock.
Pat: Now when you say drop like a rock, most people think of bond funds as really low volatility funds.
Richard: Yeah, most people think bonds are the safest thing out there but they’re not. Your principle is at risk just like it is when you’re in the stock market. You have to know when to get in and when to get out of the market. And bonds are the opposite of stocks, you want to buy high and sell low.
Pat: Okay explain that one.
Richard: Okay, so when you look at an average rate for a AAA corporate bond over the last 30 years, it’s around 6.50%. So you want to buy in the AAA, what we call investment grade bonds, when the market is above 6.50%. What do you think it’s at right now?
Pat: I have no idea.
Richard: Generally, it floats around 1% to 1.50% over the 10 year Treasuries, which are right now at about 3.50% so they’re running about 4.50 % to 5%. So let’s say you buy that AAA bond at 5% today and you think you’re getting a great rate because you’re towards the upper end of that range and in two years, treasuries are trading back at their historical average rate around 5.50%. Now the bond market is at 7%, and you go to sell one of your AAA bonds that has a coupon rate of 5%, it’s only paying 5% and the new ones that are coming out are paying 7%, what’s yours worth?
Pat: Well, since I bought at $1000, let me just follow you here, I bought it at $1000 and that produces $500 year.
Richard: He bought it at $10,000, it produces $500 a year, he bought it at $1000 it produces $50 a year.
Pat: So let’s say I bought it with $1000 and so it produces $50 a year, okay, now it’s a couple of years later. Everything that’s new that’s coming to market is now, still offered at $1000 but they pay 7% or $70, or at $10,000 it’s $700. So, you’ve got a much higher, what do you call it, interest rate? I’m going to have to sell mine at a discount.
Richard: Absolutely. And the discount is you divide five by seven. So what’s five divided by seven? It’s about 72%. So you’re happy with that 5% rate you got for two years? You may 10% right. When CDs were only making 1% or 2%, you felt like a king. And now all of the sudden you’ve got to sell this thing and you take a 28% loss. You’ve just lost 18% on your investment. Is that a good deal?
Pat: No.
Richard: Hello.
Pat: Well, especially if we start to get some real racing going, I know, if interest rates go up, they went in the late 70s we went to 21% on one index that I know of, and “ow.” So, there’s so much more to say. I know one thing Richard, let’s talk about your workshop coming up.
Richard: We’ll be at Southlake Timarron Country Club the next two Wednesdays on May 26 and June 2. And we’ll be explaining a lot of these things to investors. It’s an educational program. There will be no selling allowed, so you’re welcome to come at 6:30 PM. Just call 972-325-1700 and if you don’t want to ask your questions in public, you’re welcome to call my trading desk at 972-758-2484.
Pat: That’s 972-325-1700 to register. Now, we’ll talk about who should be there after the break. I know that you don’t want to miss this and it includes dinner so it’s a nice deal, 972-325-1700. You really do want to be at the next workshop with Richard Jordan. And we’ll be right back.
Pat: Welcome back to Financial Fortress. This is Pat Dougher and we have a great show going. There’s so many ways that people invest in the market and we’re really trying to help people learn how to do it smartly. How smart investors will, is professional organizers. I know there’s, we talked about earlier than, Richard, most of the masses out there use brokers.
Richard: Yeah, they use a stockbroker or an insurance broker or both. And they think that’s all we need. And what they’re not getting into this year he. Not getting someone that has to take the client’s interests first. What they’re agreeing to is to work with someone that works on commission and by the regulations of the industries they are allowed to take their own interests first, and then the clients. Does that sound like a smart thing to do? I mean, for instance, when you go to buy a car and you know that guy is on commission and he is only interested in selling the car for the highest possible price, and you’ve got to go in there and dicker with him to try to get a reasonable deal, did you think that that’s what you might have to do in order to get a reasonable deal from your stock broker and your insurance broker? No.
Pat: Well, that’s the thing, you expect people to be massive professionals, is that you really want to deal with.
Richard: Enough with the commercials want to tell you.
Pat: Well, the one thing that’s really tough though is that if you’re entire living is generated from the revenue that you produce, bring in the house, so to speak. You’re getting a percentage of everything you bring into the investments, that means in a sense you’re just a salesperson.
Richard: The commissions that these guys earn on these products is outrageous.
Pat: Well I think back to that old TV show with Michael Douglas and Emilio Estevez, I think, what was the name of the show I think it was like Stock Market or something like that.
Richard: The Wall Street movie?
Pat: Yes, that’s right.
Richard: Yes. Michael Douglas was saying greed is good.
Pat: Greed is good. The other thing that a lot of people miss, is that that’s fairly accurate. In fact there’s even been a show in the last few years with Will Smith, and not to knock as far as Will Smith is amazing, the guy he was portraying was a stockbroker and it didn’t look like he spent a ton of time doing research?
Richard: No. It was all about sell, sell, sell, sell.
Pat: And also, we knew that it was you go to Monday morning meeting and here’s what you’re selling this week. So where does the professionalism come in?
Richard: The only professionalism comes in through the registered advisors. They’re the only ones that have a fiduciary duty to the client. And the confusion comes in, in that most of the major wire line houses, the major brokerage houses have convinced most of the brokers to pick up this license. So now about 95% of the registered advisors still carry brokerage licenses and charge commissions. So they’re operating at a conflict of interest and the SEC says this is okay and the new financial regulations that just got pushed through Congress does not address this. You are not protected still.
Pat: amazing. Why is it that…
Richard: Only the wealthy are smart enough to make sure they are doing business with someone it is only a registered advisor.
Pat: What does that mean that only the wealthy can afford these guys that are the registered investment advisors?
Richard: No, but they are educated, so most of my clients are either better educated people that have tried on their own and failed, and for once they are willing to admit it. And you know what I’ve tried doing this on my own because I got frustrated with brand-name broker one and brand-name broker two and brand-name broker three. I tried it on my own for five years. I couldn’t even beat the indexes so I am looking for the right way, the best way to do it. And they found out about the registered investment advisor and now they’re happy.
Pat: Very good. What are some of the other ways that the smart money use professional advisors?
Richard: Well, obviously they are looking for high returns without stock market risk if you’re scared of the stock market.
Pat: To me that sounds like an oxymoron. High returns without stock market risk. Is it possible to get high returns and not be in the market?
Richard: There are certain periods of time and certain asset classes that can happen, and this is one of those periods.
Pat: What do you mean by that? I know that when I look back over the market for the last 30 or 40 years, it’s been volatile, but it looks like one whale of a ride, but I also realize there have been years when they just went sideways.
Richard: Exactly. So you can achieve true asset diversification if you’ll come to our offices or come to the seminars. Most people have been taught that true asset diversification is buying stocks and bonds period.
Pat: Right, that’s diversification. Stocks and bonds.
Richard: Right. And they are missing other categories that they could be in, like precious metals. If you’d been in precious metals and then hedging your bets against potential inflation over the last five years, you would have tripled your money.
Pat: Right. Now that’s not a large portion of anybody’s portfolio is it?
Richard: No.
Pat: Because usually the only ones that get gold are the ones that apply the 4Gs: God, Guns, Gold, Groceries.
Richard: Exactly. If you are 100% in it then you’re probably one of those survivalists living in the woods worried about when the aliens are going to land the space ships.
Pat: Whatever works. What are some of the other ways that smart money use professional advisors?
Richard: They look to find opportunities that they were not able to find in the brand-name brokers because the opportunities there are all based on commissions. There’s a lot of other financial services and products that are out there that are not at the brokers’ office. And they’re not at the insurance sales offices and I don’t care if it’s a quiet company or if it’s a so-called you know the guy with the blimp and the Peanuts, it doesn’t matter which commercial you think is fascinating that the insurance guys are pushing. Those people are driven by the same things the stockbrokers are driven by. They’re 100% commission driven. Their interests come before yours. Their only requirement is to offer you a suitable product in their opinion, and in their opinion this product fits everybody over age 45.
Pat: Right.
Richard: Does that sound custom fit to you?
Pat: Right. Well I know you’re going to be covering all of this at the seminar on Wednesday, well the next two Wednesdays, Wednesday the 26th and June 2 and you’ll be at Timarron?
Richard: We’ll be centrally located in the Dallas-Fort Worth metro area near Highway 114 and 121, where it splits in Southlake at the Timarron Country Club the next two Wednesdays at 6:30 PM.
Pat: Now tell us who should really attend that meeting?
Richard: People that want are high return low fee investment solutions instead of what they’ve been getting from the brokers for the last 50 years, which is high fee low returns. If you’re interested in finally achieving some gains that fall to your bottom line, you need to show up.
Pat: Right. Now are there any special qualifications other than that?
Richard: Well, I mean most of our clients have a minimum of $250,000 to invest. We’ve got some large multimillionaires in there, but that’s not our primary focus. Our primary focus is the middle class. We wanted to do something for the middle class, that’s part of our mission statement, along with the fact that we want to operate under the Golden rule.
Pat: Very good. I know that in order to register you just call 972-325-1700, that’s 972-325-1700. Register. It’s a free workshop. No sales pitch. It’s a ton of information.
Richard: It is. It’s a bunch of information, please bring a pen will give you some paper. It will have a pen really, if you can’t remember to bring your pen, just kidding.
Pat: and then they get a really nice meal. I’ve been to Timarron many, many times. One of the things I encourage you guys to recognize is there is a difference when using a registered investment advisor. And Richard, folks can call you during the week at your office?
Richard: Yes. You can call my trading desk, 972-758-4484 if you don’t have time for this seminar or you just want to ask a question and you’re scared to ask it on the air or in public.
Pat: 972-758-4484. Now if you did want to call in today, we are taking calls on the show, it’s 972-299-KSKY that’s 5759, or 866-660-KSKY, 5759. And we just encourage you to get with Richard one way or the other. Come and see him talk. Listen to a good hour presentation, get a good meal at Timarron Country Club on this Wednesday and the following Wednesday.
Richard: May 26 or June 2 at 6:30 PM. You will be eating at 7:30 we promise you. We will not run over.
Pat: And they won’t. They are good about that. But the information, you won’t want to miss it. It’s great information to help you achieve your financial goals the way that the smart investors do. We’re always here for you. We’ll come back after the break and answer your questions.
Pat: Welcome back to Financial Fortress Radio this is Pat Dougher with Richard Jordan here in the studio. We are talking about how the smart money invest wisely in one of the things that continues to come up, Richard, is the smart money people hire advisors that use formula based investment strategies, right?
Richard: That’s right.
Pat: So what are some of the, what creates so much success in that arena?
Richard: Well we take the emotion out of investing and a lot of people that read magazines and newspapers read about simple formulas like moving averages and think they can manage their own portfolio that way. But since 1987 when the market crashed in one day 22%, all the simple formulas went out the window that day. Moving averages did not forecast that. They simply didn’t. Moving averages did not forecast the flash crash that happened just this month on May 6, that Thursday a few weeks ago, when it dropped 1000 points in 20 minutes and the SEC and the White House were on the air the next day going “we’re going to get to the bottom of this.” Well, the bottom of this is there’s computerized trading with triggers that are set to go off based on certain formulas, and by the time you get home from work that portfolio can get knocked down 10 or 20% if you’re not working with the formula based advisor who has set up your portfolio correctly, you could lose big.
Pat: Well I know that there have been some real amazing results that some registered investment advisors have been able to produce, one of the ones that you talk about, the guy, that literally his fee was a larger number than I can comprehend.
Richard: Well yes. We’ll talk about one of the PhD’s in this business. You’ll hear about him. He’s on the Forbes 400 list and his minimum investment is $20 million. And he uses the same type of investment logic that we use. The difference is he only wants to deal with the very upper, upper crust and we want to deal with the middle class.
Pat: Very good. $20 million is just a little beyond my pocket book, but you’re saying that the strategies that you’re seeing there are the same things that you’re guys are employing. You’re going to be showing some of this, this week?
Richard: Absolutely. This coming Wednesday, May 26 at 6:30 PM at Southlake Timarron Country Club real close to DFW airport, where 114 and 121 meet, about a mile and a half west of there, so it’s very convenient whether you live in the Dallas or the Fort Worth area.
Pat: Very good. Now to register…
Richard: 972-325-1700 to register, just leave your name, address and phone number and we’ll send you the letter of confirmation that you’ll need to get in the club and into the meeting.
Pat: Now, at this point for this Wednesday the letter might not get there in time. How can they…
Richard: Just call in right away and we’ll send that letter out Monday. It’ll get there by Tuesday.
Pat: Okay, no worries. And I also realize that some people may have questions for you and they don’t want to ask on the air…
Richard: Or they don’t want to talk at the seminar, so they can call my trading desk directly at 972-758-4484.
Pat: That’s 972-758-4484.
Richard: Correct.
Pat: And during the day I know that the best time to catch you is probably after three?
Richard: Yeah, the market closes at three clock.
Pat: But if they call earlier, you’ll still call them back later that day?
Richard: Absolutely. We’ll get to you before five.
Pat: Very good. Now, I know that when we are talking about what are the ways that people win, why the smart money win with a financial advisor, like a registered investment advisor, what are some of the other things that you do this unique and special?
Richard: Well we started out in estate planning, so we can help you set up your legacy for your children, your grandchildren, your charities. We can help you do things that you can’t get done trying to do it yourself because you just don’t have enough information or time to gather the information. I’ll give you an example. I read an article last week that analyzed the retirement calculators that are available on the top 25 financial websites. And these are the all the top financial services or names in the business, and none of them are able to factor in longevity risk. Well one of the questions that we ask people routinely is “how long did your mom and dad live?” Because that will indicate how long you will probably live. Medicine is better, you’re probably going to live 5 to 10 years longer than your parents, you need to plan for that. In fact, over 50% of the people that live to age 65 this year will live to 85. And if they were thinking about planning for retiring the way their parents did back in the 60s and 70s, back then the average person only received about 22 Social Security checks before they checked out. Today, 20 years is a very typical retirement. A lot of people are seeing 30. So our spreadsheets go up to 35 years as a minimum. And that way we can take a 55-year-old to 90, we can take a 70-year-old to 105. The fastest growing class of people in terms of age categories are people in their 80s and 90s, isn’t that amazing?
Pat: That is amazing.
Richard: But we need some health care reform to make sure that doesn’t happen anymore, right Pat?
Pat: I would call that population control at that point. Anyways, okay. By all means folks connect with Richard this week. Make sure that you register for this Wednesday’s workshop or the following Wednesday, that’s Wednesday the 26th or Wednesday, June 2. And it’s a free workshop, it’s an hour of great information followed by a great dinner and you do need to call in and make sure that you’re really qualified to come. It’s really designed for a specific kind of person.
Richard: Well it’s designed for someone that has saved up at least $250,000, because a lot of the strategies that were going to talk about are not going to work for somebody that is just getting started.
Pat: Well I really know that even some of the things that you are able to do for folks, he really need to be qualified to invest in, is that about right?
Richard: Well sure. You want to avoid risk when you first start your initial savings program. One of the biggest mistakes that people make when they self invest is they take on too much risk when the market is at the top when they should be bailing out of the market and they don’t take on enough risk when the markets at the bottom. They’re being driven by fear and greed instead of being driven by statistics and by probabilities by the formulas that are complex, but they consistently outperform the market indexes and the mutual funds.
Pat: In the market right now, are you comfortable with it going up? Were you think
Richard: It depends upon your investment horizon and your appetite for risk. If you’re an aggressive investor, you want to be in right now. It might drop another 10%, but honestly if you can buy within 10% of bottom every time and sell within 10% of the top, you will beat 96% of the mutual funds out there; I don’t care if they are a loaded fund or they’re an unloaded fund. 96% and that’s the kind of performance that we strive to achieve for our clients.
Pat: Now if you are looking in that direction, you obviously in this volatile of a market you need some care.
Richard: Absolutely. It’s just really tricky out there right now.
Pat: So folks can connect with you at, they can call you at 972-758-4484.
Richard: That’s my desk.
Pat: And then register for this workshop or the June 2 workshop at 972-325-1700.
Richard: Sure. Come on out and kick the tires at the seminar. See if you like this, if you do you can agree to a free consultation. If you don’t hail get a free dinner just for showing up and no hard feelings.
Pat: 972-325-1700 to make sure that you’re registered for either this Wednesday on the following Wednesday at Timarron Country Club, 6:30 PM to what about 8:30 PM. And the other thing is what a great place to connect with other folks that are really, just a really good group. A higher savings rate. I just encourage you to connect. It’s 972-325-1700 or 972-758-4484 to connect to Richard Jordan. And this has been Financial Fortress Radio. We’ve been talking about ways that the smart money invest. We’ll see you next week.