Tag Archives: Financial Independence

Three key investment strategies hidden in plain sight; #1 — Being There

Posted By Financial Independence Hub | August 26, 2015

By Paul Philip, CLU, CFP Financial Wealth Builders Securities

Special to the Financial Independence Hub

If you’ve ever dabbled in graphic design, you’re familiar with the concept of white space. When viewing an illustration, we typically pay the most attention to the visible ink on the page, such as a paragraph of text, a bar chart or an entertaining illustration. White space is the essential empty areas in between that are hidden in plain sight. We barely notice them … until they’re not there:

Pretty cheerful girl pointing white space over hands — Where’s the white space? (Deposit Photos)

When making investment decisions, most people likewise assume that the most eye-catching ink matters the most: an alarming economic forecast, an exciting Initial Public Offering, hot trading tips. But there’s a catch. This evident assumption does not hold up under evidence-based scrutiny. In reality, you have little or no control over how the most obvious news impacts your investments. The most exciting action has already been priced into any trade you might make well before you decide to make it.

Stop fixating on headlines

Instead of fixating on the headline news, consider that liberating financial white space. There, hidden in plain sight, you’ll find a number of powerful investment strategies that are freely available and far more within our control. In this series, we’ll introduce three of our favorite “plain sight” investment strategies:

Being there
Managing for market risks
Controlling costs

Retirement – Heaven or Hell?

Posted By Michael Drak | August 22, 2015

by Michael Drak

Special to the Financial Independence Hub

Recently, while reading an article relating to the risks of boredom in retirement, I was reminded of a TV show that I had seen more than 40 years ago. I’m always amazed at how something can trigger a memory and we can recall it with such clarity as if we just viewed it yesterday.

The show was a Twilight Zone segment entitled “A Nice Place to Visit.” In it, the main character is Rocky Valentine, a small time thief who is shot during a robbery and passes out. He wakes up and at some point he realizes that he’s in fact dead, but by some mistake he’s in heaven and has been assigned a guardian angel by the name of Mr Pip.

Life for Rocky is great for a while as all his wishes are catered to: there are beautiful women, an expensive penthouse, fancy clothes and all the money he desires. In fact every time he goes to the casino, no matter what game he plays he wins: he can’t lose. But eventually Rocky gets bored of the predictability of his life, the excitement is gone and with that all of the fun.

Finally Rocky pleads with Mr Pip to send him to the other place where he belongs and that he doesn’t deserve to be in heaven. At this point Mr Pip’s says “Whatever gave you the idea that you were in heaven? This is the other place!”

I love the punch line and the lesson here is that Rocky goes crazy because there are no challenges in his life, there is no effort required and there’s nothing to hope for because it all exists as soon as he wants it.

The boredom of endless leisure

Weekly Wrap: Dow Theory sell signal?, Electoral goodies for homeowners, will Robos make your dreams come true?

Posted By Jonathan Chevreau | August 21, 2015

markHulbert_480 — Mark Hulbert, Marketwatch.com

Influential investment newsletter ranker and market analyst Mark Hulbert says the Dow Theory just flashed a Sell Signal as Thursday’s swooning stock markets closed.

Two of three conditions for a “sell” signal were already in place before this week’s meltdown: the Dow Jones Industrial Average and the Dow Jones Transportation Average both must experience a significant correction from their joint new highs; then in any significant rally attempt following that correction, one or both Dow averages must fail to rise above their pre-correction highs. As Hulbert notes, the first two conditions were met earlier this year: after sharp declines in January, the Dow Transports were not able to join the Dow Industrials in rising to new highs.

The third condition is that both averages must then drop below their respective correction lows. Hulbert says the “third and final hurdle of a Dow Theory ‘sell’ signal was generated at Thursday’s close when it broke under the low identified in step 1, which was 17,164.95.”

However, Hulbert says not all followers of the Dow Theory are throwing in the towel just yet, at least until the action in the broader S&P500 index confirms the negative action of the far narrower Dow indexes. Hulbert says Jack Schannep, editor of TheDowTheory.com, “acknowledges the original version of the Dow Theory has indeed emitted a ‘sell’ signal” but Schanne’s modified theory that focuses on the S&P500 as well as the Dow averages won’t generate a “Sell” signal until the S&P 500 closes below its January closing level of 1992.67. Even after Thursday’s carnage, the S&P500 was still 2.2% above its January low. Something to watch in Friday’s action: if that occurs, you can expect some pretty gruesome reading in this weekend’s financial pages.

It’s probably a good time to talk to your financial advisor but before taking drastic action of any nature, you might want to go back and read Steve Lowrie’s Hub posts that began each of the last three weeks, such as Stop reacting to Market Noise or Stop feeding on Junk Media.

The commodities sell-off

About the only thing that wasn’t headed south this week is gold, which has been in the doldrums for ages, along with oil and most other commodities. This week’s The Economist has a good summary of the dire situation of the commodities market: The Sell-off in Commodities: Goodbye to all that. It warns “the latest leg down in crude prices may not yet have run its course.”

Planet Boomer: The Beginning

Posted By Financial Independence Hub | August 19, 2015

1429562861 — Jim Herrier and Ellen Ma, PlanetBoomer.com

By Jim Herrier

Special to the Financial Independence Hub

When my wife Ellen and I announced to our friends and family that we were moving to Asia the consensus was we would be back in less than two years.

That was ten years ago.

Our first move to Singapore was simply fantastic. A beautiful and sophisticated city on the doorstep of every dream destination you can imagine. Within weeks we were in Bali (the weekend retreat of Singapore ) and we’ve now been 17 times. Beijing was next, then Hanoi, then Phuket and Bangkok in Thailand. We never stopped travelling in Asia and have never run out of amazing places to go.

After two years we left for a business opportunity in Shanghai. The drama and pace of living among 23 million people in what is surely one of the most dramatic cities in the world was exciting but getting out of it was a necessity. We kept travelling, throughout China and farther afield: Sri Lanka, India and all over Australia.

While in China we made friends with two respected Australian journalists: Steve and Colleen Wyatt. As reporters for the Australian Financial Review they went to places we had only heard of, covering stories ranging from worker unrest in Mongolia to riots by Uyghur peasants in Urumqi. Dinner with them was never dull.

After three years, business — this time our own — took us back to Singapore and our travels continued unabated. More India, Laos, Cambodia and the delightful towns and villages of Hoi An, Danang, Ho Chi Minh, Luang Prabang, Chiang Mai, and Phnom Penh. Our Australian friends were posted back to Sydney and then to their hillside home in Byron Bay. On a Skype call Steve revealed they were writing a new book. No surprise, they had written a number of business books; usually exposes of big business and government fiascos. But this one was different.

A new book on Retirement

5 Pitfalls to Avoid on the Road to Retirement

Posted By Financial Independence Hub | July 27, 2015

By Matthew Ardrey

Special to the Financial Independence Hub

One of the greatest things I can do for my clients is to reassure them that they’ll be financially independent when they’re ready to retire. Unfortunately, not everyone meets their financial retirement goals. When they don’t, it’s often because they’ve made one or more of the five following mistakes:

1.) Not understanding your spending habits

Most people know what they earn and what they save, but have no idea what they spend. As you approach retirement and your ability to earn income is more limited, understanding what you spend and where you spend it becomes crucial.

Not knowing what you spend can lead to living beyond your means. Spending more than you earn can result in debt accumulation and, ultimately, reduced savings. Think of savings as fuel for your retirement; if you don’t have enough in the tank, you might not make it to your final destination.

2.) Carrying debt into retirement

A cornerstone of financial independence is being debt free. Continue Reading…