Jeff Louderback's Write Perceptions

Three Simple Strategies for Investing Success

Just like playing the lottery or dropping a quarter in a slot machine, investing is not a sure thing. Though most of the financial world likes to pretend that investment decisions are purely based on logic and rational thought, the truth is that the majority of these investment choices are driven by emotional and psychological factors, Dr. Joshua Helman believes.

 

A Harvard-trained M.D. who is also a CFS (Certified Fund Specialist), Helman learned first-hand that traditional brokerages are not interested in providing their clients with sound, academically-based advice. He put his medical career on hold and accepted a position with a prominent Wall Street financial institution with the intent to learn about the ins and outs of investing so he could help his friends and colleagues. Instead, he discovered that the institution’s primary goal was not to offer “sound, academically-based advice” but to sell its own products without concern for the clients’ best interest.

 

This is why Helman divorced himself from these traditional financial institutions andcreated the Institute for Healthy Investing, which is based in the Orlando suburb of Lake Mary. Helman is aligned with Abundance Technologies, an investment firm that was founded and is operated by Mark Matson. Abundance manages $1.7 billion and uses the Nobel Prize-winning research of Merton Miller, Harry Markowitz, and William Sharpe, and the groundbreaking research of Eugene Fama and Kenneth French from the University of Chicago. . Their philosophy is based on the Free Market Portfolio Theory investment approach, which emphasizes academic principles in investing.

In his “Investor Awareness Guide,” Helman offers readers these Three Simple Strategies for Investing Success:

 

Eliminate Speculating and Gambling in Your Portfolio

 

Anytime you pay a fee or a commission to managers for picking stocks they believe will beat the market, you are gambling that those stocks are the winners and that others are the losers. The first strategy for investing success is to stop this self-destructive behavior.

 

Compare investing to dieting. It is important to eat the right kinds of food, but it is also crucial to stop consuming massive portions of cakes, cookies and ice cream. Success with your diet involves a lifestyle change.  You must identify healthy and empowering foods and activities, and start consistently incorporating them into your life while recognizing destructive behaviors and eliminating them. Investing works the same way. To have success, you should eliminate speculating and gambling with your money via stock picking, market timing and track record investing.

 

A Dalbar study determined that, over a 22-year period from 1984-2005, the S&P averaged 15.67 percent. The typical investor, placing his money in mutual funds trying to beat the S&P, made a meager 4.12 percent over the same 22-year period. These investors believed in a fund manager’s performance and mutual funds that had seen a profitable five or 10-year period, thinking that it was that fund manager’s superior ability which generated the returns. Instead, it was the underlying asset category that accounted for the results. Investors are often unaware that they could lose 20 to 50 percent of their money. After massive losses, panic spurred them to sell the funds and invest in other assets that were up, repeating the destructive cycle.

 

Every time this cycle occurs, it produces more profits and commissions for the brokerage firms. Whether you win or lose, the brokerage takes its cut. Thus it is important to eliminate stock picking, market timing and track-record investing from your investment strategy.

 

Use market forces; don’t fight them

 

Don’t fight market forces by attempting to beat the market because a majority of managers do not achieve market returns. Instead, harness the power of free markets by owning structured market portfolios that are designed to deliver market rates of return. These funds buy a cross section of all the stocks in a given asset category and often employ effective trading strategies to minimize trading costs to the portfolio.

 

Many investors are surprised to learn how generous market rates of return have been over long periods of time, and there is no stock picking or market timing required to achieve results. Research indicates that the average active mutual fund underperforms the market by two or three percent each year. If the market has historically earned double-digit rates of return and the average investor has seen just 2.6 percent, this means that the investor’s behavior accounts for about a 10 percent annual loss.

 

Based on this knowledge, you only need to allocate your assets into various asset categories to achieve market returns and remain disciplined over long periods of time. Of course, that is easier said than done, thus the value of a financial coach. By focusing on market returns, there is no stock picking involved, and no gambling on beating the market. You own as many stocks as possible in a respective asset category.

 

Hire a financial coach

 

Just as you would hire a coach to improve your golf swing or tennis game, you can turn to a financial coach to maximize the benefits you receive from your investment strategy.

A coach can help you make prudent decisions about how much volatility and risk you want to incorporate in your portfolio. The coach helps you learn the difference between a prudent and imprudent risk. A good coach also provides you with guidance about understanding and measuring diversification in your portfolio.

 

Traditional commission-driven financial planning often leads to fear, anxiety and confusion for consumers. Brokers do not explain all of the options, just the ones that involve the products their financial institutions sell. A financial coach helps you wade through the complex issues and maintain long-term discipline in the investing process because, ultimately, investing roadblocks are caused by people, not portfolios.

 

Importantly, a financial coach will make independent recommendations – not based on commissions, but focused on what is in your best interest.

For more information about Dr. Joshua Helman and the Institute for Healthy Investing, visit www.freemarketinvestor.com.

 

 

“Navigating the Fog of Investing” is a film that exposes the conspiring minds of brokerages

Few topics are more confusing than investing. Consumers are bombarded by television commercials and slick magazine advertisements from big-name brokerages. In the wake of dwindling portfolios caused by a major recession and Ponzi-scheming financial advisors, it is more difficult than ever to know who to trust.

 

“Navigating the Fog of Investing” exposes the conspiring minds of the brokerage community and their tawdry ways, Dr. Joshua Helman says. Armed with a hidden camera, Helman and associates reveal stock brokers and investment gurus for what they really are -- financial cheerleaders without the skirts. The movie is to the personal finance industry what Michael Moore's “Sicko” film is to the healthcare industry.

 

A Harvard-trained M.D., Helman is the ideal person to spearhead the movie. Discussions with his father, also a physician, and his father’s colleagues led Helman to enter the financial coaching arena. He learned that physicians were typically pushed into high-risk investments that netted little return but generous commissions for the financial institutions. Helman put his medical career on hold and accepted a position with a prominent Wall Street financial institution with the intent to learn about the ins and outs of investing, so he could help his friends and colleagues. Instead, he discovered that the institution’s primary goal was not to offer “sound, academically-based advice” but to sell its own products without concern for the clients’ best interest.

 

He left the company and started the Institute for Healthy Investing, which is based in the Orlando suburb of Lake Mary. Helman is aligned with Abundance Technologies, an investment firm that was founded and is operated by Mark Matson. Abundance manages $1.7 billion and uses the Nobel Prize-winning research of Merton Miller, Harry Markowitz, and William Sharpe, and the groundbreaking research of Eugene Fama and Kenneth French from the University of Chicago. Abundance's philosophy is based on the Free Market Portfolio Theory investment approach, which emphasizes academic principles in investing.

 

Throughout “Navigating the Fog of Investing,” Helman asks viewers “to get real” about separating the truths and myths of Wall Street. He appears periodically, along with a number of seriously heavy hitters, from Nobel laureate Markowitz to former Chairman of the U.S. Securities and Exchange Commission Arthur Levitt, who reinforce Helman's argument that in truth there is no such thing as a broker who can predict how the market will perform.

 

From ads by the financial institutions that have little or nothing to do about their business to financial news programs on television, much of today’s world of investing is more about entertainment than helping Americans build wealth. In one part of the film, viewers learn that Susan Krakower, producer of the Jim Cramer juggernaut Mad Money, used to produce The Jerry Springer Show.

 

For more information about “Navigating the Fog of Investing,” visit www.investingfog.com.

Go Frugal blog’s Best Time to Buy Guide offers consumers guidance about how to save money on more than 45 products

Timing is everything. The old saying especially applies to consumer purchases. You can save hundreds and even thousands of dollars every year by knowing the best time to buy products - from automobiles, appliances and furniture to clothing, cookware and linens. With this in mind, Luke Knowles has created the Best Time to Buy Guide for more than 45 products. The in-depth feature is available on his popular “Go Frugal” blog at http://www.freeshipping.org/blog/best-time-to-buy-guide.

 

Knowles understands this concept first-hand. In December 2007, he and his wife, Maisie Knowles, co-founded FreeShipping.org, which is a one-stop destination for consumers to find online retailers that offer free shipping deals. The site grew rapidly and it now features more than 1,320 merchants. Knowles - who also wrote an e-book about free shipping and recently created Coupon Sherpa (www.couponsherpa.com), an application that allows iPhone users to access coupons on their mobile device – hatched the idea for the Best Time to Buy Guide when he started conducting research for his own use.

 

“We are having a house built, and within weeks we will need to make several purchases, such as furniture, appliances and electronics,” Knowles said. “We were curious about when we should buy these products, and that made me realize that other people would be interested, too.”

 

Among the items detailed in The Best Time to Buy Guide are:

 

Big Appliances

The new models for large appliances roll out in September and October, so stores will be working to make room by discounting previous models. Some stores will keep older inventory in stock through the holiday months and then reduce what ever is left at the beginning of the new year.

During the rest of the year look for holiday sales around Memorial Day and Independence Day.

Best time to buy big appliances: October and January

 

Cell Phones

The best deal on a cell phone is offered when signing up for new service. Consider moving to another carrier, if you are at the end of an existing contract. Another way to save on cell phones is with rebate savings. "Free After Rebate" offers are made on most every popular phone at some point. Pricing usually includes a combination of instant savings and a rebate. The best time to buy is when you can get a cell phone for free, either by signing up for new service or with "cash back after rebate" offers.

Best time to buy a cell phone: When starting a new contract

 

Clothing

Once merchandise has been in stores a month or more, retailers begin dropping prices to circulate new items. Stores begin stocking shelves on Thursday to prepare for the weekend. Weekends are when the most items are sold so the best selection and best prices can be found if you make it to the store before the weekend.

Save additionally by shopping at the end of the season. Clothing stores need to make room for new collections and will mark down clothing significantly to reduce stock. As a new season nears begin looking for deals on clothing. For example, spring is the time to get a good deal on winter clothing.

Best time to buy clothing: Thursday evening and end of season

 

Computers

Computers have become essential items for students which is why most retailers have big back to school sales in August. You can also get a good deal on a computer during the run up to Christmas.

Technology blogs and manufacturer websites should have information about when new computer models will be released. If you have your eye on an older model and a new model is soon to be released, it may be worth the wait in order to buy it at a lower price.

Best time to buy a computer: August and December

 

Mattresses and Box Springs

The best time to buy a mattress and box springs is in May when retailers need to make room for new models. Your chances of getting a great deal at this time are quite good as manufacturers leave retailers enough room to reduce prices.

Best time to buy a mattress: May

Founders of Coupon Sherpa and FreeShipping.org introduce free shipping iPhone app that allows users to access free shipping codes and price discounts for online purchases

Commerce over mobile devices, such as iPhones, is booming in the United States. With this in mind, the founders of Coupon Sherpa and FreeShipping.org have introduced an iPhone application that allows users to find coupon codes for online shopping and make purchases off their iPhone.

The app, which is $1.99 and available at the iPhone App Store, is also ideal to conduct a price comparison and see if you can get a better deal online versus an in-store purchase. The free shipping app features codes for price discounts as well as free shipping deals from participating merchants. Users can search by store or category.

 

“A rapidly growing number of people are making purchases online through their mobile devices, so it makes sense to give them an app where they can get codes for discounts and free shipping offers,” said Luke Knowles, who founded FreeShipping.org (www.freeshipping.org) with his wife, Maisie, and Coupon Sherpa (www.couponsherpa.com) with his Maisie and his brother, Jesse Knowles. “This app is especially convenient when you are in a store and you want to know if the price there is good, or if you can find a better deal online. The only drawback to buying something online is shipping costs, and our app gives you free shipping coupon codes so you can save even more money.”

 

Knowles is building a cluster of businesses centered on frugal living. Launched in December 2007, FreeShipping.org is a one-stop destination for consumers to find online retailers that offer free shipping deals. The site, which now includes more than 1,500 name-brand stores, allows visitors to search by brand or category. Among the major retailers on FreeShipping.org are JCPenney, Macy’s, Target, Bloomingdale's, Kohl’s, Sears, Best Buy, Old Navy and Nordstrom.

 

Knowles debuted Coupon Sherpa, which is also $1.99 and available at the iPhone App Store, in April. Coupon Sherpa allows iPhone and iPod Touch users to access in-store coupons from their mobile device and present that coupon to the cashier at the participating merchant. Finish Line, Zales Jewelers, Coldwater Creek, Gordon’s Jewelers, CompUSA, Jackson-Hewitt and Tiger Direct are among the retailers that offer coupons on that app.

 

The new free shipping app is essentially a mobile version of FreeShipping.org, Knowles says.

 

“We are changing the way people use coupons. We believe this is the future of shopping,” Knowles explained. “The free shipping app is a perfect complement to Coupon Sherpa because the free shipping one is for online shopping and Coupon Sherpa is for in-store purchases.”