Posts Tagged Asset Allocation

I often speak with clients who simply tell me that they want something conservative. I always respond with my strong conviction that assuming you have the stomach to watch a little volatility (which is why we train our clients to remember why we picked the stocks we picked and to focus on the number of shares you hold and the average price per share, not the market value of the day) and your investment horizon is at least 5 years, but I prefer 7-10; then, the most conservative thing you can do is diversify into major stakeholders in emerging markets and diversify out of just the US dollar. I tell them that since inflation is destroying your buying power, it is not conservative at all to be happy with a One Year Treasury bill with a yield of .48%. (see link below) Plus, our clients spend money in areas where the inflation rate is much greater than the Consumer Price Index link below. The 1% increase in the cost of a loaf of bread is not where they are getting hit. It’s the 15% annual increase in Ivy League tuitions, to name just one. Inflation is real. Think about it. Think about what you used to pay even ten years ago for the products and services you consumed. For our businessowners, think about the rise in your operating expenses and how it feels impossible to keep costs under control. Inflation is real.

http://www.ustreas.gov/offices/domestic-finance/debt-management/interest-rate/yield.shtml

http://www.bls.gov/cpi/home.htm
see more at http://www.crinvestmentadvisors.com/

This is what you will feel like in 7-10 years if you don't confront inflation now