Your Advisor's Thoughts

TANSTAAFL

In my senior year of undergrad, I was reviewing my professor's notes on microprocessor design the night before a final exam.  I found a slide that had this one phrase on it:  TANSTAAFL.  Confused and slightly embarrassed, I visited the professor's office and asked about TANSTAAFL.  He laughed and said, "There Ain't No Such Thing As A Free Lunch"! 

Now I bring this up because I fall for the free lunch over and over again.  The coffee shop I recently wrote about finally opened.  As I buzzed into the parking lot Monday I saw the sign above.  I was excited because I read it as Free Donut + Med Coffee.  Notice the strategic placement of "with purchase of."  I promptly went across the street and said to the guy at the counter, "I hear you're giving away free coffee and donuts."  He responded with, "No, you get a free donut with the purchase of a coffee."  This time I was shocked and slightly embarrassed because I fell for the "Free Lunch."   I want you to know I'm not upset at all that I was fooled, and actually think it's kinda clever.

Remember as you navigate through life, there are no free lunches and "If It Seems Too Good To Be True, It Probably Is."  You will save yourself some time, money, heartache and embarrassment.

PS.  I got my free donut. It only cost me the price of a medium coffee!

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Greg Teal is an investment advisor representative of Trustmont Advisory Group, Inc.

HAVE YOU ABANDONED YOUR RETIREMENT?

Many people we talk to have not been paying attention to their retirement plans.  This last year has been absolutely unprecedented.  Some investors have not even opened a statement for their investments this year, because they are afraid of what they might see.  Others have 401(k) or 403(b) plans that they have abandoned when they last changed jobs.  This may have been 5 or 10 years ago, or even last week.

My professional advice to you is don't ABANDON your retirement; CLAIM it as your own.

 

Make sure you have your money working hard for you, by investing it appropriately for your time horizon and risk tolerance.  If you don't know how, get help.

 

BTW:  We have a cutting edge service called 401KPro to do exactly what is mentioned above.  Find out more by going to http://www.Your401kPro.com

 

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Greg Teal is an investment advisor representative of Trustmont Advisory Group, Inc.

Toe-May-Doe---Tow-Mah-Toe

A September 16, 2008 headline: "Financial crisis as Dow drops 504 points"

 

The Dow is a stock market index that has tremendous history dating back to 1896.  Its official name is the Dow Jones Industrial Average (DJIA).  It is a computed average of the stock price of each of the 30 largest and most widely held companies in the US.  For the geeks, the average is a scaled average which is a price weighted average which compensates for splits and other adjustments.  Being a price weighted average, it gives higher relative priced stocks more influence over the value of the index.  This means if a $10 stock declines 10%, or $1, it can be washed out by a $100 stock increasing in value by $1, or 1%.  You have to keep in mind that this is the average of only 30 stocks when over 7000 are publicly traded.

 

 

A better indication of a well constructed portfolio (one that has a reduction in systematic risk), and a measure of overall market performance, is the S&P500 index.  It is comprised of an index of 500 companies selected by a committee and is mostly US stocks.  It is mostly large cap common stocks and the index is calculated by using float weighting.  The S&P500 index can usually be found by the ticker symbols ^GSPC, INX, $SPX.

 

 

Overall, I think most people should use the S&P500 index.  It is a better measurement of overall market performance unless, of course, you own a portfolio similar to the DJIA.  Although using the S&P500 index is against popular convention and may seem like swimming upstream, you need to be an informed investor.  Personally, I attempt to be bi-lingual (speak both Dow and S&P500) but use the S&P500 as my indicator of choice.

 

 

As a side note, one of my favorite services for market data when I am not at my desk is to text message (google) 466453 the message "stocks inx".  The service will reply to you with the current value of the S&P500 index.  (Google's service is free, but text messaging rates of your wireless phone provider may apply).

 

 

You should also note you cannot invest directly in any of the above indices or averages.  They are simply calculated values based on the stock market.

 

 

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Greg Teal is an investment advisor representative of Trustmont Advisory Group, Inc., Member FINRA, SIPC

ON VACATION!

 

“Your Best Interest” Financial Services Inc. will be closed July 3, 2009 through

July 9, 2009.  We will return on Friday,

July 10, 2009.  In the event of an extreme emergency, Phil can be reached at

610-639-4058.

 

Vacation –

(vey-key-shun) noun

a period of suspension of work, study, or other activity, usually used for rest, recreation, or travel; recess or holiday.

 

 

I have a problem with vacations.  I work really hard before I go, and dread the backlog of things when I get back.  Another thing I do is I try to accomplish something while I am on vacation.  Usually it takes me 5 days to unwind, encroaching on the time to go back to work.  But I realize that vacation is a necessary part of being productive.  Everyone needs some downtime or they will suffer burnout.

 

 

Shortly after the conclusion of the 2008 tax season I went to the Outer Banks in NC.  A client, and friend, took me aside and spoke directly into my life.  She told me to relax.  I had explained to her my wackadoodledoo plans for completing a college course while I was away.  She told me to enjoy my family while I can.  She was speaking to my heart directly from hers.  Her words weighed heavily on me.  I did take my books, but “studied” only a few hours.  I will admit to you, and have admitted to my friend, that I thoroughly enjoyed my vacation and I am grateful for the wisdom imparted on me. 

 

I encourage you to plan at least a few consecutive days off this summer, simply as a mental health holiday.  This is a time you set aside to not work on the house, complete a college course, do a project, etc., and does not have to include a great expense of traveling.  Set yourself up for success by taking breaks from your regular routine, and relax. 

 

Stay Tuned For More...

 

Greg Teal is an investment advisor representative for Trustmont Advisory Group, Member FINRA, SIPC