Are you ready for your retirement?

Posted February 25, 2011 by admin. tags:Tags: , , ,
Beautiful Beach and Sunset


photo by David Saunders Photography

Written by Dave Young, President of Paragon Wealth Management

At the start of a new year, we begin to think about our goals. We might think about getting back in shape, spending more time with our families, eating better, reading more, etc.

Another goal you might have is getting your finances in order to help you prepare for your retirement. Do you know if you are on track to retire at the age you’d like? How is your portfolio positioned? Is your portfolio set properly for your investment risk tolerance? If you have retired, are you on the right track? We’d like to help you answer these questions and more.

We are introducing a new service that we are only offering to our blog readers for the next month. It is a complimentary retirement analysis. We will focus on your investments, give you a second opinion on how they are positioned, make sure your plan is aligned with your goals, and answer any questions you may have.

Call 800-748-4451 to schedule your appointment.

This is one of the most important goals you should evaluate. If you don’t know where you are going, it is difficult to get there.

We will help you answer these questions:

– How much money do you need to save each year to meet your retirement goals?
– What rate of return does your portfolio need to generate?
– What is the probability you will reach your objective – at a different rate of return?
– Is your portfolio properly positioned for where we are in the market cycle?
– Are you taking too little or too much risk?

Paragon began in 1986. Since then we have talked to thousands of investors about their porfolios. These are some of the investment mistakes we’ve seen repeatedly.

Mistakes Investors Make

RISK TOLERANCE
Investors don’t often know how much risk they need to take in order to reach their goals. In addition, they haven’t defined how much market volatility they can comfortably live with. Most of the time they don’t know how much risk they are actually taking because they haven’t defined their risk tolerance. As a result, next time the market goes down they will likely endure sleepness nights as they hope the market recovers. Their odds for success are low.

DIVERSIFICATION 
Investors own many mutual funds and think they are diversified. We regularly see accounts that are holding 40+ funds. What they often don’t realize is that many of their funds hold the same stocks. In reality, they are not diversified at all. They usually take more risk than they realize.

BONDS 
Investors hold bonds for safety and stability. Bonds provided safety over the past 30 years because interest rates declined from 18 percent down to 2.5 percent. Most bonds do not provide safety when interest rates move up. To the contrary, bondholders may see significant losses going forward as rates increase from the all time lows.

HIGH EXPENSES
Many portfolios are filled with expensive mutual funds. Investors are paying management fees, transaction costs and 12b1 fees. They can often achieve the same market exposure through ETF’s at a fraction of the cost.

KNOW WHEN TO SELL 
Buying a stock or fund is the easy part. Knowing when to sell is the hard part. Investors should never own a position they wouldn’t be willing to buy today. We see portfolios full of investments that should have been sold long ago.

Are you ready for your retirement? Is your retirement going well if you’ve retired already? Call us at 800-748-4451 from now until April 1 to schedule your complimentary retirement analysis.

Paragon Wealth Management is a provider of managed portfolios for individuals and institutions. Any information presented is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Investments in securities involve the risk of loss. Past performance is no guarantee of future results. All opinions and estimates constitute the judgement as of the dates indicated and are subject to change without notice. Do not rely upon this information to predict future investment performance or market conditions. This information is not a substitute for consultation with a competent financial, legal, or tax adviser and should only be used in conjunction with his/her advice.

 

Seven Reasons Why Investing is so Tough

Posted February 17, 2011 by admin. tags:Tags: , , ,
American Stock Exchange photo


Written by Dave Young, President of Paragon Wealth Management

Successful investing is tough. Over the long term, it may be one of the toughest tasks you take on. It’s not about your physical toughness. According to a story in USA Today, 60 percent of retired NBA players are broke within five years. The NFL is worse — 78 percent of retired players are in the poorhouse just two years after retirement.

Athletes aren’t the only ones with money issues. The problem seems to show up anytime people come into large sums of money without prior investment experience.

Studies show that the majority of widows who receive life insurance proceed to lose the money within three years. Lottery winners carry the same characteristic with most losing their winnings within a few years. Because of difficult markets and poor investment strategies, over the last 10 years, many retirees have lost more than half of their retirement savings.

Why is investing so tough? Here are seven reasons:

IT REALLY IS THAT DIFFICULT
Certain types of investing can be almost impossible. Regardless of what the infomercials promise, a small percentage of options, futures or currency traders actually succeed. While the potential is there, the odds of success are totally stacked against you.

SCAMS
Invest in real estate, business or stock scams and you will have no chance of getting your money back. They seem like a great idea at the time, but without experience, scams are difficult to identify.

IT’S OUT OF YOUR CONTROL
Legitimate real estate or business projects can go sour because of a bad market, poor management, competitive factors or other issues beyond your control.

DIFFICULT MARKETS
If you invested at the peak of a stock or real estate bubble, like 1999 or 2007, you are still waiting for your account to get back to even. Unfortunately, markets are always difficult. No one rings a bell when to buy or sell. Human nature drives most investors to buy when prices re high and sell when they are low.

LOW-PAYING GUARANTEED PRODUCTS
Bank CDs, savings accounts and annuities induce buyers by promises of safety and security. The only real guarantee is that your returns will be so low you’re guaranteed your earnings will not keep up with inflation and taxes, ultimately destroying your purchasing power.

BAD ADVICE
Unfortunately, many “advisers” know little more than the people they are advising.

BAD PRODUCTS
A lot of investment products sold by salespeople are not good for investors. Many are expensive and full of hidden costs. Some even limit your upside. Often, they are structured to benefit the company selling them.

So what should an investor do? First, embrace the fact that investing is difficult. Take is seriously. Recognize little is taught about investing in our educational system. Be realistic about your level of investment proficiency. Understand taking it lightly can be hazardous to your financial future.

Second, educate yourself about investing. Learn the basics. This does take time. Realize many investment theories contradict each other. The more you read, the more you realize how much more there is to know.

Third, find an adviser you can really trust. If you really don’t have time, resources or expertise to manage your own money, then work with an exceptional adviser. At a minimum, you want someone who is a fiduciary, who has at least 10 years of experience and who can show you their actual 10-year track record.

On our website, paragonwealth.com, we provide a free, educational download titled, “How to Select a Financial Adviser.” I highly recommend you download and use it as a reference.

The bottom line is successful investing really is tough. It is competitive. To succeed requires knowledge, experience, mental toughness and discipline.

Paragon Wealth Management is a provider of managed portfolios for individuals and institutions. Any information presented is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Investments in securities involve the risk of loss. Past performance is no guarantee of future results. All opinions and estimates constitute the judgement as of the dates indicated and are subject to change without notice. Do not rely upon this information to predict future investment performance or market conditions. This information is not a substitute for consultation with a competent financial, legal, or tax adviser and should only be used in conjunction with his/her advice.

Estate Planning Tips

Posted February 10, 2011 by admin. tags:Tags: , , ,

Taken from an interview on Paragon TV with Dave Young, President of Paragon, and Randall Paul, Paragon TV’s host.

“When I retire, I am concerned about my spouse,” said Randall Paul. “What counsel would you give us to make the transition seamless if I were to pass away before her? Should we both be involved our financial decisions?”

Dave Young, President and founder of Paragon Wealth Management said every situation is different as some couples are both involved in their financial decisions, others only one person. He said it depends on the couple. Young said the most important thing is to have a structure in place. Both people should know where their important paperwork is kept and understand what the plan is if either one were to pass away first.

“Most of the time people don’t think about that type of planning because they don’t plan on dying,” said Young. “However, it is not really about dying. Sometimes couples go into an assisted living home. Sometimes they are no longer competent to make these types of financial decisions when they get to that point. It is important for couples to plan together while they are still competent and able to make these decisions.”

Click on the video above to watch the entire interview.

Visit Paragon’s YouTube Channel to see more videos.

Paragon Wealth Management is a provider of managed portfolios for individuals and institutions. Any information presented is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Investments in securities involve the risk of loss. Past performance is no guarantee of future results. All opinions and estimates constitute the judgement as of the dates indicated and are subject to change without notice. Do not rely upon this information to predict future investment performance or market conditions. This information is not a substitute for consultation with a competent financial, legal, or tax advisor and should only be used in conjunction with his/her advice.

Inflation: Should Investors be Worried?

Posted February 3, 2011 by admin. tags:Tags: , , ,

This was taken from an interview on Paragon TV with Dave Young, President of Paragon Wealth Management and Paragon TV host, Randall Paul.

“Inflation is on my mind as an investor, especially a retired investor,” said Randall Paul. “Should I be worried?”

“It is good to be aware of inflation,” said Dave Young. “It helps to look at the past to know where we will be in the future. 2009 had no inflation, but generally, we’ve averaged two and a half to three percent. In the last 10 years, we had 25 percent inflation. In the last 20 years we had 45 percent.

You need to have a strategy in place to off set inflation,” said Young. “If you are just buying CDs that are 1 to 2 percent, and inflation is 2.5 to 3 percent, you will be going negative. Whatever your strategy is, you need to generate more than the rate of inflation. That’s just part of it because there are also taxes involved.

“Investors should not be blindly buying stocks and real estate. If you follow specific strategies using stocks and real estate, you will have the best chance at overcoming inflation.”

Click on the video above to watch the full interview.
 
Visit Paragon’s YouTube Channel to see more videos.

Paragon Wealth Management is a provider of managed portfolios for individuals and institutions. Any information presented is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Investments in securities involve the risk of loss. Past performance is no guarantee of future results. All opinions and estimates constitute the judgement as of the dates indicated and are subject to change without notice. Do not rely upon this information to predict future investment performance or market conditions. This information is not a substitute for consultation with a competent financial, legal, or tax advisor and should only be used in conjunction with his/her advice.

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