Category Archives: Wealth Management

Market Update & How Wealth Is Created

Posted January 29, 2016 by paragon. tags:Tags: ,
golden nest egg_opt

Written by Dave Young, President & Founder of Paragon Wealth Management

Market Summary

While the stock market made significant advances in 2013 and 2014, last year felt more like a repeat of 2011 when the market went nowhere. In 2015, the S&P 500 experienced its first 10% decline in four years.

There were some winning sectors with technology, health care and consumer stocks posting modest gains. On the other hand, commodity, mining and energy stocks were a train wreck. Large stocks beat smaller companies and U.S. stocks beat out international ones. This year’s gains were focused in a minority of stocks.

No asset class posted double digit gains. In the past 28 years, that has only happened one other time (in 2001).

China and Greece continued to create financial drama. Emerging markets had a terrible year. Generally speaking, most stocks and sectors were in decline. In 2015, if you broke even as an investor, it would be considered a success.

Paragon Portfolios

Managed Income portfolio spent its time avoiding trouble. Many of the conservative asset classes it invests in ran into difficulty. Managed Income declined -2.8% for the year. This is its first negative year since 2008.

While we are never happy with a negative year, we were pleased it was able to avoid much of the downside experienced by the underlying asset classes it invests in. It was playing defense all year long.

Managed Income’s return from October 2001 to December 2015 is 5.14% compounded, which equates to a total return of 101.7% net of fees. (Please click here for disclosures.)

Top Flight portfolio had a good year considering positive returns were hard to come by — and those returns were in a relatively narrow group of stocks. Top Flight gained 3.71% for the year versus 1.41% for the S&P 500. Top Flight’s compound annual return from January 1998 through December 2015 is 11.7% versus 6.26% for the S&P 500. Top Flight’s total return for that period is 613.4% versus 194.0% for the S&P 500.

Paragon Private Strategies Fund’s recent audit showed an internal rate of return of 14.3% for the period from March 20, 2013 through Dec. 31, 2014. Our relatively conservative private equity fund has performed well in this difficult environment. We are planning to open a second fund in 2016. Please contact us if you are interested in exploring this investment option and for required investor qualifications.

How Wealth is Created

Making money is difficult. After a difficult year like 2015, it is important to go back to basics, evaluate your situation and make sure you are on the right path.

As financial advisors, we provide a variety of financial services like retirement, estate and business planning. However, our focus has always been on managing investments. Why? At the end of the day, if you aren’t effectively building wealth over time, most aspects of your financial plan won’t matter.

So it begs the question. What is the best way to invest? How can you invest to meet your retirement goals?

Step one. Invest in things that increase in value. Currently, money markets, CDs, bonds and fixed annuities are not likely to gain much value. Interest rates are at historic lows, and those investments are tied directly to those low interest rates. After inflation and taxes, most of these investments are actually taking you backward.

In order to build wealth, you have to invest in things that appreciate over time. With interest rates this low, only stocks, real estate and direct business investments meet the criteria.

Step two. Enhance your return by buying when prices are low and things are cheap. Conversely, you should be reducing exposure when prices are high. Is this easy? Absolutely not. It is completely counterintuitive and requires you to ignore your natural “fight or flight” inclination.

This is why we have been holding so much cash for the past eight months. Our models showed that the upside was limited — there was too much risk for the potential reward.

Let me explain by highlighting a study published last year by DALBAR, one of the nation’s leading financial research firms.

The study found that over a 20-year period ending Dec. 31, 2014, the average equity-stock-fund investor posted an average annual return of 5.19%, which compares unfavorably to the average annual return for the S&P 500 Index of 9.85%.

Going back 30 years, DALBAR paints an even gloomier picture, with the average equity-stock-fund investor earning 3.79% annually versus the S&P 500’s average annual gain of 11.06%.

The reason most investors significantly underperform over time is because they constantly follow their emotions, which consistently puts them in the wrong place at the wrong time.

Rather than buying low and selling high, they do the opposite.

Step three. Reduce investment costs where possible. There is so much “junk” — i.e. prepackaged financial products sold to the retail investor. These products are sold by banks, brokerages and independent financial planners. They’re pitched at really nice dinner seminars. The excessive internal costs of these products make it difficult for the investor to gain the benefit of their underlying investment. With many of these products, it can take years, if ever, to overcome the internal costs.

Step four. Be patient — and this is the most important step. Stocks, real estate and direct business investments take time to play out. If you buy a quality stock or a property today, for a decent price, odds are that 10 years from now it will be worth significantly more than it is today. It will likely be worth much more than if you had invested that same money in a conservative investment.

The downside — and the part that trips up most investors — is that the investments that go up the most typically fluctuate the most. And that instability causes investors to bail out at the worst possible time and lose money.

This is why we recommend diversifying your portfolio with some conservative, albeit relatively unexciting investments. Each of our clients has an investment portfolio built to their specific goals and individual risk comfort level. While this is not necessarily the way to maximize returns, it is the way to maximize your return. We know if we can keep you invested for the long term, we can significantly increase your odds of meeting your goals and building wealth.

The concept is simple; the execution is difficult. But that’s why we’re here. We are committed to helping you reach your goals. Please call if you need help or have any concerns.

Disclaimer Paragon Wealth Management is a provider of managed portfolios for individuals and institutions. Although the information included in this report has been obtained from sources Paragon believes to be reliable, we do not guarantee its accuracy. All opinions and estimates included in this report constitute the judgment as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Past performance is not a guarantee of future results.

Market Mayhem

Posted October 28, 2015 by paragon. tags:Tags: , , , ,
wall street_opt

Written By Dave Young, President and Founder of Paragon Wealth Management

This article is from Paragon’s Third Quarter Newsletter.  If you are interested in receiving a free printed copy of Paragon’s Newsletter, please click here

It’s been a difficult three months. From July through September, investors worldwide faced a market with vicious volatility and the worst performance we have seen in four years. As a group, hedge funds posted their worst performances since 2008.

Prior to this, the benchmark S&P 500 had gone 44 months without suffering an official correction, which is defined as a decline of 10% from its high. That streak ended on Aug. 24 when the index was hit with an intraday plunge of 1,100 points.

It is interesting to note that while the S&P 500 index itself declined — 12.4% from its highs — just over half of the stocks that make up that index were actually down more than 20%. This disparity shows the actual breadth of the decline.

Most indexes and asset classes were down for the quarter. The large cap stocks of the S&P 500 were actually a bright spot — only losing -6.9%. The NASDAQ was down -7.3%, U.S. Small caps lost -11.9%.

The international EAFE index lost -9%, while the emerging market index declined -12.1%. The broad-based GSCI commodity index lost -18.5%. Australia was down -15%, Canada -20%, Singapore -19.5%, China -22.7%, and Brazil -33.6%.  Gold mining companies lost 25% and silver miners lost 28%.

Why The Drama?

Last quarter, we were wrapping up our annual Greek drama. This quarter, the worry shifted to China. China’s stock market languished for much of the decade, but with encouragement from government officials, the Shanghai Composite Index went up 152% from June 30, 2014, to its peak on June 12, 2015. It is amazing what impact government meddling can have.

It was a meteoric rise by any standard, with a buying frenzy fueled by margin debt. But the index quickly shed 32% of its value in less than one month, forcing the government to implement additional measures to stem the decline.

China is the world’s second largest economy, and its growth rate has been slowing. Although China officially announced that Q2 GDP expanded by 7.0% in Q2, few believe the official report.

The most immediate impact has been on the emerging market currencies, which are grappling with a China slowdown and a possible Fed rate hike.

In addition, China surprised markets by devaluating its currency on Aug. 11 by about 3%. China’s central bank billed the surprise announcement as a market-oriented reform and a one-time move. Almost everyone else viewed it as an attempt to shore up their sagging economy by increasing their exports.

The Federal Reserve is also being blamed for the sell-off. In late July and early August, markets seemed resigned to the idea the Fed was set to boost rates at its Sept. 17 meeting. When they didn’t raise rates, it led to a circular argument as to whether that was positive or negative for the markets — which ultimately led to more uncertainty.

In my opinion, Greece, China and the Fed were just excuses for a sell off. In reality, we were in the seventh year of a bull market that was overdue for a correction.

The U.S. economy is doing OK — but not great. More importantly, market internals have been deteriorating. Valuations have been hitting the upper end of fair value. Earnings growth has slowed. And the weakness in the energy sector and the stronger dollar have both provided headwinds for the market.

Paragon Portfolios

We ended last quarter’s newsletter by saying, “We cannot see into the future.  However, as of today, (June 30), we are conservatively positioned. Based on our indicators, it would make sense that the market may continue to move sideways or that we could see a 15% to 20% decline from these prices. Our expectation is that this may play out over the next three months.”

As a result of our defensive positioning, we were able to avoid most of the carnage.

Managed Income Portfolio, our conservative portfolio, generates returns three ways.

First, Managed Income captures yield whenever available from government and corporate bonds. With interest rates being held down by the FED, most bond investments haven’t made much sense for some time. The risk-to-reward ratio for bonds is upside down and will stay that way until interest rates reset higher.

Second, Managed Income generates returns from several less risky, equity income oriented asset classes. Those are high-yield bonds, utilities, real estate, convertible and preferred stocks, MLPs, closed-end funds and some equities. The current sell-off temporarily eliminated most of these options because the market was so weak. This will likely change when the equity markets start to recover.

Third, for a very limited portion of the portfolio, Managed Income generates returns from select equity positions. Those opportunities have not been available with the market in a downtrend.

Managed Income is down -3.4% year to date. The portfolio generated a compound annual return of 5.09% from its inception Oct. 1, 2001, through Sept. 30, 2015. Its total return for that period is 100.4%.

Top Flight Portfolio is our flagship growth-oriented portfolio. Considering the difficult quarter we have just been through, we are very pleased with its performance.

This portfolio is driven by two sets of models. The first group is made up of eight primary models, each of which is either on a buy or sell signal. These models measure price momentum, volume, advance decline ratios, sentiment and a host of other market indicators. These models took us to a 50% invested status about four months ago.

The second group of models provides a ranking system, which rates about 100 asset classes. These asset classes give us potential exposure to almost every investment category available. That rotation between asset classes also helped our performance.

Top Flight is only down -0.46% year to date. Its compound annual return is 11.45% from Jan. 1, 1998, through Sept. 30, 2015. Its Total Return for that period is 584.7% versus 174.7% for the S&P 500. (See our track record page for appropriate disclosures.)

Going Forward

The good news is there can be advantageous opportunities created by the sell-off. We will work to capitalize on them as they become available.

When the market stabilizes and the potential reward justifies the risk, we will re-enter our investment positions. We do not attempt to forecast; we only react to what the market is actually doing at the time. We will continue to follow our models.

Successful investing is about playing offense and defense — each at the right time — and keeping a long-term perspective. Patience is key.

We appreciate your confidence in us. Feel free to reach out to us if you have any questions or concerns.

Disclaimer Paragon Wealth Management is a provider of managed portfolios for individuals and institutions. Although the information included in this report has been obtained from sources Paragon believes to be reliable, we do not guarantee its accuracy. All opinions and estimates included in this report constitute the judgment as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Past performance is not a guarantee of future results. 

WealthManagement.com Advisors with Heart Awards

Posted May 4, 2015 by paragon. tags:
Advisors with Heart Awards

From: WealthManagement.com

This year, we pored over nearly 150 nominations for REP.’s 35th annual Advisors with Heart Awards, which honors advisors who put sweat equity into philanthropic and charitable causes. There were so many outstanding advisors in the bunch that it was hard to narrow the list down to just 10, but by April 6, we made our final selections.

These FAs go beyond just writing a check or serving on the board of an organization. And each one brings his or her unique skill set to the table when serving others. Take Russell Redenbaugh of Kairos Capital Advisors. Blinded at the age of 16, he used his skill as a juijitsu champion to launch a self-defense program for young children, among other projects. Edward Jones advisor Ryan Harman learned to fly-fish when he was a teenager in the mountains of West Virginia, and now he teaches fly-fishing to disabled veterans as part of a rehabilitation program.

“I have a chance to share something that’s been really important in my life with some truly deserving soldiers,” Harman says.

Click here to check out their stories.

Uncle, Uncle!!

Posted February 4, 2015 by paragon. tags:Tags: , , , ,
Oil Well

The dramatic drop in the price of oil over the last few months is captivating the markets. It seems it is coming down to a giant game of chicken to see who will cry first: Shale producers, unstable oil dependent export countries such as Nigeria, Venezuela, Russia, or other unconventional sources such as deep-water and oil sands projects. A massive supply glut that has been building for the last few years has finally come to a head. On Thanksgiving Day, to the dismay of many OPEC members, the Saudis decided against a production cut and in favor of letting the price fall in order to maintain their market share. They have decided to let the market do the work in taking out the competition. The competition to OPEC from the so called unconventional sources (e.g. shale, deep water, oil sands) is responsible for most of the global production growth over the last few years.

There is no way to know where oil prices will bottom. The drop is in a spiral that has tremendous downward pressure in the short-term and trying to call the bottom is nearly impossible. Everyone is producing as fast as they can while they are still alive. This causes inventories to continue to build in the short-term thereby exacerbating the supply situation and causing the price to continue to fall further. Drilled wells are literally “sunk costs” and you might as well keep pumping and getting something for them. However, new wells are discouraged from coming online at these low oil prices. The economic effects are just starting to be felt on the oil producers and it will take at least a few quarters to play out. In the end it is as it has been said, the cure for low prices is low prices. Ultimately it is more of a question of how long rather than how low.

The Saudis can withstand the drop with a few caveats. They may act sooner if the price drop creates systemic effects that threatens themselves in a geopolitical manner. The dramatic drop in oil is now getting so low that it is causing tremendous pain for oil dependent countries like Venezuela, Iran, Nigeria and Russia. The contagion effect from a crisis in these countries is becoming a significant concern. If the concerns for economic stability become too great you could see OPEC act as it is in no one’s best interest to have a significant devastation to the global economy.

Ultimately, oil prices are unsustainable at these levels and lower. How does a one percent excess of inventory levels lead to a fifty percent drop in the price of oil? In the end low oil prices are self-correcting as the effect on high-cost producers reduces supply in the out months and years. The big question long-term is whether $80 oil will be the new $100. The oil market is currently oversupplied by 2 million barrels a day. The irony is it really doesn’t take much disruption to take out that oversupply – which would cause prices to ricochet back up. Nigeria, Libya and Venezuela, produce about 5 million barrels a day and all are fragile situations that are hurting significantly. Much of the U.S. shale production is on the ropes, especially among those who came late or in low quality areas. Cheap capital and high prices made the shale boom viable but now the situation is the opposite. Some shale production will always remain but much of it could fail. The majority of shale wells are depleted within two years requiring constant drilling to keep up production. The constant drilling requires continual capital infusions making it questionable even in good times. On December 11, Bloomberg reported that a Deutsche Bank analyst report predicted that about a third of junk rated energy companies may be unable to meet their obligations at $55 a barrel. When prices recover shale will not recover as quickly now that its weaknesses have been exposed.

As I mentioned in a previous blog post, much of the energy boom in the U.S. has been financed with cheap credit to due to the easy money policies of the Federal Reserve. The process of normalization has caused the dollar to rapidly strengthen because our rates are higher relative to other developed countries. Since commodities like oil are priced in dollars a rising dollar pushes the effective oil price down. Rapid currency movements can create economic stress with major casualties. Normally the Fed could combat this by lowering interest rates but rates are already at zero.

Although the price of oil is down over fifty percent since last summer the current panic indicates that a bottom could be found in the first quarter of 2015, if not within the next few weeks. Whether that means it dips into the $20 or $30 range first is a real possibility. However, there is the very real probability that prices could recover quickly. Shale production growth will come off faster than expected. As mentioned previously, most of the current oversupply is due to shale production which can be brought online much quicker than conventional oil projects and requires constant drilling to maintain production. Now the lower price and higher financing costs will preclude new shale production from coming online thereby reducing the future supply growth. From a technical point of view, the price of oil itself is in a panic sell-off with extremely negative sentiment. As the supply/demand dynamics eventually change it could cause the price to snap back as quickly as it went down. As I mentioned earlier the surplus of oil is only one percent above daily demand. That is literally on a few hours of worth of consumption! Oil fields are always in a natural state of decline and so require new means of production to offset the declines. The demand for oil grows faster at $50 a barrel than $100 and demand was growing when the price was over $100. The net effect of lower oil prices is a stimulus to the economy.

So what is our current approach in regards to energy? We are currently altering our exposure in the energy space to reflect the new reality and opportunities. Along with everyone else, we have been surprised by the dramatic drop in oil. The impact on energy companies’ shares has had a negative short term effect on our performance but is also creating great opportunities as the quality assets get taken down along with the weak ones. The challenge in the short term is whether some version of a crisis develops because of the contagion effects of the economic damage done to energy producers or export dependent countries. We will use any continued drop to gain exposure to quality assets in the space but in a patient manner as a bottom has not yet been put in. We want to take advantage of the sell everything related to energy mindset that is currently unfolding. We favor conventional and well capitalized energy producers and servicers and will be moving our exposure in this direction.

Written by Nathan White, Chief Investment Officer of Paragon Wealth Management

Disclaimer Paragon Wealth Management is a provider of managed portfolios for individuals and institutions. Although the information included in this report has been obtained from sources Paragon believes to be reliable, we do not guarantee its accuracy. All opinions and estimates included in this report constitute the judgment as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Past performance is not a guarantee of future results.

Why Use An Active Manager?

Posted January 28, 2015 by paragon. tags:Tags: , , ,
Senior investment officers

Because certain indexes have performed well over the past few years, those who promote passive investing are recommending that you follow the current fad and just buy index funds. Passive investing can be useful if it is done right. However, it can be dangerous done blindly. Passive strategies are fully exposed to the whims of the market and can expose investors to significant declines and risks. With this approach you must be aware that you will likely go through a 50% decline at some point.

Making money is difficult. Keeping your money is even harder. There seems to be ten ways to lose money for every one way there is to make it. To complicate things further, managing investments is counterintuitive. Research repeatedly shows that most people invest when they shouldn’t and don’t invest when they should. According to studies by Dalbar, for the 30 year period ending December 2013 the average stock market investor earned only 3.69% compounded versus 11.11% compounded for the broad stock market. Underperformance of 7.42% annually for 30 years is a huge penalty for the “average” investor to pay.

The bottom line is that if you do not have the time, resources, and expertise to manage your money then you are walking into a minefield. Over the years I have seen countless people lose their entire savings to bad investment decisions. Whether it be through leveraged real estate, misguided business ventures, poorly structured annuities, bad stock choices, expensive life insurance, loans to relatives, or even offshore investments, the end result is always the same. They lose their savings and what was once a good situation turns into a bad one.

Your success has brought you money. That money can be a blessing or a curse. If you manage it properly then it can help you simplify and enjoy your life by allowing you to do whatever is most important to you. If you don’t make good money decisions then it can bring you more grief than good.

Everywhere you turn there are different voices telling you how to invest. Financial news channels, magazines, insurance companies, infomercials, self-proclaimed experts, etc. There is no shortage of free advice. The problem is that most free advice is worth about what it costs.

Paragon has been guiding investors for 28 years. We have experienced, survived and thrived in some of the most difficult markets in U.S. history. Those very difficult markets include the Crash of 1987, the Asian Crisis of 1998, the Tech Collapse of 2000 and the Financial Crisis of 2008. We have steadily grown in the face of adversity.

Our clients are our friends. We are their guide. Our money is invested right alongside theirs. Most clients initially choose Paragon because of our stellar investment performance. However, as time goes on they realize that our highest value is actually protecting them from their inexperience and stopping them from making bad investments. It is our mission to help you make the right decisions and find financial peace.

Written by Dave Young, President & Founder of Paragon Wealth Management

Disclaimer
Paragon Wealth Management is a provider of managed portfolios for individuals and institutions. Although the information included in this report has been obtained from sources Paragon believes to be reliable, we do not guarantee its accuracy. All opinions and estimates included in this report constitute the judgment as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Past performance is not a guarantee of future results.

Buy And Hold

Posted October 29, 2014 by admin. tags:Tags: , , ,
Old Stock Certificates

I was recently reminded of how much I disagree with the “Buy and Hold” concept of investing. One of our clients, brought in several stock certificates that she inherited from her family. They were dated from 1902 to 1920. That was a period of time when mining companies were very popular with investors. She asked us to research the current value of the certificates.

Her family held several of these certificates for over 100 years. Based on the number of shares and their valuation levels it appeared that some of these stocks had been valuable at one time. Unfortunately, her family had followed the Buy and Hold investment strategy and still continued to hold them.

After some research, it turns out that one company had been sued into oblivion, one morphed into another company and then that new company collapsed, one just disappeared, one went bankrupt and another had financial fraud issues. Bottom line, all of the stocks had gone from being valuable to becoming worthless….over time. They bought and held just like the “experts” told them to.

While this may seem surprising, it really isn’t. Imagine if your relatives in 1920 had the foresight to buy the original 20 stocks that made up the Dow Industrials average and held them until today. You would be very rich, right? Your relatives had bought the largest, highest profile stocks available 94 years ago. Actually, only six stocks (out of the original 20) from the Dow Industrial Average still exist.

If you read our blog, you know that I am not a fan of the Buy and Hold approach to investing. Actually, I get annoyed when I hear financial advisors and the media espousing its virtues. Some advisors support it with such zeal that it almost seems like it is a religious experience for them. I often wonder how many of those advisors actually have their own money invested in a Buy and Hold strategy.

The truth is that Buy and Hold works best sometimes and Active Management works better other times. Different styles of management come in and out of favor over market cycles. The big problem with Buy and Hold is that everything seems great while the market is going up. However, as soon as the market starts going sideways or down, then the Buy and Hold strategy becomes very difficult to stick with. If you cannot stick with your strategy then it is likely that you will never be able to generate good long term returns. If you aren’t going to generate good long term returns, then what is the point of investing?

In both the 2000 and 2008 bear markets, investors who followed a Buy and Hold strategy and invested in the S&P 500 lost roughly 50% of their value during those bear markets. Many found it too difficult to stick with that strategy and sold out of their investments near the bottom of the decline. Many investors never recovered from their extreme losses.

John “Jack” Bogle of Vanguard is one of Buy and Hold’s biggest proponents. It is hard to take him seriously when you understand that he has personally made a fortune pitching the Buy and Hold strategy for years. He is definitely not an impartial voice in the debate.

According to a November 28, 2013, Wall Street Journal article, Jack Bogle is invested in his son’s fund. It is even more interesting when you realize that his son, John Junior, has been managing a fund since 1999 that follows a very active investment strategy that is the polar opposite of Buy and Hold. His fund uses computer models to analyze earnings surprises, relative stock valuations, corporate accounting issues, etc. His strategy is about as far away from a Buy and Hold strategy as you can get. Even more interesting is that Jack (senior), considered the unofficial spokesman of the Buy and Hold movement, is personally invested in his son’s highly “Actively Managed” fund.

If John Bogle senior does not believe in using “Active Strategies”, then why is he personally invested in a fund that follows a very active strategy? Why is he paying higher fees than his index funds charge to invest some of his own money? Interesting….

My belief and experience is that pro-active strategies, such as the ones we follow at Paragon, require a lot more work to execute but provide the highest probability for long term investment success.

As always, if your risk tolerance or investment objectives have changed, please reach out to me or one of the members of our team, and we can discuss any adjustments we need to make to your current plan. We appreciate the confidence that you put in us.

Written by Dave Young, President & Founder of Paragon Wealth Management
Disclaimer
Paragon Wealth Management is a provider of managed portfolios for individuals and institutions. Although the information included in this report has been obtained from sources Paragon believes to be reliable, we do not guarantee its accuracy. All opinions and estimates included in this report constitute the judgment as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Past performance is not a guarantee of future results.

Looking Past Scary Financial News Headlines

Posted October 15, 2014 by admin. tags:Tags: , , , , ,
Looking past the scary figures

I encourage you to learn more about investing and planning. It will pay dividends in many ways, and we are here to assist you as you take steps to educate yourself.

But I caution you about spending too much time in front of the financial news channels dotting the cable landscape or the many Internet sites that are just a mouse click away.

It’s not that they don’t report hard news. They do. But there are times when markets get volatile and the “shrillness meter” hits alarming levels.

Just a couple of months ago, when the Dow fell over 300 points in one day, I went onto the MarketWatch website and found a section highlighting the most popular stories.

1. “Warning: the Plunge in Stocks Is Just Beginning.” Well, stocks quickly recovered and claimed new highs.

2. “S&P 500 Suffers Largest Weekly Loss in 2 Years.” True, but we emphasize the longer term and continually stress that your plan should take into account setbacks in the market. Be very careful of allowing weekly volatility sidetrack a multiyear plan.

3. “Three Market Warning Signs that Predict a 20% Tumble.” See my comment on article number one, above.

The top three stories were playing on the fears of investors. Simply put, bad news sells. But it can be confusing if the noise isn’t filtered.

It’s been over 570 days since we’ve had a 10% drop in the S&P 500 Index, or a decline that would officially be called a “correction.” Going back to mid-1940s, the median time period between corrections has been 121 trading days, and the average has been 273 trading days.

Markets never move up in a straight line and we are due for a 10% pullback, which, coupled with the expanding economy, would be healthy. No one can accurately predict when that might occur but it will happen. The portfolios we recommend have a long-term time horizon and are designed to help you achieve your personal financial goals.

Stay focused on your goals and make adjustments that take into account changes in your personal circumstances. Ignore fear-mongering that can be deafening during market volatility.

Written by, Dave Young, President & Founder of Paragon Wealth Management

 

Disclaimer Paragon Wealth Management is a provider of managed portfolios for individuals and institutions. Although the information included in this report has been obtained from sources Paragon believes to be reliable, we do not guarantee its accuracy. All opinions and estimates included in this report constitute the judgment as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Past performance is not a guarantee of future results.

It

Paragon’s Client Social Dinner

Posted September 3, 2014 by admin. tags:Tags: , , , ,
Picture of the 2014 Client Appreciation Dinner

Thank you all for coming to Paragon’s Client Social Dinner! We all had fun visiting and giving away some great prizes! We hope to see you all again next year!


 

I Heard the Stock Market is Going to Crash!

Posted March 22, 2013 by admin. tags:
Where is the market going

Will the Market go up or down

Written by Dave Young, President and Founder of Paragon Wealth Management

Last week I received a call from a very concerned client.  He was talking to a friend who told him that the stock market was about to crash.  He had heard it from an expert on television and wanted to know if I had heard that the crash was coming!  Also, he wondered, “What he should do with his account?”

I explained that no one knows with absolute certainty where the market is going next.  The stock market is essentially a giant auction. Everyone has an opinion on whether or not the values are fair.  Some think they are too low, some too high and some just right.

Just because the market is hitting all time highs that doesn’t mean that it has to go down. Regardless of where it is at in the cycle, it will do one of three things.  It might go up more, may move
sideways or could go down.  The only thing that is guaranteed is that one of those three options will occur.

At Paragon, we go to great lengths to position our portfolios in front of the path that our analysis shows the market is most likely to go.  We are right more often than we are wrong, however, unfortunately we are not always right.

So how do you invest and keep your sanity?  You control the variables that you can control and you don’t worry about the others.
One variable you can control is whether or not your risk tolerance is
set properly.  We also call this your “investment comfort level”.  If
you are invested according to your appropriate investment comfort level then you significantly increase your potential for long term success.

If you haven’t checked your Investment Comfort Level lately
then I would suggest you take the Risk Tolerance Survey on our website.  Click here to take the Risk Tolerance Survey.  After you take the risk tolerance survey – then verify that your investments match your personal investment comfort level.

This is one of the most useful exercises you can do in order
to make sure you are invested the way you should be.  Call or email us if you have any question whether you are invested appropriately.

Disclaimer
Paragon Wealth Management is a provider of managed portfolios for individuals and institutions. Although the information included in this report has been obtained from sources Paragon believes to be reliable, we do not guarantee its accuracy. All opinions and estimates included in this report constitute the judgment as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Past performance is not a guarantee of future results.

 

What To Ask When Hiring a Financial Adviser

Posted February 14, 2013 by admin. tags:
Hire a financial advisor

Written by Dave Young, President & Founder of Paragon Wealth Management

For some
reason, it has always been easier to lose money than it is to make it and keep
it.

Managing
your own investments can be done successfully, but it is not easy. First, it
requires a time commitment to research and track your investments. Second, it
requires discipline to stick with your strategy through challenging times.
Third, and most difficult, it requires you to remove emotion from your
investment process.

Studies
have shown that most investors would be better off with the help of a financial
adviser. Unfortunately, finding the “right” adviser is difficult. Most
investors hire someone they “trust”. However, “trust” is very intangible and
difficult to quantify. Also, the size of the firm or familiarity of the brand
name does not indicate the quality of the advice provided.

To make
sure you don’t get stuck with a salesperson when you are really looking for an
adviser, make sure you ask these four questions:

  • Fiduciary?
    Fiduciary advisers have a legal obligation to put your
    interests ahead of their own.  A minority
    of all financial advisers actually meet the fiduciary requirement.
  • Experience?
    How many years have they been managing money? Ideally, your
    adviser has experience investing in both good markets and bad markets. In the
    final analysis, you are paying an adviser for their experience.
  • Track
    record?
    Legitimate
    advisers will be able to show you a clear report of what they’ve done for their
    clients over the years. Any adviser who refuses to show you their past performance
    should be crossed off your list.
  • Conflict
    of interest?
    By
    working only with advisers who are paid through management fees and not
    commissions you can make sure their interests are aligned with yours.You
    should never own a product with a surrender charge.
As I mentioned, it has always been easier to lose
money than it is to make money. Implementing these tips will help you find a
great adviser.
Disclaimer
Paragon Wealth Management is a provider of managed portfolios for individuals and institutions. Although the information included in this report has been obtained from sources Paragon believes to be reliable, we do not guarantee its accuracy. All opinions and estimates included in this report constitute the judgment as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Past performance is not a guarantee of future results.

Blog Role

Meta