September 11, 2015


There are some dangerous clouds on the horizon for investors, young and old, seeking financial advice or guidance. You may have heard or read about the Department of Labor's proposal to reduce conflict of interest for brokers working with retirement accounts. This is all about the conversation around the fiduciary responsibility of brokers working with investors. Basically, the difference between "suitable investment" versus "in the best interest of the client" plays a big part in this proposed legislation. 

Quite frankly, I don't think the average investor really cares about the subtle difference between these two terms, what they want is guidance that is fair and helps them meet their goal. It is a given that the advice should be given without undue influence or reward, but most people know that nothing in life is free. I don’t know too many transactions that don't have some element of a conflict of interest upon purchase.


I believe that what matters is the clear understanding and presentation of the expenses associated with any transaction. I don't know too many industries whereby the cost of every step has to be identified and made available to the consumer as required now in the financial services industry. Do you get an itemized list of every expense associated with the manufacturing and distribution of products in your grocery store or the breakdown of every ingredient and step for that smoked sea bass? No, and if you did, would it change your mind about ordering it? I mean, what if you really wanted smoked sea bass, would you order something different because you realized that the waiter made an extra dollar pushing it? Probably not. And, I think that is the same with any financial investment that is used for a given purpose. If it gets the job done, and the pricing is fair, then it should be a win-win. 


I learned from my father to treat the client just as I would want to be treated. I am happy to say this has remained my focus ever since taking over the practice in 2002. I have worked hard to offer cutting-edge ideas that offer risk-returns that are consistent with customer needs. In addition, I believed early on that by keeping my fees and expenses low, my clients would benefit through potentially higher investment returns.

I don't know the outcome of the Department of Labor rule but many financial professionals may be forced to change their business practices. If the rules proceed as currently written, the ability for financial professionals to serve most clients will be limited and at greater cost. In fact, this rule might do what the recent great recession couldn't do--drive a large number of knowledgeable advisors out of the business. And, while that would be a travesty for them, it will be most unfortunate for the millions of low to middle income Americans that desperately need their guidance and advice.

I have been working to stay ahead of this business shift by running my practice in a low-cost efficient manner that allows me to serve my clients on a win-win basis. Yes, if this financial legislation passes your choices might be limited, but one way or the other, we will plan for your future. How we achieve that goal is unknown: Do you take over the controls, while I provide hands-off guidance and navigation, or do I fly the plane and let you enjoy the ride--that is the million dollar question? All I can say is "I'm ready one way or the other--game on!"

In closing, I will admit that this time really is different. I have never observed so many challenges for my clients to earn a descent rate of return and for me to service them in a manner that is consistent with normal business practices. 

The world is expanding rapidly and markets are changing on a minute-by-minute basis. It is bewildering and exciting at the same time. However, we must be cautious and measured in our planning for the future. I believe we will continue to see large, daily swings in market pricing due to fears related to currency, demographics, uncertainty and global government intervention. In fact, we might not experience relative calm for another decade, which underscores the requirement for individuals to have an investment plan from which to use and rely upon during such tumultuous times. 

There will be a time when things will return to normalcy, when I do not know, but I am ready to help my clients successfully navigate these unchartered waters. If you need help getting your bearings in these choppy seas, don't ever hesitate to reach out. 951-533-1563 day or night!

August 12, 2015

The summer heat shall soon fade, but the economic heat will remain due to the many challenges facing U.S. and global investors alike. It seems reasonable, then, to address these issues in this market commentary.


Here at home, low oil prices continue to benefit those of us pumping gas (well, maybe not those of us in OR or NJ) while at the same time hurting the large number of new and old companies that embraced the renaissance in oil and natural gas production over the past decade. It remains to be seen how low oil prices will impact these companies and the many regional banks that offered to fund their thirst for cheap money. I don't see much change over the next few months, but we may be close to an entry point. It might be time to re-consider your exposure to the energy sector.


Housing seems to be improving, or at least that is what I read and hear in the news. But the experience of selling our house in California suggests otherwise. It appears that the term "low inventory" is more myth than substance because buyers have way too many choices, resulting in downward price pressure. I think the number of home equity loans coming due in 2016 and 2017 may collide with the continued over-hang of foreclosures from 2008-2010 causing even more challenges. Be thankful if you are in a city, county or state that has risen from the ashes or never experienced this mess. However, the message is clear: sell out now or wait another five years until the dust settles.

Residential, single family housing is in the mire but multi-family homes (e.g. apartments) are all the rage. In fact, they are in such high demand that the equation may be shifting towards home purchase rather than renting or leasing. However, there are still some opportunities in the multi-family space but that window will be closing soon. Do you have multi-family in your real estate portfolio? And, while we are on the subject, what about senior housing? The aging of America means that more and more of our friends and loved ones will be needing some form of senior housing, whether it be independent living, assisted living or memory care. Don't overlook this opportunity as well.


Jobs seem to be plentiful in those metropolitan areas focused in the technology and healthcare sectors throughout the U.S., but, sadly, a large number of the filled-positions fall under "service sector" jobs. While these jobs are great starter jobs, they are more often filled by mature workers who need higher wage and benefits necessary to feed and clothe a family. And, don't get me started on the labor force participation rates often bantered about in the media. This economic measure reflects the percentage of adult Americans working or actively looking for a job and as reported by the Bureau of Labor Statistics is currently 62.6%, a four decade low. People are just fed up with the process of job hunting--the competition, the questions, the forms and the culture. Jeez, enough to make anyone just want to stay home and watch television. However, there is a cost to low participation rates such as reduced GDP, lower taxable income and governmental revenue and lower individual savings and investments. These do not bode well for our future economic strength and prosperity. It is paramount that you consider their impact on your own income stream and retirement future.


Looking around the globe we can see caution and concern rearing its head in China and emerging markets. The Chinese people are eager to achieve middle-class status similar to that achieved by the developing market citizens of years past. While the Chinese are a hard-working bunch, they suffer from a government that wishes to satisfy on all levels, not worrying about future consequences. But, then again, when you need to employ over 1.2 billion citizens, immediacy is paramount rather than long term planning. And, it seems as China goes, so does the rest of the emerging market space. It is no wonder then that countries like Brazil, Africa, and smaller Asian countries are exhibiting below trend economic growth. This won't get better anytime soon.

The recent sell off in China, both in currency and equities, may offer a little glimmer of hope and excitement for those that wish to push the envelope of risk. However, one must be super critical when evaluating such opportunities and investment choices, a good alternative might be countries surrounding China that gain from export and import transactions.


The investment performance narrative for the past few years has been written by U.S. indices, with the SP500, NASDAQ and the Dow Jones all flirting with recent highs and strategists saying they still have more room to run. I am in agreement with many asset allocation managers saying that NOW isn't the time to go all-in with U.S. equities, and for that matter, U.S. treasuries as well.

Long story short, stay allocated in your current positions, take profits when you can and be patient as the world goes through this side-ways market. My client strategy remains steadfast as we take profits when we can, use insurance for protection, alternatives for diversification and be just a little contrarian to generate higher returns. What I don't want to do is hold a basket of indexes, owned by just about everybody, as we head over the cliff during the next big sell off.  It really does make sense to utilize passive and active investing to your benefit. 

June 29, 2015

A few weeks ago I posted on LinkedIn my thoughts about the markets:
"Markets Go Up and Markets Go Down - Yada, Yada! We hear it on the radio and TV; we read it in our newspapers and magazines; and sometimes even from our friends or THAT person down at the coffee place. Europe, China, FIFA, the FED, interest rates, housing, jobs, the list goes on. What's a person to do? At Centerpointe Advisers, we help our clients focus on what they can control, not on the noise that bombards us daily. The best way to take control is to have a plan covering short, medium and longer term goals. What are your plans?"
Well, the noise surrounding the Greek crisis finally hit and the markets reacted accordingly. But, what does it really mean? And, by that I mean, what does it mean to you--today, tomorrow and the future?
I suggest it is a good time to review your investment plan and whether there is a need to make adjustments. For some, this market decline might be a good time to buy. But, for others, it just might be the incentive to start thinking about re-positioning assets. Of course, when one starts thinking about re-positioning, the question to ask is, "Re-position where?"
And, that my friends, is the million dollar question!
It can vary depending upon your situation. So, if we haven't talked in awhile or perhaps you just need some assurance, give me a call.
My view of this tortuous path is that we must build, clear, build and clear again, until we can get to the point where we can build for that next big leg up. I don't quite know when that will be, but it is on the horizon.
The key will be your response until we get there.
As always, thinking about you and your money daily.

June 11, 2015

Wellness and Wealth

I am fortunate to have been an early adopter to the Wellness and Wealth movement. This has not always been easy because for so long their inter-connection and correlation was unproven and unforeseen. However, I believe the data is now clear that one without the other is a losing battle.

Now mind you, practicing wellness does not always lead to better health or more wealth, but I believe it does offer great value. Likewise, having wealth and the ability to buy organic, buy upscale and pay for a personal trainer/nutritionist means nothing, if you are pre-disposed to illness. 

I believe the solution is to do something small each day to improve your health and wealth. It is the collection of these small things that will make a big difference in your life. Believe, and let the power of your mind and spirit deliver.

I have been working on strategies to help my family, friends, and clients achieve better health and wealth. I am happy to report that my first deliverable is a book titled, "Eat Less, Sleep More and Slow Down."  Coming soon to your favorite e-bookstore. Or, use this link to download a sample.

May 20, 2015

I am happy to introduce the launch of Centerpointe Advisers. It has been a year in the making but I am excited about the opportunity to grow and serve my clients across the United States. I will be bringing in new talent to help me stay on top and to help grow our clientele. 

As we approach mid-year, domestic equities have finally cooled off and our international and emerging market portfolios have picked up some steam. While diversified portfolios lagged in 2013-2014, I believe they should improve over the next few years. It really is impossible to guess the direction and top of any market. This is especially true when central banks and governments are exerting their influence on credit and equities. 

I believe that we will see more volatility but eventually the markets will grind higher albeit slowly and without much fanfare. The strength of the dollar and the decline in energy prices have benefited consumers across the income spectrum, probably most notable in their monthly cash flow. How long this pattern continues remains to be seen. So, enjoy it while you can. 

It is 2016 that I think offers the greatest challenge to investment portfolios after six years of steady growth. Patience is a virtue but caution is rewarded; and I remain overly cautious the longer we push through higher highs on most stock indices. I am not opposed to holding cash when I think it offers balance to a portfolio and when it can take advantage of opportunity. 

A recent study by the Employee Benefit Research Institute noted that workers who have a retirement plan are more confident about their future than those that do not. So, perhaps that feeling of anxiety or frustration, just might reflect your own uncertainty about the future. 

What is your plan?  

Give me a call and let's talk about your future, today!

January 23, 2015  


Well, that is the one billion dollar or one hundred dollar question depending upon whether you are a one percenter or just regular folk. But, seriously, there is much to consider when thinking about where to invest your savings or retirement contributions. It seems that professionals and amateurs alike are stuck between a stock market that shows continued strength despite global events that often times make one worry. As for the latter issue, it is no wonder then why the U.S. stock market continues to outperform its peer groups. There is good reason to believe that this upward trend may continue for a few more years.

What started out with the U.S. aggressively re-pricing assets and lowering interest rates has now come full circle with the Japanese and European bankers doing much the same thing. This will continue to keep the likelihood of interest rate increases low as the addiction to “free money” is hard to pass up.  


At this time last year, I wrote that the economy would be stronger (which it had) but that the stock market would be muted (which it was not). Jobs ended up to be plentiful (as I thought) with low wage growth as I suggested and, I was definitely on the money, about emerging markets having lackluster performance. For many, the allure to pull out of such markets was too strong as both mutual funds and exchange traded funds saw increased redemptions in this asset class. But, these people may miss out on longer term growth and the potential for less volatility.

Diversified asset portfolios have really suffered over the past several years as U.S. markets have garnered all the attention. This gets back to the “least dirty and safest place to be” scenario which is why when we look at averaged portfolio returns, diversified asset allocation models gained almost half of what individual U.S. indexes earned last year. In hindsight, it always seems evident that one should have over weighted large company U.S. equities but then again, very few analysts predicted that U.S. interest rates would go down or that the energy market would implode. However, I still believe that diversified asset allocation models will “win the day” when the world comes to grip with that “free money” addiction.

The decline in the cost for a barrel of oil and gasoline caught most professionals by surprise. There were some who suggested a slight decline, such as Barron’s magazine in March 2014, but no one saw the carnage that has ensued over the past 7 months. While this is good for you and me, it doesn’t necessarily bode well for oil service providers and transporters. In addition, there is concern that banks who loaned money to the many companies within this sector may be at risk for some defaults. It seems we’ve heard that story before during the housing boom and bust. Will it play out with the energy bust? Only time will tell but it does pay to consider your exposure to this possibility.


Are there other issues that loom on the horizon? Well, there are three that come to my mind. Besides energy, healthcare has been one of the growth engines of our economy. With advances in medical practice, pharmaceutical research and patient management, it seems that healthcare can do no wrong. Not even the Affordable Care Act which was supposed to up-end many companies proved not to be an obstacle. Healthcare investments were some of the top performers last year after an even better 2013.

I still like healthcare but not necessarily U.S. domiciled companies as I feel that perhaps that U.S. opportunity may be coming to an end. But, I believe there is still opportunity in emerging countries that have a growing population and inadequate healthcare systems and providers. These countries will benefit from the many companies that have developed patient management software, generic medicine and surgical-assisted devices that can extend into newer markets. The key, like any investment idea, is to pick those companies that will be able to make the transition to low cost countries and constituents.  


I still view housing as a problem. There are still way to many homes on the market that are owned by an owner who is underwater and under financed. They have no recourse and have just about run out of time. In addition, there are a tremendous amount of homes owned by investors who came in and bought properties at considerable discounts. I believe these two factions are keeping the prices down in many of the major metropolitan areas. Naturally, if you are in San Francisco, New York or other desirable communities, there isn’t much of a problem and full price is rule of law. But, in general, even with the lowest mortgage rate in U.S. history, there are not many first-home or move-up buyers taking advantage of such rates. There are several factors to explain this phenomena such as down payment and credit score, but one would expect that after almost 8 years since the great recession, people would be able to get past those issues. But, they aren’t, so the question is why? Are we in the midst of a re-think regarding home ownership? Are young buyers just not feeling the warm and fuzziness of owning their own home? We probably won’t know until after the turn, but by then it will be too late. All I can say is a home is a home; and be wary when you think it is an investment because it is not!


The last and final area of concern is the global credit market. As I mentioned before, what started out in the U.S. in terms of cheap money has now extended to our major trading economic partners. It seems that countries of all sizes are competing to see how low their interest rates can go. The world is awash in cheap money that is being used to buy just about everything but the kitchen sink. But, there will be a time when someone has to pay the price of that free money. Moreover, there is a real risk that we may have begun the currency war which has been bantered about now and then. The recent surprise move by the Swiss National Bank caught many traders off guard leading to some defaults on one way bets. Now throw in the recent quantitative easing (QE) program of the European Central Bank and the likelihood for rising interest rates and inflation is about zero. This may be the biggest elephant in the room in the not so distant future.  My advice is be wary of the amount of government paper that you hold within your portfolio.  


While it seems that every day is a new day when it comes to investing, I believe that we must continue to believe in what history tells us. First, we must invest for the long term knowing that everything tends to revert to the mean. But, it doesn’t mean that we should blindly ignore trends or patterns in market conditions. Over the past few years I have come to believe that one must be an investor for the long term but a trader in the short term when the opportunity exists or when conditions dictate. Second, I believe that asset allocation models do represent a sound investment strategy but that they will not always perform as desired. It is best to consider how they fit within a portfolio rather than being the main component of a portfolio.

Finally, health and wealth are two different concepts that share one undeniable source—you. One without the other is not a path to take. So, make sure you have a balanced view of both as you go about your day. To survive in the future, the total cost of the day must be cheaper than the total return for the day from your income and investments. So what good is an investment portfolio growing at 5%, if your medical expenses cost 7%. There are no guarantees in health or wealth but planning and prevention can go a long way to making your future a success.


January 20, 2015

What Tennis Can Teach Us About Investing – As a young man I dabbled in tennis, often times with a bit of anger thrown in! But, with my recent move to Portland, I decided that I would return to the game and work to improve every point and every match. And, along the way I have realized that tennis and investing share a few things. I learned that for each point, I need to be in the moment at that time—not in the past worrying about the point that got away or the point in the future to win the game. And, inevitably, I had to focus on the long term—game, set, match-- in order to be victorious! So don’t get bogged down by the points on the market each day, the trades that got away or the investment idea that just didn’t pan out. Instead, think about what those daily points mean over years and decades. You may just sleep a little better and have a bit more fun; and end up in the same place after all—victorious!




Material discussed herewith is meant for general illustration and/or informational purposes only, please note that individual situations can vary. Therefore, the information should be relied upon when coordinated with individual professional advice. Investing involves risk including the potential loss of principal. No investment strategy, including asset allocation or diversification, can guarantee a profit or protect against loss in periods of declining values. Past performance is no guarantee of future results. This material contains forward looking statements and projections. There are no guarantees that these results will be achieved. It is our goal to help investors by identifying changing market conditions. However, investors should be aware that no investment advisor can accurately predict all of the changes that may occur in the market.