What does “Wealth Management” mean, and what do “Wealth Managers” do that is different from other advisers?
Why did I name my company “Generosity Wealth Management”.
I’m glad you asked, because I answer these fine questions in a 3.5 minute video below.
I encourage you to click on it and listen.
TRANSCRIPT:
Hi Clients and Friends, Mike Brady here. This week I want to talk about wealth management and wealth managers and how that might be different than a money manager. And then I’m going to talk a little about why is my company called Generosity Wealth Management.
Wealth management is holistic, it’s integrated, comprehensive and planning based. Now, let me take each one of those words and go a little bit deeper in each one.
Holistic: it looks at the big picture, the whole picture, the whole piece of the pie, all right? You’ve got tax planning; tax issues; you’ve got estate planning; you’ve got retirement planning; you’ve got investment management; all of these are different silos but they’ve got to be brought in together.
And that comes to our second word which is integrated. How do they integrate together for a plan and for your life to get from point A to point B.
Comprehensive, what does comprehensive mean? It means the big picture, it means large, large picture, of how these various components work together.
So it’s holistic, the whole part; integrated, it is comprehensive and it’s planning based.
Now planning based; one of the very first things I do for someone who is in a new relationship with me, a client/advisor relationship, is for us to have the plan- that retirement plan, that investment plan, that estate plan, that tax plan, all together, into a plan that’s for that client. Point A to point B, and how we are going to get there.
And it is really taking into consideration the risks and the individual risks and tolerance level of the client with the various investments, what’s the tax situation, what are the goals as it relates to estate planning; meaning, if you were to die or become incapacitated, what does that mean for your, for your loved ones that are still living?
So that is what wealth management is. A money manager is typically only looking at one, or maybe two of those pieces without regard for the others. And I really feel that wealth management is the best way to work with clients and it’s what I truly love.
Why did I call my company Generosity Wealth Management? If you take all these various areas that I’ve talked about and you’ve come together with a good plan, all these things are working together in sync, then you can be generous. You can be generous. The goal is to be generous with yourself, with your family and with the causes that you believe in. And so my goal is to get a client to the place in their life where they feel that they can be. They can be generous with their life. You know what: “I’ve…you know, now I’m retired, and I feel like I’m in a place where I can go out to dinner a little bit more, or I can spend a little bit on my kids and grand kids. I can go to that foreign country on a vacation whereas I felt that I never could.” And then the causes you believe in, I mean if… to your church, to your community. Whatever those causes might be whether it’s global or local. I want to help clients get to the place where they feel they can be generous with themselves, their families, with the causes they believe in.
So, that’s what I’m thinking about this week. Thank you for listening to me. My name is Mike Brady, my company is Generosity Wealth Management, 303.747.6455. I am a registered representative with Cambridge Investment Research. And give me a call if you think I can help you out. Thank you bye bye.
TRANSCRIPT:
Hi Clients and Friends, Mike Brady here. This week I want to talk about wealth management and wealth managers and how that might be different than a money manager. And then I’m going to talk a little about why is my company called Generosity Wealth Management.
Wealth management is holistic, it’s integrated, comprehensive and planning based. Now, let me take each one of those words and go a little bit deeper in each one.
Holistic: it looks at the big picture, the whole picture, the whole piece of the pie, all right? You’ve got tax planning; tax issues; you’ve got estate planning; you’ve got retirement planning; you’ve got investment management; all of these are different silos but they’ve got to be brought in together.
And that comes to our second word which is integrated. How do they integrate together for a plan and for your life to get from point A to point B.
Comprehensive, what does comprehensive mean? It means the big picture, it means large, large picture, of how these various components work together.
So it’s holistic, the whole part; integrated, it is comprehensive and it’s planning based.
Now planning based; one of the very first things I do for someone who is in a new relationship with me, a client/advisor relationship, is for us to have the plan- that retirement plan, that investment plan, that estate plan, that tax plan, all together, into a plan that’s for that client. Point A to point B, and how we are going to get there.
And it is really taking into consideration the risks and the individual risks and tolerance level of the client with the various investments, what’s the tax situation, what are the goals as it relates to estate planning; meaning, if you were to die or become incapacitated, what does that mean for your, for your loved ones that are still living?
So that is what wealth management is. A money manager is typically only looking at one, or maybe two of those pieces without regard for the others. And I really feel that wealth management is the best way to work with clients and it’s what I truly love.
Why did I call my company Generosity Wealth Management? If you take all these various areas that I’ve talked about and you’ve come together with a good plan, all these things are working together in sync, then you can be generous. You can be generous. The goal is to be generous with yourself, with your family and with the causes that you believe in. And so my goal is to get a client to the place in their life where they feel that they can be. They can be generous with their life. You know what: “I’ve…you know, now I’m retired, and I feel like I’m in a place where I can go out to dinner a little bit more, or I can spend a little bit on my kids and grandkids. I can go to that foreign country on a vacation whereas I felt that I never could.” And then the causes you believe in, I mean if… to your church, to your community. Whatever those causes might be whether it’s global or local. I want to help clients get to the place where they feel they can be generous with themselves, their families, with the causes they believe in.
So, that’s what I’m thinking about this week. Thank you for listening to me. My name is Mike Brady, my company is Generosity Wealth Management, 303.747.6455. I am a registered representative with Cambridge Investment Research. And give me a call if you think I can help you out. Thank you bye bye.
A puzzle that was so hard the first time around is simple in hindsight.
This is known as Hindsight Bias.
This week I talk about the psychological phenomenon of Hindsight Bias and investors’ over reliance on Performance Numbers.
TRANSCRIPT:
Hi Clients and Friends, Mike Brady here. This week I want to talk about Hindsight Bias and why many investors put an overemphasis on past performance. I mean if you’ve been an investor for some time, you’ve probably had that experience where you find a mutual fund that’s had a great track record for three, four, five years, or so, you put your money in then all of the sudden the track record goes right down the toilet. You take it very personal, and I’m here to tell you it is not personal. That person probably put an overemphasis on past performance.
Now, hindsight bias is a group of distortions that are created when we have knowledge of an event that has already occurred. When we remember the past we find it impossible to remember all of the uncertainties that were facing us at the time. We remember a reconstruction of past events based on what actually happened. It makes it seem so much more inevitable, the actual occurrence that happened. Have you ever had that puzzle or that riddle that was just impossible to figure out, and then you figured it out. And then it’s like, “oh, that’s child’s play, that is so very obvious!” Well, you forget that at the time it wasn’t so obvious. It is the same thing as it relates to a kind of a hind sight bias.
Now, in general, I’m going to philosophize here a little bit, I believe that humans and people, and investors, we don’t like uncertainty. I mean, the more uncertainty there is, it kind of reminds us how little we really know. It is very discouraging to understand and to realize how limited our understanding of cause and effect really is. Sir Isaac Newton, talked about cause and effect. And it is very hard for us to understand that sometimes things happen without a very clear cause. And we are always looking for that exact cause to correlate with that effect. And the world, I’m kind of a chaos theory proponent, that the world is a very complex place. And so we’re always looking at a past performance, we’re always looking at data in order to reduce some of our uncertainty as we go in to a particular investment.
There is another study, just kind of talking about from a behavior science point of view, that the more data we have makes us feel better but doesn’t necessarily make the decision we make that much better. There’s one study after another that has shown that. And so what I would recommend is to really talk with that particular manager to find out how he or she makes decisions, how they think, how when some adversity some problem comes before them, how do they approach that problem? What’s their knowledge in the field that they are managing in? They’ve got to be absolute experts in it. But I would also argue, now I’ve said this in previous videos, they’ve got to have a sense of humility. A sense of humility about what they do know and what they don’t know; what are the certainties and what are the uncertainties- an ability to be comfortable in that unknowing place.
That is my discussion this week on the bias and also on past performance- about avoiding putting too much emphasis, almost as if it is a given “past performance guaranteed…future results.” It’s just not true – it’s not just a catch phrase at the disclaimer at the back.
I am a registered representative with Cambridge Investment Research. My company is Generosity Wealth Management. Phone number is 303.747.6455. You have a wonderful week, talk to you later, bye.
This week’s video is my 1st Quarter Review and my 2nd Quarter Preview.
The first quarter was good (yeah!), and I list the items I’ll be watching and thinking about for the 2nd quarter.
A must see video (if I do say so myself).
TRANSCRIPT:
Hi Clients and Friends, Mike Brady here. This is the first quarter review and second quarter pre-view for 2011.
Now, in general, the first quarter was a little bouncy in February, but overall a positive quarter; actually, a very strong and nice quarter. The indexes, which of course you can’t invest in indexes, but they’re something that you see in newspapers and TV, etc., that we refer to all the time, the stock market indexes in general were all positive sort of in the middle numbers, four, five, six, something like that. The big winner was the sector that is small cap around nine or ten percent for the first quarter, depending on which slice you look at. Corporate bonds were positive for the year, for the first quarter I should say. And that is good for them, two to three percent. Government bonds were pretty flat either zero or actually negative, between zero and one percent, once again depending on which slice and what duration you want to look at.
So for this second quarter, what’s going to happen? Oh, boy, that’s always a tricky one. We have to look at it, I think, week and month by month. Some of the things I will be paying attention to will be quantitative easing, ending in June. Quantitative easing, (QE2 is what we call it) has been an influx of capital into the markets and that is going to end in June. Also Bernanke is going to give his first ever press conference at the end of April and boy, I think if you’ve been watching my videos and reading my newsletters you know I’m not a big fan of Ben Bernanke, so I’m kind of curious what he’s going to say and well you know kind of what the reaction is to him.
I’m going to continue to watch for the real numbers. I’m becoming more and more of a proponent that what you read and what gets put out there is not really telling the full story. A great example would be unemployment. The unemployment rate is 8.8 percent right now which is supposed to be good news. But the U6, which is the unemployment number including people who have given up looking, is quite high, sixteen or seventeen percent. So, I’m going to continue to look at what the real numbers are, telling us the real data. Just one more example while I’m thinking of it is inflation. Inflation, the CPI, does not include food and oil, as if we don’t drive or eat. I mean that’s a goofy number. So what are the true numbers so that we can understand what the recovery is saying.
I’m going to continue to watch oil. Oil has really increased in the last three or four months or so. And as I mentioned at the beginning of the year oil can be a real sidetrack, a good de-railer for the economy if it increases. And it has increased quite a lot since the beginning of the year. I don’t have the number right in front of me but as I recall it was around $88, and now it is right around $113, or $114. So it has started to increase and that is of concern to me.
These are some of the things that I’m going to really watch very closely this second quarter. And of course, I encourage you to give me a call as we go through the quarter if there are any concerns or questions you might have about the impact of this or that on the markets and on your portfolio, etc.
My name is Mike Brady. My company is Generosity Wealth Management, The phone number is 303.747.6455. I am a registered representative with Cambridge Investment Research. And we’ll talk to you next week. Thank you bye bye.
Like it or not, globalization is here to stay. Japan, and the impact on supply chains throughout the world, is only going to reinforce the move towards a diverse, diffused world economy.
In the coming years, we’ll see an even greater push toward interrelatedness amongst countries, and each country’s businesses will rely on many countries for their materials. Diversification of supply is key.
Japan is going to recover and recover quickly.
TRANSCRIPT:
Hi Clients and Friends, Mike Brady here.
This week I want to talk about globalization. It’s here to stay and Japan is just an example of why it’s going to stay. Periodically, I talk with people here in Boulder who think globalization is a bad thing. I’m not here to say that it is good or bad. I have my opinions, but now is not the time to get into that political discussion. But what I am here to say is that it is not going anywhere but more globalization.
Japan: Toyota and Honda, 68-72% of the parts for those companies are actually made outside of Japan. So they are going to continue to make automobiles. China and South Korea and other places that are getting their materials from Japan are having a little bit of supply issue, supply problems, for their products that they export to the rest of the world; or export back into Japan once it’s finished goods. And so, Japan and South Korea and frankly, much of the world is going to diversify, in my opinion, going to continue to diversify their supply chain. So that an event from one country does not disrupt it, they’re going to need 2, 3, 4, different supply chains, sources, for their goods as they distribute it into the rest of the world.
I do not believe, that Japan, a year from now a year from now, two years, five years from now, that we’re going to look back and say that this was a huge economic event that had this very negative impact. Japan as a country is the third largest economy. It is a very wealthy country. They’re very resilient people. And while this is very painful, what has happened, I think that Japan is going to pick itself up and pick itself up very quickly. In the meantime, countries that have relied upon Japan, and will continue to rely upon Japan will continue to rely upon Japan but also diversify into other countries.
So from an investor point of view, the question we might ask is how can we benefit from this trend of diffused supply chains, diffused need and globalization? And so that I think that is really the question that we need to ask ourselves.
I continue to believe that 2011, this year, will be a positive year for the stock markets. And frankly, I’m not changing that. Nothing that I’ve seen in the last three months has changed that opinion. In two or three months as the buying of the, from the, QE2 changes or stops, that will be another obstacle that we’ll have to watch very closely to see what happens.
Anyway, that’s what I’m thinking about this week. I hope you’re doing wonderful.
My name is Mike Brady. My company is Generosity Wealth Management. I am a registered rep with Cambridge Investment Research. My phone number is 303.747.6455. Hope you’re doing well. And I’ll talk to you next week, bye bye.
The tsunami that hit Japan last week and has affected their nuclear reactors is causing great concern in the stock markets.
The Nikkei dropped 11% a few nights ago. The US markets have dropped 2% this morning (Tuesday as I write this).
Now is the time to determine if you’re gambling or investing?. Is this an emotional sell off or a harbinger of things to come?
I discuss Emotional Selling in my video this week.
TRANSCRIPT:
Good Morning Clients and Friends, Mike Brady here.
This week I want to talk about emotional selling. The tsunami hit Japan late last week. I’m recording this on a Tuesday morning and overnight the Nikkea went down 11%. It is just absolutely getting killed. Our markets have opened up very sharply down. So the question I’m posing is what do you do in a situation like this? If your first inclination whenever a huge catastrophic event happens, and now we’re trying, and looking and waiting for what’s going to happen with these nuclear reactors, is if your first reaction is to sell, “I’ve got to move right to the cash!” Then you might ask yourself, are you gambling or are you investing?
What I look for, and if you watch some of my videos, particularly my beginning of the year video (hopefully, you’ve watched it time and time again, it’s must watch) that we’re looking at months, weeks, and the year, of what the market is doing; the value of it, the quality of the market. Because there always going to be events like Japan right now, is happening. I don’t want to minimize the impact of what is happening there in Japan. Japan is a huge global economic player and what is happening there is absolutely horrific. So please, don’t take this the wrong way- that I’m trying to minimize it.
But I am looking at historically, there have been huge events- in our most recent times, the last 20 years or so, there’s been Gulf War I, there’s been Gulf War II, there’s been 9/11- where the market really went down. When the markets reopened that, you know, the week after, and the quarter ended up being positive; the next quarter after that.
So, you know, the major impact that this is going to have, I don’t know yet. I absolutely acknowledge that I don’t know and anyone who says they absolutely know is pulling your leg.
What I will do is to continue to watch this very closely. I do not get emotional about it. You know, emotional selling I think, doesn’t serve anyone’s best interest. I might change my mind in days, in a week, and in a month. That is why you can’t be beholden to your theory, you know, so very stringently. But you do have to kind of keep a straight arrow. What are you doing? What are the value of the market? What’s the impact going to be, not just the immediate impact but one month, one quarter and one year from now? And, with all the data that I have right now, as it’s being compiled, etc., I’m not convinced that now is the time to sell out. So I’m not doing anything with my portfolios for clients. But you know, I will continue to keep you abreast that’s why I have weekly newsletters so you can know what I’m thinking.
Anyway, I just wanted to kind of touch base on that. Hopefully, you’re getting this video, I’m doing this on a Tuesday morning, getting it a little late to my compliance department. And hopefully they’re really good about getting it turned around so you are getting this on a Wednesday morning. If not, you’re getting it as soon as possible.
So anyway, have a wonderful week. I’ll keep you informed.
My company is Generosity Wealth Management. I am a registered rep with Cambridge Investment Research. 303.747.6455. I am here in Boulder. If you’re my client, I love you. If you’re not my client, I still like you but I’d love you to be my client. 303.747.6455. Thanks bye bye.
If you’ve been reading my blogs and watching my videos religiously, I not only love you, but you’ll also know that I’m a big Warren Buffet fan.
One piece of sage advice he has given that I agree with is “don’t buy something you don’t understand”.
In this week’s video, I expand upon that and talk about how I was once pitched one of the instruments that lead to the financial disaster of 2008. It just didn’t make sense to me, so I didn’t recommend it to clients.
Be sure you have good transparency, understanding, and a tolerance for the risk for any investment you make.
