William Bernstein is one of my favorite authors. I think I have learned more from his books than I did throughout all my years of college. Having said that, this article is a bit of a departure from his normal fare.
It's a rather entertaining piece that attempts to plot today's politicos on risk/return, mean-variance scale.
I know what you're thinking - if I think this is entertaining I must have a warped sense of humor......once again, you'd be correct!
Scott Dauenhauer, CFP, MSFP
Monday, May 15, 2006
Wednesday, May 10, 2006
Real Estate Bubble: Opposing Views
It seems like we've been debating whether there is a bubble in real estate prices for over five years now and as of yet, nothing has popped. Does this mean there isn't a bubble?
I don't know, but I do know that there are areas that seem way to high priced to be sustainable.
I have found two different articles (in addition to the article I posted yesterday about Buffet) that argue for and against a real estate bubble. I'll report, you decide....
TIAA-CREF: Will the Housing Boom Become a Bust, Pushing the US Into Recession?
BusinessWeek: Why The Housing Bubble Won't Burst
Both articles are short and interesting.
Scott Dauenhauer, CFP, MSFP
I don't know, but I do know that there are areas that seem way to high priced to be sustainable.
I have found two different articles (in addition to the article I posted yesterday about Buffet) that argue for and against a real estate bubble. I'll report, you decide....
TIAA-CREF: Will the Housing Boom Become a Bust, Pushing the US Into Recession?
BusinessWeek: Why The Housing Bubble Won't Burst
Both articles are short and interesting.
Scott Dauenhauer, CFP, MSFP
Tuesday, May 09, 2006
I'm Healing Fine - What about You?
Tonsils & Collar Bone are both Healing Fine – What about You?
It’s been awhile since the Meridian Monthly has been published (early March) and that is because I’ve been busy with work…..and surgeries.
I had my tonsils out at the end of March, this went well but it was very painful and I didn’t eat for eight days. As I got better from the tonsil surgery I felt well enough to rejoin my soccer team and promptly broke my collar bone. I won’t bore you with the details, but I was sidelined for another week. Just when I thought my collar bone was feeling better I found out I had to have surgery on it. I was shocked because 97% of collar bone breaks don’t result in a surgery……I always did strive to be in the top percentile!!!
Anyway, my surgery was last Friday (May 5th, yes Cince De Mayo) and I am starting to feel much better. It will take some physical therapy and about 6 – 8 weeks to fully heal, but I am pretty much back at my desk working and being productive.
All in all it’s been a tough few months, but in the scheme of things it hasn’t been that bad. After all, I still have my health, my family, and wonderful clients. I’m upbeat and optimistic about the future and aching to get back to working out and playing soccer and softball (though my wife is rather apprehensive!).
I do want to share a few things that have come to mind over the past few months that I believe will benefit you.
With both surgeries my doctors asked is I had a living will, power of attorney for health care, or an Advanced Medical Directive – I did and I provided them (though after re-reading them I think I may make a few changes). The reason I bring this up is that I am willing to bet that with all the planning we’ve done – most of you still don’t have these essential documents. I also have a living trust and a will and life insurance. In addition, I have left instructions for my wife on who to call to help notify and work with my clients should anything happen to me. My question to you is……what have you done to prepare your family for the unexpected?
While death was a possibility it was pretty small, the real danger was disability and luckily I have a disability policy on me and my wife – do you? You have a greater chance of becoming disabled than you do of dying. Have you insured this risk?
Think about these things – are you really prepared if something bad where to happen to you or your spouse? Perhaps we should sit down and talk more in depth.
The year is still young and I have big plans for it, I’m not one to let a couple surgeries get in my way. When you are ready let’s make sure we really have all you’re planning needs taken care of.
Scott Dauenhauer, CFP, MSFP
It’s been awhile since the Meridian Monthly has been published (early March) and that is because I’ve been busy with work…..and surgeries.
I had my tonsils out at the end of March, this went well but it was very painful and I didn’t eat for eight days. As I got better from the tonsil surgery I felt well enough to rejoin my soccer team and promptly broke my collar bone. I won’t bore you with the details, but I was sidelined for another week. Just when I thought my collar bone was feeling better I found out I had to have surgery on it. I was shocked because 97% of collar bone breaks don’t result in a surgery……I always did strive to be in the top percentile!!!
Anyway, my surgery was last Friday (May 5th, yes Cince De Mayo) and I am starting to feel much better. It will take some physical therapy and about 6 – 8 weeks to fully heal, but I am pretty much back at my desk working and being productive.
All in all it’s been a tough few months, but in the scheme of things it hasn’t been that bad. After all, I still have my health, my family, and wonderful clients. I’m upbeat and optimistic about the future and aching to get back to working out and playing soccer and softball (though my wife is rather apprehensive!).
I do want to share a few things that have come to mind over the past few months that I believe will benefit you.
With both surgeries my doctors asked is I had a living will, power of attorney for health care, or an Advanced Medical Directive – I did and I provided them (though after re-reading them I think I may make a few changes). The reason I bring this up is that I am willing to bet that with all the planning we’ve done – most of you still don’t have these essential documents. I also have a living trust and a will and life insurance. In addition, I have left instructions for my wife on who to call to help notify and work with my clients should anything happen to me. My question to you is……what have you done to prepare your family for the unexpected?
While death was a possibility it was pretty small, the real danger was disability and luckily I have a disability policy on me and my wife – do you? You have a greater chance of becoming disabled than you do of dying. Have you insured this risk?
Think about these things – are you really prepared if something bad where to happen to you or your spouse? Perhaps we should sit down and talk more in depth.
The year is still young and I have big plans for it, I’m not one to let a couple surgeries get in my way. When you are ready let’s make sure we really have all you’re planning needs taken care of.
Scott Dauenhauer, CFP, MSFP
Buffett wary of real estate, commodities speculation - May. 8, 2006
Buffett wary of real estate, commodities speculation - May. 8, 2006
Warren Buffet has a way of making the complex easy. He is not big on residential real estate and sees some slowing, possibly even a drop. He says the same for Gold and Oil. My favorite quote from this article is "As the old saying goes, what the wise man does in the beginning, fools do in the end."
In other words - don't get caught up in the mania. Stay diversified and hold on through the good and bad times.
Scott Dauenhauer, CFP, MSFP
Warren Buffet has a way of making the complex easy. He is not big on residential real estate and sees some slowing, possibly even a drop. He says the same for Gold and Oil. My favorite quote from this article is "As the old saying goes, what the wise man does in the beginning, fools do in the end."
In other words - don't get caught up in the mania. Stay diversified and hold on through the good and bad times.
Scott Dauenhauer, CFP, MSFP
Will The CFP Designation Step It Up?
Will The CFP Designation Step It Up?
What follows is the text of a letter sent from The National Association of Personal Financial Advisors (NAPFA) to the Certified Financial Planner Board. It details what I have been pushing for with the CFP designation for a long time – a required Fiduciary Responsibility. I have come across too many CFP Practitioners who abuse their clients and put their own interest first, it’s about time the board acted.
May 5, 2006
Sarah Ball Teslik, CEO
Certified Financial Planner Board of Standards, Inc.
1670 Broadway, Suite 600
Denver, CO 80202-4809
Dear Sarah:
On behalf of the NAPFA Board of Directors, we are writing you and the CFP Board to express our concerns regarding the CFP Code of Ethics. We understand that the Code of Ethics is currently being revised and that these revisions are due to be published soon.
We encourage the CFP Board of Standards to strengthen its Code of Ethics to require, without any qualifications or exceptions, that any financial advisor giving financial planning advice adhere to a fiduciary standard to place the client's interest first. As you surely know, this is the same standard that is required of an advisor giving investment advice under the 1940 Investment Advisors Act. And it is the standard that the SEC has chosen not to impose on broker-dealers who claim to provide something less than "financial planning."
Leading professions that are held in high regard by the public inevitably reach their level of credibility by developing and adhering to high standards. In numerous professions in which practitioners work with clients' money, a strong fiduciary standard is part of the commitment to the public. NAPFA and the CFP Board of Standards stand side-to-side in attempting to bring financial planning to the status of a true profession. If financial planning is to be considered a profession, we must make certain that our members put their clients' interests first. We urge the CFP Board of Standards to maintain the CFP as a mark of the profession, not the mark of a professional salesperson.
Consumers need clarity if they are to be confident about where they turn for financial advice. Not only do they need to know that their advisor is a fiduciary, but they also need full and complete disclosure of all possible conflicts of interest. The CFP Board should set the mark with a requirement of a fiduciary relationship and full disclosure - both conditions are necessary, but neither is sufficient by itself.
At the moment, the only guarantee that an individual client has that his or her advisor is adhering to a fiduciary standard is if the advisor is an RIA or a member of NAPFA. Our Fiduciary Oath has been effective for more than 20 years as helping our members define what they stand for, and how they will conduct themselves. Our Fiduciary Oath has contributed to the success of our members and our organization, as it has built credibility with consumer advocates, regulators, and others. It has not resulted in professional hardships or difficulties for our members; to the contrary, it is a strong argument in their favor, as they offer their services.
By contrast, a holder of a CFP might be a fiduciary, and might not be a fiduciary. The public is confused, and the CFP certificant must go through an additional layer of explanation about where his loyalties lie. It would be simpler for all CFP holders to be able to say they are fiduciaries, and to explain why a consumer should value that type of relationship.
We encourage the CFP Board of Standards to adopt a Code of Ethics that will give consumers the guarantee that when they work with an advisor who provides financial planning advice under the CFP mark, that advisor will hold to a fiduciary standard.
Sincerely,
Peggy S. Cabaniss
Chair, NAPFA Board of Directors
Ellen Turf
CEO, NAPFA
What follows is the text of a letter sent from The National Association of Personal Financial Advisors (NAPFA) to the Certified Financial Planner Board. It details what I have been pushing for with the CFP designation for a long time – a required Fiduciary Responsibility. I have come across too many CFP Practitioners who abuse their clients and put their own interest first, it’s about time the board acted.
May 5, 2006
Sarah Ball Teslik, CEO
Certified Financial Planner Board of Standards, Inc.
1670 Broadway, Suite 600
Denver, CO 80202-4809
Dear Sarah:
On behalf of the NAPFA Board of Directors, we are writing you and the CFP Board to express our concerns regarding the CFP Code of Ethics. We understand that the Code of Ethics is currently being revised and that these revisions are due to be published soon.
We encourage the CFP Board of Standards to strengthen its Code of Ethics to require, without any qualifications or exceptions, that any financial advisor giving financial planning advice adhere to a fiduciary standard to place the client's interest first. As you surely know, this is the same standard that is required of an advisor giving investment advice under the 1940 Investment Advisors Act. And it is the standard that the SEC has chosen not to impose on broker-dealers who claim to provide something less than "financial planning."
Leading professions that are held in high regard by the public inevitably reach their level of credibility by developing and adhering to high standards. In numerous professions in which practitioners work with clients' money, a strong fiduciary standard is part of the commitment to the public. NAPFA and the CFP Board of Standards stand side-to-side in attempting to bring financial planning to the status of a true profession. If financial planning is to be considered a profession, we must make certain that our members put their clients' interests first. We urge the CFP Board of Standards to maintain the CFP as a mark of the profession, not the mark of a professional salesperson.
Consumers need clarity if they are to be confident about where they turn for financial advice. Not only do they need to know that their advisor is a fiduciary, but they also need full and complete disclosure of all possible conflicts of interest. The CFP Board should set the mark with a requirement of a fiduciary relationship and full disclosure - both conditions are necessary, but neither is sufficient by itself.
At the moment, the only guarantee that an individual client has that his or her advisor is adhering to a fiduciary standard is if the advisor is an RIA or a member of NAPFA. Our Fiduciary Oath has been effective for more than 20 years as helping our members define what they stand for, and how they will conduct themselves. Our Fiduciary Oath has contributed to the success of our members and our organization, as it has built credibility with consumer advocates, regulators, and others. It has not resulted in professional hardships or difficulties for our members; to the contrary, it is a strong argument in their favor, as they offer their services.
By contrast, a holder of a CFP might be a fiduciary, and might not be a fiduciary. The public is confused, and the CFP certificant must go through an additional layer of explanation about where his loyalties lie. It would be simpler for all CFP holders to be able to say they are fiduciaries, and to explain why a consumer should value that type of relationship.
We encourage the CFP Board of Standards to adopt a Code of Ethics that will give consumers the guarantee that when they work with an advisor who provides financial planning advice under the CFP mark, that advisor will hold to a fiduciary standard.
Sincerely,
Peggy S. Cabaniss
Chair, NAPFA Board of Directors
Ellen Turf
CEO, NAPFA
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