Hosts: Gary Abely, CFP®, AIF® and Joe Bert, CFP®, AIF®

Well, good Saturday morning to you Central Florida, I’m Kyle Cassandra, this is On the Money with the Certified Financial Group here on News 96.5 WDBO’s Ask the Expert weekend.  Joe Bert, Gary Abely live here in the studio taking your phone calls at 844-220-0965.  Good morning, gentlemen.


Good morning.


Good morning.


How are you both today?


We’re doing great, how are you?




Alright Mr. Oracle of Orlando, Joe Bert, what can the audience call you about today?


We are here to answer any questions that our listeners might have regarding their personal finances.  As we often say, we go through life trying some of this, trying some of that, and wake up when we’re 55 years old only to find we have a collection of financial accidents.  At some point in time that paycheck will stop, you’ll be looking at Social Security, and then you have a gap.  Well, how are we going to enjoy the lifestyle that we always dreamed about if we only have Social Security and that’s only going to come from if you’ve been able to save, and invest, and accumulate over your working lifetime.  And unfortunately, Gary and I see time and time again folks that make these decisions, they really have no idea why they made them.  Maybe they listened to their brother-in-law, their co-worker, money magazine, some guys on the radio on Saturday morning, who knows what they were listening to, and they find out that they really don’t have any direction.  So, as we often times say on Saturday morning, we do this for free.  On Monday through Friday, there is a fee.  So, the good news is we are here to answer your questions that you might have about stocks and bonds, and decisions that you might be making about your 401k or IRA, reverse mortgages, life insurance, reverse — I said reverse mortgages — insurance, annuities, anything else that’s on your mind.  So, the lines are absolutely wide open and if you have any questions on any of those topics, anything that’s on your mind, anything you are curious about, wanted to know, Gary and I are here to take your calls.  And all you have to do is pick up the phone and dial these magic numbers.


844-220-0965.  Poof, just like that.  Magic.


Magic numbers.


844-220-0965.  I also have another set of magic numbers for you.  They’re called the text line, text numbers, 21232.  You can text us your question, just keep it to about 160 characters.  Again, you can text it to 21232.  Gary Abely, who just sent some of his kids off to college in here has our topic of the day, kicking it off.  How to help children establish credit and when to start.


Well, you can just imagine why I came up with that topic, right?  So, there’s really a few ways that you can help your children establish credit, and I guess the when to start just really depends on your children.  But we started in about 11th grade as I recall and there’s a few options that you can do.  So, with respect to at least credit cards, you could do a secured card and that’s a situation where you would put $500 or so in a bank account and then you would have a credit card with a $500 limit.


On your child’s name.


On your child’s name.


So, you’ve given them $500 of plastic.




Got it.


Now there’s a negative to that because it is their card and I, as the parent, don’t know what they’re spending.  Right, I’m not going to get a copy of that statement.  It’s their own.  Now, the beauty of it is they can only get into $500 of trouble, right?




But often those cards have high fees and they tend not to be the best bet because often at times there’s low balances and we can all think of an emergency that might cost more than $500 today.  So, you have another option.  One would be to cosign on a card.




What, you don’t like that option?


I don’t like that option.


I didn’t like that option either.  So, these would be for the extremely trustworthy children who have already been taught financial basics and you have complete confidence.  But, the negative with that is you don’t know what they’re spending the money on.  They could actually get an increase in the line without you knowing it.




Now you’re responsible for more money.  So, I didn’t like that idea either.


So, let me ask this: If you cosign on one of those cards do the statements still come to the kids or do you get a copy of the statements or what?


No.  You do not get a copy of the statements.


So, the kids — so, you cosign on a card for $1,000 and they got an increase to 5,000, you don’t know it? They’re getting the statements?


You still cosigned <Inaudible>


Okay, got you.


So, didn’t like it.




Okay, and that’s option two.


So, the option that I chose and I think the option that is probably best for most is to allow your child to be an authorized user on your own account.  Now, you get your statement just as you normally do and you do see all of the charges.  Of course, you’re responsible for them, but the beauty of this is your child will basically piggy-back on the credit that you have established for that card.  So, for example we chose a card that my wife and I have used now for I can’t remember, maybe — actually, I can remember because it was when they were born, so about 18 years ago because it was a Fidelity card that it gave 2% of your purchases into a 529 plan.  So, in any case, they will get credit, that credit history on that card, they’ll be able to piggy back on.


Got it.


Now, there was a time we might have a listener think well no, I don’t think that’s accurate, because there was a time when that was not the case.  But, they actually will get credit by being an authorized user on our card.  Which is pretty nice.  And with American Express, if your credit is good you have unlimited credit.  So, theoretically if they had the American Express card, they could only buy one Maserati and then you call them, right.


Whoa, I’m not sure I like that idea.  Well, ours does not have such a high limit.




But I do like that, because you can monitor the spending.




And you have a little bit more control.


So that’s the path you’ve chosen?


That is the path.


And now they’re off to college and that’s what they have in their wallets?






We’ll see what happens next month.


There you go.  Stay tuned.


I have confidence.


I’m sure you do.  They’re good ladies, twins.




And they were both joint valedictorians of their high school graduating class too <Inaudible> good for you.  Congratulations.


Well, we had a couple of callers call in and they just dropped off.  I was about to go to them.  I just looked down <Inaudible>


We talked too long.


No, I want to give out the phone number one more time; 844-220-0965.  844-220-0965.  Great information on the credit cards; authorized user versus cosigner on an account.


Right, right.


Or do you recommend like the cash back cards.  Is that something you would give a child? Or <Inaudible> APR?


Well, you know, any card that has cash back, as long as the fees aren’t too high — sometimes these cash back cards will have high fees and there’s not enough charged on it to even cover the annual fee.  So, it really does depend on what they spending will be — what your anticipated spending will be and what the fees are with that card.


Of course, the key with every credit card is to pay it off every month.


Well, that’s right.


You don’t want to use it as a lifestyle, because unfortunately we have seen as well when folks get these — you know, when my kids went to college, which are older than yours of course, but they are — I remember going on campus in the orientation and every credit card in the world had these little tents set up giving you yo-yos and t-shirts and whatever.  Sign you up, sign you up — by the end of the day, you could have 10 credit cards and all of a sudden the kids in — you know, they’re at college and running up the credit.  We’ve seen that happen.  Not my kids fortunately, but I have — we’ve seen those stories.  And not only do they have student debt, now they have credit card debt.  What a mess.  So, that’s a good approach, Gary.  Alright, we’ve got a call here.


Yeah, let’s go to Steven in Apopka who’s up first.  Steven, you’re on with the Certified Financial Group here on WDBO.


Good morning, gentlemen.


Good morning, Steve.


I wanted to piggyback on the question — I have a question on the subject you’re talking about now with the adding kids onto your credit history.  I have a 17 year old.  Do I need to wait until he turns 18 in order to add him?


That’s a good question because my daughters are just about 19 and I’m trying to remember whether there was an issue with the age 18 or not.  You don’t happen to know, Joe?




No, I think you can, as —


You have to be 18.


As an authorized user?


No no, not as an authorized user.


Right, right, right.


I don’t believe so, but to have it in your name alone.






Correct, yeah, so you could — the strategy that I was talking about, Steven, you could add them as an authorized user, but they could not get a card on their own until they were 18.








Okay.  The objective is to add them so they can get the benefit of my history.


That’s right.


And eventually transition them into their own credit history.  My second question would be at that point when I’m transitioning them off of my credit, will that harm their credit?


No, it won’t harm their credit at all.  The whole idea of it is to help improve and establish credit, have them establish a credit score so that they could get their own card once they’re off on their own.


So, the history that — the amount of time that I’ve had building all that credit, when that falls off of their credit, it won’t harm them?


No.  It doesn’t even pick it up.  That’s not transferable.




Your credit history is not transferable to your child because you’re the responsible party.


Alright, but you mentioned they would piggyback and get my score essentially.


No, not your score.  Not your score.  They would be getting credit for the history of that card.  Not your score.  <Inaudible>


Oh, I misspoke then.


And so they will get the benefit of that.  So, it’s very important if you do make your child an authorized user on a card, that you select a card that you have always paid off and that you’ve never had any problems with.  Because if you were to select a card where, whoops, we forgot to pay because we were on vacation or something, then you’re actually hurting your child, not helping your child.


The number one thing, Steven, that affects your credit score is your payment history.


Well, I have zero balances on all my accounts, so I’m very studious on that.




I would probably pick, I guess, the longest — or oldest credit account that I have to add them to —


I would too.


And try to get the maximum benefit.  Are you able to add them to more than one account?


Yes, you could add them to several accounts.  I don’t know that I would do that because I have a child heading off to college with multiple cards, eh, I think I’d just stick with one.


The thing is I’m not going to give them the actual card.


Oh, okay.


So they’ll get the benefit of the score, but they’re not getting anything tangible in their hands.


Okay, well there you go.


That’s cagey.


You’ve thought this through, Steven.  I like it.




I’m not going to actually give them a card, but I want to make sure he gets the — Steve in Apopka, thanks so much for your phone call.  If you want Steven’s line, it’s 844-220-0965.  844-220-0965.  Yeah, you can get them a card and use it at the Home Depot and it’s under their name, right?  Is that how that works?


Yeah.  I was just going to add before he left that it would be a good idea to use that card in the child’s name.


Oh yeah.


And just don’t stick it in the drawer.  <Inaudible> don’t just stick it in a drawer.


Exactly, exactly.


Use it on occasion.


I wish our listeners could have a peer into our studio this morning because I’m sitting here in the air chair as I usually am on a Saturday morning talking into the microphone and Mr. Abely is standing next to me and Mr. Abely has one of those stand-up desks, so he stands all day long.  Yeah, stands, and he’s —


I wish I had one of those.


Ah, they’re great.


He started the trend in our office, so we have more than a couple around the office and we swear by it.


Well, I think you’re smarter —


How long has it been you’ve been using it now?


I don’t know.


About a year maybe?


Maybe a little over.


Yeah? Have you — give me the — give our listeners — because we see these things advertised all the time.


Well, I purchased the <Inaudible> desk which you see a lot in the papers and there’s no assembly, which is what sold it for me.  I have 10 thumbs.  So literally, you just plop it on your desk and you can lower it very easily if you want to sit.


But the benefit — physical benefits to you.


Well, outside of you burn a few more calories —


You look trimmer.  You look trimmer.


Yeah, well, I don’t know about that.


Well, you do.


But, I think being able to move around you have less issues with your back, I really do.  You know, your back and neck — you can adjust your monitors perfectly.




And when you’re standing, it’s just you move around a lot more.


The benefits of a standing desk are just documented all over the place.  What’s so funny, when I went to ABC in New York this past couple months ago, all of the desk for the big wigs were all hydraulic.  So, if you wanted to sit, you could.  Or you, could press a button and they would lift and they would stand.  And I was like aw, man, I want once of these.


Only in New York.


I was going to say, that’s at the network level.  We need to bring that here to DBO.


Yeah, sweet.


844-220-0965.  844-220-0965.  That is the number to dial us up, talk to Joe or Gary today.  Text number is 21232.  We will continue with your calls right after we get the three big things you need to know.  And welcome back, this is On the Money with the Certified Financial Group here on News 96.5 WDBO.  We are taking your phone calls at 844-220-0965.  That’s 844-220-0965.  We’re the certified financial planner professionals, the Certified Financial Group; Joe Bert, Gary Abely in studio, again taking your phone calls and text, 21232.  We are four minutes away from the latest news, weather, and traffic with Dave Wall over in the News 96.5 news room, so let’s get back to our busy phone lines here.  Talk to Fred over in Winter Springs.  Fred, you’re on with the Certified Financial Group here on WDBO.




Good morning.


Good morning.


Thanks for taking my call.


Sure, how can we help you?


Yeah, I’ve got a couple of — well, my wife and I have a couple of IRAs from past employers — 401(k)s.  Considering rolling them over into an IRA possibly, but wanted to look at — we have some other funds in a Scottrade account, but we’ll have to probably get away from managed mutual funds style of account.  Was looking more into diversifying into either silver and gold with that money.  Is that a good thing to do in your estimation?


Well, I don’t think so.  Well, when you say diversifying into silver or gold, if a client came to me and said Gary, I want to have 2%, 3% in a silver or gold mining fund or something along that line I would say alright, the 2%, 3%.  But, if you look at the history of investing in precious metals, you might have done better burying it in the backyard.  Am I exaggerating, Joe?


No, not at all.  The problem is is that because there are little if any restrictions on what these adds can say, you see them all over the place and they — I’ve seen them.  The most recent one; silver is at all-time low.  If it ever gets back to where it was, you’ll have a 200% — I mean, if we said that in the investment world, we’d be in handcuffs.


Yes, right.


So, they throw all this stuff out there to entice you to think you’re going to find the next silver nugget if you will to improve your investment returns.  And then you have to be careful of who you’re dealing with because a lot of these — not a lot, but there’s some of these firms that they’re boiler rooms, they want to get you on the phone and then next thing you know, they want to sell you <Inaudible> coins and things that are very hard to value with big mark-ups.  If you want to have precious metals in your portfolio, and I’ve done this for clients on a limited number of cases, we can buy the bullion for you at a 2% over spot price and have it stored for you at 1% per year and you’re actually owning the bullion.  But, at a part of your overall portfolio, as Gary said, I wouldn’t put more than a couple percent in it.  Because, it’s a high risk/high reward proposition.




And I think, Fred, Warren Buffet said it best and I’m going to butcher trying to paraphrase what he said.  But he said you know, you buy a metal; first you’ve got all the costs of digging it out of the ground and then mining it.  You get it into this beautiful state and then all of a sudden what do you do? You put it back into the ground and you pay somebody to guard it, and then you also have to pay an insurance company to insure it.  So, my wife and I have a coin collection that we — of course, you can’t keep it in your house.  You have to keep it in the safety deposit box.  And a lot of people don’t know this, so I thought I’d throw it out for our listeners, if you have your safety deposit box at any bank, Bank of America where we have to have it, you are not insured there.  So, if you have any sizeable collection, you have to pay that fee and that fee for an insurance policy is called a personal articles policy.  And it can actually run 1% to 2% per year to insure what’s in a safety deposit box.  So, most people don’t do that.  So, because of the issues of owning metals and having to pay for it and, as Joe mentioned, the cost each year, it just really adds up.  So, we wouldn’t recommend it, Fred.  Stick with diversified mutual funds.


And if you buy it, then you have to find a good way, an efficient way, to sell it.  And you’re going to pay a fee to sell it.


A commission to sell it, right.






Alright, Fred, thanks so much for your phone call.  If you would like Fred’s line, the number to dial us up is 844-220-0965.  That’s 844-220-0965.  We are planning tomorrow —


Today —


With the certified finance planner professionals, the Certified Financial Group, Joe Bert, Gary Abely here on News 96.5 WDBO.  Hey, welcome back, this is On the Money with the Certified Financial Group here on News 96.5 WDBO’s Ask the Expert weekend.  We have the certified financial planner professionals from the Certified Financial Group, Joe Bert, Gary Abely live here in the studio taking your phone calls at 844-220-0965.  844-220-0965.  We also have the text machine up and running as well, 21232.  Joe, for the people that joined us during the latest news, weather, and traffic, what can they call you about today?


Well, once again, Gary and I are here to take any questions that’s on your mind.  There’s no such thing as a dumb question, that — anything that’s on your mind concerning your personal finances.  What do I do with stuff? I’ve inherited some money, I want to buy a house, all this kind of thing.  What do I do with this life insurance? Do I really need life insurance anymore? I’m thinking about buying an annuity.  What’s an annuity all about? What’s a mutual fund all about? In fact, talking about what a mutual fund is all about, Mr. Abely right here is standing next to me, on October the 21st is going to have a session: everything you want to know about mutual funds.  This is the most popular investment today —


Of course.  Mutual funds.


Yet many people have no idea —


No idea, not a clue.


No idea what they are, how they work, why they’re good, why they’re bad, where they should be used, maybe where they shouldn’t be used.  That’s on October 21st from 9:00 to 11:00.  This is a daytime session on a Tuesday.


On a Tuesday, okay.




That’s what it says right there.


Was that your intention?


I don’t know.  I’m thinking —


Maybe not.


Maybe we have a look at that date.  I’m not sure that’s right.  Anyway —


Anyway, alright.


It’s on the website.


In any case, what are you going to cover?


So, well, a lot of people, just — we had that phone call earlier and thinking, well, maybe I want to diversify into gold.  Well, we talk about what is diversifying.  Do we have all of our money in an index fund? Well, that could be diversified if it’s a broad index, right? Do we have all of our money in a managed fund or should we use both managed mutual funds or passive or index funds? So, we talk about what’s the difference between the two of those.  We talk about large cap, mid cap, small cap.  What’s the difference between those.  What’s a large cap fund?


Should you even have a large cap fund?




What if you have a small head?


Alright, I think we’re getting off topic.  But, alright, so then we talk well, what’s value versus growth? Well, if we look at the returns of late, you’d probably never want to buy a small cap They’ll probably never want to buy a small cap value or a large cap value because they have grossly been underperforming growth.  But as you know Joe, that’s not always the case.  Thank <?> small cap value’s long-term have been one of the best categories to invest in.  So what’s the difference between value and growth, what’s —


<Inaudible> blend fund.




What is a blend fund.


Yeah, of course that’s <Inaudible>


How do you look at what the fees are, and how long the managers <Inaudible> been there?


Well, these are important things because we’ll have folks who manage their money on their own and they’ll come in and they’ll say would you take a look at what I’m doing and just bless this or tell us where we’ve gone wrong?  And that’s quite a bit of what we do, and you’ll oftentimes see somebody has picked a fund that was great at one point, and when they picked it, maybe it was a five star fund.  And then now all of the sudden it’s a two star fund.  They haven’t been monitoring it.  And perhaps the manager of that fund retired three years ago and they put a rookie or who knows who they’ve put in place of these seasoned manager.  So we have to look at several things when we look at mutual funds.  But obviously management tenure, we want to know how is it comparing next to its peers.  So we had somebody come in a couple of weeks ago and they were going over the portfolio and they had 180% return on one particular fund and said oh <Inaudible>.


I want more of that, <Inaudible>.


No, no, no, no, so it this has been my best investment.


Yeah, right.


And I calculated it out and it was about a 4.5% return because they had held that darn thing for 26 years or something <Inaudible>.  And so what looked good on paper looking at that statement, they had no concept of what the annual return was <Inaudible>, because I think their statement was with Schwab and it just said the overall gain or loss.  And I said well this thing — this is dog doo, you don’t want this.  Look at it, it’s two stars.  Yeah, it’s done well because you’ve owned it, but is well.  I would say this has not done well.  So we really get into asset allocation.  I remember we had 2013, I had met with somebody and they were in a 60/40 portfolio.  Everything they had looked good and I said that’s looking good.  Came to me a year later and that portfolio was 80/20.  And I said you’ve got to watch this <Inaudible> because <Inaudible> small caps went up over 40% that year, large caps were up in the mid 30s, and all of the sudden they were in a whole different risk profile.  So those are the kind of topics that we cover <Inaudible> we do for our clients what they really don’t want to do but what they have to do is right.  And that’s to sell high and buy low, <Inaudible> re-balancing, and that’s where the strength long-term is for investing.  But unfortunately people — it goes up, and then they watch it go down.


Well, it goes against the stomach.  They say why would I sell something going up?




Or why would I buy something that’s down, that doesn’t make sense.


Exactly, exactly <Inaudible>.


But you know I think people —




People — they don’t realize that an investment is an investment.  If they thought about investing in <Inaudible> mutual funds as you would like in real estate.  If the price went down, you’d buy more of it.  Remember the recession, 2008, 2009, <Inaudible>.


That’s a great example.


Prices were depressed, you’d almost give the stuff away.  Nobody was buying it, but the smart people said man there’s some opportunities here <Inaudible> buy.




Yeah, right.


When it comes to investing, it’s just the opposite.  Investing in securities or mutual funds, you know.  People don’t want to buy it when it’s low, they want to buy it when it’s high.






It’s a <Inaudible>.


So Warren Buffett said you know we love to buy a pair of jeans when they’re half off, but when stocks are half off nobody wants to <Inaudible>.


To buy, yeah.


It makes no sense.


As I say, the stock market is the only market that when things are going on sale, people run out of the store.




Well that’s why most people unfortunately are poor investors.  But this is where we take responsibility as their certified financial planner professional or as their advisor to force them to do the things that need to be done and take the emotion out of it, and that’s where people mess up time and time again.  For instance, right now with what’s going on with the news about Korea.


Oh my goodness, yes.


So we — in fact I met with somebody yesterday that said yeah I’m thinking I’d like to move to cash, government securities because I’m worried about North Korea potentially <Inaudible>.


Before you keep going Gary, I just want to give out the phone number real quick in case anybody has a phone question.  844-220-0965.  844-220-0965.  Gave out a lot of information about mutual funds in case Gary says <?> ooh, I want some more information about that.  844-220-0965.  Text machine is up and running as well, 21232.  Yeah, North Korea in the news a lot lately, a lot of people getting a little nervous about those headlines.


Before we get off to that, going back to the mutual funds, Gary’s got this workshop and it is on a Saturday.


Oh yes.


It is.


Saturday, this Saturday <Inaudible> October, it’s misstated here on this form that I have, but it is Saturday, October 21st in the morning.  Come on by.  What time?


9:00 to 11:00.


9:00 to 11:00, there you go, at our office in Altemont Springs.  You can go on our website, it is a Saturday.  It might say Tuesday, but we know it’s a Saturday and Gary will be conducting.  Gary is not only a certified financial planner professional, he’s also a CPA and we’re proud to have him with our team.




Well <Inaudible> speaking of that, so another aspect of mutual funds.  I remember back — I think this was 1995, I was doing a tax return for somebody and they had invested in the Fidelity Magellan Fund, if I recall.


Oh yeah.


And I think that was the year — I might be off, but it did 40%.  And I said oh, I’m sorry about that.  And he goes why?  He said this was great.  I said well look at the Vanguard 500 Index Fund, look what that did.  And he said well okay, it did 37%, well mine did better.  I said okay well this is held in a non-retirement account.  Now let’s look at the after-tax issues, right?  Because the Magellan Fund had turned over the portfolio so much in that year that he had a $10,000 tax bill to pay for the capital gains distributions.  Meanwhile, the index fund had very low turnover, very tax-efficient, and he actually had to sell a good bit of the Fidelity Magellan Fund —


To pay the taxes.


To pay the taxes.  So in addition to just overall returns, we’ve got to look at the tax-efficient, any what mutual fund should you hold in your retirement account, what mutual funds or ETFs, exchange-traded funds should you hold in your brokerage account.  Because everything we do, we have to remember, it’s not the return we see on the statements, it’s what you get to keep.  So we’ve got to focus on taxes when we look at investments.


Right.  Alright.


So back to North Korea.  That’s not a fun topic, so.  What do you think, Joe?  When you have so — I can say what I quote that individual.  I said you know I remember 9/11.  And in the workshop, I typically will ask the attendees how many years did it take us to recover from 9/11.  And of course it’s a trick question because the answer was 22 days.  And people are surprised, most people think it took years to recover from 9/11 and what I said to this individual is tomorrow, if my children were sick, I would take them to the doctor.  And to get there, I might have to fill up my gas tank.  And I’m not going to not go to Publix or Costco, wherever I buy my food and not feed my children because of some catastrophe.  So I’ve got to buy food.  If they have a flu, I’m going to go and buy Tamiflu or something, right?  So life goes on in the midst of craziness.  You think about what the Israelis have had to suffer through almost their entire existence under the threat of something.  So while it’s very uncomfortable to think about the what-ifs, you really can’t worry about what you cannot control and you can’t change your long-term investment strategy over these issues.  If you want to <Inaudible>


And there will always be an issue.  If it’s not Korea, it’s going to be what are the Chinese doing, Chinese <Inaudible> now, what’s going on in Greece, and all of the stuff we have day in and day out, year in and year out.  There’s always an issue.  There’s been some great charts put out by the investment community about all of the things that have happened.  The presidential assassinations to world wars and all of that stuff, and the world just continues to spin.




Now, if there was a nuclear holocaust, all bets are off, and what’s the difference?


Right, what’s the difference?  Then all of the gold we have in our safety deposit box doesn’t matter <Inaudible>.


But if you’re going to live your life like that, then <Inaudible>.


Right, exactly.


So in our business, you have to be an optimist.  You have to be an optimist about — you have to be a realist.  But I think you can’t cower at everything that comes across the water about what’s happening.  And unfortunately, as we know the media plays on fears because that’s what drives sales, that’s what drives sales, that’s what drives attention.  When you have a hurricane, people turn on the phone.  When the market goes down 1,000 points, people are wondering what’s going to happen and it’s the media’s need to drive traffic.  And when the plane lands, it’s not good news.  When the plan crashes, everybody talks about it.


And now more than ever it’s so much information that’s just available.  I pull out my phone, look I can click my phone right here and I’ve got the stock in real time.  It’s like that wasn’t the way even 10 years ago.  You still had to go look it up and find a computer, it wasn’t available for you at any second of the day.


But reacting to news, for example there’s a commercial out, most of us have probably heard it.  The woman’s meeting or date for dinner and she says oh a NATO plane was just downed, I’m going to <Inaudible> my brokerage account and hedge.  And I’m thinking, are you kidding?  That’s just the worst possible <Inaudible> ever give, is okay I’m going to going to reposition my long-term investments because of a NATO plane.  Give me a break, we have to think long-term and we can’t worry about what we cannot control.


Well our experience is the most successful investors think long-term.




You can’t think about what’s happening today, this week, this month, this year.  When we do planning, it’s for the rest of your life.  And that’s the only way I believe to address and achieve long-term financial security.




You have to think in those terms.


And for most people who are invested moderately to the individual who wanted to go all to cash, I say well let’s look at where you’re at now.  And she had roughly about 45% of her money in fixed income, a good bit of that was government bonds, some are corporate bonds.  And I said now let’s look at that number and let’s divide that number by your spending annually.  After factoring in your Social Security benefits, and we calculated that she had 12 years of spending — current spending based on just her — we’ll call it her safe portion.  Her non equity, and I said now well you can’t think of any crises that has occured <Inaudible> that would last 12 years, right?  This is going to be probably done fairly quickly, this current crisis.


So what the take-away there is if you lost all of your equity portfolio, every company in the world was useless, worthless, you’d still have 12 years of living — in fact it’d probably be greater than that because all of the money that came out of stocks are going to bonds and a bond portfolio would increase, so she’d have more than 12 years.






<Inaudible> Interesting.  You know sometimes I just sit and listen and learn so much <Inaudible>.  Because before this segment, I thought mutual funds meant everybody was having a good time.  But now I know to buy high, sell — it’s just amazing.  844-220-0965.  844-220-0965.  Text at 21232, we are planning tomorrow —




With the certified financial planning professionals, the Certified Financial Group here on News 965 WDBO.


It is the final segment of On the Money with the Certified Financial Group here on News 965 WDBO.  We’ve got the certified financial planner professionals, Joe Berg, Gary Abely still in studio answering your phone calls.  844-220-0965.  844-220-0965.  Text machine is up and running as well, 21232.  One text question here for you, Joe Berg, is on the machine before we get out of here.  We were talking about North Korea and the markets and all of that stuff.  Texter writes the market dropped earlier this week amid the North Korea.  No one has a crystal ball, but do you think the market has bottomed down, or will more losses be incoming?  And you guys have already started laughing a little there.


Let’s talk about the market and it dropped, right, right?




In perspective.


Yeah.  In fact, I was watching the news at 6:00 on Thursday evening.  Market plunges —




Plunges 200 points and North Korea, yadda yadda yadda.  Folks, a plunge of 200 points is less than 1%.


Not a plunge.




That’s not a plunge.


Nothing.  But you know people hear the points, they forget that the Dow is the <Inaudible> 21,000, right?






And so let’s talk about that.


Well, so if we go back to 1980, if you look at the average intra-year, so within one calendar year decline for the S&P 500 Index, a nice broad index to look at, the number is a decline of 14%.  Personally, I don’t see any reason why this year would be different than any other average year <Inaudible>.


So a 14% drop on the Dow —


3,000 points.


It’d be 3,000 points.


So that’s 15 of those 200 days.


And that’s not even a bear market.


No, a bear market would be 20% or more <Inaudible>


Over 4,000 points.


Yeah, exactly.  So these are not — now the question is — this particular text is we will we have more losses coming due to the North Korean scare, as it’s worded.  Possibly, who knows.  Again, <Inaudible> even says I know you don’t have a crystal ball.  No, we do not have a crystal ball.  I actually do have one in my office but I have found it does not work very well, because clients ask me my crystal ball.


And the key is you will get through it if you’re diversified.


That’s right.


And if you have a longer term perspective.


And the beauty I think you alluded to it earlier, the beauty of when the market does decline is when we are re-balancing our client portfolios, we are buying more shares at lower prices, which improve that long-term performance.




That is the key.






Yeah, you can’t be static about it.  You’ve got to watch it and you have to make the moves and nobody has a crystal ball.  But once again the key is — two keys: quality and diversification.




<Inaudible> and re-balancing —


And re-balancing as you go.


Is a terrific strategy for buying low and <Inaudible>.


And re-balancing using tax-efficient strategies.




Exactly.  You got it.  That’s what we do.


Let’s see, we’ve got about a minute and a half left, so let’s re-stage a little bit about the upcoming workshop.




Gary, you’ve got one coming up.


Mr. Abely.


We do.  <Inaudible> we talked about the mutual funds, we also have one coming up, financial basic, life strategies for success.


And what do you cover there?


You can sign up for that.  Boy, what don’t we cover?  So we talk about compounding of money, we talk about basic life principals, learning to live on 90% of what you make, always saving 10% would be one strategy we talk a little bit about.


Don’t give away all of the secrets.


Oh no.  So we talk about 10 life strategies and then we go into overall financial basics, asset allocation, diversification, mutual funds, what are they?  What should you have in your portfolio?  So it’s very educational.  I started doing this in high schools and I noticed that the teachers were taking all of the notes and realized that you know this isn’t something most people have learned going through high school or even college.




So you want a good broad understanding of how the financial systems work, come to that workshop.


So you’re going to do that on September 16th, go to our website,, that’s  You can make your reservation right there, it’s absolutely free.  You’ll get to meet Mr. Abely, CFP, CPA.




That’s right.


Yeah, <Inaudible> hope to see you there.  Alright, that’s going to do it for this week’s addition of On the Money.  We have been planning tomorrow —




The News 965 WDBO ask the experts weekend.


Dictation made on 8/15/2017 5:37 PM EDT.


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