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Ask the CFP

Too Much of a Good Thing?

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Ask The CFP® Practitioner Darcie Guerin darcie.guerin@raymondjames.com “We can be sure that the greatest hope for maintaining equilibrium in the face of any situation rests within ourselves.” – Francis J. Braceland, former U.S. Surgeon General  Question: My portfolio contains a fair amount of stock in the company I retired from. One of my children still works for the same company. What are your thoughts on how much is too much to have invested in one company? Answer: The situation you’re describing is referred to as a concentrated equity position. This is generally defined as any single holding that’s three or more ... Read More »

Knowing When to Ask for Help

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ASK THE CFP® PRACTITIONER Darcie Guerin darcie.guerin@raymondjames.com Humble people ask for help.” – Joyce Meyer, American Author Question: I’m not sure if I need the help of a financial advisor. At what point should someone seek professional help with their finances? Answer: Most of our new clients approach us when there is a significant change in their lives such as preparing for retirement, marriage, divorce, or a death in the family or relocation to Southwest Florida. If there is a diminished interest in overseeing your own investment portfolio and the desire to have a face-to-face relationship with a professional it may be ... Read More »

The Saudi Prince, Oil and Electric Vehicles

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ASK THE CFP® PRACTITIONER Darcie Guerin darcie.guerin@raymondjames.com “Straight roads are for fast cars, turns are for fast drivers.” Colin McRae, British Race Car Driver, 1968-2007. Question: How will sales of Electric Vehicles (EVs) impact oil demand and how prevalent is the use of EVs at this time? Answer: More Electric Vehicles (EV) on the road will certainly reduce oil demand. During the last quarter of 2015 the total number of EVs in use worldwide reached the one million mark. To put this in perspective, there are roughly one billion cars in use and the number of EVs on the road is one ... Read More »

Files and Piles: Should It Stay or Should It Go Now?

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ASK THE CFP® PRACTITIONER Darcie Guerin darcie.guerin@raymondjames.com Our life is frittered away by detail. Simplify, simplify. ~ Henry David Thoreau  Question: How long do I need to keep my financial documents? I have tax returns, investment statements, credit card bills and loads of other paperwork. I’m not sure if I need to hang on to it any longer. Help! Answer: Here we are on April Fools’ Day, the first day of the month when individual tax returns are due. It’s likely that you’ve at least started on your taxes and have already tackled stacks of documents, e-files, and scanned receipts from the ... Read More »

Election Day and the Markets

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ASK THE CFP® PRACTITIONER Darcie Guerin darcie.guerin@raymondjames.com The only limit to our realization of tomorrow will be our doubts of today. –Franklin D. Roosevelt Question: Does the stock market do better when there is a Democrat or a Republican in office as President? Answer: It’s a common misconception that financial markets do better when Republicans, or the Grand Old Party (GOP), occupies the White House. This is because they’re known for being “pro-business.” In contrast, Democrats are believed to support higher taxes and increased regulation, which tends to slow down economic and market growth. Therefore, the implication is that markets don’t do ... Read More »

Chasing Windmills

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ASK THE CFP® PRACTITIONER Darcie Guerin darcie.guerin@raymondjames.com The essence of portfolio management is the management of risks, not the management of returns. All good portfolio management begins and ends with the premise! – Benjamin Graham (1894-1976), author of “The Intelligent Investor.” Question: Should we be worried about the economy heading into a recession? Answer: My answer might be “yes” if stock market volatility alone indicated the likelihood of a recession. Luckily, the economy and the stock market aren’t always connected. Presumably, financial markets move on information signifying company valuations like earnings, growth and profitability. Reality tells us that individual investors who participate ... Read More »

The January Effect

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ASK THE CFP® PRACTITIONER Darcie Guerin darcie.guerin@raymondjames.com “Prosperity is not without many fears and distastes; and adversity is not without comforts and hopes.” – Sir Francis Bacon Question: Is it true that how the stock market behaves in January indicates what it does for the rest of the year? Answer: “As January goes, so goes the year,” was conceived in 1972 by Yale Hirsch, the creator of The Stock Trader’s Almanac. The January Effect simply means that January’s market performance, as measured by the S&P 500 Index, is an indication of how the market will do for the year. Back-testing to 1937, ... Read More »

Domicile, Residence and Homesteads, Oh My!

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ASK THE CFP® PRACTITIONER Darcie Guerin darcie.guerin@raymondjames.com “The strength of a nation derives from the integrity of the home.” ~ Confucius Question: As a retiree from another state, with homes in both places, I’m confused about the difference between residency, homestead and domicile. I read all the information on various workshops and seminars on this topic, yet I’m still confused. Please help. Answer: Actually, it’s not as complicated as it may appear. Let’s start with a little history to help understand the background of the subject matter and the differences between the three terms. Homestead In 1862, during the Civil War, Abraham ... Read More »

The China Syndrome: The Week That Was

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ASK THE CFP® PRACTITIONER Darcie Guerin darcie.guerin@raymondjames.com “The best thinking has been done in solitude. The worst has been done in turmoil.” ~ Thomas A. Edison Question: Could you explain what happened to the stock market during the first week of 2016? Answer: That’s a tall order, but here’s my best shot at describing a few of the market moving events that took place during that first week. For starters, China took center stage, overshadowing everything else. To borrow from the 1960s BBC political satire show featuring David Frost, “that was the week that was.” For anyone associated with financial markets in ... Read More »

Avoiding the Traps

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ASK THE CFP® PRACTITIONER Darcie Guerin darcie.guerin@raymondjames.com Man is the only kind of varmint who sets his own trap, baits it, then steps in it. ~ John Steinbeck   Question: Eager to begin the New Year with a fresh start, I’m wondering what separates successful investors from those who obtain mediocre or poor results? Answer: As the John Steinbeck quote above implies, we tend to be our own worst enemies. It’s safe to say that the classic emotional and psychological traps fall into five categories. These pitfalls, left unchecked, can sabotage otherwise sound financial planning. Trap 1: Overconfidence We trust ourselves, and ... Read More »

Family Financial Huddle

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ASK THE CFP® PRACTITIONER Darcie Guerin darcie.guerin@raymondjames.com “Give me the gift of a listening heart.” ~ King Solomon   Question: Our family will be together for the holidays. I’d like to take advantage of this time to discuss a few financial matters. What advice can you provide to make this conversation as valuable and productive as possible? Answer: Providing your family with the gift of communication is commendable. This is an opportunity to share financial philosophies, discuss planning strategies and listen to how others feel about monetary matters. Keeping the lines of communication open and flowing with information is vital to the ... Read More »

STASH CASH?

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ASK THE CFP® PRACTITIONER Darcie Guerin darcie.guerin@raymondjames.com “There are two times in a man’s life when he should not speculate: when he can’t afford it, and when he can.” ~ Mark Twain Question: With interest rates so slow and the stock market basically flat for the past year, how much money do you suggest I keep available in cash? Also, do you think interest rates will rise? Answer: The classic textbook answer to your question is to have a minimum of three to six months’ worth of living expenses readily available. If you’re still working then you may face additional risks, such ... Read More »

What is a Corporate Inversion?

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ASK THE CFP® PRACTITIONER Darcie Guerin darcie.guerin@raymondjames.com “The only source of knowledge is experience.” ~ Charles Kettering   Question: The term corporate inversion is in the news lately. Can you explain this and discuss why would a company want to invert? Answer: The dictionary definition of invert is “to turn something upside down, change the position, order or relationship of things so that they are the opposite of what they had been.” Corporate inversions are a hot topic in the presidential debates and are regular discussion items on financial news channels. Most recently, we’re hearing about the New York based drug maker ... Read More »

Estate Planning: Avoiding the “Oops”

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ASK THE CFP® PRACTITIONER Darcie Guerin darcie.guerin@raymondjames.com   “The only source of knowledge is experience.” ~ Albert Einstein   Question: My brother passed away and his will and estate plan had not been updated. This left everything in disarray with the family fighting. What can I do to avoid this type of chaos for my family? Answer: My condolences on the loss of your brother. Life is unpredictable and each day is a gift. Situations change personally and professionally and estate documents are often overlooked and not updated. Grief and uncertainty never go well together. Proper planning is a gift you can give ... Read More »

Avoid Charity Scams

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ASK THE CFP® PRACTITIONER Darcie Guerin darcie.guerin@raymondjames.com “Rather fail with honor than succeed by fraud.” ~ Sophocles, Greek playwright born in 495 B.C. Question: How do I distinguish reputable charitable organizations from others that may be scams? Answer: It’s interesting that you ask this question now because I just received several calls requesting donations for the victims of the South Carolina floods and was leery of making donations to unknown entities. We know that as year-end approaches, the push will certainly be on for donations to numerous organizations. Weeding out the worthy ones from the unworthy can be tricky. For instance, in ... Read More »

Divorce: Rent or Own?

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ASK THE CFP® PRACTITIONER Darcie Guerin darcie.guerin@raymondjames.com Question: I’m in the midst of a divorce and don’t know if it’s better to keep the house, sell it and buy another or rent. What are your thoughts? Answer: The answer is the same as it is for most questions, and that is “it depends.” This is an important time to regroup emotionally and financially. Realistic analysis of the economics of your new lifestyle, with financial planning, gets beneath the raw numbers as you go through this transition. Cookie-cutter advice isn’t specific enough to rely on for decisions of this magnitude. A woman in ... Read More »

Gifts to Charity

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ASK THE CFP® PRACTITIONER Darcie Guerin darcie.guerin@raymondjames.com “The best thing to give your enemy is forgiveness; to an opponent, tolerance; to a friend, your heart; to your child, a good example; to your father, deference; to your mother, conduct that will make her proud of you; to yourself, respect; to all men, charity.” ~ Francis Maitland Balfour, British Biologist, 1851-1882   Question: What is the most efficient way to make gifts to charities? I support a number of organizations and want to know if the gifts need to be completed before year-end for tax purposes? Answer: Making charitable donations isn’t only commendable, ... Read More »

Shaken, Stirred and Perturbed, or Were You Prepared?

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ASK THE CFP® PRACTITIONER Darcie Guerin darcie.guerin@raymondjames.com “For those properly prepared in advance, a bear market in stocks is not a calamity but an opportunity.” ~ Sir John Templeton   Question: Why were financial markets so volatile during August? Was it all because of China? Answer: China’s currency devaluation and overall economic slowdown were the likely catalysts for the recent dramatic declines, yet other factors also fueled the fluctuations. It’s convenient and tidy to pinpoint one reason for the market’s downward drift, but it’s usually not that simple. Slow(er) Boat to China For the past twenty years, China has experienced frenzied growth. ... Read More »

Your Longest Vacation

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ASK THE CFP® PRACTITIONER Darcie Guerin darcie.guerin@raymondjames.com “Never lose sight of this important truth that no one can be truly great until he has gained knowledge of himself, a knowledge which can only be acquired by occasional retirement.” – Johann Georg von Zimmerman, Swiss Physician and Philosopher, 1728-1795.   Question: My husband and I are both 65. We don’t want to be caught off guard during retirement. What advice can you offer? Answer: While some surprises are positive experiences and lots of fun, eyes wide open is the way to go when planning for the financial reality of retirement, or the longest ... Read More »

Easy Money?

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ASK THE CFP® PRACTITIONER Darcie Guerin darcie.guerin@raymondjames.com “The influences on stock prices are so numerous and so complex that no person has ever been able to predict the trend of stock prices with consistent success.” ~ As stated by Sir John Templeton in August, 1958. Question: Once again, there is talk all over the news of the Federal Reserve raising interest rates. Please explain why they would raise rates and how it would affect the economy. I’m not clear on the relationship between these two variables. Answer: Let’s start by examining the role interest rates play in the overall economy. In the ... Read More »