Article Share: “What if Rip Van Winkle Invested in the U.S. Stock Market?”

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Friends, The following article was written by a friend and colleague of mine, Sheldon McFarland, from Loring Ward. I thought the article was well-written and useful on a very important topic – to help us maintain a long-term investment perspective. I hope you too find the information relevant. Best, Nate

Nate WilliamsArticle Share: “What if Rip Van Winkle Invested in the U.S. Stock Market?”

Should I Invest In…?

Nate Williams Financial Planning, Investments 2 Comments

One of the most important things we do for our clients is talk them out of bad decisions. In life, the decisions you don’t make are as important as the decisions you do make. Like the decision not to do meth. Likewise, the investments you don’t make are as important as the investments you do make. We were recently introduced to a 65-year-old dentist who doesn’t have anything saved for retirement. Admittedly, he spent his life keeping up with the Jones’. Additionally, he blew his entire life savings (several million dollars, he told us) on a bad investment with a friend. Very sad. My father-in-law, a physician, told me that when he graduated from residency, the director of his program told him to “take the first $500,000 you save and burn it!” When he was asked why, he simply said, “well, that’s what you’re going to do anyways, so just …

Nate WilliamsShould I Invest In…?

Sage Wisdom from the Greatest Investor of All Time

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Annually, the world’s single greatest investor, Warren Buffett, writes a letter to the shareholders of Berkshire Hathaway, Inc. For decades, this letter has been a much anticipated, widely read treasure for business and investing minds as Buffett shares deep wisdom in simple, witty terms. Click here to read the entire letter. In this year’s letter, Buffett praises the American economy and gives sound, common sense reasons for optimism. This principle — optimism, or faith in the future — is the first great principle necessary to achieve actual investment success. The whole idea of investing is that your capital will be used in the creation of something better. Without faith in that process, you might as well eat, drink, and be merry today, for tomorrow you’ll be broke. I wanted to share with you an excerpt of Buffett’s letter discussing this principle of investment optimism. Pay particular attention to what Mr. …

Nate WilliamsSage Wisdom from the Greatest Investor of All Time

Why Investors Should HOPE the Market Goes Down

Nate Williams General, Investments Leave a Comment

Bring on the next recession! The beginning of 2016 tested investors with the S&P 500 falling 10.51% in just over a month, hitting a low of 1,810.10 on February 11. Since that time, the US Market Index has pulled back, almost breaking even with the January 1, 2016 starting point of 2,043.94 with a closing price on March 16, 2016 of 2,027.22. At this point, most investors are wiping the sweat off their brow, breathing a sigh of relief and saying “that was close.” During this volatile time period many of our clients called with concerns over the market decline. After recommending a new investing savings plan, one client texted me saying, “Looked at Schwab account last night…down $15,000…doesn’t make me want to jump into putting more money into stocks.” My response was simple: “When the market falls you should be more excited to buy ownership of companies, not less …

Nate WilliamsWhy Investors Should HOPE the Market Goes Down

What Return Will I Get On My Investments? (AKA “The Run/Pass Analogy”)

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When having discussions about investments with clients, there is one question we get more than any other… What return will I get on my investments? It’s a great question. In our long-term financial plans we have to use a long-term estimate of market returns, so in a way we’re forced to answer this question. As such, our clients sometimes expect us to know the answer. After all, you can walk to the bank and they tell you exactly what the interest rate will be on a CD or savings bond. Can’t you do the same thing with all investments? Let us ask you a similar question: what exactly will the profits in your business be next year? And if we were investors in your business, what would be our exact return be? You don’t know for sure. In fact, you can’t know. Will there be a recession? Will all your patients disappear like …

Nate WilliamsWhat Return Will I Get On My Investments? (AKA “The Run/Pass Analogy”)

5 Investing Principles Every Dentist Should Know and Follow

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This post is the fourth in a series of five posts that lay out the PFG Investment Philosophy. This describes the five investing principles that every dentist should follow. Through these posts, we try and lay the foundation of knowledge around investments that clients should know, and answer the most commonly asked questions. Having a sound, well-researched, time-tested investment philosophy is like having a game plan to use against your next opponent. Most investment advisors (to say nothing of investors) do not have a specific investment philosophy to use to face the future. Instead, most investors, as well as many so-called advisors, look at last year’s returns (or last 5 years, or whatever) to pick their current plan. Unfortunately, this “return chasing” is a great way to lose your money. Here is what this plan looks like graphically: (idea for image borrowed from Carl Richards, author of “The Behavior Gap,” a book …

Nate Williams5 Investing Principles Every Dentist Should Know and Follow

The Two Best Investments for Dentists

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This post is the third in a series of five posts that lay out the PFG Investment Philosophy. This describes the two best investments for dentists. Through these posts, we try and lay the foundation of knowledge around investments that clients should know, and answer the most commonly asked questions. What are the Best Investments for Dentists? There are two. First, Invest in Yourself and Your Business We believe in this key principle of investing in yourself and your ability to earn a good living. We advise young dental school students to finish school; we advise recent grads to get a good job where they can further their skills and to look for a practice to buy or start; and we advise doctors who are in practice to reinvest back in their businesses in the form of advertising, new equipment and continuing education. But you personally can only do so …

Nate WilliamsThe Two Best Investments for Dentists

Why Should Dentists Hire an Investment Advisor?

Nate Williams Investments 2 Comments

This post is the second in a series of five posts that lay out the PFG Investment Philosophy. This describes why dentists should hire an investment advisor. Through these posts, we try and lay the foundation of knowledge around investments that clients should know, and answer the most commonly asked questions. Hiring an investment advisor is like a golfer hiring a caddie. Have you ever seen a pro golfer without one? No, and you never will. Why? What does the caddie do to earn their compensation? Like an investment advisor, they provide three key services: Administrative support (carry your bags). Your advisor should handle paperwork, trading, rebalancing, tax notices, etc. You should help make high-level decisions and do nothing else. Technical Expertise (they know the course). Your job is to make money as a dentist. Let your advisor be the expert on investing. It’s your advisor’s job to know the difference …

Nate WilliamsWhy Should Dentists Hire an Investment Advisor?

Why Should Dentists Invest?

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This post is the first in a series of five posts that lay out the PFG Investment Philosophy. Through these posts, we try and lay the foundation of knowledge around investments that clients should know, and answer the most commonly asked questions. Question #1: Why Should Dentists Invest? The wealthiest people in the world, and the wealthiest doctors, are good investors. Why? They want their money to work for them. If you’re going to last 30+ years in retirement, you’ll need your money to work for you long after you’ve stopped working for yourself. Investing is not gambling. We don’t “put our money in” and cross our fingers hoping that on some magical day it will all come back to us. Just like you expect a profit in your own dental practice, we fully expect a return on our investments. We advise investing in real companies with real people working to …

Nate WilliamsWhy Should Dentists Invest?

When to Start Saving as a Dentist

Nate Williams General, Investments 1 Comment

We have two main jobs with our clients, understand their goals and help them reach the goals they set for themselves. It is inspiring work. Truly, we have one of the best jobs on the planet. We try and account for everything that will help or hinder a client in achieving those goals. However, there is often one person who cares the most about you goals and plans, but can’t do anything about it right now: your future self. In our work, we often try to advocate for this poor, unfortunate soul – you, but the older, feebler version. We want this version of you to live a good life with dignity and independence; but whether or not that happens will depend largely on the decisions the current version of you makes today. Two of these decisions include how much money to save, and when to start saving it. How …

Nate WilliamsWhen to Start Saving as a Dentist