Annuities are wrong for almost everyone. If you’re unfamiliar with annuities here’s the gist – you pay a lump sum now in return for a future income stream, usually for the rest of your life. Annuities are essentially the opposite of life insurance. Think of it as you vs the insurance company – in a life insurance contract you “win” if you die prematurely, in an annuity you “win” if you live longer than expected.

“Financial advisor” has become a very broad title over the years. When someone says they are a financial advisor, what does that mean? What’s their background? What qualifications do they have? Do they focus more on insurance or do they have education and training related to investing.

Millennials, also known as Generation Y, are individuals born between 1981 – 1996. Many millennials are currently reaching their prime working and earning years. In 2016, millennials passed baby boomers and Gen Xers and now make up the largest generation employed in the workforce, according to PEW Research Center.

Approximately 75% of Americans are content managing their money on their own, according to a recent CNBC survey. The decision to forgo professional financial advice could end up being a costly one.

Earlier this week, one of the most popular TV shows of all time announced that it would officially be leaving Netflix. The Office, which has gained a cult-like following over the years, will be leaving Netflix at the end of 2020 and will begin streaming exclusively on NBCUniversal’s forthcoming streaming service. Is this a bump-in-the road or are Netflix’s best days behind it?

For privacy purposes I’m not going to use my real client’s name, let’s call him Jack. Jack is an old high-school friend of mine, we manage to see each other once or twice a year despite living halfway across the country. Jack has moved up the professional ladder and has accumulated a sizable investment account for being in his late 20’s. Jack has a basic understanding of the market and began to grow leary of his portfolio. I offered to take a look to see if his suspicions were warranted.

A mutual fund is a company that pools money from many investors and invests them in stocks, bonds, and similar investments. The purported goal of every actively managed mutual fund is simple: beat the market. However, few can do so, and even fewer can do so consistently.

In August 1999 near the peak of the stock market tech bubble, a long-time, normally conservative client asked me for a “low priced” stock pick in the then red-hot technology sector. I told him about several stocks that fit the bill. He settled on Corel Corporation, a Canadian based Software Company that was working on porting their Perfect Office Suite to the Linux operating system. Almost immediately upon his buying 1,000 shares at $4.75, Corel began climbing nearly doubling within a few weeks before pulling back. In November 1999, Corel stock soared higher. I called my client and recommended he sell his shares at $28. He sold, booking a 560% profit in just 3 months. The day after he sold, he called me back and asked excitedly “Where is Corel trading now?” “Forty-three dollars a share” I replied somewhat uncomfortably. “Buy it back!” my client exclaimed enthusiastically. Fortunately, I was able to dissuade him. Corel peaked that day at $44 and within months crashed back to earth as the stock market tech bubble burst. The chart below illustrates the gory details. Investors who bought and held Corel stock during its inexplicable moon shot of late 1999 and subsequent crash ended up owning a stock market DOG.

Mutual fund marketing material often makes the spurious claim: “You cannot invest directly in an index.” We disagree. You can, in fact, invest directly in an index-based stock portfolio. No mutual fund or ETF needed. This paper begins with a brief history of the Dow Jones Index and its methodology. We review historical index returns. You will learn how to create your own portfolio that precisely replicates the Dow Jones Composite Average™ . We then provide seven clear and concise tips on how you might customize a index-based portfolio to seek superior investment returns.