Gary Allen on Business, Sunday, August 16, 2015 – Podcast Now Available

Silver and Gold! Hedge Fund Performance and More

Yukon CorneliusYukon Cornelius is one of my favorite characters from the childhood classic, Rudolf the Red Nosed Reindeer. Yukon is the ultimate prospector always looking for silver and gold with his trusty pickax. Unfortunately… his most famous line from the movie is… nothin!

As a child I loved the song Silver and Gold sung by Burl Ives. But as an investment professional, I am not a big fan of silver or gold. There are several potential reasons to invest in silver and gold but alas the evidence points out they have not done so well for most folks.

In segment one of the program, I cover what is called a pre-mortem investment exercise. In simple terms, it is to imagine what would happen if your portfolio blew up before it happens. It is something similar to what I call the fire drill exercise.

Instead of waiting to conduct a postmortem exercise after your portfolio blows up, it is better to plan in advance for the worst and make any corrective actions necessary to beef up your portfolio risk management.

Segment two is all about Silver and Gold… see above.

Segment three is a look at hedge funds and their long-term performance. You may want to seriously look at those fancy numbers that hedge fund salespeople are showing you. It may be surprising just how poorly they have done in recent years. In fact, many hedge funds had only a few years of great performance early on… and then lots of lean years since then.

Segment four is a quick discussion on the idea of focusing your investments on a final goal of income instead of wealth. There are a lot of implications if you focus on income versus wealth.

Gary Allen on Business – Sunday, August 2, 2015 – Podcast Now Available

International Turmoil… China Greece

China Greece High Resolution Sign Flags Concept

Trouble Overseas?

Summer financial headlines have been dominated by foreign financial markets. As we enter the month of August, Greece has begun to fade from the headlines while China rises to the top.

Segment one of this program I spend time talking about Greece and its recent financial crisis. Despite the dire headlines, Greece is a very small country measured by its financial markets and its economy.

China is the focus for segments two and three. This country is very large and its economy is one of the largest in the world. What happens in China is meaningful compared to Greece.

However, because of its communist system the Chinese stock market is very small relative to its population and its economy. Because of the severe restrictions on foreign ownership, the Chinese stock market is not very well developed and is prone to market manipulations. In recent years, the Chinese government has done much to prop up the stock market as its economy goes through transition.

Finally in segment four, I discuss the recent 4×6 index card of financial advice provided by University of Chicago professor Harold Pollack. The professor thinks that simplicity is the way to go.

Gary Allen on Business, Sunday, July 19, 2015 – Podcast Now Available

The Annuity Sales Pitch… What They Don’t Tell You – (Part 2)

SharkThe saga continues… In this program, I continue to expose what is not said during annuity sales pitches. The old adage that annuities are sold and not purchased is very true. Without the “kind and polite” assistance of insurance salespeople, my opinion, it is doubtful that many variable annuities would be sold in America.

I base this opinion on the large sales commissions offered to salespeople to entice them to sell variable annuities. The commissions can often be in the 3% to 5% range and often more than that. Imagine someone retiring with a lump sum of $600,000 in their 401(k).

The newly minted retiree receives help from an insurance salesperson who convinces them to purchase a variable annuity with the entire lump sum. Let’s assume the insurance salesperson will make 5% on the transaction. That works out to be a very nice $30,000 payday for the insurance agent.

In this program, I continue to explore the annuity sales pitch and the often unspoken words that taint the sales process. I hope you enjoy the program.

Gary Allen on Business – Podcast Now Available – Sunday, July 12, 2015

The Annuity Sales Pitch… What They Don’t Tell You!

Shark

Variable annuities are one of the most popular insurance products sold in America today. Insurance agents love them because they offer a very lucrative sales commission. However, I wonder if as many people would buy them if they really understood the whole story.

On this program, I spend time talking about the annuity sales pitch and provide the rest of the story. I go point by point through some of the most common sales pitches and provide you some additional information that is not usually shared by the person trying to sell you that annuity.

My largest complaint about annuities is the way they are distributed and the large sales commissions offered to agents to sell them. I hope you enjoy this inside look at variable annuities.

Segment 1 – The NYSE Goes Down Because of a Software Upgrade!

Segment 2 – Annuity Sales Pitch

Segment 3 – Annuity Sales Pitch

Segment 4 – Annuity Sales Pitch

Brilliant Investor… I Don’t Know!

Question, mark, child.

Brilliant Investor?

This program explores the mindset of many investors who trick themselves into thinking they are brilliant and can do no wrong. If on the odd occasion something does go wrong, we are very good at blaming someone or something else for our losses. If only the Fed would get out of the way. Or if the Chinese would stop manipulating their financial markets, I would be making a fortune.

In the second segment, I spend time giving some fatherly advice, since this program was broadcast on Father’s Day. And in segment three, I provide some humility with the thought that people should be more willing to say three simple words… I don’t know. Too often people rely on the prognostications of people who sound very authoritative and convincing, but in reality they don’t have a clue.

Finally in part four, this short segment talks about focusing on income instead of wealth. Do all the television and radio commercials talking about, what’s your number, have it wrong?

Fiduciary Rules and Your Retirement

New Fiduciary Rules and the Future of Investment Advice.

New Fiduciary Rules and the Future of Investment Advice.

On this program I discuss the ramifications of the proposed fiduciary rules from the SEC. After years of work and lots of comments from interested parties, the SEC is preparing to issue its final rules on the new definition of fiduciary. The new regulations are considered the most sweeping changes regarding fiduciary in decades. Ultimately, the rules may reshape the investment and brokerage industries for decades to come. At stake is the current state of affairs on Wall Street and main street between financial salespeople and their clients.

Proponents of the new regulations hail them as a big step in the right direction, while opponents say it will cost consumers more money. Of course, no one knows for sure until the final regulations are out. However, in my humble opinion, brokerage firms and insurance companies are spending millions on lobbying not in the best interest of their clients, but in the best interest of their own bottom line. I would not expect anything less from for profit companies who have resisted being fiduciaries for decades.

Segment 1 – The new fiduciary rules

Segment 2 – How investment advice might change

Segment 3 – The accidental retirement plan (the 401(k))

Segment 4  – Fee Transparency and 401(k) plan access

Hope you enjoy the program

Gary Allen on Business, Sunday, March 8, 2015 – Podcast Now Available

The Fiduciary Battles… Inflation

Conflict battle

 

The battle is raging in Washington over the conduct of care in the financial services industry. One of my partners, Scott Simon, is one of the nation’s leading authorities on fiduciary matters dealing with investments and standard of care. In the opening two segments, I spend time discussing his thoughts about the current conflict going on in Washington DC. There is a titanic struggle amongst Wall Street interests and fiduciary interests to bend the ear of regulators. How this battle turns out will impact how investors are treated in the coming decades. While the language and the rhetoric can be hard to understand, this is a battle investors should worry and care about.

 

InflationIn the third segment, I spend time talking about inflation and how investors can protect themselves from the risk of inflation. My biggest personal concern is the poor use of what I consider inappropriate investments to battle inflation. Often, people will be influenced by paid spokespeople on radio and television who are touting the use of gold and silver as inflation hedges. In this segment, I provide my reasons why I think these investments are a very choice for people who are truly worried about protecting themselves against inflation. This is especially true, since there are some very low-cost instruments that can do a much better job of protecting against inflation.

In the final segment I spend a few minutes talking about the current state of financial markets.

 

 

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Gary Allen on Business – Sunday, March 1, 2015 Podcast Now Available.

Spock, Warren Buffett, Weather vs. Climate and Money Mistakes

VulcanYes, one of those shows with a wide variety of topics related to business and investments. This also happens to be the last show from our former studios at 55 Hawthorne in the SoMA district of San Francisco. So the show is nostalgic for me since these are the only studios I have ever worked in over the past seventeen years. So it is a fond farewell to the corner studio on the 11th floor with the view. Lots of time spent over the years with so many friends and co-workers. Good times and some trying times too.

On the program this week, I open the show with a short trip down memory lane, then dive right into how people should be more concerned about the investment climate instead of the daily investment weather. Segment two is devoted to Warren Buffett and his annual letter to shareholders. Once again there are some great nuggets in this letter that all investors should pour over. In segment three, I review an article about the Vulcan Stock Market and Spock. It is a good read with some dare I say it, logical conclusions! I would be remiss if I did not say it was a sad day in the universe with the passing of Leonard Nimoy, which inspired the article about the Vulcan stock market.

Finally, in the last segment of the program this week, I review a column that highlights ten common mistakes people make with their money. I agree with some, but not all of the points the author makes.

I hope you enjoy the program this week.

Gary Allen on Business

Gary Allen on Business

 

 

 

 

 

 

 

Gary Allen on Business – Sunday, February 15, 2015 – Podcast Now Available

Want to Get Rich?

Don’t Invest in a Hedge Fund, Start One!

Hedge Fund hunchIn my opinion, hedge funds are one of the worst investments offered to investors. They are full of promise and sound so sophisticated, but in the end, they often deliver poor results and they always have, in my opinion, very high fees. Over the years on my radio program, I have railed against hedge funds on a regular basis. I have never understood the logic nor the math behind hedge funds. Even the most sophisticated of investors (think California Public Employees’ Retirement System, (CalPERS)) have at one time or another been mesmerized by the story of hedge funds.

The CalPERS hedge fund story came to an end last year (2014), when the giant retirement system said no more.  Last year, they announced a termination of all of their investments in hedge funds after the conviction of former CEO, Fred Buenrostro , for hundreds of millions in fraud involving the funds. Beyond the salacious scandal was a bigger problem with the overall investments in the hedge funds. They failed to deliver on their promise. For example, CalPERS paid $135 million in hedge fund fees in the fiscal year ending June 30, 2014 for their portfolio of hedge fund investments. Those investments earned a total of +7.1% during the period. However, over that same period of time, CalPERS earned +18.4% from its other investments. On top of that, they paid a small fraction of the fees for the conventional investments. This under performance by hedge funds has been a problem over the past decade not just for CalPers but for investors overall. The returns on hedge funds have lagged as a whole.

On the program this week, I provide my argument for why I don’t like hedge funds. I think they are a terrible investment for people. The reality is the people who really make out with hedge funds are the managers and the promoters, not their investors. This is the classic case of the manager doing very well, while the investors not so much. But you can make up your own mind on that opinion. I hope you enjoy the program.

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Gary Allen on Business – Sunday, February 22, 2015 – Podcast Now Available

Some Oscar Swag… and America Saves Week!

One celebrates the art and glamor of Hollywood, while the other tries to celebrate the savings of average Americans. Strange bedfellows but it works for me!

Oscar Swag Bag

On the program this week, a little bit of Hollywood glitz with the Oscars grabbing all the attention this weekend. So who am I to ignore the bright lights! In the first segment, I cover this year’s swag or goodie bag that 21 folks will receive this year.

The host and twenty losers from the major Oscar categories will receive the so-called swag bag. However it must be quite a “bag” if you notice the picture to the left. In the show I mention it has a retail value of $125,000 but I found out later, that was an incorrect amount. In fact, the swag bag is worth an astounding $168,000.

Above is a picture of the Oscar Swag Bag, but the Academy actually has nothing to do with it at all. Back in 2006, the Academy settled a long dispute with the IRS over taxation of the goodie bag and since then they have steered clear of it.

Here is a list for those that really want to know what’s in the bag!  Here are SOME of the highlights of the 2015 Oscar Nominee Swag Bag:

Antiperspirant: $5.49
Each swag bag holder will receive a bottle of Dove Dry Spray antiperspirant and Dove Men+Care antiperspirant.

Lip gloss: $36
The swag bag will contain a bottle of Flickable’s vegan-friendly lip gloss.

Lollipops: $68
This six-pack of herbal tea-based lollipops from Dosha Pops incorporates 24 karat edible gold leaf.

Travel pillow: $69
The Oscar nominees and host can rest easy on the trip back home with an innovative travel pillow from NapAnywhere.

Ambrosia Apples: $75
This new variety of apple is known for its low acid content and sweet flavor.

Condiments: $280
Rouge Maple is providing an assortment of organic maple syrup, salad dressings, jellies and mustard, as well as an apron to keep all that sticky stuff off those gowns and tuxedos.

Accessories: $300
Female nominees will receive a trio of bracelets from Jan Lewis Designs, and the men will receive silk ties.

Personal Training: $900
Celebrity trainer Alexis Seletzky is offering up 10 sessions of personal training.

Skincare: $1,200
Gift bag recipients can stay forever young with a host of products from Wellness 360, including a hair stimulant and skin serum.

Liposuction Wearable: $4,068
The stars can avoid going under the knife with a non-invasive liposuction wearable device from Ventura Lipo-Light.

Home spa system: $5,060
Steamist is providing a home spa system that delivers the ultimate steam bathing experience.

Italian luxury hotel package: $11,500
The Nominees and host can enjoy a three-night stay at the Grand Hotel Excelsior Vittoria, the Villa Armena in Tuscany and the Grand Hotel Tremezzo in Lake Como. Maybe George Clooney will have them over for cocktails.

Glamping: $12,500
This luxury camping trip from TerraVelo Tours includes surfing, hot air balloon rides and horseback riding.

Lifestyle makeover: $14,239
Reset Yourself is offering the recipients supplements, hair mineral analysis, a kitchen/pantry detox, expert meditation consultation and more to help them maintain a healthy lifestyle.

Luxury rail trip: $14,594
The Oscar swag bag recipients can enjoy a luxury rail trip through the Canadian Rockies from Rocky Mountaineer.

Horoscope reading: $20,000
The founder of Enigma Life, Olessia Kantor, will fly out to meet each Oscar nominee and host to deliver their 2015 horoscopes. Kantor will also teach mind control techniques and conduct dream analysis.

 

America Saves WeekIn segment two of the program, I start the festivities for “America Saves Week,” which is the eighth year of this event. However, in this segment and the following one, I point out how the name might not be the best. The reality is a better name might be, “America Does Not Save Week” or possibly it should be more aptly named, “America Needs to Save More Week.”

I continue to cover “America Saves Week” in this segment of the program. I spend some time chatting about one of the major problems or disconnects with saving for retirement. The actual information we receive about:  How Much?, How Am I Doing?, What Should I Be Doing?, and a few others is less than satisfactory. It is no mystery why people feel in the dark about their retirement. That needs to change if we are to see a marked improvement in the coming years.

In the last segment of the program, I cover some of the excuses people use not to save as well as some of the highlights of a Fidelity study that outlines how even small increases in savings over time can have a big impact. Finally, I challenge the listeners to make a difference in their own lives by increasing their retirement savings at work by one percent.

I hope you enjoy this program and I really hope you find it possible to increase your retirement savings.

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