What Can We Learn From "Sharp Dressed Man" by ZZ Top

Financial Symphony
Saturday, February 24th

What can we learn about fnances from the song "Sharp Dressed Man" and answers to listenesrs questions.


Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

No financial symphony. Helping you can. Harmonious financial plan and getting your portfolio in two weeks so sit back slowly strike at the the financial simple it's starts now. Thanks for joining us this week although financial symphony a mortar store alongside investment advisor at Carolina retirement resources Richard future rally he is your local financial maestro here in the Charlotte metro area. But offices and hundreds ill and Rock Hill as well if you wanna get in touch at any point in time with Richard and his team pick up the phone call 800. 6465996. Again that number is 8064659. 96 Richard thanks for being here this week how are you sir under a great Walter Murray you very glad to hear that I'm well and I'm looking forward to our conversation today we have a lot to get into. Richard we seem to be getting flooded lately with questions about. Precious metals so I thought we would start this week off by sharing a few of these questions. To try and hopefully answer you know a lot of the questions that are on people's minds out there so the first one comes to us from Matthew and he is in Charlotte. He says and considering investing in silver because of the rise in solar technology. To generate electricity do you think that silver is something I should consider. For a portion of my portfolio and if so how much do you typically recommend. Well you know definitely in today's economic environment you know I'm I'm pretty much sold on the fact he convinced. Then investors should have some exposure -- model you know anywhere from a a five to 10%. Portfolio Holden would be fine. And definitely. The demand for silver short film is growing because silver is a key ingredient in mole solar panels. In fact the average solar roof in the United States say uses about 2000 grams. Or about 71 ounces of silver and that's a lot of silver. So he and I think it's why you so many analyst thanks over demand for. In fact according to the just over institute. Worldwide consumption of show over for a store shelves. In order reached a record 76 million plus ounces in 2016. So obviously demand is up. And for 20172018. That number's expected to be approximately 100 million ounces so. You know overall. Current global sort of man is about one billion ounces. So the usage over First Solar it equates to almost 10% above the entire silver demand. You know that's a big deal considering not only ten years ago it was zero. You know real demand pursue over and it's huge shoes are definitely surging higher year after year. And then you look at the amount of children is being in mind you know and producers it's even. It isn't even close. To what's being consumed so you know there is a real humor deficit and the supply line the exploration side of the business. In my opinion silver's about the feel an enormous price reset the markets simply can't allow us over prices to remain the slow. In fact last year was the fourth straight year the demand. Outstrips supply and it's likely so Vermont production will fall again this year. In other words. The supply of silver is gonna get even tighter so you don't have to be an economist to know that this is a definitely a good thing for the crisis over. You know we're seeing an exploding demand for industrial use kind of collapse in demand from physical corner investors at a time when. You know US debt worldwide dead is an extremely high in the top hundreds of trillions of dollars worldwide. The ready to sole supplier of silver you know it won't be able to take much more so you can imagine what will happen when these corn investors come back to the market. When it's over rallies past 20/20 five and ultimately fifty dollars an ounce in the near future. So you don't children my opinion now walker. More likely in this decade at the asset everyone wished that they owned the industrial demand for so rude grown was for power be in the driving force behind short to stage is set for a much higher so overpriced. I think it's a great question Matthew thank you for submitting them into us here on the financial symphony if you would like to submit a question of your own you can do that any time. At south financial symphony dot com again that is financial symphony. Dot com. Now Massey was pretty specific in his question about silver JoAnne in hunter's bill has a little bit broader question for you Richard and she's asking that age old question of why why should I invest in gold silver. Or or other precious metals you know well historically precious metals are served as the storm well no longer and prizes the only true reliable hedge against inflation you know less tangible commodities with intrinsic value. They offer distinct advantages over stocks bonds and other paper process all the value of stocks can declined. You know precious metals such as gold silver palladium. And even platinum. You know they always retain value regardless of market conditions. Even when compared to other hard assets such as real estate. War find work for Bart precious metals compare favorably based on their high degree of liquidity and portability. And you know precious metals are one of the five massive clusters you know the other Indian stocks bonds energy commodities. Currencies. You know so true diversification would include all five asset classes on thing you wanna diversify within each asset class. This gives you ten different types of market environment such a potentially profit from. Enjoy and you know most financial experts recommend maintain in some exposure in your portfolio to precious metals. This way you ensure a sufficient diversification. As well as provide a hedge against inflation and market downturns. In a recent trends and events. However might favor. An increased asset allocation of pressure no but but you know make sure you do so within the confines of an overall investment plan. If you should decide investor purchased no make sure you work with an experienced professional broker you know there are three things that I look at when choosing a precious metal brokers first dude you should have confidence that your precious metal broker takes measures to keep all of your transactions confidential second your personal broker should have a respected name in the precious metal industry with a proven track record over a period of time. And you surely don't wanna fall victim to firms that are less reputable we need to be careful there you know choose to invest with people that have at least two decades. A solid precious metal experience you know I personally have maintained a relationship with a precious metal broker since 2002. You know my client showing interest in investing in precious metals. I referred those individuals to hand but I remain an interest of party on the account. You know my job is to make sure arm geezer take and how Roth conversions are implemented or wherever you are concerned my clients may have. And there are no investment advisory fees on those accounts you know just an annual account fee in a storage fees charged by the institution custodian so I can be of assistance so please don't hesitate call. Again that number to call to reach Richard future really is 8064659. 96 that puts in touch with Richard who's an investment advisor at Carolina retirement resources offices and hundreds built in Rock Hill as well. 806465996. That's 8064659. 96. I want to get to one more question here Richard because it was sort of specific went abroad and we've got one more specific question worth highlighting today it's from. By iron in Concord. Sticking with our good gold and silver and precious metals theme here what is the gold to silver ratio and does it matter. The gold silver ratio Walter measures how many ounces of silver takes to buy one ounce of gold. And a high ratio means that it takes many ounces over to buy one ounce of gold and that's over is cheap. Relative to gold the gold silver ratio today is about 75. To one it takes about 75 ounces this over to purchase one ounce of gold. That's 50% higher than its average going back to 1950. So another words silver's trade and had a huge discount to gold. So when it comes to the gold so ratio. In my opinion the critical level is eighty and I say critical because. The gold so ratio has only hit this level four times in the last three decades. In every time it has. Silver went on to have big rallies you know after him in this level in 1990. Silver went on a church about 47%. You know thirteen years later that eighty was hit again and so crucial work to under 24%. Over the following three years it happened a third time in 2008. And silverware on the tour 371%. Over the following three years. The fourth time it happened was back in February of 2016. And suspense over has risen about 9%. You know those are decent movie but I takes over hadn't even higher that's because the gold silver ratio is still far too high. You know we should be closer to nine to one that's a bold call to say the least it means it's ovaries likely eight times cheaper than it should be. But I didn't just pick that number into thin air you see there's about seventeen ounces of silver nearest cross for every one ounce of gold. But only about half of that silvery recoverable. We know this because modern mining companies dig up about nine ounces this over. For every ounce of gold they mine so it's also was worth noting that silver tends to be more volatile than gold because it is has a lower trading volume. But when precious metals are now performing and silver tends to overshoot gold to the upside significantly. When precious metals are stuck in the bear market trends over tend to draw much faster you know they don't call store that doubles medal for nothing. The reason that the ratio matters is that it gives you a a snapshot. On how the prices of gold silver relate to one another which can be useful you know today's ratio of nearly 75 to one would certainly suggest that's over can be more of an attractive investment opportunity when precious metal prices had higher. And at some point I'm confident they will especially silver tone my opinions over the metal dog owners I believe the upside is over higher than half of gold. Another reason are for first overs as so rouge used in many aspects of our lives so it's hard to think. Of living without it it's it's in everything I mean you're talking cell phones and computers and you know animated batteries you know simply put silver makes much of our modern lives possible so. We are dependent on its over for today's modern conveniences. And when you consider your social economic climate worldwide it's critical to ensure against a potential currency devaluation from inflation. If you haven't done so already you may want to consider diversifying your portfolio further. To include precious metals. It's very important are your world prepare. Retirement and want to extend an opportunity here right now to help you be sure that your world compared. I'm offered a copper Mary financial review anyone call the next fifteen minutes and has at least you're thousand dollars saved for retirement. I'll talk about your retirement income needs where the income is gonna come from. How you outpace inflation. Pay as little as possible and taxes and make sure that you don't outlive your money. Now you might say I don't really have to call an X fifteen minutes and yes it's true he could probably take care of it next week or even next month. But here's the deal I mean coaching people on retirement plans for a long time and I've learned that it's really easier procrastinate or get distracted. So if you don't start the process now there's a very good chance you're not gonna do it at all so the first coach and then I'm gonna give you is to encourage you to take the first step right now. So you're ready to finally get a plan in place give us a call now. And this is the number that you need to dial 8064659. 96 setup which in touch with Richard dutrow rally investment advisor at Carolina retirement resources. The state of the phone and call 8064659. 96 if you are retiree or approaching retirement that's a great opportunity to make sure that you are on the right track. To get to and all the way through retirement 806465996. Is the number to call. Again that's 80646. 59. 96. Richard has offices and hundreds fil a didn't rock feel as well easy to get in touch and to come in have a conversation but you have to be the one that starts at all. And it starts with a phone call 806465996. It complementary review of your financial play 806465996. Much more coming up on today's program mutual funds are the ins and outs of them what is important to note. Mutual funds that did the bad the ugly dive into it all coming up on the financials and. It's time for another musical connections. Where we blend the worlds of music can finance together. Here's friend of the show financial advisor and musician mark lawyers with bronzed us. The boys it's easy topic they're classic sung sharp dressed man teaches about retirement planning I don't know if you remember diesel Blair expect. Gold watch. Diamond ring I mean this in not a single thing yeah top coat. Top hat and a lower because while wallets fat and what we learned from that apple epic from sharp dressed man by it's easy to. Well you your thinking that their role in the Diallo what is the and they don't have to worry about it and feel when you first started talking about gold I thought you're gonna sit there and tell me about Gil investing in gold now usually go out by ago. Yeah because right now there's a lot of people on TV say an old. Things are Gatorade give daddy you better you better have more money in gold. And I've told you in the foot and a path you know gold is located away air. And you know commodities are are not affect class. It is not the whole have a some commodities in your portfolio but Kiki it you don't wanna run away from the things that are really working for you. And the growth right now is coming in equities that is coming in equities globally. You know but the financial connection when it comes to live in light and it was easy couples living in that's wrong. Remember when that when they came out and FA NC you know hot rod both at 1940 year that the top bras something like that idea yet how beautiful car and they came out with a Fuzzy guitars and they are all on top hat you know top hats that top coaches felt that not everybody wants that gold watcher of top hat but whatever your thing is. The thing that you want to you know that's what you want to be able to do in retirement. The goal was not to get to retirement to keep consider out all day and try to spend as little money as possible. That you don't have to worry about running out the goal is to have a plan you do the security. Knowing that you don't have to worry about running up the pleasure wallets that. That makes that may represent to me we have a nest egg that we're living off by the he needed just look at the big picture here it doesn't mean we go spend crazy. Noble but one thing we didn't know how to do is become monitors overnight at a fat wallet retirement planning termed usually has nothing to do the size of your account but is that how much income your able to produce from that wallet. It reliable paycheck is what keeps few for worrying and retirement. Because ultimately retired we lost the page yet. So it doesn't necessarily that they someone says you know what is the magic number. How much do we how the house they need in order to retire comfortably without the fear running out of money it's not the hormel folks. It's about how much income. You need to supplement your Social Security to live the quality lifestyle. That you been accustomed to. And and you know what you're bringing home from your paycheck and how much of that you're investing back in your 401K. And how much you're saving at the bank or whatever maybe how much you're paying. Put it toward the mortgage. And we can sit down and crunched the numbers that say okay how much income. Do I really need to have. So it's not a dollar amount if the income you can brawl. From the dollar amount that's either gonna give you equality lifestyle that affords you the ability to retire today eat or or at least gives us an idea how many more years you need to work that you can retire comfortably. And while you're still working you're still drawing a paycheck and hopefully useful saving. And hopefully your pay down some debt. But we're gonna be able to crunched the numbers and look so if you don't even know that answers to these questions. It's time folks. It's time for you to sit down and have an analysis performed on your situation. Have a retirement plan put together haven't in complaint put together have an analysis on your current investments to see if you're getting the right returned. For the risk you're taking. Because it really should be about living the lifestyle you wanna live in retirement and not have to worry whether or not you're going to run out of money or you're gonna have to really start getting you becoming a tightwad becoming Scrooge and not spending money. I had a couple they came in here for the movement working with the last few weeks and it was all about the dollar now this is what we need to net per month. And we were able to design an awful what they've already saved a strategy. To bring the risk down. We cut the risk down and we created higher cash flow than when they came into this office but it took them that they took that to the effort of them. Picking up the phone and giving us the call to the find out how to do this so Ron's gonna share with you folks how to get in touch with us. To speed up the phone call 806465996. That's 806465996. You can get a complimentary review of your financial plan. Just call now to take advantage 8064659960. It's time for a fireside chat. As we get to know you're local financial symphony maestro. This is the financial symphony in this part of the show we like to call getting to know you aware I ask a random question to Richard future rarely each week just gonna get to know his personality a little bit better. Maybe his hopes and dreams and goals serve maybe it's just his favorite food sometimes that'll ask questions like that. Just a fun part of the show and Richard I'm asking you to look into the future on this edition of getting to know you what you want your life to look like ten years from now. You know I wish I knew but I don't. You know my goals there are shorter length at this time. Personally. My wife and I have there's only recently started discussing how our life would look ten years from now. More likely I'm I'm thinking in terms of you know if I stopped being an investment advisor and didn't serve my clients you know what what I do to replace my time I think that's something I've been focused on. A little bit but done from a business perspective. I think did there within next five to ten years I will be out in the solution advisors to our practice. So then maybe I can transition out of practice. To about 1015 years down the road. Lets kids so just kind of solidifying. The that your practice and then bolstering it with some additional help that's always a good goal to have I think there. I think some Q well wonderful let's give ten years from now ritual have some extra help in the office. That'll be nice that's a good goal to have. That's getting to know Richard who drilling a little bit better here on the financial symphony there's much more coming up on the way system. Much like the musicians nineteen U trustees of their instruments or analyzing the acoustics of early in the forum performance. Your financial maestro fine tuned to your financial planed to adapt to the ever changing financial world don't settle for an advisor who offers us sales. And also a plane and make sure you hit all the right notes in your financial plan. Come visit with your financial my stroke Richard Richard Elliott and serving the Charlotte metro area call 806465996. 806. Or 65996. Johnny Cash is a state was approached by an advertising company asking permission to use the ring of fire on an ad for him right greens. The request was freaky. On a similar note here's the financial Stephanie we requested that Johnny Cash the state allow us to use Folsom prison blues is our theme song. That request was also reviews. But keep listening anyway. This is the financial symphony Walter Schuerholz here alongside Richard future rally Richard is an investment advisor at Carolina retirement resources. Serving you in the Charlotte metro area with offices and both hunters hill and Rock Hill as a wealth. Great opportunity for you today to get in touch to have a conversation with Richard about your financial plan. The number to call is 806465996. Again that's 80646. 5996. I promised we talk about mutual funds on today's program and let's dive in you know mutual funds have long been. The most popular way for people to invest but that landscape certainly. Is changing and so we're gonna spend some time on the show today discussing that Richard. What percentage of your clients owned mutual funds in one form or another when they first came to see how how popular were they indeed. Well every investor Walters who has a 41 K over her out of variable annuity. They're mutual funds and meaner and everyone affiliated with the mutual funds or now known as financial engines. Has mutual funds and their portfolios almost investors. That work with a broker. Have mutual funds as well but that is not true many individuals are utilized investment advisors and and the reason why is an investment advisors must constantly be cognizant. Of their fiduciary duty to their clients. You know for years we've been sold the lie than mutual funds are the most effective way to grow your wealth. Fortunately it's just not true the truth is is that 96% of actively managed mutual funds do not beat the market over fifteen year span. And the 4% that do beat the market is changing all the times show a little bit and on a jockey that won the last race doesn't mean that you're gonna win a race again. In a chase and performances just simply fooled Aaron. In fact over twenty year period if you look at December 31 1993. Through December 31 2013. The S&P 500 returned an average return of nine point 28% annually. However the average mutual fund investor made just over 2.5 4%. According to delve more which is one of the leading industry research firms you know that's and that's the nearly. An 80% difference and to add insult to injury the all in Costa mutual funds is on average of three per cent plus according before. In this is when you add the management fees transaction cost of sales loads. All those different fees that are associated with. Our mutual funds some have called hidden fees. Perhaps this number doesn't sound high Cuba consider this. The market was flat period known as a lost decade. There were a lot of ups and downs but nobody made any money. And so if you were paying 3% annually during this period your 100000 dollar portfolio would be about approximately 70000 dollars at the end that fly period. You're down 30% and if you were making withdrawals was if you're retarded making withdrawals the monthly expenses you're down even further so many times. These mutual funds are simply not the best choice for your portfolios they may ignore your unique goals especially in retirement. Again these mutual funds have hidden fees that may have a negative impact on your portfolio over time. In addition to that mutual fund may not provide as much diversification as you thought. QQ significant overlap so almost all the portfolios are review. Walter are full of mutual funds. Answer it interesting to see just how prevalent they are richer now you know there's these things in mutual funds all these different terms then you start hearing you know. Back clothes and from lows will get into those may be a little bit later another one is expense ratios in mutual funds can you explain what those are. You know and why it's important understand the. Play at a typical mutual fund expense ratio includes several different cost you know the management fees and fee paid to the mutual fund company. For investing your money on his speed is usually the biggest cost. And in my run anywhere between you know point 5%. To as high as two and a half percent I've seen them higher than that. It just depends on the type of funnier investment and you know for example. An international fund is gonna probably be costlier than domestic fun. You know then there's custodial costs as mutual fund companies are required to hold their investments that are custodial back. These banks will register the stocks the bonds or other securities on behalf of the fund. They'll collect dividends and interest they deal with stock splits they maintain cost accounting and so gain and loss information can quickly be accessed by the company. They also have what is known as twelve B one fees you know these fees cover marketing and advertising cost and are taken from your your portfolio. These he's do absolutely nothing for you personally. Mutual fund companies also incur legal expenses. As they must file paperwork with the Securities and Exchange Commission which includes incorporation fees and short licenses. And when you buy or sell part of your investment in the fund a transfer agent handles. The paperwork can also transfer agency. They do do day to day work of keeping records for you. Also were paid out by the mutual fund not a company. So the lesson in all of this is that you need to pay attention to mutual fund expense ratio it represents real money coming directly on your portfolio. And you know I've never had an initial meeting was anyone that completely understood the costs. Of the mutual funds they own these hidden costs have had infiltrated the mutual fund industry and are being paid by many of you unknowingly. Whether to feel your pain or baked into the fund selected as an expense ratio had an honor as a brokerage commission when you buy and sell. Or charge by an advisor who's helping you sort through at all. It's important that you know what you're paying for. So if you give us a call next fifteen minutes we're gonna custom designed if you and easy to understand financial review. And that review will indicate if you're in need of a full blown financial plan there are no obligation or cost this initial reviewed all callers who have at least 200000 dollar save for retirement. So you meet those qualifications here's what you can expect. Already fee report. To help you untangle what is cost you work with your current planner or advisor. Next I'll perform a tax analysis to show you how you could possibly read future taxes. And it creature cash flow. And finally I'll creating customized lifetime income plan you have proven strategies and techniques. That could Turbo charger retirement income in short a take the guesswork out of financial planner for you. So for all the caller Walter who called next fifteen minutes it comprehensive financial review being offered but no obligation. All you have to do is pick up the phone call now 806465996. And now to get the conversation started. 8064659. 96. Called let Richard know that you would like to meet for compliment our review of viewer financial plan here in the near future and he can help set that up. And one of his offices in hunter's bill or Rock Hill. 806465996. Serving you throughout the Charlotte metro area this is the financial symphony. Richard is your local financial maestro was we liked college here on the show he's an investment advisory Carolina retirement resources. 806465996. Is your number to call. That approach in touch 806465996. This is especially important if you're recently retired or approaching retirement. In the next couple of years the decisions you make now are so important you don't have time on your side to recover. From big mistakes to make the right decisions now get the right plan in place. All you have to do is pick up the phone call Richard the start process 806465996. That's 806465996. Don't move a muscle continued talking about mutual funds as we continue with the financial symphony. It's remarkable sometimes the emotions and feelings music brings to our daily lives it was there for graduation. On her wedding day. And sometimes even resonates on our darkest days. So as you look back on life and remember the music strikes aren't you take a moment to look forward to your retirement. There isn't any time ripe with uncertainty. Oh will be a time eventually. If you're in a spot now where you don't think your current plan deserve that kind of celebration when you reach retirement. Think it's time to get a second opinion. Come visit with your financial my strength Richard materially. Serving the Charlotte metro area. Call 806465996. 806465996. Stroud ray. This part of the financial symphony we call in the news in this is where I get to ask Richard who derailing your local financial maestro that's something that's been making a lot of buzz may be in. Good news and world. Over the last couple of weeks and. Richard we would be way off the mark if we didn't talk about. Did coin so. Obviously that's dominated a lot of headlines recently what's the deal with bitcoin. Is it worth paying attention to or is it just a passing fad. Yeah there's a lot of hype concerned big car and I have a lot of people asking me about bitcoin. And down you know they're surprised when I tell them that I don't involve myself in bitcoin. One of the things that concerns me is is that there's every indication that the governments are regulators. Tax authorities are moving in for what I call a crypto kill. You know the iris was successful in getting in federal court recently. To order one of the largest bitcoin exchanges to hand over certain customer information including names. I addresses Social Security numbers are more you know as the exchanges don't keep this information. You know they're guilty of anti money laundering violations and all the accounts can be frozen. In fact we've seen where banks are actually freeze on assets at this time with respect to pick corners well. You know if the exchanges do you have the information that guy handed over the RS. And the iris will likely be contacting you. But I don't think the Irish have stopped there they'll play hardball to get big calling customers to reveal names of counter parties. They were both its take on big corn is that you know it's an effective way of transferring money but but that is a terrible investment. They've acted as if it's really not an investment in oil bitcoin is a form of money. Just like dollars euros yen two pounds but when buyers of a big coins say is that it went up 1000 dollars. You know from a thousand dollars to 4000 dollars or you know that's not really your return on investment. It shifts a change in the exchange rate you know so you know governments. Let's face it they don't like competition especially when it comes to money you know I prefer the old monetary standbys of goldmans over. You know at least would golden silver when the lights go out you still have to golden silver. Not so much with electronic currency so. You know stick in the sound investment decisions especially retirement. You know that's extremely important you know we wanna gamble a little bitty got some extra cash you know go ahead but don't do understand that this is a very risky. Move on your part in and chances are that it's a little bit too late to get involved you're probably gonna end up lose in that that money that you put to work great in big going. And I could be wrong it's possible but I'm just not really. Comfortable. With the crypto currency because it's noon. I'm more excited about the block change technology and the possible investments associated with that I don't own any big corn and I don't recommend them to my clients are my reasons have to do a bubble dynamics. And the potential for fraud. You know so it if your concern. Or if you're interested and you're not really sure which direction to go you know if you like to have a couple of recession sit down talk with me about your options in the marketplace. You know let's just have take a look at chief or some alternatives that would work for you or not. You know maybe I can make a recommendation with respect to how much you should allocate to be going so that you don't. Oh sure war or harm your retirement income portfolio again if you have any questions about how bitcoin would fit into your portfolio just give Richard a call at 800. 6465996. Again that's 80646. 5996. It's certainly an interesting item that's been in the news lately and if there's anything that ever. Pops up in the financial news that makes you scratch your head in wonder or. You have concerns about your own plan it's always worthwhile to reach out to Richard future rally again and 800. 64659. 96 that's 806465996. And he can look at sort of. You know what's happening in the news the moves of for the news and world and how it might impact your client work. How your plan is built to last against the whims of the markets in the news tonight to build both clintons and Richard have yet. With guidance there one more time that number to call is 80646. Six there's more on today's edition of the financial something. You're listening to the financial Anthony that show that makes your your financial plan at the perfect fit. Thanks for joining us on the financial symphony today this is the show that'll help you better prepare for your financial future why well we turn to investment advisor. Richard future rally of Carolina retirement resources for guidance each week he serves you. Throughout the Charlotte metro area with offices and hunters hill and Rock Hill as well you get in touch with Richard by calling 80646. 5996. That's 806465996. We've been talking on today's show amount mutual funds to the ins and outs some of the nuances of mutual funds the terms that are important to note. And Richard I mentioned earlier that you know there's a lease terms that often will surround target added onto. Mutual funds and moods is one of those terms and you might hear it is up front load or back load and no load. What do all these loads mean why is that important for the average investor in saver to now. We know mutual fund load Walters a pretty name force sales commission. You know simply money going from your pocket to a shell whose pockets I find that most of you. Aren't aware of these commissions and you're quite surprised. When their disclosed view because at the time of purchase they were not disclosed to you. So there are three versions of mutual fund loads class day or front loaded mutual funds. Charger commissioned right when you make the purchase. In a mutual front load. If it's five point 9% and your invest in a thousand dollars then you're gonna invest 941. One dollars an actual fund shares. And you're gonna give yourself person 59 dollar. Our class B. We're back loaded mutual fund you know they have contingent deferred sales charges which is a fee. That you pay if you leave defined within certain time for him. The feed which you pay usually decreases over time you know starter now it may be let's say 5% if you fell within a year. And then decrease of 1% each year until you could leave after the fifth here. This one is in my opinion the most deceptive the ball loads. And no load mutual funds are funds that allow you buying and redeem the mutual fund shares at any time. Without a commission our show charge in most cases no load funds have lower expense ratios and load funds and lower expenses translates into higher returns so. You should never invest in loaded mutual funds the evidence is simply too strong to justify taking that approach over the long term. I just don't see any benefit for you pay a mutual fund lived. Yet loads one of the just you know couple of communal confusing terms that get added on to mutual funds I think in. You know it goes right in hand I think we're talking about. You know the expense ratios and things we talked about a little bit earlier in the program. But you know you often hear the synopsis conversations about terms and definitions and things like that Richard but. We shouldn't overlook the tax issues that often get created with investments in mutual funds what are some of the things to consider. One Uncle Sam enters the equation parents that. Good point the big issue. Is that many of you pay more than your fair share of taxes when you own mutual funds. The problem is more transparent when mutual fund your own outside. Of and hire ray Roth higher rate for one K your other tax preferred accounts. So when you buy into a mutual fund that is whole and stocks that have appreciated prior to the purchase of the fine. You run the risk of paying for these stocks capital gains taxes even if you did not benefit from the stock's gains. You will share proportionately in the taxes due from the sale of these appreciated stocks. When the mutual fund manager makes a change. Ultimately you can end up paying taxes on investments and other investors profited from before purchase and and actively managed mutual fund that taxable account. I'm not qualified account is another term for that you should consider contacting the company can determine the level embedded gains with a mutual fund. Since a capital gain must be reported each time of purchase or sale of shares is made. Father's Day trade securities in an hour and a very frequent basis may accumulate more taxable gains. You know I recommend to all my clients that they shouldn't own mutual funds and taxable accounts. Actively managed mutual funds are tax disaster because each year with actively managed mutual funds there are billions of dollars in capital gains distributions TU. And taxes are due. And what makes this so horrific is that often he may pay taxes based on someone else's activity. He may have to pay taxes when someone other than yourself sold shares of the fund it's just fundamentally unfair and that creates a huge drag on your return. So many things to consider when it comes to mutual funds in I guess the last question Richard I mean since there's so much. A complication and there are some issues with mutual funds sometimes they're viewed is. You know the greatest investment of all time in other times he kind of uncovered these different issues and problems with them. Do you think mutual funds should be eliminated altogether how often if at all are you incorporating them into your clients' portfolios. Well if tour more mutual funds have significant overlap. In the holdings of the mutual funds you know some of those funds can be eliminated you know there's simply no point. In have been multiple mutual funds that hold the same underlying stocks. It doesn't make sense to own mutual funds and taxable account because mutual funds aren't tax efficient. But mutual funds provide built in diversification unfortunately. They're not managed to risk in retirement investment. Your savings and mutual funds usually nutritional Wall Street model means the first refine your shape in between stock mutual funds and bond mutual funds. The idea is that the bond mutual fund will hedge your portfolio and down market. Unfortunately most balanced funds are fun with a blend of stocks and bonds. Went down 30% or more 2008 and you know and retirement that's simply unacceptable. And your retirement your time horizon requires. That your savings be managed first and foremost for little risk of loss in a mutual funds are managed for growth. For these reasons I do not use a lot of mutual funds and my clients' portfolios. And if I do those funds or are you can make tactical approach rather than buying whole approach. The primary goal being into preserve capital and downward market by allocating the cash. For retirees and pre retirees focusing on preserving capital. Should certainly be your primary goal you know many of you unfortunately are still investing in mutual funds. During retirement just like he did while you're working in of the difference being in that he had a paycheck to meet your expenses while you were working and and your retirement your savings needs to supplement your Social Security or glacier workers' paychecks. To provide income for monthly expenses. You know retirement plan and to many of you mean saving and investing for retirement. But a retirement savings goal the accumulation phase. And a retirement income plan the distribution phase. Are different should be approached differently so you need a strategy for taking distributions from your savings as well as you know how you continue to invest or retirement so. How to plan is a great start but haven't won that feeds you and your specific needs for your retirement is the only way to help ensure your retirement years will be everything you want him to be. It all boils down to the fact that all the pieces of your financial puzzle need to fit together so I'd like to offer you the opportunity comment for complete financial review. And we'll offer this review for free to all listeners who have at least 200000 saved for retirement are talking to all those different puzzle pieces that you need to consider. You know how much risk you take in your portfolio how much you're in fees you're paying commissions that you might be paying mortar attacks implications of your statements. Do you happening come plan in place to be sure that you are in danger remember money you know do you have a plan to address inflation in future decades as the cost of everything continues to rise. Obviously there's a lot that we need to discuss and we found that most people just haven't planned for early enough to address these issues. Again this review is complementary to anyone that has at least 200000 dollars saved for retirement. But the calendar does still quickly should go ahead and give us a call right now so that we can be sure to get a spot reserved for you. Here's the number 8064659. At 96 that's how to reach Richard future LE your local financial maestro here in the Charlotte metro area. 8064659. 96 Richard will help put together for you a solid financial plan for the future and make sure it's built the last. Getting you to and all the way through retirement if you're retiree or approaching retirement very important to make the right decisions now. 806465996. Is the number to call again that's 80646. 5996. Richard has offices and owners Phil and Rock Hill and you can get in touch by calling now 80646. 5996. If you want a complementary review of your financial plan that's the number to dial. 80646. 5996. Thanks so much for tuning into the program today for Richard future rally a mall or store multiple look for talking to again next time right back here. On them financial something. Information is for administrative purposes only. And does not constitute tax investment or legal advice. Always consult with a qualified investment legal or tax professional before taking any action investment advisory services offered through Brookstone capital management LL CBC him. A registered investment advisor. BCM and Carolina retirement resources are independent of each other.