Kevin Kroskey's Money & Mind

Having proper expectations is incredibly important in investing. Expectations will impact your investment allocation and may influence your ability to stay disciplined in adhering to your investment plan. The video below reviews a 5-year expected return forecast as of January 2017 made by the world's largest asset manager Blackrock. It was done in conjunction with the 2017 Q1 market review by Kevin Kroskey, CFP, Senior Wealth Advisor at True Wealth Design, and is edited for brevity. Note: To improve viewing quality on your player to HD video, select play and then the square icon to view in full screen mode.    

If you don't already read Jason Zweig's regular column in the Wall Street Journal, you should. He is one of the few financial journalists worth reading. His recent article on the psychology of the recent market drop is rational and instructive. ==== Click here to read the article in it's entirety: http://blogs.wsj.com/moneybeat/2015/08/24/the-cruel-psychology-of-the-1000-point-drop/ See below for a snippet: Experiments have shown , for instance, that people believe cancer is riskier when they are told that it kills “1,286 out of 10,000 people” than when they hear that it kills “24.14 out of 100 people.” Hearing “1,286” immediately brings a large number of victims to mind, while “24.14” is simply a much smaller number. To notice that the first number is less than 13%, while the second is more than 24%, you have to focus on the denominators of the fractions and do some quick division. But your emotions will likely hijack your brain long before you get to that poi...

The value of delaying Social Security has been written about a lot recently. In the current low-yield environment for bonds and low expected return environment for many stock asset classes, it is a particularly attractive strategy now. But should retirees include Social Security as part of their bond allocation? Watch the short video to learn one expert's perspective.  

Motivational speaker Denis Waitley once remarked, “You must stick to your conviction, but be ready to abandon your assumptions.” That statement certainly applies to retirement planning. Your effort must not waver, yet you must also examine it from time to time. 1       Perhaps you may realize that you under-estimated your health insurance costs and will need more retirement income than previously assumed. Or perhaps, with today's low interest rates you are not getting the level of investment returns you counted on. With those factors and others in mind, here are some signs that you may need to double-check your retirement strategy.     Your portfolio lacks significant diversification. Many baby boomers are approaching retirement with portfolios heavily weighted in U.S. equities. As many of them will have long retirements and a sustained need for growth investing, you could argue that this is entirely appropriate. Yet, U.S. equities by some me...

On March 3rd, the Ohio 529 Board announced changes to the college savings program fund lineup. The Board announced, "Based on extensive research, Dimensional was recommended because it offers relatively low-cost options and has many products that are ranked highly by OTTA’s investment consultant, Wilshire Associates, Inc." This is great news for Ohio 529 plan participants. Dimensional Funds have a strong, empirical underpinning and have long been a core component of the True Wealth Design investment portfolios. For participants that well-utilize their funds, this should help provide more dollars on a tax-free basis for qualified higher education expenses. To Your Prosperity, Kevin Kroskey, CFP® MBA   Click here for the full news release  from the Ohio 529 Board.   Click here for  cover story from Baron's “A Different Dimension” for more information on Dimensional Funds and what makes them different. Selected highlights are below: ...

Yet another study showing how poorly prognosticators do. There's too much noise in the markets in the short run to have any forecasting methodology with reliable predictive ability. And if there were such a methodology, why would anyone share it rather than make huge profits for themselves?   - Kevin Kroskey, CFP, MBA   Gurus Achieve An Astounding 47.4% Accuracy ( From Forbes.com )   "After tracking 68 experts and 6,582 market forecasts, CXO Advisory Group has concluded that the average market prediction offered by experts has been below 50% accuracy.   The results are in and they are bad. After tracking 68 experts and 6,582 market forecasts, CXO Advisory Group has concluded that the average market prediction offered by experts has been below 50% accuracy. Flip a coin and your odds for predicting the market are better. It’s hard to imagine that the average market expert isn’t able to at least match the track record of a coin flip, but it’s true...

It is helpful to think of a combination of asset classes--emerging markets, U.S. or international stocks, treasury or corporate bonds, cash, etc.--as a recipe . And think of the individual funds that you own as the ingredients being used in the recipe. Both matter a great deal. And both determine the net investment results from your portfolio and how the food you eat will taste.   Emerging markets as an asset class have been a better performer than either US or international developed markets in 2014. But over the prior three years Emerging Markets had fallen out of favor and an unsophisticated investor may have not had the patience to realize the increased expected returns.   In October 2013 I wrote Emerging Markets and Kenny Rogers' "The Gambler,"     "If anything, one should consider increasing their targeted allocation to emerging markets, precisely because they have had such a bumpy ride recently. After all, price and value are inversely re...