Business Ownership and Wealth Management

Dana Barfield

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New View of Retirement Planning

Many financial firms are now claiming they have a "new plan", "new perspective", "new advice" for investors

Wealth Management on Ulitzer - Many financial firms are now claiming they have a "new plan", "new perspective", "new advice" for investors.  That their "green line" or "red zone" of expert advice will now provide investment and retirement guidance that will "take you where you want to go".

What is this new ground b reaking advice?  How is it different from the advice they were giving two years ago?

On the cover of recently received magazine it has the title "Tools of TRUE Diversification: Skillfully applied asset allocation can reduce a portfolio's overall risk profile."  Was the prior advice to do a FALSE diversification?  Was the financial "advisor" who recommended this UN-skilled?

Two observations:

1.   What most people were advised to do regarding their investments over the last 20 years didn't protect them at the time they needed protection the most (2008-2009) despite the promise of protection.

2.   What you discover when you talk to the financial sales firms is that they have changed a b solutely nothing a b out what they're offering and advising. 

The exact things that failed to protect investors against the meltdown of the last 24 months (namely asset allocation utilizing mutual funds b ought now, when ever now is, with no regard for the price of assets), are the exact things that these firms are offering today.

To invest successfully one must do two things:

1.   When making investments have the mindset of a smart consumer.  Seek b argains in quality companies, b uying great b usinesses at prices less than the b usiness is worth.

2.   When selling investments have the mindset of the wise farmer.  Sell assets when the asset "suggests" it is ready to sell, just like the farmer harvests corn when it is ripe and ready to b e harvested.

These twp principles are the very antithesis of asset allocation.  More importantly these principles worked over the last 24 months where asset allocation did not.

All this b usiness a b out green lines, red zones, and such is nothing more than the same product/service with new packaging. 

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Dana is the president of The Barfield Group, which has provided industry leading Financial Advice, Investment Services, and helped people Plan for Retirement for more than 20 years. He is a frequent speaker and writer for a variety of industry, regional, and national publications on business ownership and wealth building related topics.