Friday

Worst Investment Idea Of All Time - Timeshares

In my twenty plus years as a stockbroker / financial advisor, financial writer, author and speaker, I have worked with thousands of people and their money.  I have seen some otherwise smart people make some silly investments; breeding emus, ostrich eggs, xmas tree sales, penny stocks and more but one investment stands alone as the worst investment idea of all time.

Timeshares are incredibly stupid.

You own very little if not nothing, all you bought when you paid for your timeshare is the right to book a room/condo at a future date.

Sure you will be told that you have exclusive this and exclusive that but in the end, you have been SOLD.

Timeshares (called vacation ownership by salesmen) were invented in the 1960's but grew up in the 1990's when it was cool to talk about your REC property at parties.

If you just sit yourself down with a paper and pen and do the math, you will soon realize that aside from some pipedream of selling for a profit one day, that you can book on your own at a nicer property more cost effectively and you won't be stuck in the same room with the same view year after year after year!

Wednesday

Boomer Exposure To Dividend Stocks Is Dangerous

With fixed income rates at historic lows, it is no surprise that baby boomers (those born between 1946 and 1964) have increased their exposure to equities (stocks and stock mutual funds).

While a small percentage of any portfolio should be investing in stocks (usually via growth mutual funds), the trend over the last few years has been to increase exposure.

A normal asset allocation rule of thumb is your age as a percentage in fixed income (bonds, CD's and money market) and the balance in equities.

Recently some folks are utilizing dividend paying stocks for the fixed income portion of the asset allocation (to increase income).  This is not a good idea and a disaster waiting to happen.  In the end, equities are equities, stocks are stocks and sure, those that pay a nice dividend are usually safer with more price stability but will never and should never be mistaken for fixed income.

If your financial adviser or stockbroker has messed with your allocation, you need to call me.  If you have done this to yourself because you heard somewhere it was a good idea, call me.  I am happy to help.