The 3 Financial Headwinds Overview

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Over the past three decades, our core partners have had the privilege of working with millions of people across the globe in the scope of personal development and finance. Over this period, the world has changed quite rapidly. Today we are living in a "new normal" and the headwinds facing investors today could derail their chance for financial freedom.

There are two core challenges we all face...

  1. Our Country’s national debt and out of control spending which should ultimately impact your quality of life through inflation and rising taxes
  2. The financial services industry, 90% of which operates under the standard of "suitability," is not legally obligated to have your best financial interests at heart (a legal fiduciary). As a result, clients may be unknowingly paying exorbitant commissions/fees for services that seem to provide little investment value.

Consider these facts...

  1. "Buy and HOPE" may no longer work in active, volatile markets. Only 4% of stock mutual funds have beat the S&P 500 in the last 10 years (USA Today; December 2011) which means 96% of mutual funds are adding no value whatsoever. David Swensen, manager of Yale’s endowment writes "Overwhelmingly, mutual funds extract enormous funds from investors in exchange for providing a shocking disservice."
  2. Nearly 55% of trading volume today is executed by algorithms in search of profit. Wired Magazine reports "In 2007 the SEC instituted an ambitious new rule, the national market system, that opened the door to dozens of new venues for stock trading, but now that transaction times are measured in micro¬seconds and prices are carried out to six decimal places, those opportunities have arguably gone past a point of diminishing returns." Translation: the individual investor gets "retail" pricing.
  3. In 2012, the Wall Street Journal released an article called "Why stocks are riskier than you think." Volatility is through roof yet like an addicted gambler, investors keep going back to the card tables and forgetting the risks of another possible "2008." The author writes, "Even though they experienced the hazards of stock ownership firsthand in 2008, investors are venturing back into equities again. They've been advised that there's no other way to make up the losses they suffered—or meet their looming retirement requirements—and, not to worry, the risk of stocks diminishes the longer you hold them." The author goes on to say that "Despite the assurances of the financial industry, stocks are always a risky investment, and the longer you hold them, the better your chances of getting blindsided by a downturn."

In this section, we will explore the 3 main financial headwinds that are facing clients as they attempt to navigate their way to a successful and fruitful retirement:

  1. Market Volatility (click here)
  2. Excessive Fees and Taxes (click here)
  3. Inflation (click here)