What’s wrong with people? Insanity in $ANWWQ.

What’s wrong with people? Insanity in $ANWWQ.

What the hell is wrong with people?

Listen, at the end of the day, when you purchase a security you are purchasing a share of ownership. You then have a personal, monetary stake in the health and viability of that business. So answer me this…

Why in the world would someone buy into a company that is actively filing for bankruptcy???

I don’t get it.

$ANWWQ hasn’t even had it’s court hearings which, from what I’ve read, is scheduled for early March.

So many people are bickering about whether the shares will be terminated or not post filing. Whether the shares will be “worth” something on the other side of bankruptcy!!

People, I’ve got bad news.


Why is this even a discussion?

So many other companies that deserve your attention and aren’t in the process of filing for bankruptcy.

Where’s your head at? Don’t get caught up with all the hype.

Think rationally.

What is the Efficient Frontier Ratio in Wealth Management?

What is the Efficient Frontier Ratio in Wealth Management?

As with all wealth management principles, there are a lot of moving parts. But one major concept that everyone needs to wrap there heads around is the risk to reward efficiency frontier ratio. Even though different research firms might use slightly different names, the idea is always the same.
Equity and Bond markets carry certain risk, and technically speaking they operate within an inverse relationship. That means when one market goes up, the other goes down, and visa versa.Therefore, when taking this inverse correlation into account you can see how having both equities and bonds in your portfolio helps to balance the equation.
The chart below, posted on the Young Research website, is the risk/reward efficient frontier, there is an optimal mix of asset classes that determine how much risk you are taking on in your portfolio vs the potential for reward. The way to read this graph it to understand the mix of equity and fix income holdings. 
The x axis measures how risk and the y axis is the potential for reward. As you can see, the riskiest allocation is 100% equity holdings, but it also has the greatest potential for producing rewards. The least riskiest portfolio, according to this graphic, is perceived to be about a 20/80 mix. Meaning that 20% of your portfolio is held in equity shares and the other 80% consist of fixed income holdings. Notice how placing your entire portfolio 100% in bonds is perceived as taking on more risk for less reward. This is because there is ZERO diversification. 
Now most investors, including myself, have an aggressive investor profile. Follow the link here to learn more about what an investor profile actually is, and how you can use it to determine what strategy is right for you. Personally, my profile is largely determined by my long time horizon. I have a 20+ year window and therefore and withstand the market fluctuations. The most important thing you can do in a down market is STAY INVESTED. It seems counter intuitive but down markets are the time to buy them if you need them, and hold them if you got them.
As I approach retirement age I will adjust my allocation to a more conservative model, and eventually land in the 20/80 capital preservation model when I actually start accessing my funds. 
Now that you know the basic principles of wealth management, it’s time to start learning to tools to implement this ideology to your own financial assets.  
If you don’t have a brokerage account, I recommend using TDAmeritrade, especially if you are just starting out. Personally I have used multiple brokers and eventually closed out all but TDA. By for their platform is the easiest to you, their real time quotes and low costs make them a top choice for money management. You can read about my favorite brokers here, and learn why I ultimately chose TDA by reading this article. To put it into one sentence. TDA has the best platform and lowest fees making them my number one choice for money management.
Not sure what type of account to open up. Read this article and the different types of accounts, and the benefits of each. If you are familiar with the brokerage accounts, you can click here to take it one step further and learn about the different types of financial vehicles that are available to you as an investor, Holding securities in a brokerage account a step, but it is not the only step in creating a properly diversified portfolio.
How to Easily Analyze a Mutual Fund for Free.

How to Easily Analyze a Mutual Fund for Free.

This post is going to be a quick one.

Here at Moneyshire we are always talking about approaching the market with an investors mentality. With that being said, we don’t usually recommend nor encourage day trading or “flipping” stocks for a quick profit. We believe that true wealth comes over time by having consistent behaviors that allow you to accumulate assets in financial vehicles that help mitigate risk and appreciate in ways that maximize tax advantages. (Phew, what a mouthful…)
So when it comes times to select which funds to hold, there is a free and simple tool provided by FINRA that helps analyze each fund. The main statistics to look at are the fund objective, Morningstar category, and expenses. These three metrics will help you identify which funds belong on your portfolio.
Check out the analyzer here!
Now, there are a lot of caveats to this post so follow the links below to learn more.
What is the difference between active and passive funds?
Understanding investment objectives.
Understanding Morningstar ratings and categories.