Six Keys To Investment Success: T. Rowe’s Brian Rogers Reflects

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I hope you had a wonderful weekend! Remember Valentine’s Day is tomorrow!

LRPC’s Monday Morning Minute for this week, “Six Keys To Investment Success: T. Rowe’s Brian Rogers Reflects” (presented below) comes to you courtesy of ThinkAdvisor. As an independent, objective Registered Investment Advisory firm, Lawton Retirement Plan Consultants, LLC has access to research from many sources. Be assured that I will share enlightening, useful information with you each week. This is a short piece I believe everyone can read in less than 60 seconds.

As his retirement approaches, Brian Rogers, Chairman and CIO at T. Rowe Price, shares his knowledge gained from 35 years working with investments.

Have a wonderful week!

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Six Keys To Investment Success: T. Rowe’s Brian Rogers Reflects

By Emily Zulz, Staff Reporter, ThinkAdvisor

On Brian Rogers’ desk at T. Rowe Price is an engraved cube displaying the reminder, “Doubt everything. Believe nothing.” “And I think those are good things for investors to do,” as well, Rogers said

As the time nears for him to step down from his current roles as chairman and CIO at T. Rowe, Rogers is taking time to reflect on his career. “One thing that really struck me” in 1982 when he joined T. Rowe, he recalled at the event, is how “passive was making increasing inroads into our business.” In addition, he said, “fees were under cyclical pressure in 1982. Fast forward to 2016 and it feels like the same two trends are in place, and will continue.”

Recently, T. Rowe Price announced that Rogers will retire as chairman and CIO on March 31, 2017, after nearly 35 years at the firm. While he will stay on as a non-executive chair, his role as CIO will be taken on by six senior investment executives. Recently, Rogers shared six keys to investment success he’s learned over his career.

1. Be an optimist

“When I think back over the course of my career I think back to Warren Buffett’s description of the 20th century,” in which Buffett suggested that ‘If you had $1,000 to invest in 1901 but you knew about everything that was going to happen in the 20th century, you never would have invested the money.’”

However, despite two world wars, depressions, financial crises, oil embargos, global tension and the Cold War, it actually was a good century in which to invest. Rogers suspects this century will be similar to the last. “So be an optimist despite how bad things seem and despite how volatile markets may be,” Rogers said. “Being optimistic, I think, is something that really makes sense for the individual and the institutional investor.”

2. View crises as opportunities

“When you look back over history, a lot of the crises we’ve lived through now just look like little blips on a price chart,” Rogers said. “If you think back to the crash of ’87, the downturn in 1990-91, even the Dot Com crash…when you look at a long-term price chart, they look like little blips. So you have to view those things as opportunities. Everything is cyclical.”

3. Price determines success

“Think of your own lives: If you pay too much for a house, it may not be a good investment for you. If you pay too much for a stock or bond, it may not be a good investment for you,” Rogers said. “Ultimately price and value converge, but it can happen from different directions. You can have price and value, and price drops. Or you can have value and price, and price rises. “Not surprisingly, it’s tougher to make money when prices are high.”

4. Be humble

“One of the things I think I’m known for within our organization is — -very gently — -from time to time telling people that they don’t know as much as they think they know,” Rogers said. “Over-confidence as an investor is a great challenge.” To support his point, Rogers quoted Confucius: Real knowledge is to know the extent of one’s ignorance. “One of the things we preach within the investment organization is ‘Know what you know. Know what you don’t know. And don’t be overconfident about it all,’” he added.

5. Avoid complexity

“Simplicity is a virtue. I have seen so many investors get into so much trouble over the years with what I call ‘fancy products,’” Rogers said. Today one of Rogers’ favorite investment products to “really go after” is leveraged ETFs. “Does anyone really think that betting the 3x Brazil [will go] up is a good bet for the individual investor?”  though he acknowledges “it would have been this year, but it’s a very difficult thing to do and I think the financial services industry from time to time should be criticized for offering products that are so complicated, so complex that investors can’t really understand the risk and return framework of them.”

6. Avoid investment cults

“I remember Bethany McLean when she wrote the book The Smartest Guys in the Room [about the Enron scandal], she talked about steering clear of companies that are so popular, so much in the press — think Valeant, think Theranos, think companies like that. Over the years it’s been companies like Enron and Tyco.”

For example, Rogers pointed out that the leaders of the equity markets in the ‘80s — like Digital Equipment Corporation, Data General and Intergraph — are barely remembered today. “Beware the ‘It’ stock,” he said. “And beware of companies always on the front page. Beware of hot sectors and companies with very low entries into their businesses.”

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About LRPC’s Monday Morning Minute

Lawton Retirement Plan Consultants, LLC (LRPC) Monday Morning Minute is crafted to provide decision-makers with important information about the economy, investments and corporate retirement plans in a format that allows a reader to consume the information in less than 60 seconds. As an independent, objective investment adviser, LRPC has access to many sources of research and shares the best and most relevant information with its readers each week.

About Lawton Retirement Plan Consultants, LLC

Lawton Retirement Plan Consultants, LLC is a Milwaukee, Wisconsin-based independent, objective Registered Investment Adviser (RIA) providing investment advisory, fiduciary compliance, employee education, provider management and plan design services to retirement plan sponsors. The firm currently has contracts in place to provide consulting services on more than $400 million in plan assets. For more information, please contact Robert C. Lawton at (414) 828-4015 or bob@lawtonrpc.com or visit the firm’s website at http://www.lawtonrpc.com. Lawton Retirement Plan Consultants, LLC is a Wisconsin Registered Investment Adviser.

Important Disclosures

This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance, tax, legal or investment advice. Each plan has unique requirements and you should consult your attorney or tax adviser for guidance on your specific situation. In no way does Lawton Retirement Plan Consultants, LLC assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations. Investors should carefully consider investment objectives, risks, charges and expenses. The statements in this publication are the opinions and beliefs of the commentator expressed when the commentary was made and are not intended to represent that person’s opinions and beliefs at any other time. The commentary does not necessarily reflect the opinion of Lawton Retirement Plan Consultants, LLC and should not be construed as recommendations or investment advice. Lawton Retirement Plan Consultants, LLC offers no tax, legal or accounting advice and any advice contained herein is not specific to any individual, entity or retirement plan, but rather general in nature and, therefore, should not be relied upon for specific investment situations. Lawton Retirement Plan Consultants, LLC is a Wisconsin Registered Investment Adviser and accepts clients outside of Wisconsin based upon applicable state registration regulations and the “de minimus” exception.

Six Critical Rules For Successful Retirement Investing

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MMM Newsletter and Website Header 10.2.15I hope you had a great weekend! The kids are now done with school for the summer — look out!

LRPC’s Monday Morning Minute for this week, “Six Critical Rules For Successful Retirement Investing” (presented below) comes to you courtesy of Jean Folger. As an independent, objective Registered Investment Advisory (RIA) firm, Lawton Retirement Plan Consultants, LLC has access to research from many sources. Be assured that I will share the most relevant information with you each week. If you are short on time, make sure you review each of the six rules highlighted below.

Everyone should be aware of the rules of retirement investing (I think Rule #6 may be the most important). Take a look below at Jean Folger’s thoughts on how you should invest for your retirement. Ms. Folger is an award-winning author of investment planning books.

Have a wonderful week!

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Six Critical Rules For Successful Retirement Investing

By Jean Folger

Retirement planning is the process of identifying your long-term income, determining your intended lifestyle and defining how to reach those goals. When planning for retirement, you’ll need to consider a variety of factors, such as when you’ll retire, where you’ll live and what you’ll do.

Keep in mind with each additional year you hope to retire early, your investment needs greatly increase. Also consider the difference in cost of living between cities, or even among neighboring zip codes. Add on daily expenses, medical expenses, vacations and emergencies, and you begin to see how the costs of retirement add up.

Your retirement goals will rest largely on the income you can expect during your retirement, and will likely evolve as your ideals, risk tolerance and investment horizon change. While specific investing “rule of thumb” guidelines (like “You need 20 times your gross annual income to retire” or “Save and invest 10% of your pre-tax income) are helpful, it’s important to step back and look at the big picture. Consider these six essential rules for truly smart retirement investing. [Read more…]

What Do Stock Market Trends In Q1 Mean For Q2 And Beyond?

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MMM Newsletter and Website Header 10.2.15I hope you had a great weekend! We had frost on Friday night!

LRPC’s Monday Morning Minute for this week, “What Do Stock Market Trends In Q1 Mean For Q2 And Beyond?” (presented below) comes to you courtesy of Schwab. As an independent, objective Registered Investment Advisory firm, Lawton Retirement Plan Consultants, LLC has access to research from many sources. Be assured that I will share the most relevant information with you each week. This is a short piece I believe everyone can read in less than 60 seconds.

The first quarter of 2016 proved to be a rough ride in the markets for many of us. Take a look below at what Schwab believes is in store for Q2 of 2016 and beyond.

Have a wonderful week!

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What Do Stock Market Trends In Q1 Mean For Q2 And Beyond?

By Jeffrey Kleintop, Charles Schwab & Co., Inc.

Key points

  • Despite the stark differences in the first and second halves of the first quarter, a few themes dominated the performance trends.
  • In the first quarter, many stocks were boosted by the turnaround in oil and the dollar while the broadening adoption of negative interest rate policy weighed on the performance of others.
  • Looking ahead to the second quarter, more volatility is expected. The trends that may drive second quarter performance could again include the price of oil and the value of the dollar, along with changes in inflation expectations.

Stocks were close to flat at the close of the first quarter, hiding the down and up rides they took to get there. The MSCI All Country World Index fell -11.3% during the first half of the quarter, bottoming on February 11, and then rebounded back to where the year began as the quarter ended.

Key trends in the first quarter

[Read more…]

Three Sentences That Explain Investing

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MMM Newsletter and Website Header 10.2.15

I hope you had a great weekend. How are your NCAA tournament picks doing?

LRPC’s Monday Morning Minute for this week, “Three Sentences That Explain Investing” (presented below) comes to you courtesy of Marshall Jaffe. As an independent, objective Registered Investment Advisory (RIA) firm, Lawton Retirement Plan Consultants, LLC has access to research from many sources. Be assured that I will share the most relevant information with you each week. If you are short on time, make sure you read the three sentences.

The three sentences outlined below lay a foundation for a sound understanding of investing.

Have a wonderful week!

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Three Sentences That Explain Investing

By Marshall Jaffe , Managing Partner , Jaffe Asset Management

During the course of its long descent, a snowflake passes through a multitude of different weather conditions. The variability of temperature, atmospheric pressure and humidity produces an infinite variety of possible designs. The future of each snowflake is a structure that has never existed before and will never occur again — at no point in its development can we know exactly what it will look like when it finally lands. This is pure uncertainty — a completely unknowable future. [Read more…]

Market Volatility: What You Need To Know

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MMM Newsletter and Website Header 10.2.15I hope you had a great Valentine’s weekend.

LRPC’s Monday Morning Minute for this week, “Market Volatility: What You Need To Know” (presented below) comes to you courtesy of Schwab. As an independent, objective Registered Investment Advisory firm, Lawton Retirement Plan Consultants, LLC has access to research from many sources. Be assured that I will share the most relevant information with you each week. If you are short on time, make sure to review the major headings.

We have begun 2016 with tremendous market volatility. Find out why below from the experts at Schwab.

Have a wonderful week!

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Market Volatility: What You Need To Know

By Schwab Center for Financial Research

Key points

  • Markets have been unusually volatile so far in 2016, with plunging oil prices, slowing growth in China, steep declines in overseas equity markets, fragility in the high-yield bond market and concerns about the Federal Reserve all contributing to uncertainty.
  • While we have experienced a 10% U.S. stock market correction twice in the past year — and some pockets of the equity market (for instance, the NASDAQ) have done worse — we do not expect the current  correction to turn into a broad-based bear market.
  • Investors should review their portfolios to make sure they still reflect their target asset allocations and goals. They should also resist the urge to buy and sell based solely on recent market movements, as it could hobble their performance over time.

[Read more…]

Top Six Investment Ideas

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MMM Newsletter and Website Header 10.2.15I hope you had a great weekend. We are almost through the coldest part of the winter. Hang in there!

LRPC’s Monday Morning Minute for this week, “Top Six Investment Ideas” (presented below) comes to you courtesy of ThinkAdvisor. As an independent, objective Registered Investment Advisory firm, Lawton Retirement Plan Consultants, LLC has access to research from many sources. Be assured that I will share the most relevant information with you each week. If you are short on time, try and review the six headings.

Wondering where to invest in 2016? Take a look below at what the experts from ThinkAdvisor believe will be hot this year.

Have a wonderful week!

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Top Six Investment Ideas

By Bernice Napach, Senior Writer, ThinkAdvisor

If there’s one overriding outlook for the financial markets in 2016 it’s this: No big gains are expected. The weakness in oil markets is expected to continue though prices could hit bottom at some point, and the dollar is expected to remain strong though not quite as strong as it’s been relative to other major currencies.

Most important, the change in U.S. monetary policy, following the Federal Reserve’s first rate hike in almost 10 years, will color market performance not only in the U.S. but globally.

Given this backdrop, investors and advisors need to choose carefully for 2016, then monitor investments closely.

Here are the six best investment themes and picks for 2016 that ThinkAdvisor has culled from myriad outlooks by market strategists as well as interviews with strategists and analysts. [Read more…]

Will Bond Funds Make Sense When Interest Rates Rise?

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MMM Newsletter and Website Header 10.2.15
I hope you had a great weekend. The leaves are changing here in Milwaukee!

LRPC’s Monday Morning Minute for this week, “Will Bond Funds Make Sense When Interest Rates Rise? (presented below) comes to you courtesy of Schwab. As an independent, objective Registered Investment Advisory firm, Lawton Retirement Plan Consultants, LLC has access to research from many sources. Be assured that I will share the most relevant information with you each week. If you are short on time, make sure you review the “Key points” below.

We all know it is coming. The Fed is going to start raising interest rates soon. Is any fixed income portfolio safe? Check out the thoughts below from the experts at Schwab.

Have a wonderful week!

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Will Bond Funds Make Sense When Interest Rates Rise?

By Rob Williams, Charles Schwab & Co., Inc.

Key points

  • Although the value of most bonds and bond funds fall when interest rates increase, not all bond funds react the same.
  • A look at how various bond fund categories performed in prior rate cycles can help your fixed income strategy.
  • Short-term bond funds have performed better than intermediate-term, long-term, or multisector funds during the past three rate-tightening cycles.

As the Federal Reserve prepares to raise interest rates for the first time in almost a decade, many bond investors are concerned about how their portfolios may be affected. Although the value of most bonds and bond funds fall when interest rates increase (all else being equal), not all bond funds react the same. Short-term bond funds have tended to perform the best in this type of environment.

Although past performance is no guarantee of future results, during the past three rate-tightening cycles, short-term bond funds have delivered positive cumulative returns. That’s partly due to rising income, which helps bond and bond fund investors over time. Consider this when shaping your fixed income strategy. [Read more…]

Panic Is Not A Strategy — Nor Is Greed

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MMM Newsletter and Website Header 10.2.15

I hope you had a great weekend. It is almost time to start getting ready for winter!

LRPC’s Monday Morning Minute for this week, Panic Is Not A Strategy — Nor Is Greed (presented below) comes to you courtesy of Schwab. As an independent, objective Registered Investment Advisory firm, Lawton Retirement Plan Consultants, LLC has access to research from many sources. Be assured that I will share the most relevant information with you each week. If you are short on time, make sure you review the “Key points” below.

Everyone is getting banged around by volatile markets. What can you do? The experts at Schwab have some good suggestions below.

Have a wonderful week!

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Panic Is Not A Strategy — Nor Is Greed

By Liz Ann Sonders, Charles Schwab & Co., Inc.

Key points

  • It’s time for another reminder about the perils of panic.
  • Asset allocation, diversification and rebalancing are as close to a “free lunch” as you can get as an investor.
  • In a world where time horizons have shrunk precipitously, think longer term.

If markets are good at one thing, it’s reminding investors that they don’t go up uninterrupted forever. The U.S. stock market went over 1,000 trading days between its 2011 correction and the one we’re in the midst of presently. Normally, corrections — defined as declines of at least 10% — occur about once a year. [Read more…]

How Chasing Returns Can Sabotage Your Savings

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MMM Newsletter and Website Header 10.2.15
I hope you had a great weekend. Pro football is back!

LRPC’s Monday Morning Minute for this week, How Chasing Returns Can Sabotage Your Savings (presented below) comes to you courtesy of Schwab. As an independent, objective Registered Investment Advisory firm, Lawton Retirement Plan Consultants, LLC has access to research from many sources. Be assured that I will share the most relevant information with you each week. This is a short piece I believe everyone can finish in less than 60 seconds.

Do you gauge how well your investment portfolio is performing by comparing your returns to your friends or relatives? Schwab illustrates how destructive these comparisons can be since none of us are likely to share the same investment goals or objectives.

Have a wonderful week!

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 How Chasing Returns Can Sabotage Your Savings

By Anthony Davidow, Charles Schwab & Co., Inc.

Meet Allison and Keiko, longtime friends in their late 40’s who also have been fierce competitors since their days on the college track team. Over drinks one night, Allison tells Keiko about a “hot” stock she owns that has delivered impressive returns. It was up 35% in 2013, she says, and while it was down 10% last year, she’s confident it will surge to new highs in the year ahead.

Keiko thinks that sounds volatile, but she’s intrigued and a little envious. When was the last time her returns got anywhere near 35%? Why didn’t her financial advisor tell her about this stock? She wonders if she should consider a new advisor — or a more aggressive equity allocation like Allison’s.

Comparisons can cause trouble

[Read more…]

Women And Investing – Six Ways To Help Strengthen Your Retirement Plan

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MMM Newsletter and Website Header 10.2.15
I hope you had a great weekend. The first pro football games take place this week!

LRPC’s Monday Morning Minute for this week, “Women And Investing – Six Ways To Help Strengthen Your Retirement Plan (presented below) comes to you courtesy of Schwab. As an independent, objective Registered Investment Advisory firm, Lawton Retirement Plan Consultants, LLC has access to research from many sources. Be assured that I will share the most relevant information with you each week. If you are short on time, make sure you review the six key points.

Women invest differently than men — they tend to take less risk and have less diversified portfolios. But since women generally live longer than men, they need to save substantially more. Take a look below at how Schwab believes women can strengthen their portfolios.

Have a wonderful week!

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Women And Investing – Six Ways To Help Strengthen Your Retirement Plan

From Charles Schwab & Co., Inc.

Americans are living longer than ever and enjoying retirements that make up almost a full quarter of their lives. That means your money will need to last longer as well — a particular challenge for women, who tend to both to retire earlier than men and outlive them, according to government data.

Add in the gender pay gap and career interruptions women are more likely to experience, and many women face a serious potential shortfall in savings. Here are some ways women can rethink their financial and investing plans to get ahead of the game. [Read more…]