Photo by Bob Green

Photo by Bob Green

Today we have a much different financial and monetary landscape. Central Banks struggle to nudge inflation closer to their 2% target, The balance sheet of the Federal Reserve has grown to more than $4.4 Trillion dollars in 2017. Equity markets have recovered dramatically since the Great Crash  yet most ‘investors” missed out. Why? How do they continue to leave healthy market gains on the table? Research has consistently determined that investors only capture about 35-40% of the return of the assets they were invested in. Bad behavior, emotional capitulations, pessimism, optimism, euphoria; all the usual suspects are to blame along with many financial advisers playing to all of the aforementioned emotions in order to make new sale. Without a clear strategy, investors, when faced with daily news, become reactive. Investors do well when they anticipate and focus on risk from the beginning not after some news event.We are proud of our client relationships, which average 15 years in tenure and  $1.3 Million. Our practice is National in scope and client referrals remain our # 1 source of introduction. I wouldn’t have it any other way.


And so you can see why I am designing this web site to be instructive to our clients and educational for those other folks stopping by. We operate as an Investment Fiduciary with a Legal Duty of Care to only our clients not to a Firm. We have partnered with a major financial institution, with more than $600 Billion under direct and indirect management. All client accounts are custodied in the client’s name at a Private Bank never at BG Financial Advisors, LLC. This is important for client peace of mind and safety. Recent headlines have recounted countless Madoff-like breaches of Trust that can never occur within this framework. It is also important because we are partnered with a large, publicly traded institution, providing daily trading oversight, analysis and review beyond the capability of any Broker/Advisor  or team within a Bank. We are small and focused on a select clientele without the pressures those Brokers feel to move their firm’s products or else. A recent example of which would be a marketing program focused on brokers originating loans secured by customer accounts to make big ticket purchases, rather than have the client sell assets to make such purchases. It is hard to imagine how such a sales promotion would ever be beneficial to the customer. FINRA the regulator for stock brokers is investigating.. We simply work in the best interests of our clients by designing a specific portfolio to be aligned with each client’s specific needs. Sounds simple enough but it does not match the sales pitch for an Indexed annuity,i.e. "You cannot lose a dime but you do get to participate in the upside of the stock market.". As Paul Harvey was fond of saying, " And now the rest of the story." Such sale pitches from life insurance salespeople, usually in a seminar setting are dangerous,.   

In those early days, the highest marginal Federal Income Tax rate was 70%. The highest marginal Federal Estate tax rate was 55% and ERTA (1981) capped the Exemption amount at $600,000 but not until 1987. Understandably, affluent clients were focused on different stuff back then. IRAs were capped at $2,000 per year and a popular joke included the line: “… my 8% mortgage loan is assumable!” There were more individual stocks than equity mutual funds. In August of 1982 the DJIA was below 800 while as of April 28,2015 it sits at 18,090......yet according to all 30 year monthly studies of investor returns by DALBAR, investors recouped less than 40% of the returns for the investments they were in because of ill advised behavior.

I was admitted to the South Carolina Bar on my birthday, November 11, 1975 as I began to practice law in Columbia, South Carolina. Gerald Ford was President, there were no money market funds for individuals and the stock market was a miserable, terrible experience for those in it and many left never to return. In the business they are referred to as the “Lost Generation;” primarily Depression and WW II by experience, they never came back. They eschewed Risk and viewed the stocks as too risky. The DJIA was below 600 not 6,000 but 600! As 2015 unfolds we find the Dow around 18,000 yet those who left in 1973-1976 and again those who left on 2000-2001 or 2007-2009 and went to cash, gold, real estate, oil or Bitcoin look over at the “market” crying It’s too expensive, too risky, rigged or worse yet, compare stocks to Vegas casinos. 

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