Models

by Bill Parrott on

A few months after the Great Recession a writer for a national magazine asked a simple question: “Did asset allocation models let down the individual investor?” I don’t think they did because conservative models lost less money than aggressive ones during the meltdown. In other words, the models...

Correlation: Positive One

by Bill Parrott on

A diversified portfolio is always recommended. Balancing your accounts between stocks, bonds, and cash will allow it to grow with less risk than a concentrated portfolio.

A key metric to determine how well diversified your investments are is the correlation coefficient. It ranges from positive one...

Marathon Investing

by Bill Parrott on

Running a marathon with 30 or 40 thousand runners is chaotic – especially the start. When the gun goes off the crowd surges forward, so you better be ready to run or you’re going to get steam rolled. It’s pure emotion and adrenaline.

The first few miles are crazy as runners try to find a little...

Financial Lifestyles

by Bill Parrott on

The stock market has been less than kind to investors these past few weeks. The Dow Jones has dropped 3.75% and the Nasdaq has fallen about 7%. Investors have reacted negatively to rising interest rates, mid-term elections, and a trade war.

When it comes to reaching your long-term financial goals,...

What Is a Mutual Fund?

by Bill Parrott on

Several years ago, I met with a client who was retiring from his long-time employer. He wanted to purchase a basket of stocks for growth and income. We discussed mutual funds as an alternative to owning numerous stock positions. He wasn’t aware that mutual funds could own stocks. I informed him that...

Nebraska Football

by Bill Parrott on

Nebraska Football has a storied history. It’s regarded as one of the best football programs of all time. Since 1890 they’ve won 893 games, more than all but four schools, and claimed five National Championships: 1970, 1971, 1994, 1995, and 1997. Three of their players have won the Heisman Trophy:...

Timeframes

by Bill Parrott on

When my daughter was young we read The Monster at the End of This Book starring Grover from Sesame Street. He’s convinced there’s a monster lurking at the end of the story. He’s so sure of this that he pleads with the reader to not turn the pages. When the pages are turned he panics and freaks out,...

Are You Maximizing Your Giving?

by Bill Parrott on

We are entering the giving season. It’s the time of year when churches and non-profits raise most of their funds because individuals wait until the last minute to give a donation. In other words, most people give from their last fruits, not their first fruits.

Money has a stronghold over people,...

Sound Familiar?

by Bill Parrott on

From November 11, 1974 to November 20, 1974 the S&P 500 fell 9.6%. It dropped because of economic uncertainty and political unrest.

Let’s explore the major themes from 1974.

In August 1974 President Richard Milhous Nixon resigned. He was the first, and only, U.S. President to resign. His...

Did You Die Today?

by Bill Parrott on

Few people like to ponder their mortality, but what if you didn’t make it home from work today? Is your estate set up to handle your passing? Is your family? If they walked into your home, would they be able to find your important documents? What would you leave behind? What are your final wishes? A...

Weeds

by Bill Parrott on

This past weekend my church participated in a serving project at a local elementary school. The school has a garden they use to teach their students about nature. It has vegetables, fruits, and a natural habitat with native Texas plants and trees.

When we arrived at the school it looked like the...

Di-worse-i-fi-ca-tion?

by Bill Parrott on

Diversification or concentration? To create wealth, concentrate; To preserve it, diversify. A concentrated portfolio can produce huge gains, if you own the right stocks. Of course, if you own the wrong ones, your wealth will be wiped out. Buying the right sector, at the right time, at the right...