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A Better Way…

Kirk SpanoAccording to Warren Buffett, the top 2 investing rules are…

Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1.  

The most important aspect of financial planning is having an investment approach that protects you from large permanent losses and still gives you an opportunity to make money over the long-term.  I founded Bluemound Asset Management after seeing that most of the sales driven financial industry comes up lacking.

My name is Kirk Spano. I am visible and easy to follow in the media. Please take some time to read about the advice I have given. Then, if you are ready to find a better way to secure your lifestyle and create a legacy, contact me so that we can talk about what is important to you.

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Avoiding the Next Crash & Investing in the Next Boom

In January 2012 I told people on MarketWatch not to miss the upside coming in American stocks, especially energy stocks, most of which doubled and tripled within two-and-a-half years. By June of 2014, again on MarketWatch, I told people to sell their oil and gas stocks, most of which were cut in half by December 2014.

Click for your Special Report

Today, I am telling people that the next few years are lining up for some very negative events in parts of the world that will effect your portfolio. In my special report “The Two Most Important Trades You’ll Ever Make — Avoiding the Next Crash & Investing in the Next Boom” I discuss how to protect yourself and how to preserve your lifestyle. 

Request your free report today.

Ever Feel Like Andy Rooney?

This is an archived article written November 21, 2003 

Ever Feel Like Andy Rooney?

I was in my office recently writing an article about why and how Americans were missing the boat on international investing.  An idea and practice that likely could increase their potential returns and lower their risk.  Then I talked with a couple of prospects, got correspondence from another and watched a little bad CNBC.  I decided that finishing the international investing article wasn’t as important as reiterating some points that I like to make to folks over and over again– if nothing else to remind myself of the points.
 
Making money isn’t always about making money.  Most of the time it’s about not losing money.  And in that vein, it’s about measuring risk versus potential reward.  That’s called “risk adjusted returns.”  Having a Margin of Safety when selecting investments is imperative to achieving strong risk adjusted returns over time. 
 
Building in enough margin of safety when investing is a lesson that I learned not in the hardest way, but in a hard enough way.  During the current bear market– I believe we are in a secular bear market, even if the past couple quarters have been good– I’ve done pretty well by most folks.  Bad luck, getting lied to by some companies, folks refusing to listen and my own misjudgments did lead to some losses however.  I think I’ve learned from my mistakes and am a lot more focused on investing with a safety net.  I hope you can use my experience to do the same.     

Now I know that I’m not the best in the world at this whole investing thing.  But boy oh boy, I study a lot, and from time to time, I find a gem of a company at the right price.  For folks with accounts appropriate for single stock investing, we usually buy stocks in addition to mutual funds.  Most importantly though, I work this Asset Allocation thing.  That is, I try to find the right mix of asset classes at the right prices for the right accounts. 

Keeping track of the general pricing of multiple asset classes isn’t that hard anymore.  Computers are pretty neat.  Knowing when asset prices are relatively high, low or about right is really tough though.  I cheat by reading and listening to a few multi-millionaires (the kind measured in hundreds of millions) and billionaires who have pretty good investment records.  You should cheat too, just remember to copy from the smart kids, not some loud flunkie.  After I get a bit of direction, I crunch numbers, consider the future and try to find asset classes with more upside than downside.  Not the sexiest way to pick investments, but it seems to make sense.  BTW (that’s “by the way” for those who don’t use online abbreviations) buying low and selling high, isn’t market timing, it’s smart.  And it pays to be super picky and cautious. 

We diversify among asset classes so that we don’t have to be perfect or clairvoyant– which we can’t be anyway.  Our goal is to create a good fund portfolio by focusing on undervalued asset classes and adding a few undervalued stocks (20 to 30 ultimately, for reasons I won’t go into today) over time for spice, and whoola, money stew– just allow 10 to 20 years to simmer. 

So why do I feel a bit like Andy Rooney?  Well, I’m concerned that the current round of Wall Street corruption is just going to be a distraction to the smartening up of investors.  A few months ago I heard somebody mention their concern over the weakening dollar, whether it could lead to capital flight and depress markets.  I heard somebody else wonder how tax policy would affect the economy and certain types of investments.  Seemed to me that until the recent stock market uptrend, mutual fund scandals and other Wall Street malfeasance, investors were starting to smarten up.  Now I’m not so sure.  I know that’s harsh, but it might be true. 

I roll my eyes in amazed consternation when I hear a prospect, a guy at the bar (yes, I like beer) or a broker (can you believe that) talk about this or that HOT idea, then hear that they have no idea what that company earns or what some mutual fund is invested in, AND, they never mention prices. 

I am also really baffled when folks who don’t trade securities full-time try to pick a good time to get into or out of stocks based on a guess of where the markets or a stock price are going.  That IS market timing– and it doesn’t work for about 90% of the folks who try it.  Folks, there is only a very small handful of traders who make money– and they do it by taking advantage of those who don’t do it full-time.

I’m bugged that many folks seem emotional (not the people I work for) about getting the best return this quarter or that quarter.  I’m bewildered that many people’s lust for a few extra percentage points of gains supercedes their willingness to manage risk– until of course they lose a few dollars.  I’m bothered that the media feeds into the Wall Street cult of personality over and over again.  I’m perturbed that the middle class seems to be getting squeezed again when they really don’t have to.  I’m concerned that so many people are focused only on American markets.  I worry that Americans are going to miss the growth of the world economy over the next few decades. 
 
I’m especially bugged when I start to feel like Andy Rooney, like I feel now.   So, I’ll stop worrying so much about all this stuff, and make some money in spite, or because of it.  Maybe you should do that too. 

We’ll talk about those international investments some other time.  Hmmmmmm?  Maybe we just did. 

I hope you read in Andy’s cadence.  If not, you might want to read this again.

 

Computers make it easier to do a lot of things, but most of the things they make it easier to do don’t need to be done.”  Andy Rooney

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Investment Programs

All of our investment programs provide a level of service and expertise rarely found within the retail financial industry. Our programs also are at the low-end of the fee scale relative to the financial industry. All of our investment management and consulting services have access to our founder and nationally recognized advisor Kirk Spano.

 Punch Card Stocks

Based on Warren Buffett’s idea that if there was a limit to how many companies we invest in, that our investments would be less risky and perform better. Learn more…

Retirement Income Options

A flexible income strategy designed to handle any interest rate environment and provide enough growth for a long life.  Learn more…

Resource Opportunity

Scarcity for resources and looming inflation require that any portfolio have exposure to hard assets and companies that provide resources for our lives. Read more…

Investment Coaching

A flat-fee program for self-directed investors who would like a well regarded professional to consult with and learn from. Very limited space.  Learn more…

Tactical ETF Allocator

A unique diversified low cost exchange traded fund (ETF) strategy for dealing with an uncertain global economy. Learn more…

Mutual Fund Allocator

A low cost flat-fee program for traditional investors who want a better way to manage a mutual fund portfolio without new commissions.  Learn more…

401(k) Monitor

Fund selection, contribution strategy and ongoing asset allocation recommendations for your at-work retirement plan.  Retire Sooner…

Annuity Rescue

A chance to reduce annuity expenses, increase net returns and avoid the nasty surprise awaiting most annuity owners.  Learn to get more

Kirk’s Recent Quarterly Letters

Dealing With Today’s Volatility

“I don’t really care about volatility.” Warren Buffett

Asset Returns vs InvestorsI put off publishing this letter for about two weeks, as over the past month, stock market volatility has increased quite a bit. While we are not seeing the wild swings of 2011, we are seeing a significant reaction to the overdue realization that the enduring slow global growth I have talked about multiple times and the end of quantitative easing by the Federal Reserve are both real. 

Buffett’s quote above is meant to convey a message that emotions should not be a part of our investing process. He goes onto discuss how volatility gives us opportunities to buy great companies at good prices.

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Freedom to Unite and Invest in Tomorrow

UpWhen I was a kid I dreamed about being an astronaut, a baseball player, a rock star and the President. As I hit my teen years and I hadn’t done much musically, I dropped the Mick Jagger aspirations and focused on baseball. By senior year of high school I knew that baseball was fun, but that I wasn’t an elite player so I had to drop the Robin Yount dream too. 

When I got to college, I focused on having a good time and taking courses that might help me when I grew up. For awhile I thought I’d be a lawyer, but a great uncle gave me some guidance…

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The Great Retrenching Continues…

Total DebtIn September of 2008 I had coffee with a group of executives from local manufacturers, it was just after the financial crash had started. One company president in the group — a particularly political sort — asked me how long the economic slowdown would last? I said “until the middle of the next decade sometime.” He laughed at me.

Fast forward to today. What we know now is that the economy still has not recovered in real terms and that it will be a few more years until it does. The United States is just about in the middle of a demographic depression that can not be fixed with legislation or easy money. We must wait until household formation and spending by the very large millennial/ echo boom generation ramps up. Last year was the first year since 2008 that we saw an uptick in the birth rate, so that is a positive, however, it is only a baby step.

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2014 Another Crossroads 

S&P 5002013 proved to be a profitable year for investors. The S&P 500 rose 29% and set new record highs. Global balanced indexes, more representative of most people’s portfolios, also did very well by returning about 20% despite a tough year in China which lost 9%.

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Volatility, Opportunity and the Next Crisis

Secular Bulls and BearsOver the past several years, I have discussed the monumental demographic changes that not only America is dealing with, but also that Europe, China and Japan are dealing with. The cumulative impact of national and personal debts, de-leveraging from the bubbles of the 2000s and the four largest economies in the world having aging populations has created global demand destruction that is not likely to end soon.  

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