Financial Advisor News

Piedmont, CA

Financial Advisor News

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Piedmont, CA

by: ALISON VAN DYKE

FIRST AND MAIN FINANCIAL

(510) 601-1935

Oakland, CA | East Bay; Financial Planning for Tech Dominating the Stock Market

How to Plan Appropriately—

Hi, I’m Erik Wolfers. I’m the managing member of First & Main Financial. We’ve been helping clients achieve financial success since 2001. Today I want to talk a little bit about large stocks, or the largest stocks.

We’ve had for some number of years now the Fang Stocks: Facebook, Apple, Amazon, Netflix and Google. Microsoft is also stock that’s done quite well for a long period of time. Tesla right now is rocketing to new highs.

This is not the only period in history where a small number of stocks have dominated the news and excitement and innovation. There have been periods in the past where other companies, other names, have dominated and they’ve made up the largest share of the stock market cap weighting in the US Stock Market. Companies like General Electric and General Motors and AT&T are some of the names from the past that were innovators and on top for some decent period of time.

Some of these stocks I think (and I’m speculating here) are just enjoying phenomenal amounts of participation and momentum based on the feeling or the sense that these companies are going to dominate and be the best forever—it’s possible. We do have clients that held individual stocks for a long period of time and have made lots and lots of money on them, and then they do have some other holdings that haven’t made quite as much money. As humans we always want to attribute success to the whole portfolio instead of the actual returns or performance of the portfolio.

But if we look at dominant stocks in historical terms: when a stock becomes one of the top-ten biggest stocks in the stock market, for three years following on average it continues to outperform stock market by a little bit (less than one percentage point), and then for the next five and ten years, stocks have historically underperformed the rest of the stock market, once they’ve joined the top-ten list.

We don’t know what the future holds and maybe it’s different this time. It’s always possible that something’s different, but historically speaking companies that have dominated and gotten to an enormous size have not been able to maintain their dominance.

It’s interesting, potentially, to participate in some of these names, especially companies that you believe in, or products and services that you use, but concentrated bets in a small number of stocks over a very long period of time, a lifetime of investing, may not give the results that one hopes for.

I have a report if anybody wants to see it, that was produced on this, please feel free to contact me.

If you are looking for some financial guidance; whether for a one time financial plan or continuing advice on your investments, we invite you to meet with a First & Main Financial planner for a free consultation. We would be more than happy to sit down with you, assess your situation and review our services to help navigate your financial future.

Oakland, CA | East Bay; Finding Refinance Options with Your Financial Planner

Hi, I’m Erik Wolfers. I’m the managing member of First & Main Financial. We’ve been helping our clients live healthier and more secure financial lives since 2001. Today I’m going to talk a little bit about home loans

There’s a lot of excitement these days for refinancing and to lower interest rate loans. Rates are at or near historical lows and the reason they’re low is because we have government-sponsored entities, Fannie Mae and Freddie Mac, that will buy up loans and take the risk of the borrower, which makes the money cheaper.

Back in the financial crisis there were all kinds of loans that got package together in crazy ways and that wasn’t super honest and all those crazy ways of borrowing money or lending money have been taken off the table. Now if you want to refinance and get the best deal, you would get what’s called a conforming loan. If you can get a loan that’s at $510k or below that’s a standard conforming, and then $765k is a limit for a jumbo conforming. So, if you can borrow on one of those ranges, that’s the cheapest money available because of the government-sponsored entities that will buy these loans that are packaged up like a security.

Then the cheapest money these days is also available mostly only to the best borrowers. We are in somewhat of a stressed financial time so if you have a loan of $700k and you can lower your rate down to 3% from 3.625% or something like that, your cash flows better, it makes you more stable and a better consumer.

There’s a big incentive for the government to have entities that will make credit available in times when non-public entities might not be able to or might not be willing to take the risk.

It is potentially a great time to refinance. There are some constraints on getting the absolute best rates or getting historical rates, but we do have clients who are investigating it and we’re helping them try to find the best lenders or the companies that are going to give the best service.

If you are looking for some financial guidance; whether for a one time financial plan or continuing advice on your investments, we invite you to meet with a First & Main Financial planner for a free consultation. We would be more than happy to sit down with you, assess your situation and review our services to help navigate your financial future.

Oakland, CA | East Bay; Cash Flow and Budgeting with Your Financial Planner

Hi, I’m Erik Wolfers. I’m the founder and managing member of First & Main Financial. We’ve been helping people achieve financial success since 2001. Today I want to talk a little bit about cash flow.

Cash flow can be thought of in conjunction with budget. When we help people with a financial plan, we need to know what their lifestyle is and what all their expenses are, so that we can use that information to calculate the probability of success for not being able to work someday (retirement).

A lot of people don’t really want to go through their budget, especially when they think about looking at all the ways that they spend money or all the small things that they spend money on. There are pieces of software you can use to itemize all your spending. It does take work to itemize your spending and teach a piece of software how to bucket your different expenses—especially if you’re writing checks, the software doesn’t know what the checks are for.

We have software that allows clients to electronically attach accounts and then it counts up how much money you spend. Personally, I’m not a big fan of pieces of software—I like simple spreadsheets. One way to think about a budget or your cash flow, is to make big buckets: When did my paychecks come in? When does my pay come in? When do I have my big expenses like mortgage payments or property taxes?

Credit cards are a great way to simplify your budget or your cash flow. If you put everything you can on a credit card or even two credit cards that bill two different times of the month, then you can build a simple spreadsheet that summarizes the money coming in and the money that’s going out and the dates that this is happening; then you see when you might run out of money or when you might have extra money.

A method also for cushioning against big cash flow needs in the short-term is a line of credit on a house. You can borrow a little bit on the equity of your house and then pay it back as quickly as you can, or borrow more for home improvement projects or a big vacation, so long as it does get paid back—it’s not good to leave money on a line of credit for a long time, necessarily. Credit cards often have a year-end statement that just shows you how much money you spent. You can just take your grand total divide it by 12 and then use that in your cash flow spreadsheet.

If you’re watching this and you have any interest in having me help you build this cash flow spreadsheet, a simple cash flow spreadsheet, or share the one that I use personally, I’d be happy to do so.

If you are looking for some financial guidance; whether for a one time financial plan or continuing advice on your investments, we invite you to meet with a First & Main Financial planner for a free consultation. We would be more than happy to sit down with you, assess your situation and review our services to help navigate your financial future.

Oakland, CA | East Bay; Understanding Volatile Markets, Risk and Return

Hi, my name is Erik Wolfers, I’m the managing member of First & Main Financial. We’ve been helping people with their personal finances since 2001. Today I want to talk a little bit about investing risk.

It’s been well proven that people are on average twice as averse to loss as they are to being excited with gains in their portfolio. We get lots of calls when markets are volatile to the downside, but we virtually never get calls or emails when we make people lots of money. And that’s normal, it’s human—but the concept of risk is not completely understood by many people. There is the possibility to invest your money in such a way that you will experience permanent loss, but with a well-constructed diversified portfolio, you should never lose money. The function of losing money should be whether you have to sell at an inopportune time.

So this ties into a bigger plan for your finances. You want to make sure that you have cash reserves or possibly access to equity in your house so that you can ride through volatile periods in the market—but volatility pays.

You want to have some amount of volatility in your portfolio likely, even if you’re retired because the volatility goes on the downside and upside, and the upside volatility provides positive return which allows for income to be produced inside of a portfolio for years, decades.

It’s good to understand how volatility works and understand how risk really works so that you can achieve better outcome with your wealth, building up to retirement and in retirement.

If you are looking for some financial guidance; whether for a one time financial plan or continuing advice on your investments, we invite you to meet with a First & Main Financial planner for a free consultation. We would be more than happy to sit down with you, assess your situation and review our services to help navigate your financial future.

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BIO: At First & Main Financial, Alison Van Dyke helps clients with their financial lives. She has worked in Corporate Finance for Bank of America and Chase Manhattan Bank. Alison is pursuing the CFP® certification; she received her MBA at Georgetown and her B.A. in Political Science from UCLA.

235 Wildwood Avenue,
Piedmont, CA 94610, USA

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BIO: At First & Main Financial, Alison Van Dyke helps clients with their financial lives. She has worked in Corporate Finance for Bank of America and Chase Manhattan Bank. Alison is pursuing the CFP® certification; she received her MBA at Georgetown and her B.A. in Political Science from UCLA.