Adams Financial Concepts LLC
President and Principal
Alexander Michael Adams (“Mike”) founded Adams Financial Concepts as a Registered Investment Advisor. He believes that the fiduciary status of always putting his clients’ interests first is superior to the philosophy of big brokerage firms.
Formerly a Senior Vice President and Senior Portfolio Manager at Wachovia Securities, LLC, he has been a securities portfolio manager since 1990. Mike began his career in the financial industry at Paine Webber in 1986, where he was a retail stockbroker. In 1990, Mike moved to Dain Rauscher to transition his business from the traditional transaction-based stock and bond trading to fee-based portfolio management. From the inception of his career, Mike has been recognized as a leader in the industry, earning distinction as a rookie by being named to the "Eagle's Nest" and in subsequent years at Dain Rauscher, being recognized as part of the President's or Chairman's Counsel.
Mike's prescient instincts and desire to "do it his way" led him to develop his own portfolio philosophy and strategies. Earlier training as a mathematician enabled him to interpret portfolio dynamics in "game theory" terms. Mike Adams began his professional life with eleven years in the aluminum industry in 1967, after gaining a masters degree in industrial administration from Carnegie Mellon University and a bachelor’s degree from Oregon State University. He started as a management trainee, including one and a half years in France and worked up the corporate ladder to spend five years as plant superintendent managing several hundred people.
Mike believes in giving back to the community. He serves on the Board of Directors of Music Aid Northwest and is a Rotarian. He formerly served as Chairman of the Board of Directors of Seattle Theatre Group (a not-for-profit corporation), operator of The Paramount and The Moore Theatres. He has served on a number of other boards including the Seattle Symphony. He was involved with a number of youth programs while his children were at home. Mike is married to his wife Pamela. They have two children and three grandchildren with a fourth on the way.
MBA, Business, Carnegie Mellon University
BS, Mathematics, Oregon State University
Assets Under Management:
Very interesting question. It depends on what time period is used. For example, the average annual return from August 1982 to March 2000 was 12.2%. That was a long secular bull market. From March 2000 July 2016 the return is less than 3%. If you look at the secular bull markets since 1900 to the end of 2000, it seems like the average return has increased for each successive secular bull, but the time has been shorter. Take for example the 1941 to 1966 time the S&P increased approximately 10 fold in 25 years. The secular bull from 1982 to 2000 was an increase of 10 fold in 18 years. The question is whether we entered a new long-term secular bull market in 2010 or 2011 and how long will it last. I believe we did and the duration will be less than 18 years.
By the way, 10% will double in 7 years, not 10.
There is one other factor to consider in all this. Things are changing ever more rapidly. The companies that made up the S&P 500 in 1920 had an average life of 70 years before they died (think Eastman Kodak, Woolworth, Union Carbide, etc.). Today the average life of a company in the S&P 500 is less than 20 years and is approaching 15 years.
Let me ask you a question. If you started with a penny and each time you received twice what you had the day before, how much money would you have at the end of 30 days? Take a guess before you read further.
You would have over $10 million at the end of 30 days. But, 1/2 of that came the last day. 75% came the last two days. 90% came the last 4 days. The curve in the beginning looked like a flat line. It is only when the curve turns sharply upward that you realize it is exponential.
Is the S&P going to look like an exponentially increasing curve? I think an argument can be made it is showing that characteristic. And the speed of turnover seems to validate that.
While many market pundits are publicizing a view that returns are going to be significantly lower than history, I believe they are going to be shocked with what the returns will actually be. The danger is investors who buy into the view of lower returns. Instead of firing their advisor for lousy results they will keep the advisor because the so-called experts said to expect low returns.
Of course you can, but why? I will be presenting at the Seattle Money Show on "How This Secular Bull Market Ends" on June 15 and "Superior Stock Returns Minimizing Risk" on June 16. The two presentations will be streamed soon after the presentation. The Money Show draws some 2,000 to 4,500 individual investors. Log into The Money Show Seattle and look for Mike Adams presentations.
Sorry to hear. You seem to be an honorable man to have paid off all creditors but one. You should pay a little money to an attorney to verify but I do not think they can take your home. I am not an attorney and cannot say for sure. Ask an attorney.
Next tell them they have to do what they have to do, but you are 70 and do not have the money to repay. No matter what they say or threaten, continue to tell them "Do what you have to do, but I am 70 and do not have the money to pay."
Hedge funds come in a large variety of forms. There are long/short funds; long only; commodity funds; distressed real estate funds; real estate funds; etc. The concept is to "hedge" or reduce risk. For example a long/short fund might be structured with 150% long; 70% short giving a net long exposure of 80%. In theory, it will trail the market but provide a cushion during times when the market turns down like it did September 2018 to December 2018. If you find the right fund they might make money on both the stocks bought long and the stocks shorted. I believe many are more conservative than a regular long only stock, ETF or mutual fund portfolio.
The way in which you make money for most hedge funds is you get to keep 80% of the profits that the fund earns.
You can sometimes find an advisor who runs a long/short indivual account with only a profit share and no management fee. Look for advisors that publish their returns on their website. There are not many, which in itself says something about how well advisors will make money for you.
$700K seems like a lot of money. Sadly it is not. Most financial advisors will use 4% as a sustainable return over the remainder of your lifetimes. Even if your retirement accounts were to double in 5 years (unlikely), using a 4% rule of thumb means that $1.4 million will give you $56K as retirement income. Add to that social security of perhaps $5K per month ($60K annually) and you will have $116K as retirement income as opposed to a current income of $230K. To further complicate your situation, you have an adjustable mortgage that in 5 years will probably jump to 4 to 6% increasing your monthly outgo. If you both plan to retire in 5 years, you will probably have to live on 40% of what you have today.
I don't believe you can count on a healthy financial retirement income. I believe the others who answered with "congratulations" are misleading and not giving the honest answers you need right now. I don't believe you will be able to both retire in 5 years. I also believe you need a non-traditional financial plan or one of you will never be able to financially retire with a healthy financial income.
And do not convert your 401(k) to an IRA. Check the fees. Check the returns. IRA fees are generally significantly higher than 401(k) fees and will for the same investments simply enrich the financial advisor to your disadvantage.
I am sorry to deliver such bad news. Right now you have 5 to 8 years to get a plan set. You will need to begin to make rounds of financial advisors and let them give you a financial plan. Make sure the financial advisor is a "fiduciary" so every decision has to be make in your best interest. That means they either have a Series 65 license or Series 7 and 66. Do not go to any large firm - they are broker-dealers. For each financial advisor ask for a published and regulator reviewed composite on all their client returns. Make sure it is at least 10 years.
Good luck and I sincerely hope you find an advisor who can get you to a healthy financial income. There are, in my opinion, very few, but they do exist. I wish you the very best.