Opulen Financial Group LLC
Tom Cymer, a Certified Financial Planner, is the founder and owner of Opulen Financial Group, LLC since 2009. Having double majored in economics and psychology at the University of Massachusetts in Amherst, Tom is particularly well suited to crunch the numbers but also address the behavioral side of personal finance. Tom joined the nation's largest financial planning firm and achieved numerous awards including 1st year and 2nd year top achiever, Mercury award and the Centurion award. He later went on to become a mentor and trainer of new recruits as a P1 Certified Advisor Coach while maintaining his own practice. During his tenure there he achieved the Chartered Retirement Planning Couselor(TM) designation.
Tom defines true financial planning as a comprehensive, ongoing approach to managing all areas of his client's financial life that takes into consideration their income, expenses, investments and debt. He focuses on their short-term and long-term goals such as paying for college or retiring comfortably. He provides management of his client's taxes and financial risks such as disability and death, and finally, ensuring that they leave a legacy.
Tom brings a comprehensive approach to his planning which starts with goal development and progresses through every nook and cranny of his client's financial picture. Once a personal plan has been created and implemented, Tom provides regular quarterly review meetings that keeps his clients on track and progressing toward their goals.
Tom is a native of Warsaw, Poland having immigrated to the United States as a child. His family resides in New England and he has since settled in the Metro DC area. Tom is a member of the Financial Services Institute, past president of the Arlington Jaycees, and active with various chambers of commerce in the area. Tom is a strong believer in continuing his education and as such has since gone on to obtain a certificate in financial planning from Boston University as well as obtain his CERTIFIED FINANCIAL PLANNER(TM) designation. In his spare time Tom enjoys trips to the local wineries as well as traveling to tropical locations for some fun in the sun!
BA, Economics/Psychology, Umass Amherst
Assets Under Management:
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At this point, your guess is as good as mine. The conversation I have been having with my clients is that it is way too early to tell which way things will go. Trump has already flip flopped on numerous issues and that will likely continue. For the time being. I have been suggesting that clients focus on their long term goals and understand that no matter who is the President, the market will go through natural cycles. If you are investing for retirement years from now, then focus on that and buckle up for what will likely be a volatile ride (up and down).
If you are investing for a short term goal, then you probably shouldn't have a ton of equities in your portfolio because the market can do some large swings in short time periods, no matter who our King...er President is. Keep in mind we have been on a bull run for a good part of 8 years and it is natural for the market to reset itself periodically. Some interesting research I came upon recently talked about what happens to the markets when a Republican beats an incumbent Democrat:
When Republicans Beat Incumbent Democrats
Since 1900, the Republicans have ousted the Democrats five other times (1920, 1952, 1968, 1980 and 2000). The post-election year performances were mostly negative: +12% (1921), -4% (1953), -15% (1969), -10% (1981) and -7% (2001). However, every subsequent year (i.e. the mid-term year) except 2003 was positive, with gains of +22% (1922), +44% (1954), +5% (1970) and +20% (1982). The lone loser was 2002, when the DIIA fell -17%. The mid-term year strength also tends to continue the following year (i.e. the pre-election year) as well: 1923 (-3%), 1955 (+21%), 1971 (+6%), 1983 (+20%) and 2003 (+25%).
Take this with a grain of salt - history doesn't always repeat itself and this is an area we have never touched on before.
Tom Cymer CFP
President- Opulen Financial Group LLC
That must of been some degree you earned! Without knowing your details of income/interest rate on your loans/cash flow it is hard to give you a specific answer so this is a general thought. I would suggest you contribute to your 401k up to the maximum matched amount and then focus on putting everything above and beyond onto the loans. It sounds like you may be just starting out in your work life so some of my reasoning behind this would be:
1) Assuming you are just starting out you probably have a small 401k balance which means even if you earn a high rate of your return you will probably pay more in interest because you are paying it on a bigger balance. For example 10% ROR on 50k = 5k growth but 4% interest on 200k = 8k paid out (your net worth decreased)
2) We are at a high point in the market - equities are at all time highs. Knock off the loans and if we have a reset at some point in the next few years you may have more cash flow to dump into the market at a lower point.
3) Those high debt balances will impact many other aspects of your life - buying a house, having a family etc.. all that debt will bog down your cash flow making it difficult to do anything else.
Good luck and happy new year!
Tom Cymer CFP
President Opulen Financial Group LLC
You actually sound like a young me! I had my first brokerage account at TD Ameritrade when I was in college trying to figure how to make money in the markets.....and here I am doing the same thing today!
Anyways, most studies suggest that the majority of people (professional or regular) do not systematically beat the market on any consistent period of time. Most people actually trail market returns when they try to outperform by active trading. This is due to the the fairly unpredictable nature of the markets as well as costs involved both in transaction fees and taxes on short term gains. You are likely going to be better off buying those index funds and holding them long term even, as boring as that may seem.
With that being said - there is a certain level of excitement in having some "play" money in the market. At the very least you will hopefully learn from your investing venture and maybe even make a little money. My advice would to be to invest the majority of the money you have allocated, for the long term, in index funds and let them sit there. Then carve out whatever you are comfortable potentially losing for your trading endeavor. As far as trading platforms - etrade, TD Ameritrade are all pretty good and fairly inexpensive. For options trading (which involves substantial risk and I really suggest you open a paper trading account first) you can look at optionshouse.
Tom Cymer CFP
President Opulen Financial Group LLC
The first step to figuring out gains or losses would be to determine your cost basis of the stock in question. Your cost basis is typically what you paid for the stock plus add in any commissions/fees that you paid to acquire the stock. For example:
You bought 10 shares of XYZ stock at 100/share = 1,000
You paid a commission of 50 bucks to your broker/trade platform
Total paid = 1050 as your basis you can then divide by 10 shares you own = your basis per share
Next up you have to adjust your basis for dividends you may have gotten from the stock which were reinvested. So let's say your stock paid you $100 in distributions which you then paid tax on via a form 1099 DIV. You can now adjust your basis upwards:
1050 + 100 = New basis of 1150.
Finally you the difference in proceeds from the sale will be your gain or loss.
* The situation can potentially get trickier when you have stock splits that may have occurred or if you are working with stock that you inherited as well.
Great question! First off I think your worry about investing all of your cash at this point is warranted. The rally may have legs or may not - there is no crystal ball! As far as your asset allocation goes - YES you should worry about what it looks like. Most studies attribute the majority of long term performance to what your asset allocation looks like.
As far as investing with wealthfront - from my experience the robos do a pretty good job in breaking down your assets into various asset classes. If you dig a little deeper, you may actually see that they use some of the same holdings that you already own in your portfolio or something that is quite similar.
I would suggest you set a monthly amount you want to invest from your savings and dollar cost average the cash you plan to invest into your portfolio (with wealthfront or on your own). This way if the market continues to rally, you'll see some gains. If it reverses course, you'll just be buying more shares each month on the way down.