Sound Asset Management Inc.
Russell Wayne is a Certified Financial Planner and President and Chief Investment Officer of Sound Asset Management, Inc., an independent financial advisor based in Weston, Connecticut primarily serving clients in the greater New York tristate region and throughout New England.
Russell began his career with Arnold Bernhard & Co., Inc., the parent company of Value Line, Inc. Positions he held while associated with Value Line included Managing Editor, The Value Line Investment Survey; Portfolio Adviser, The Value Line Mutual Funds; Executive Editor, The Value Line OTC Special Situations Service; Business Manager, Value Line, Inc.; Portfolio Manager, Value Line Asset Management; and Director of Investment Software, Value Line Software.
From 1991 to 1995, Russell was Vice-President and Chief Investment Officer with Heine Management Group. He was also Vice-President and Secretary of the LMH Fund, Ltd. Clients for whom he has managed portfolios include Xerox, Texas Utilities, National Maritime Union, and United Cerebral Palsy Association.
Russell has been a featured guest on television, including CNN and the Bloomberg Network. He has been quoted in leading business print periodicals and well-known websites, including The Wall Street Journal, Barron's, BusinessWeek, The Wall Street Transcript, The New York Times, Investment News, MSNBC, Yahoo! Finance, NASDAQ, and Facebook.
Russell earned his B.A. and M.B.A. at Hofstra University. He earned his Certificate in Financial Planning from Florida State University and has pursued postgraduate studies at New York University School of Law. He is listed in Who's Who In The East, Who's Who In Finance and Industry, Who's Who In America, and Who's Who in the World. Russell has contributed to a number of published works. His own published works include Markets, Myths, and Memories (2010) and Live Well and Sleep Well With Your Investments Now and When You Retire (2016).
Russell is a proud member of the National Association of Personal Financial Advisors.
M.B.A. (Finance and Investments). B.A., N.Y.U. Law, Hofstra University
Certified Financial Planner, Florida State University
Assets Under Management:
From the standpoint of preparing for the future, you're certainly thinking the right way. The sooner you begin, the better off you will be. Although many folks wait until the years before retirement, it's much more helpful to get going now and take the long view. With that said, however, you would be well advised to consider making regular contributions, however small, to a broadly diversified investment vehicle rather than what amounts to the highly risky practice of buying a few stocks and keeping your fingers crossed. May I suggest a combination of two exchange-traded funds: VTI, Vanguard Total U.S. Stock Market ETF, and VXUS, Vanguard Total International Stock Market ETF. They are about $125 and $52, respectively, so you could buy 1 share of VTI and 2 shares of VXUS to get started. The trades can be done through online brokerage houses (Schwab, TD Ameritrade, etc.) for $5-7 each. As funds are available, you can add to these holdings.
This is a bad idea. Even if the stockbroker were a Registered Investment Advisor, he would be prohibited from accepting what amounts to a piece of the action. In addition, there would be a conflict of interest because he would be likely to invest in risker trades to increase the potential for his own gain. Although I can think of an exceptional situation in which the logistics of such of an arrangement would be possible, my sense is that you must turn down this offer. It is irregular, usually prohibited, and yes, dangerous.
Given your extended time horizon, I think you are moving in the correct direction. Investing regularly on a systematic basis is akin to dollar-cost averaging. Dollar-cost averaging has its pros and cons. One pro is the sense of controllingyour cost positioning when you invest over long periods of time. At times such as these when valuations are stretched, not only will you get that advantage, but you may also gain better average pricing if you use the same approach with the lump sum you refer to.
Further details of your investments would help. With that said, however, I suggest you simplify your portfolio. At your age, there's little reason other than risk mediation by holding fixed income. A few exchange-traded funds holding broad range of U.S. and international is sufficient. A decade or more from now, you might begin adding well-selected fixed-income securities. For your children, a 529 plan would be appropriate, heavily invested in equities until they are in their early teens.
Broad selloffs are triggered by rapid changes in investor psychology. When there's a selloff for one or two days, that's often an emotional response to a significant economic development or an important geopolitical event. Quite typically, however, these short drops have little, if any, impact on the long-term trend of the market. When a selloff is long-lasting, such as what we experienced back in 2008-9, however, that's a reflection of a major negative impacting the economy. In that case, it was the near-freeze of the credit system and the meltdown of the subprime lending area.
The major mutual funds are trading all day long, but their actions are not what triggers the kinds of selloffs you referred to. Over time, stock prices are reflections of underlying earnings. If prices were perfect reflections of fundamentals, they would change very slowly. But there are extended periods in which they are well above or below what might be considered normal levels. The difference is the result of either greed or fear. Along with changes in fundamentals, these are the key determinants of stock prices.
Although you indicate that you have a broad and diverse portfolio of ETFs and bonds, what is not clear is your asset allocation. With your extended time horizon, there's every reason to focus totally on equities, both domestic and international. Over periods of 20 years or more, equities have always been the best performing asset class. With that said, however, and given the richness of current U.S. equity valuations, you should consider a substantial portion in both developed and emerging international equities. Since there is such a broad range of ETFs covering these areas, there is more than enough opportunity to increase your potential without taking on undue risk. I suggest you consider some of the ETFs offered by PowerShares and Guggenheim. Investing in stocks would require at least a dozen or more holdings, which would increase your cost, but I doubt that you would gain benefits greater than those offered by well-selected ETFs.