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:
You are quite right about the number of funds. In almost all cases, no more than a dozen funds covering most major asset classes should be sufficient. Indeed, I find it curious to see that there are four cash funds. One floating rate fund and perhaps a short term high yield fund would do the job.
You should also be in the lookout for funds with high fees, which could be reducing your returns.
With that said, however, and given the likelihood that your account holds equities and fixed income securities, returns in the mid single digits are within a normal range. As you probably know, bond returns have been flat and returns from international markets have been negative. Properly diversified portfolios need both, but they have been a drag on results so far.
You certainly should consider having professional assistance, but that means an experienced Certified Financial Planner who has been in the business long enough to manage both the ups and downs. Simply going to a brokerage house for assistance is exposing yourself to folks who are primarily salesmen, not money managers. Plus, the likelihood of high fees.
To find a qualified adviser near you, go to Find An Adviser at Napfa.com. That’s the website of the National Association of Personal Financial Advisors. Call and meet with several. Then select the person with whom you’ll be most comfortable.
With two years to go before your daughter starts college, the top priority would be capital preservation. As I'm sure you are quite aware, although returns from stocks over time generally are well in excess of those from fixed-income investments, they are accompanied by significant volatility along the way. Long-term returns from stocks average near 10% a year, but in most years there are interim pullbacks of 10% or more. Understanding that you probably need to put away more to complete the funding for all four years of schooling, it would be in your best interest to minimize risk to the principal you have accumulated. With that said, I suggest that the asset allocation for these funds should be exclusively in relatively short-term fixed income vehicles. That could include floating rate bond funds, which offer a combination of low risk and current returns now in excess of 2%. A variation on this theme would be leverage floating rate funds, some of which are now yielding more than 4%. You may also consider relatively short term bond funds or exchange-traded funds that focus on short-term high yield bonds. The risk with high yield bonds is that of default of the issuer, but when the maturity date is near (five years or less) the default risk is reduced. Yet the current yield on these funds is over 5%.
So there are options available to provide worthwhile return without undue risk.
Great question. Although your investment manager should be providing you with evaluations, it's a relatively simple process of doing it yourself. Step One is to learn the percentages of funds held in each of the asset classes, primarily stocks and bonds. Step Two is to identify the benchmarks for these asset classes over the period involved Step Three is to determine the returns for these benchmarks and then compare them to the returns for your portfolio.
Let us assume that you have 50% invested in stocks and that the return for the period was +15%. The benchmark for stocks is the Standard & Poor's 500 Index (S&P). If your return (after fees to the manager) was in the area of 15% or better, you're probably doing all right. If the return was more than a few percentage points below, there may be a problem, but it's important to realize that this may be too short a period for a worthwhile comparison.
If we further assume that the remainder is invested in bonds and bond-like instruments, an appropriate benchmark could be AGG, which is the aggregate measure for all bonds. Here, too, you will need to compare the return of the fixed income portion of your portfolio to the return for the AGG. It should be approximately comparable.
As long as your returns are in the neighborhood of the benchmarks, you are probably in good shape. If there's a significant shortfall, it's time to have a talk with the manager and perhaps move in a different direction.
The key difference between a credit union and a bank is that the credit unions are nonprofit operations whereas banks are run to make a profit. Since there's no margin for profit involved, credit unions generally have lower rates on loans and higher rates on savings. Those who keep their funds at bank are customers; those who keep funds at credit unions are members of the credit unions. it's also believed that credit unions provide a higher level of service.
Which to choose is another issue. Location is a key factor. For banks, another is the access to branches in other areas. That may not be possible with credit unions, unless they are affiliated with substantial networks. Banks may have more modern technology, but that's not necessarily the case.
Go where you're comfortable. Forget about the label.