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:
Without knowing what the details of the conservative growth model, more moderate or aggressive model, it's impossible to critique any of these. The problem is that Wall Street uses many labels that are essentially meaningless. The key is asset allocation, which depends primarily on your time horizon, risk tolerance, investment experience, and need for current income. If you are looking ahead to a 10-year period, you would probably want to have the largest share dedicated to equities, evenly divided between total U.S. and total international market funds, both developed and emerging. I'd speculate that this share could be as high as 75% to 80%. The remainder could be held in a total U.S. total bond market index fund. That would be the cushion against interim market volatility.
Although you could create a much more elaborate portfolio, unless that would be managed by a seasoned market professional (Certified Financial Planner or Chartered Financial Analyst), it probably would not be a good idea. The typical models offered by brokerage firms have little, if any, value added, though there may well be a substantial fee enjoyed by them for getting you signed up.
Your options are largely related to the following factors: time horizon, risk tolerance, investment experience, and need for current income. The longer the time horizon, the greater the exposure to equities since they are almost certainly likely to provide the most substantial returns over extended periods. The caveat here, as you know, is that equities can have considerable interim fluctuations. Folks with short time horizons may not have sufficient time to recover from periodic market weakness.
The other major component of properly constructed portfolios is fixed-income holdings, i.e., bonds and bond funds (both open-end,closed-end, and ETF). The keys here are interest rate sensitivity and underlying quality. The fixed-income holdings with the greatest interest rate sensitivity will be those with the longest maturities. So, the 30-year Treasury bond, which was the best performer during the 2008-2009 market debacle, may well be among the worst performers in the years ahead as interest rates rise. Shorter maturities will have much increased stability, but as maturities decrease so will interest yields. Greater yields will be available with lower quality fixed income holdings. But higher returns bring higher risk.
Rather than going into further detail, you may be well served by allocating into three funds: total U.S. equity market index, total international equity market index, and total U.S. bond market index. Without knowing your personal details, it's impossible to be more specific. I suspect that a very cautious approach would be to allocate 25% to each of the first two funds and the remainder to the bond market fund. You can certainly revise the percentages as you go along.
The main differences between exchange-traded funds (ETFs) and mutual funds (more formally known as open-end funds) are how they trade and the expense ratios involved. Let me explain. Exchange-traded funds trade during regular market hours, i.e., 9;30 a.m. EDT to 4:00 p.m. EDT. So they can be bought and sold in the same way as stocks. Mutual funds, on the other hand, are traded once daily after the close of regtular market trading hours. Why? Because the value of mutual fund shares is calculated at the end of each trading day and orders placed during the trading day are executed after the daily pricing is completed.
Most ETFs and many mutual funds are set up to follow a specific market index, e.g., the Standard & Poor's 500. For these funds, there is no active portfolio management. The ETFs are set up to track their indexes as closely as possible, though there may be very minor deviation between the actual value of the shares and the market price.
More important is the underlying cost of running these funds. Generally speaking, ETFs have lower expense ratios than mutual funds, which means that their returns will be higher (assuming the underlying holdings are similar).
I agree that lending money to investors is not a good idea. Your goal of increasing your retirement account can be accomplished by buying a variety of exchange-traded funds. Since exchange-traded funds can be found for most investment objectives, including U.S. stocks, international stocks, fixed income, real estate, precious metals, and many other asset classes, that approach should be worth considering. The process for buying ETFs is the same as the process for buying stocks. You specify a ticker symbol and the number of shares. The commissions, if there are any, are the same as for stocks.
For a young child with a time horizon of many decades, you would be far better advised to begin with a pair of broad-based equity mutual funds (U.S. and international) or exchange-traded funds and contribute regularly. Given a period of years, it is most likely that this approach will provide a multiple of the level of returns that would offered by a traditional saviings account or CD. Neither would be a good idea.