Crane Asset Management LLC
Chief Investment Officer
Crane Asset Management LLC is a full-service investment counseling firm providing investment management services to private individuals, retirement plans, endowments, and charitable foundations. All accounts are managed on a discretionary basis. John Frye founded the firm in 2003, with a partner who remains Chief Operating Officer. They work with all of their clients to formulate a long-term investment strategy that will meet their investment objectives while addressing their risk profiles. Understanding their clients in this way enables them to develop unique plans based upon each of their clients’ needs to help them achieve their financial goals.
Before co-founding Crane Asset Management LLC, John served as Executive Vice President and Portfolio Manager at Renberg & Associates in Beverly Hills. He began his career with E. F. Hutton & Company in New York and subsequently worked with Alex. Brown & Sons in Baltimore. He received his Bachelor of Arts in Politics from Princeton University in 1977 and his M.B.A. from Columbia University Graduate School of Business. John holds the Chartered Financial Analyst® designation and is a member of the CFA Society of Los Angeles.
BA, Politics, Princeton University
MBA, Finance, Columbia Graduate School of Business
Assets Under Management:
Crane Asset Management is registered with the State of California. A copy of Crane's Form ADV filing (Parts 2A and 2B) can be accessed here. In addition, Crane's Form ADV (Part 1) can be downloaded from the SEC's website. (Type in Crane's name in the field provided and follow the instructions on the site to download the information required.)
Sorry, it doesn't work that way. (I wish it did.) The 4-week rate is annualized.. That is, if you buy a 4-week bill and roll it over every month (and interest rates don't change) you will have 1.49% more at the end of the year. Not 21%. At the end of a month (at 1.49% P. A.) you will have 0.123% more.
I will add that 1.49%, after taxes and inflation, is a negative return -- guaranteed loss. You will have less purchasing power at the end of the year than you do now. You can earn much more income than that from your investments but please understand what the risks are and decide that you can tolerate them.
I am sure you will get many answers that accept your premise -- that you want to avoid common stocks. I'm writing in to say that at your age that is a silly thing to do.
Think about investing in stocks as taking a part-ownership interest in a business. The business can sell computer chips, medicines, energy products, timber, anything -- or it could provide services like rail transport, package delivery, mortgages, or a way to communicate with each other. If the business is well-run and profitable, it will grow in value.
Now, that business may see the price of its stock rise or fall due to factors that have nothing to do with the value of the business. There could be war, inflation, a foolish government, or all three. The fluctuation in its stock price would mask the steady growth of real value that the business is creating, but will do so only temporarily. Sooner or later, if a company is growing, the stock price is bound to follow. It should be your task to find companies of real value and buy them when the stock price is low. You are young and owe it to yourself to learn how to invest. (Don't fall for the notion that you have to own a fund or some other basket of stocks.)
I saw an ad yeasterday that said, "People spend more time planning a vacation than the do planning their retirement." So true. Get going. Learn finance, learn how to read an annual report, learn how to calculate measures of relative value between companies. But mostly, use your common sense. Buy businesses that you know and companies that you respect. It ain't rocket science or there wouldn't be so many people who think they can do it. Learn to be patient. Learn that market declines are opportunities to buy. Learn!!
If you are starting with amounts as small as $3,000, you are better off buying index funds. Split the money between large, mid and small cap indices. I am sure the other responders will give you lots of ideas. Once you have a decent nest egg you can build a portfolio of individual stocks. Don't try to trade, or time the market. Just invest constantly and steadily regardless of market conditions.
I am adding a response because the savings rate is so low in this country that I hope I can do my part to improve it by repeating over and over on Investopedia that you've got to put money away. My suggestion to you is to "pay yourself" $1,000 per month. Deposit the money into a brokerage account at the same time you pay your rent, your utilities, etc. Do this in addition to your 401K deposits, if you are making them. (I hope you are.) If you are 30 and have never invested you are late to the game and need to catch up. You need liquid investments of 20 times your living needs by the time you retire. It's sooner than you think. Good luck.
First of all, I must assume (since you don't mention it) that you have no meaningful savings put away outside of your retirement account. If this is true, it looks as though you are able to cover expenses with pension income plus $18,000 per year (pretax) in withdrawals from the 401(k). $18,000 is 4.4% of the value of your account, so the withdrawal rate is sustainable, more or less.
If you do have a savings account, take the $1,500 per month from it and not your 401(k) (which you should roll over to an IRA at some point). 401(k) withdrawals are taxable and withdrawals from savings are not. Let the assets in the retirement account grow as long as possible, and take them only when you have to -- at age 70-1/2 and after.
But I have to mention that I think 60% bonds is too much. You are subject to "the risk of safety" in that your retirement assets may feel safe, but are unlikely to grow much. Even an extra 2% per year, over the next 20 years, can make a big difference in your lifestyle. I know markets are at highs and that has everyone worried, but I think a 66-year-old who needs less than 5% of his assets in any given year can consider himself a long term investor. I would hold 65-70% equities. Also, consider preferred stocks as an alternative to bonds. I can give you more information on this if you are interested.
Now, don't go changing all at once. We are bound to get a selloff and when it comes you should consider it a buying opportunity.
I think this question points up the uselessness of applying the same formula to everyone of a certain age. There are so many 51-year-olds in this country that have no appreciable savings and it is they who will have to work until 70 (or past). If you have saved, you can retire comfortably. (Is everyone else reading this? Now, do it!)
I usually tell clients that they have enough to retire if, after subtracting all predictable retirement income (such as Social Security, corporate or government pensions, or net income from property you own) the annual amount you need to fund your lifestyle, including taxes, is 1/20 or less of your liquid invested assets.
If you have $2.3 million now, and if you intend to let it compound untouched for the next 9 years, then if you average 5% over the next 9 years you will have about $3.6 million. (More, if you add regularly to savings between now and then.) Thus if your living needs after SS etc. are less than $15,000 per month you can afford to retire. The only reason for you to work to age 70 is if you love doing what you do and could be happy being semi-retired.
By the way, everyone should also avoid "target date funds" for this reason. You are not like everyone your age, so you should not all invest alike.