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2010 Executive Tidbits
IBM, P&G, General Mills, McKinsey, and McDonald's have the best manager training programs according to Fortune 2009. |
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Check out Keith's other site:
Virtual Writing Coach |
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The
Executive Connection SM
a publication of The Virtual Executive
Coach SM
"Vision + Accountability = Success!"
www.virtualexecutivecoach.com
January, 2010
In This Issue:
1. Preview
2. Executive Summary
3. Time to Reevaluate Your Portfolio
4. Helpful Hints
1. Preview
The Executive Connection explores the creative and analytical
process of business development, team-building, and executive
development. We are an interactive community of executives
and small business owners who desire to network with like-minded
high-performance executives to enhance our knowledge,
skills, and aptitudes in the competitive business world.
Published monthly, the Newsletter offers coaching suggestions
around the topics of: business development, financing,
marketing, networking, incorporations, mergers, human
resources, governmental regulations, and tax laws. Topics
are presented from the perspective of Keith Barton and
represent only his ideas on creating and running your
business.
Because we are an interactive community of executives
and business owners, other viewpoints are welcomed and
may be printed in future monthly newsletters with permission
from Keith Barton.
2. Executive Summary
January, 2010
Dear Executive Connection Subscriber,
This month's newsletter features: Time to Reevaluate Your Portfolio
3. Time to Reevaluate Your
Portfolio
January is a time of New Year's resolutions: Yes, we will lose weight, put more money in our
retirement accounts, spend more time with the family, clean the garage, get a better job,
go back to school, and get that physical exam. You name it; we've done it and failed miserably
over the years.
As mentioned in my caveats at the beginning of each newsletter, I do not portend the future nor
do I give financial advice. I do read WSJ, Fortune, and other business magazines
and glean from their expertise.
Fortune's January issue has an interesting article by Penelope Wang on protecting our
nest eggs (I like the gold eggs nestled in shredded $100 bills). Those of you who left your money
in equity funds and didn't bolt for the CD route may be pleased to notice that your ROI has increased
about 35% since the March, 2009 lows. But with the Dow at 10,545 the market is still down from a
high of almost 14,500 in early 2008. So what are we to do? Penelope Wang has this advice.
- Don't' just stand there. Some investors did not panic with last year's recession.
The smart ones did move some aggressive and foreign funds to balanced funds which offer more conservative
returns and losses with less volatility. Also, others moved some stocks to bonds and cash.
Most however (80%) did nothing, and inertia is a dangerous path for 2010 investors. Most of us suffered
40% losses last year; an annual appraisal and portfolio rebalance is in order each January. Those stocks
that gained the most this past year (small and large-cap, foreign stocks) should be reduced this year
because you're betting on a two-year recovery which may not be wise.
Some one-half of 401ks today offer
an automatic rebalance option and other mutual funds offer online tools for evaluating your current
portfolio in terms of risk-aversion indices. Some plans offer Treasury Inflation-Protected Securities
(TIPS) and 19% offer REITs. Talk to your financial advisor or if you go it alone like I do, carefully
evaluate using the tools available to you online.
- Pump up to double digits. Okay, this may be a hard pill to swallow, but income
averaging is the best advice for any small investor. And contribute at least 10% of your after-tax
income to your portfolio. Only 23% contribute 10% or more to their retirement accounts and 20% are
cutting back.
Not a good idea. 35% of you who work for larger corporations may have had your 401k matching reduced
by your company last year, but many companies plan to increase their share in 2010. Try to contribute
between 10% to 15% of your net income this year to your portfolio.
- Use low-cost options like the larger mutual funds (Fidelity, Vanguard) who charge
less than 1% management fee. Check out how your mutual fund stacks up against others at Brightscope.com,
a new 401k service that evaluates over 15,000 plans on factors such as fees, investment choices, and
company matches.
If your plan's fees are higher than the average, move to lower cost options like index and institutional
funds. Try to kick in the maximum on your traditional or Roth IRAs. Those plans that charge at least
1.5% management fees will reduce your nest egg by 20% over the next 20 years.
- Build your safety cushion. If you expect to retire within the next five years you are
most vulnerable to a plunging market, because you don't have time to catch up with rebalancing your
portfolio. If you fall into this category, keep no more than 40% of your nest egg in stocks. During the
2009 crash most 2010 target date funds lost 25% because they loaded up on emerging market stocks,
subprime mortgage bonds, and other risky assets.
Invest in annuities with varying maturity dates up to seven years at retirement, build cash reserves
equal to three years of expenses to ride out tough times in the market. Fortune advises the
following balance if you expect to retire in 10 years: 35% in US stocks, 10% foreign stocks, 5% real
estate, 10% TIPS, 40% intermediate bonds.
Helpful Hints:
- Rebalance your portfolio before the end of January with your financial advisor or using the online
tools available to you with your company or mutual fund.
- Put at least 10%, preferably 15% of your net income as your match to your retirement accounts.
- Use income averaging with automatic deductions from your payroll account or if you're a
small business owner like me, transfer automatic withdrawals into your nest egg each month.
SUBSCRIPTION INFORMATION
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Be assured your name and email address are confidential.
We do not sell, rent or share our mailing list with anyone.
Contact Information:
Keith Barton, Ph.D.
Voice: 281-583-5005
Fax: 281-583-5008
Web: http://www.virtualexecutivecoach.com
E-Mail: keith_barton@att.net
(c) Copyright 2010,
Virtual Executive Coach SM
and A. Keith Barton, Ph.D.
All rights reserved.
Distribution Rights:
The Executive Connection SM is copyrighted,
but you may retransmit or distribute it to whomever you
wish as long as not a single word is changed, added, or
deleted, including the contact information. However, you
may not copy it to a web site.
Republication of The Executive Connection SM
in paper media is encouraged and permitted by individuals,
organizations and associations, as long as the issue is
reprinted in its entirety, without change, and includes
the contact information.
With advance permission, we are happy to edit an issue
to fit your space requirements. Republication also is
encouraged under other circumstances. However, the advance
permission of
A. Keith Barton, Ph.D. must be obtained in the event that
changes in the text are desired.
The Executive Connection SM
Mission:
The Executive Connection SM is dedicated to
helping first-time business owners and executives to recognize
resistance to change, while they create and manage their
own businesses. My goal is to help you transform your
vision into a successful business venture with the addition
of accountability structures and silent partner.
The Executive Connection SM is a publication
of The Virtual Executive Coach SM and Keith
Barton, Ph.D.
We would like The Executive Connection SM to
be as interactive as possible. If you have feedback, comments,
topics you would like addressed, or can suggest additional
resources to benefit us all, please email us at any time.
Send your e-mail to keith_barton@att.net.
Please forward this issue to anyone you think would find
The Executive Connection SM interesting and
beneficial. Your recommendation helps us keep growing,
and ensures an excellent exchange of information and techniques.
Archives:
You can read previous issues of The Executive Connection
SM in our archive section.
About Keith Barton, Ph.D
Dr. Barton received his Ph.D. in 1972 from the University
of Texas at Austin and has been a practicing therapist
for over thirty years. He is a graduate of MentorCoach
and is accepting new clients.
He has been an adjunct professor at the University of
South Carolina, consultant to Fortune 500 companies in
executive development, founded and managed Texas Community
Living Ventures, Inc., in 1986 for providing group home
services to persons with mental retardation. Keith founded
and has been running a clinical practice in Northwest
Houston since 1990.
He writes part-time with the goal of completing one novel
a year. His desire to coach others derives from his passionate
interest in helping others become attuned to their creative
powers of storytelling.
Dr. Barton has training in coaching, cognitive and family
therapy and health psychology. He has published articles,
made presentations and conducted workshops about:
Small Business Development
Employee Wellness Programs
Anxiety and achievement
Stress management
Self-esteem
Communication skills
Leadership styles
Core values in the workplace
Executive Development
High-performance groups
Physician support groups
Writer support groups
© 2010 The Virtual Executive Coach SM
and Keith Barton.
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