Financial Know-How in Turbulent Times

November 18, 2011

In our changing economic and political environment, we are impacted on many fronts, including the Euro crisis, budget deficits, expiring tax laws, and more. We visited recently with Bill Frisco, Certified Financial Planner, about his latest class, “An Investor’s Guide for These Turbulent Times.”
WIH Reporter: Tell us about your upcoming class.
Frisco: We will address all of the most important and controversial global issues that can impact investments including the European debt crises, our struggling economy, stagnant job growth, and the political issues affecting our government. The issues we will discuss are not just interesting, but are also important for financial health.

WIH Reporter: What are the most pressing issues?
Frisco: individuals are more anxious today than ever about world events.The governments of developed countries have staggering amounts of debt, economies are stagnant, and unemployment levels are significantly above the long term averages. The “so-called” emerging countres now control over 80% of the world’s reserves, have much lower debt burdens, and are growing significantly faster than the developed countries. It is obvious that today’s world is truly a different world.

WIH Reporter: What steps can the investor take when confronted with this new paradigm?
Frisco: To survive, it is essential that investors understand the changing world dynamics and adjust their investment portfolios accordingly. My seminar will examine the Euro zone debt crisis, and the likelihood that it will tip the world into a global recession. It will also address the rise of the Chinese currency, and the unsustainable budget deficits and debt burdens in the United States.It is important to understand that in today’s environment, every asset class has some risk, including cash, bonds, stocks, real estate, commodities, and precious metals.

The class will examine the risks inherent in each asset category and various investment strategies will be highlighted to help control the risk and volitility in an investment portfollio. For those investors concerned about their income, this session will review strategies to build income portfollios with enhanced yields. In addition, from a tax standpoint, 2012 is a critical year because many important tax laws will expire. The course will discuss the major tax law changes that will occur, and strategies to help reduce your tax risk.

WIH Reporter: Do we have to know a lot about finance to understand the issues in your class?
Frisco: Although the issues are complicated, my challenge is to simplify them so that anyone can appreciate their importance.  I’m a huge believer that if you cannot explain something that a sixth grader can grasp, you really do not know the material. I have a sixth grader so all the material will be tested on her prior to each class. As a result, I believe beginning investors will feel comfortable and learn a great deal of useful information.

WIH Reporter: In general, what is important for us to know about investing?

Frisco: I have been a pilot for many years and have flown many type of different planes from sea planes to gliders.  Flying is very similar to investing. In flying as in investing you will make mistakes.  The question is how quickly will you correct them.  My first flight instructor, who now flies jets for Delta airlines, told me “a mistake is not an error unless you fail to correct it.”  Down here on the ground, it is easy to procrastinate and put off decisions.  Up there, you are trained to correct things immediately before they become disasters.  It is always better to make a larger number of smaller corrections than to wait and make one big correction when sometimes it may be too late.

Subjects covered in Bill Frisco’s class include:
  • Investment planning in light of significant 2012 expiring tax laws
  • Impact of the Euro crisis, global economies, budget deficits and government indebtedness on the world markets
  • Income strategies to enhance income and control
  • Understanding how to re-balance investment portfolios on a periodic basis to minimize volatility and risk
  • How to determine which asset allocation strategy is consistent with risk tolerance
  • Investment portfolio for retirement and pre-retirement including transition strategies