February 13th, 2006 Podcast from the Money Guy, J. Brian Preston, CPA, CFP®, PFS

February 13, 2006

New and Exciting Update!! Next Financial Chaos Topic: Tax Preparation and Planning with special guest co-host Brandon Verner, CPA, a partner with Verner, Perling & Company, P.C.

Articles of Interest:

Money Guy in the Media

“My Story: A One-Trick Pony Nearly Galloped Off With My Fortune.” from
Kiplinger’s Mutual Funds 2006 by Robert Frick.

Other Useful Articles and Links

Getting Wise to Mortgages.” from the Saturday, February 4th, 2006

Wall Street Journal by James R. Hagerty and Ruth Simon.

Mortgage Links

“Is an HSA Right for You?.” from the Thursday, February 2nd, 2006 Wall Street Journal by Sarah Rubenstein. “Buffett Letter Provides A Contrarian Guide to Timing the Market.” from the March 9th, 2005 Smart Money by James B. Stewart.

Financial Chaos Topic for February 13th Podcast:

Mastering the World of Investing!

Basic Definitions

Stocks: Stocks represent shares of ownership in a public company.

Bonds: Bonds are basically a chance for you to lend your money to the government or a company. You can receive interest and your principle back over predetermined amounts of time.

Mutual Funds: A mutual fund is simply a financial intermediary that allows a group of investors to pool their money together with a predetermined investment objective. The mutual fund will have a fund manager who is responsible for investing the pooled money into specific securities. By pooling money together in a mutual fund, investors can purchase stocks or bonds with much lower trading costs than if they tried to do it on their own.

Diversification: The idea of spreading out your money across many different types of investments. Choosing to diversify your investment holddings reduces your risk tremendously.

Bull Market: A prolonged period if time when prices are rising in a financial market faster than their historical average.

Bear Market: A prolonged period of time when prices are falling. It is usually marked by a price decline of 20% or more in a key stock market index from a recent peak over at least a two-month period.

Market Correction: A drop of at least 10%, but not more than 20%

Bear Market Rally: A rise of at least 10% but not more than 20%.

The Balance of Risk and Reward


Dirty Little Secrets of Investing

  1. The S&P 500 usually outperforms 75% of the actively managed stock funds.
  2. The average US stock mutual fund’s expense ratio hovers at around 1.5% of assets, not including trading costs.
  3. The front-end load (commission) for the average equity fund has increased to 5.36% from 5.18% in just three years.
  4. Stay away from 1 or 2 year HOT funds
  5. Look at the Long Term Performance (5-7 years)
  6. Don’t buy what is being talked about
  7. Research the fund manager to ensure that he/she has a history of success, and is not learning the ropes with your money.
  8. Buy NO-LOAD (no commissions) funds if available
  9. Look at the funds internal expenses (the lower the better)
  10. Use Index Funds for Large US Companies (i.e. S&P 500 Companies)
  11. Buy, Hold, and use Dollar Cost Averaging
  12. Diversify your investments

Homework/Additional Reading:



Most Recent Episodes

Dave Ramsey vs. The Money Guy: Which Strategy is The Best?

Dave Ramsey has an incredible legacy of helping folks get out of debt and take control of their financial lives. We agree on a lot of things, but there are a few points of contrast. In this episode, we’ll discuss differences between The Money Guy Show and Dave Ramsey...

Top 4 Financial Mistakes We Saw This Year! (2022)

We saw some wild financial mistakes this year during the bear market. From making extreme changes to portfolio allocation, chasing the hot dot, and using too much leverage, we’ll talk about some of the biggest financial mistakes we saw in 2022 in this episode.   In...

How Millionaires Build Wealth! (With Dave Ramsey)

Join us for a very special episode as we welcome personal finance radio host and influencer Dave Ramsey to The Money Guy Show! There’s so much misinformation out there about building wealth. We had the pleasure of having a great conversation about how millionaires...

Do These 4 Things with Your Finances BEFORE 2023!

There are unique financial opportunities available at the end of the year - especially this year with the market down. In this episode, we’ll talk about what you need to do with your money BEFORE 2023! In this episode, you'll learn: What you need to do with your money...

How to Win When the Financial World is Burning!

Lately it’s felt like the financial world is in chaos, with rising interest rates, a falling stock market, and high inflation. Let’s talk about how to focus on what you can control and how to minimize the time spent worrying about what you can’t control. In this...

Financial Advisors React to RIDICULOUS Money Advice on TikTok!

The most powerful time to get serious about building wealth is when you’re young. So, what is the younger generation learning? Financial Advice (good and bad) is being produced in massive rates across online platforms and TikTok is the new frontier. Is there good...

Loss Harvesting: Why Wealthy People Love It (And You Should Too!)

Tax-loss harvesting: what is it and should you be doing it? In this episode, we’ll cover everything you need to know about tax-loss harvesting, including whether it makes sense for you, how much it could save you in taxes, and how to eliminate the downside of loss...

The Market is Crashing! (Where Should You Put Your Money?)

The stock market has not had a great year so far. You might be asking yourself, “Since the market is crashing, where should I put my money now?” In this episode, we’ll discuss how to invest when the market is dropping and how to make the most of your money. In this...

Will Rising Interest Rates Tank the Economy?!

The Federal Reserve is raising interest rates to combat inflation, and many are concerned about how it will affect the economy. In this episode, we’ll discuss what rising interest rates means for your wallet and how to make the best of it. In this episode, you'll...

How to Be Wealthy By Age! (Can You Catch Up?)

How much does it take for you to meet your retirement goals by age, and what are some common traps your peers fall into? Learn more about how to be wealthy, mistakes to avoid, and exactly what a little extra saving can do for your retirement income. In this episode,...