Wednesday, July 17, 2013

                                   40 Years As A Personal Financial Planner

This Monday, July 15, 2013, marked my 40th year as a Personal Financial Planner.  It has been a great 40 years! I thank the College of Financial Planning, the Institute of Financial Planning (ICFP), the Financial Planning Association (FPA) and the National Association of Personal Financial Advisors (NAPFA) for continuously helping me to grow within the profession.

Many people have asked why I don’t retire.  I feel my clients need me as much or more today as they did in 1973.  You see today investment markets are faced with some of the same problems that they did in 1973.
  •           In 1972 interest rates began to rise. On January 3, 1972 3 month bonds were paying 3.69% and 10 year bonds were paying 5.94%.  By January 4, 1982 3 month bonds were paying 11.87% and 10 year bonds were paying 14.19%. That was an increase of 321% and 239%.

  •       I do not believe interest rates will go this high over the next 10 years, but I do believe interest rates are about to make substantial increases, that can have the same type of an effect on a client’s investments as they did in 1973.  

  • In 1973 crude oil prices had risen from $2.97 a barrel on July 1, 1963 to $4.31 on July 1, 1973.  That was an increase of 45.1%.  Crude oil the continued to increase to $31.66 over the next 10 years, an increase of 734%. 

  • Today oil prices have risen from $30.76 on July 1, 2003 to $96.56 on July 1, 2013.  That was an increase of 314%.  It is anyone’s guess what oil prices will do over the next 10 years, but I doubt that anyone thinks they will go down in value?  

Interest rates and oil prices are important because they affect the amount of discretionary income we have to spend and in turn how our economy grows.

No, I don’t think I will retire just yet; over the next few years my clients may need some historical prospective to protect their investments.

God bless!