JOHN D. KIRKGARD, MBA
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Keeping Your Head in the Game

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by John D. Kirkgard
Registered Investment Advisor/SRI Specialist

 
As many of you know, I spent many years training and developing young baseball players at every level of the game. 
 
As a coach at Westmont College and at UCSB, I saw that the standout players—many of whom have gone on to successful major league careers—all shared one specific character trait: discipline. 
 
At the collegiate level, every player has the gifts to play the game at a high level: speed, agility, strength, hand-eye coordination. But those who see the greatest progress, reach their goals, and fulfill their baseball dreams never doubt their course of action and never pull up short. I’ve often seen lesser talents achieve great success simply because they possess greater discipline and remain focused on their objectives.
 
The same is true with investors.

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Merely “hoping” to achieve financial goals is not enough. Portfolios grow and achieve great success for their owners only when things are managed with patience and discipline.  There is little argument that today’s investment markets hold the potential for significant gains over time.  Over time. 
 
The greatest threat to any investment plan is often the investor him/herself. Impatience and an inability to stay the course with consistent effort can cost an investor with even the greatest resources far more than poor tax planning.
 
Current research points to the fact that today’s average mutual fund investor fails to remain invested for a long enough time period to enjoy true portfolio growth. They simply fall short of the returns and appreciation enjoyed by more disciplined investors. 
 
In my experience, it’s the individual investor—working without benefit of a trusted financial advisor—who usually acts impatiently and inconsistently and then wonders where things went wrong.  Imagine what happens to a base runner who ignores the signs from his coach; he often gets tagged out.
 
The sad truth is that managing one’s own investment portfolio is easily compared to the defendant who eschews lawyers and represents himself in court.  The defendant is famously “a fool” and the do-it-yourself investor is often “headed for the drain.” 
 
It’s true that today’s markets have shown impressive gains.  Given that, it remains a dynamic environment where things can change quickly and the individual investor can be caught as flat-footed as an outfielder who takes his eye off the ball. The only way to survive the inherent volatility of the marketplace is with a long term perspective built on discipline and patience.
 
Just as a baseball player performs best with the moment-to-moment guidance of his coaches, the successful investor works with a trusted, experienced advisor to help him keep his eye on the ball and his head in the game.
 
I’m happy to discuss your individual financial goals, your retirement planning, or ways to improve your portfolio performance.  We can even talk baseball! 
 
Just give me a call at (805) 570-1590.


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Socially Responsible Investing:
Values & Opportunities


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by John D. Kirkgard
Registered Investment Advisor


Many of today’s active investors are eager to support businesses that share their personal and social values. They’re in luck, because today’s SRI (socially responsible investing) trend allows for investments that  directly impact the global economy and the quality of life we all share.

Just how powerful is this trend?

Last year 20% of all investment capital went into funds focused on principles of sustainability, environmental protection, and controlling climate change. 
Today’s individual investor can reach financial and socially responsible goals through hundreds of SRI funds stock alternatives tailored to those objectives .

Whether my financial planning clients and I choose individual stocks or participate in a spectrum of SRI funds, we can target those industries with the potential for good growth while adhering to low-impact, sustainable practices.

On the surface, it might seem like SRI investing is such a solid concept that portfolio growth should simply be a given.  The reality, however, is that investing strictly in SRI issues requires increased research and can actually limit our total investment options. 

This is one reason why I continue to advise overall diversification, regardless of portfolio size. Asset allocation is the best way to protect my clients from potential loss…always a possibility in a dynamic market.

Is there a guarantee that SRI strategies and ESG objectives will always make money and achieve the financial growth we’re all after? 

Of course not. But when we work together toward realistic objectives with an educated awareness of the opportunities and pitfalls of any SRI strategy, these investments have the potential for good gains while doing some good.

If you’d like to learn more about SRI, give me a call at J. Dyhr Capital and let’s talk.  I’m happy to discuss these opportunities and how they might support your personal financial planning.


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How to Make the Three Biggest Investment Mistakes
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by John D. Kirkgard, MBA
I know the financial crisis of 2008 is “ancient history” to most of us, but many of my clients have excellent memories and are keenly aware of the potential for volatility in the world of stocks, bonds, mutual funds, and real estate trusts. 

​Investing can be risky, but it’s my job to help my clients maintain portfolio consistency, meet their goals, and mitigate the risks inherent in today’s marketplace climate.
 
The waters may feel calm today, with the wind at our back.  But navigating the financial markets demands we always be prepared for stormy seas and avoid losing the ship.  With that in mind, here are what I consider to be the three greatest mistakes I see investors making as they navigate these ever-changing currents:

  1. Ignoring the impact of inflation upon your investment portfolio. The “dollar value” of a total portfolio may increase over time, but unless the purchasing power of those holdings increases as well, the forces of inflation will seriously erode portfolio value. We all know what a quart of milk used to cost at the corner grocery store…and what it costs today. With that in mind, it’s essential for us to compute the impact of inflation upon your holdings over time.  If, for example, a portfolio grows by 3-4% annually, but inflation stands at 3%...the math is pretty simple: you’re simply treading water.  Intelligent investment planning requires us to look ahead into the eye of inflation and to put our money where it will overcome the effects of purchasing power erosion.
  2. Failing to create rational investment goals with reasonable time lines. When investors focus on short-term financial goals and spend their time anticipating marketplace swings, they’re often subject to the pain of inevitable bear market downturns…not to mention to the emotional strife that comes with trying to outguess current realities or future (completely unpredictable) trends.  The greatest protection from this sort of difficulty is to have a complete understanding of what, exactly, you expect to get out of your investment planning. J. Dhyr Capital prefers to focus on long-term objectives and strategies with an eye toward overall portfolio growth and success for each of our clients.  This means we look at asset growth, maintenance of purchasing power, and the potential for cash flow…collective objectives that require consistent flexibility, and careful planning at every leg of our investing voyage.

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    3. Improperly estimating  the time that assets  must endure. 
Just as a ship’s captain needs a clear idea of how to provision, train, and manage his crew with consideration for the length of the journey, an investor needs to compute the duration of assets through the extent of retirement years. ​Running out of money in retirement can put your ship on the rocks very quickly.  

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​       Thanks to advances in medical care, we’re all living longer… which means our money must last longer.  An honest assessment of one’s life expectancy goes a long way toward creating an investment time line that provides returns for you and your heirs.  Now that you know how to make these critical mistakes, your focus should turn toward avoiding them.  There will always be navigational hazards when sailing your “investment ship,” but knowing where they are will help you chart a course toward financial safety and well-being. 
Simple as this sounds, achieving a true course through the world of investment options is not a simple thing.  I’m happy to discuss your personal situation and help you chart your course.  Just give me a call and let’s talk it over.


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Diversification: The Rationale & The Challenge

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by John D. Kirkgard
The very nature of investing in today’s financial markets involves a degree of risk.

My job—like that of any professional asset manager—is to not only provide growth opportunities for my clients, but to help them manage their risk in a dynamic world.  One of the ways we do that is by spreading risk while maximizing opportunity, commonly known as “diversification.”
 
Sounds simple enough, doesn’t it?  But quite a bit more goes into effective diversification (risk management) than just spreading investments around over various stock issues in the hope that any economic or corporate downturns only affect a minority of those holdings.
 
Of course, that’s one very basic way to minimize risk: buy shares of companies across multiple sectors of the economy. If, for example, auto sales decline due to a rise in oil prices, those oil company shares you hold will cover your auto industry losses.  But that’s not really risk management; that’s playing on a teeter-totter.
 
The wisely diversified portfolio not only has an interest in multiple industries, but carries “short term reserves”…otherwise known as cold, hard cash.  The vehicle for such reserves isn’t a shoebox full of $20s, but is short-term money market securities which can be quickly liquidated in times of need or sudden investment opportunities. Other investment vehicles in a well-balanced portfolio include longer-term corporate and government bonds, with a lower potential return but maximum safety in even the most volatile of times.
 
At J Dyhr Capital, we take a conservative, long-term approach to our client portfolios.  With that in mind, we favor mutual fund holdings comprised of both stocks and bonds with risk-reward ratios carefully assessed for each client on an individual basis.  This requires us to examine particular mutual fund investments with an eye to its balance of holdings in various economic sectors, as well as its historic performance.  The fact that a fund portfolio holds a high percentage of Treasury notes may guarantee maximum safety, but it will sacrifice any reasonable growth potential in the process.
 
Finding the proper risk-reward balance can be a challenge. But when we work with an individual client and make the proper assessments of objectives and needs—whether or not we’re taking enough risk to achieve our investment goals…or approaching intolerable risk levels—we develop the insights to truly plan financial outcomes rather than just “split the difference” of risk vs. reward.
 
With a wide variety of investment vehicles available, diversification is no longer just a matter of buying one blue chip company for every high-flyer on the spreadsheet, or of buying into a large-cap mutual fund along with a real estate investment trust.  Today, intelligent diversification requires a careful analysis of individual investor realities: risk tolerance, personal time lines, available resources, business and family structure, and overall goals. 
 
For the individual investor, the task of weighing all those factors can be seriously challenging.  That’s where the services of a financial professional…and that needs to be someone of impeccable reputation, complete confidence, and genuine trust…comes into play.
 
Feel free to give me a call or drop an email in my Inbox…I’m happy share further thoughts and help you prosper.



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Socially Responsible Investing: At the Core
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By John D. Kirkgard
 
Anyone with an ear to the ground in the markets today has heard the buzzwords “socially responsible investing” (SRI), the strategy that focuses upon generating financial returns while affecting social change.
 
Wringing even more SRI influence out of the investment dollar is the current trend toward “impact investing,” whereby socially-oriented investors aspire to influence corporate practices promoting environmental concerns, improved labor practices, social justice, and consumer protections. 
 
With today’s investor interest often looking beyond P&L statements, the response of investment funds and asset managers—myself included—is increasing awareness of the need for shareholder advocacy and community investing.  These are very positive trends not only for our society and the international economy, but for ourselves as individual shareholders and citizens.
 
Just a quick look back at the effects of SRI over recent decades proves its value.  The investments of labor union pension funds 70 years ago promoted the improvements of working conditions still enjoyed today.  Abroad, the end of South Africa’s apartheid was heavily influenced by international investors creating a negative flow of corporate cash and industrial investment, forcing the hand of that country’s business community.
 
Today, there is a growing number of exchange-traded funds (ETFs) and mutual funds that closely examine environmental, social, and corporate governance (ESG) criteria when placing their clients’ assets.  These institutional investors—and those of us who regularly review their objectives and bottom-line performance—act on behalf of our clients’ broader social objectives while adhering to some very clear guidelines:
  • Requiring corporate management transparency and financial disclosure on all environmental, social, and governance issues prior to committing client funds.
  • Demonstrating our commitment to ESG issues in our own investments and policies.
  • Bringing to bear consistent research and analysis of ESG compliance as we make and share our investment decisions.
  • Complete periodic reporting on our success in the implementation of ESG standards and guidelines.
  • Consistently working toward the promotion and use of ESG principles throughout the investment landscape.
  • Cooperating with others in the financial community to identify and enhance ESG investment awareness and opportunity.
 
At J Dyhr Capital, the success of our individual client’s portfolio is always our prime objective.  Because ours is a highly personalized, truly hands-on approach—both responsive and forward-looking—our clients’ enjoy the highest levels of SRI awareness.
 
The world of investing is a dynamic place.  Success in any market—including those where social responsibility and a commitment to our universal environmental issues is of concern—demands vigilance, foresight, trust, and communication…the foundation of what we do at J Dyhr Capital.
 
The most successful investment planning starts with a simple conversation…so give us a call and let’s talk it over.  

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  • Welcome
  • John D. Kirkgard
  • SRI: The Principles
  • FAQ
  • What Our Clients Say
  • Get In Touch
  • John's blog