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Stocks to Capitalize on the Baby Boomers

Kira Brecht, writing for U.S. News and World Reports, quoted me in a piece about investing in the aging of the Baby Boomers:

“Boomers value quality, and you can see that in everything from their grocery bills, which are heavy in organic produce, to their home remodeling,” says Charles Sizemore, founder of Sizemore Capital Management, a Dallas-based registered investment advisor…

Investors should also consider the nostalgia factor. “Look at today’s 40-year-old man and figure out what car he wanted but couldn’t afford when he was 16. Buy that car today, at jalopy prices, and sell it to one of those 40-year-old men in another five years, when he’s having a midlife crisis, thinking back to his youth and looking to restore a classic car,” Sizemore says.

Finally, remember grandparents like to spoil their grandkids. “Don’t neglect the grandparent angle. Look at what grandparents are spending money on today, and understand that there will be a lot more grandparents coming down the pipeline in the years ahead, Remember, the millennials – the boomers’ kids – have barely started the family formation process,” Sizemore says.

You can read the full article here.

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The Force is Strong With Star Wars Stocks

I gave my thoughts to Patrick Sanders, writing for US News and World Reports, on stocks that stand to benefit from the latest Star Wars movie installment. Here is an excerpt:

The Walt Disney Co. (ticker: DIS). For its $4 billion investment to buy Lucasfilms. Disney is unquestionably the company with the biggest stake in the new Star Wars films. You can expect “Star Wars: Episode VII – The Force Awakens” to be the biggest movie of the Christmas season – the other six films collected a combined $4.4 billion in box office revenue – and Disney will primed to make this the biggest “Star Wars” yet…

“Disney has a lot of momentum right now, and it is one of the few large companies that really seems to be doing well. And this is before the release of the Star Wars installment, which will almost certainly be one of the biggest movies in history by box office sales and merchandise sales,” says Charles Sizemore, founder of Dallas-based Sizemore Capital Management, an investment advisory firm. “But the thing to remember about Disney is that ESPN is its main cash cow. Disney’s media networks make up about 60 percent of company profits, and this is completely dominated by ESPN. With TV slowly moving to an unbundled a la carte model, Disney’s long-term future here is uncertain.”

Hasbro Inc. (HAS). Unlike Mattel stock, Hasbro has been a Wall Street star in 2015, up more than 45 percent and continuing to outperform its 50- and 200-day moving averages. HAS stock has benefited from year-over-year revenue growth for five straight quarters, and the stock still appears to have room to run higher.

Hasbro is licensed to create and sell hundreds of Star Wars-branded games, action figures, electronic toys and puzzles. If you are shopping for Star Wars toys this holiday season, you’ll likely consider a Hasbro product at some point.

“Hasbro’s brands, particularly its Transformers and Marvel superhero franchises, have been well-suited to TV and movie success. And with the big ramp-up of publicity with the upcoming Star Wars movie, demand looks to be strong for probably several years to come,” Sizemore says.


You can read Patrick’s full article here.

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Why Don’t Americans Save More?

I sat down with InvestorPlace’s Jeff Reeves to chat about Americans’ savings habits…or lack thereof. You can read Jeff’s full article here: Americans struggle to sock away retirement savings.

Here is an excerpt:

According to a 2014 survey from the Employee Benefit Research Institute, only 64%

of Americans have reported saving any money at all for retirement to supplement anticipated Social Security benefits. Those with some savings typically don’t have much. The EBRI survey found that roughly six of every 10 Americans have less than $25,000 in total retirement savings.

“Americans just don’t save enough,” says Charles Sizemore, chief investment officer of Sizemore Capital Management in Dallas. “The question, of course, is why?”

Sizemore says another reason Americans have such trouble with retirement planning is cultural, based on our behaviors and emotions.

“Life is pretty stable here, and we have basic safety nets in place. The countries with the highest savings rates tend to have little or no safety nets, and people are forced to fend for themselves in old age. So in a lot of ways, our success and stability have made us a little lax in our attitudes toward saving,” Sizemore says.

Couple that with a lack of mandated savings, and you get an understandable problem.

“In many countries, 401(k)-style contributions are required by law the same way that Social Security [withholding] is here,” Sizemore says. “To the average 22-year-old in their first college job, the priority is paying the rent. Retirement savings is not high on the priority list.”

Investment adviser Charles Sizemore notes that it’s important for older Americans to take advantage of the increased cap on tax-sheltered retirement instruments such as an IRA or 401(k). A typical IRA is limited to $5,500 annually in contributions, but for those age 50 or older, the ceiling is raised to $6,500. It’s similar with 401(k) plans, where the limit is $18,000 for tax year 2015, but those age 50 or older can save up to $24,000.

In addition to supercharging your savings, you can sometimes “save a boatload on taxes” by reducing your taxable income via one of these tax-deferred investment instruments, Sizemore says.

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On WSJ Voices: Picking the Right Estate Attorney

The Wall Street Journal’s Voices column picked up my comments on choosing the right estate attorney. You can read the full article here (subscription to the WSJ may be required), and an excerpt follows below. Enjoy!

Many people think estate planning is mostly about having the right papers in place, but it’s really bigger than that. It’s about managing people. At the end of the day, you can do everything by the book—a will, trusts, custodian arrangements—but none of this necessarily matters if your heirs don’t know where the documents are, what to do with them, or are too emotionally overwhelmed to act.

This is where a good professional can really prove their value. After I had kids and it came time to update my estate plan, I took the details of my financial life—everything from my business-checking accounts to the kids’ college funds—and gave copies to my estate attorney. I then gave my wife, mother and mother-in-law the attorney’s business card and said: “If I die, call her. She knows where everything is.”

This is the kind of advice that I now give to my clients. Simply having the right documents isn’t enough; once you organize your estate plan, you need to pass it to a professional who can hold your heirs’ hands through the process after you are gone. You need someone who can take charge in their time of need.


You can read the full article here (subscription to the WSJ may be required).

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The Importance of Cash Savings

I recently sat for an interview with LoanNow on the importance of saving. Here is an excerpt:

What are the smartest financial decisions we should make?

I really can’t emphasize how important it is to save money. Virtually all other major financial decisions we make – buying a home, starting a business, investing for retirement – first require the existence of cash savings. Without savings, you cannot make a down payment on a house, finance a new businesses or buy a single share of stock; you’re sitting on the sidelines while your friends and neighbors are getting ahead. Step one – before you do anything else – is to save money.

What advice can you offer individuals and families loaded down with debt on managing it? What are your favorite methods for paying down debt?

Debt can be paralyzing. When confronted with rising debts, it’s easy to get overwhelmed with a sense of hopelessness and do nothing. And unfortunately, there are times when a debt load becomes unpayable and the only way out is to file for bankruptcy protection. But this is not something I recommend for the vast majority of borrowers because it ruins your credit, it carries an ugly social stigma and doesn’t eliminate all of your debts. For example, any debts you owe the government – such as IRS taxes or federal student loan debt – are not discharged in bankruptcy. And frankly, I consider bankruptcy the coward’s way out. If you’ve had a catastrophic setback, such as a major illness or the death of spouse, then there is no shame in filing for bankruptcy. But for the rest of us, there most definitely is shame in bankruptcy, or at least there should be.

The first step in getting debt under control is to stop adding to it. Cut your current expenses down to the point that your paycheck easily covers them. Next, prioritize. Higher-interest debts should be paid back first or rolled over and consolidated into something with a lower rate. After that, it becomes an exercise in lining them up and knocking them down one by one. Dedicate all free cash to eliminating one outstanding debt, and then once paid off, repeat the process on the next debt. It’s a long process but very doable if you keep the long-term goal in mind.

What are the worst things we can do when it comes to managing large amounts of debt?

The worst thing you can do is nothing. Interest compounds. That’s fantastic when it’s working for you as an investment, but it is fiscal suicide when it works against you as a borrower. Doing nothing puts you on the wrong side of compounding.

Along the same lines, attempting to pay back debts without a good game plan in place is a major mistake. Hey, any debt repayment is good debt repayment, but doing it right and prioritizing by paying back the higher-interest loans first can massively speed up the process.

You can read the full interview here.

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