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All About Fees…

I gave Jeff Reeves my thoughts on fees and the impact they can have on your portfolio. You can read Jeff’s USA Today piece here. And the following is an excerpt:

The thing to remember, Sizemore adds, is that you don’t get a bill for mutual fund fees; they are “baked in” to your investment’s performance. For instance, if that same mutual fund charging 0.7% each year generates a 10% annual return, it passes 9.3% in gains on to you and takes 0.7% off the top.

Furthermore, “returns lost to fees actually compound over time,” he said, since you lose not just that fixed fee up front but also potential investment returns that could have been made on that extra cash.

Given all this, it’s crucial for investors to keep an eye on what they are paying and try to keep costs as low as possible…

“A fee number in a vacuum really doesn’t tell you much. If you’re investing in a strategy that really is different and really adds something to your portfolio, then paying a higher fee shouldn’t be a deal breaker,” he said. A few investment areas that tend to be more sophisticated and charge higher management fees include emerging market investments or unconstrained bond funds, Sizemore said. However, he adds that “If you’re getting a fund that tracks pretty closely to the S&P 500, then it’s hard to justify paying a premium.”…

“When presented with many different ways to do the same thing, always err on the side of lower costs,” Sizemore said.

You can read the full article here.

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The force is with these ‘Star Wars’ stocks

I gave my thoughts on the importance of the upcoming Star Wars movie for Disney (DIS) to CNBC’s Tae Kim:

The release of the “Star Wars: The Force Awakens” this December will not just be a cultural phenomenon, but an economic one with several companies in the movie, merchandise and gaming industries set to ride this unstoppable force to big profits.

Some investors think the importance of “Star Wars” to Disney can’t be overstated.

“The ‘Star Wars’ franchise is probably the single biggest bright spot for Disney right now. Disney’s biggest cash cow, ESPN, very well may already have peaked in terms of total viewership. That’s a big deal, as media networks make up about 60 percent of Disney’s profits, and this is completely dominated by ESPN,” said Charles Sizemore of Sizemore Capital in an email.

He added, “Disney will need strong performance from its studios to keep Wall Street happy. The latest ‘Star Wars’ installment may very well prove to be the highest-grossing movie in history, and it may break all merchandising records, as well.”

View the full article here: The force is with these ‘Star Wars’ stocks

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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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