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Debt consolidation companies attempt to get the credit history of a person back on track. Many borrowers find themselves with poor credit rating after accumulating a lot of debts. Debt consolidation is also used as an alternative to declaring bankruptcy. In the state of Michigan, bankruptcy laws are very severe, therefore, debt consolidation is always a better option. To find debt consolidation companies in Michigan is quite easy, as there is at least one such company in every state.

Before choosing debt consolidation companies in Michigan, debtors should look into the company’s credibility and past performance, to know their method of dealing with the issue. Debtors must be aware that any negative reports on a person’s credit history are removed from the credit report after a period of seven years. This allows a person to correct the mistakes he or she has made, and improve their credit rating now. However, a bankruptcy report stays on the credit history for ten years. This is done to deal more severely with people who mismanage their funds to such an extent that they go bankrupt. However, many such debtors have made efforts to deal with debts by choosing debt consolidation companies. This is even more important in Michigan as the state government does not take defaults or bankruptcy lightly.

Debt consolidation can also be searched for online. Most of them accept debt consolidation applications through their websites, making the whole process easy and convenient. Debt consolidation companies help reduce high payments and can even negotiate with the creditors to lower interest rates. To ensure that too much of debt is not accumulated, debtors are not allowed to apply for or use any more credit while they are working with debt consolidation companies. Debt consolidation goes a long way towards ensuring better credit ratings, which further allows debtors to get better rates than what are regularly offered.

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Managing a global ETF portfolio does not have to be rocket science. Follow these eight steps for a successful global ETF portfolio.

1) Liquidity First: Before you even think of building an investment portfolio, you should set aside about six month of income in a “rainy day” account. This could be put into a money market fund or U.S. Treasury securities. Having this money set aside will ease your mind and allow you to be more open and creative with your global portfolios.

2) Separate Portfolios: you should separate your core conservative portfolio from your growth portfolios. With the core conservative portfolio, your top priority is capital preservation and growth is a secondary consideration. Your growth portfolios are more speculative with capital growth as the primary goal.

3) Really Diversify your Portfolios: You need positions in your portfolios that are likely to offset each other as unexpected events and market movements become a reality. This is not accomplished with different sectors ETFs or a mix of small cap, mid cap and large cap ETFs. Rather the goal is to have some investments that are on both sides of risks.

For example, if the US dollar declines, have some investments in precious metals or denominated in other currencies such as Switzerland or Australia or Singapore ETFs. If inflation heats up have some investments that hedge this risk such as timber, gold or Treasury inflation protected bonds (TIPs). If political events or policies in one country take a turn for the worst, it is helpful to have investments in other well developed countries to offset any loss of value.

4) You get the idea, spread your risk and avoid having one ETF account for more than 5-10% of your core portfolio.
Be Careful what Countries You Pick: You need some guidelines to help keep you from getting carried away and having too concentrated a position in a particular country or region.

In particular, take a good look at the following: 1) the stability and overall political and corporate governance, 2) the legal environment, respect for contracts, low levels of corruption, due process and rule of law, 3) the macroeconomic environment including fiscal discipline and currency strength, and 4) political risks that could affect financial markets.

Keep in mind that the quality of the countries you choose to invest in is the primary but not the only factor. The price or valuation of a country’s stock market is also extremely important. Oftentimes the best time to buy into a country’s stock market is when it is beaten down but there are signs that its economic and political problems will sharply improve. If you have a long-term perspective, you might consider annuities specially structured for ETF portfolios.

5) Minimize Company Risk by using our “Buy Countries, Not Stocks” strategy that helps you minimize company risk. Instead of trying to pick the best three stocks on the Tokyo Stock Exchange, why not just minimize company risk by buying the Japan iShare ETF (EWJ) that tracks the Nikkei 225 and spread this risk amongst 225 Japanese companies. Or you could hedge your bets and do both.

6) Monitor ETF Country and Company Exposure: Be careful to look under the hood of ETFs to see where your money is going. For example, let’s look at the iShares MSCI Emerging Markets ETF. It invests in 26 different countries so it is natural to think that you will get broad exposure to all 26 countries. You would be wrong: 50% of your investment in this fund is going to four countries: South Korea, South Africa, Taiwan and China. In addition, incredibly, 7.5% is going to one company, Samsung Electronics of South Korea.

The same is true for the MSCI Europe, Asia and Far East (EAFE) index. It contains 21 developed countries but 48% of the money you invest would go to just two: Japan and the United Kingdom. Meanwhile less than 1% would go to Singapore and Ireland! Country specific ETFs such as the new China iShare (FXI) can also have a fair amount of concentrated risk. Although the China iShare tracks a basket of 25 companies, the largest 5 companies account for nearly 50% of your exposure.

7) Cut Losses with Trailing Stop Loss Policy and ETF Put Options: We have all been there. You buy a stock or fund and it appreciates in value rapidly. Then it stumbles and begins to decline. What do you do? Should you buy more, let it ride, or sell?

Save yourself a lot of pain and agony by following a simple rule. If a position ever falls more than 20% from its high, sell it immediately and reassess the situation. And if you invest in an ETF with a sizable downside risk, why not spend a few hundred dollars to purchase a put option as an insurance policy?

Rebalance Your Portfolio: At least annually, you need to make some changes so that you are not overly exposed to countries that have higher risk factors and volatility. One way is by selling some shares of your winners and increasing exposure to under performers. This accomplishes another goal, locking in gains and taking some money off the table. Remember, only a fool holds out for top dollar especially in the more volatile emerging market countries.

Building your portfolios with low-cost, tax-efficient ETFs is a smart strategy but don’t set it on auto pilot.

Carl T. Delfeld
President& Publisher
Chartwell Partners
chartwelladvisor.com/ chartwelladvisor.com/

Carl Delfeld has over twenty years of experience in the global investment business with a strong background in Asia.

• Author of global investor primer “The New Global Investor”
• President of the global investment advisory firm Chartwell Partners
• Publisher of the Chartwell Advisor ETF Report and Asia-Pacific Growth
• Columnist on global investing with Forbes Asia: “Global Gambits”

• Former U.S. Representative to the Executive Board of Asian Development Bank
• Chairman of the global economic strategy think tank ChartwellAmerica
• Asian specialist with the U.S. Joint Economic Committee and the U.S. Treasury
• Former member of the U.S. Asia Pacific Economic Cooperation Committee
• Former investment executive with Robert Baird & Company and UBS
• Graduate of the Fletcher School of Law & Diplomacy with economics scholarship from U.S.-Japan Friendship Commission
• Exchange student at Sophia University, Japanese Ministry of Education Fellow at Keio Universi

Many experts in personal finance preach the need for a written financial plan. It is true when we have a written plan; we tend to see the true picture of our current financial status. A plan puts in words and in numbers our intent for future expenditures, savings and perhaps investments. Steven Covey said: “begin with an end in mind”. A plan helps us articulate the end that we envisioned. It is a great idea, but there is small problem with a plan. The problem lies in the fact that most people have a hard time putting together the plan and secondly that plan is thought of being a budget. The plan is like a diet we agree to commit to for life only to abandon the idea after a week. Most of us have what is called budget phobia.

There is a group of folks in the State Capital whose job it is to vote on a budget every year by October 1 for the next year. These folks miss the deadline every year. Why? Because they have a fear of the controlling nature of this document called budget. These folks, known in some circle as the US Congress, have shut down the government in 1994 giving the document control over the life, health, and welfare of the American people.

It is often said that Congress is out of touch with the general public and does not truly represent the general public’s interest. But when it comes to budget phobia, we are properly represented in congress. Our behavior and action as it relates to money are consistent with the folks we are sending to Washington to manage the people’s money.

I submit that budget is an invaluable and indispensable tool needed to achieve financial stability and control of god’s money. We must include it in our financial toolbox; it must be sharp and ready for use. However, before we use a tool that can be disruptive and ineffective, before we use a tool without proper training, I am suggesting some exercise to prepare us for this journey in the road less traveled. I am suggesting a renewal of financial mind set.

I am introducing two words: GUN and Butter.

Guns are more accurate the hotter they get, guns are more valuable the older they get; butter, on the other end, melt when it is hot and may not be tasty or healthy when it gets old.

I am suggesting that as we go about our business of spending our hard earned money, we need to ask the question: is the item we are about to purchase is gun or butter? Would it get better over time or would it become useless before too long? Would it improve our net worth? Would it produce income? Would that financial decision have a positive impact in my quality of life over time or would it be a catalyst for financial disaster? By asking those questions myself, I have become an expert on how not to spend money. I usually go to Sam’s to buy gas. I usually browse the store to sample the various food items they offer. I once tasted a seafood salad and bought a container out of shame because the lady serving the samples was staring at me. I still have that salad. Now when I go to Sam’s, I still taste the food as I tell myself “it’s only butter, you don’t need, remember that salad”

Keep in mind I don’t have a monopoly on good or bad financial decision. I am sure I made decisions that others may find rather stupid. In fact, I know I made decisions that have been detrimental to my financial health. In a way, making those mistakes, like the one above, improves the validity of my opinion: I can say I have been where you are today; I have walked in your shoes; today I am where you are trying to go: I have a renewed financial mind set.

To help you renew your financial mind set, I am suggesting that you think of gun and butter before you spend any money. I am well aware of the fact that we are discussing personal finance. In the word personal, there are variables that will not compute. In the word personal, there are emotions, feelings, and sentimental values. Saving money does always feel good, wasting money does not always feel bad. A friend told me he could save money if he stops supporting his 27 year old daughter, but he enjoys giving her money, paying her car insurance and her cell phone bill. That’s fine. Who am I to tell him what to do with his money? My intent here is to suggest, if you decide to buy butter instead of gun, that you make a conscious decision to do so. With that in mind, remember: Gun is good financial decisions and butter is bad financial decision. Gun is good, butter is bad!

You may want to think that we need gun, you want butter. Of course I am realistic: no is going to spend one’s salary buying stock and real estate which are the best guns to accumulate. We are more likely to spent 125% of our salary to eat out, buy expensive furniture, clothing, and useless gadget. You might image I consider those butter! I am hoping for a happy medium, I am hoping for a buttered gun approach, light buttered gun.

If you need a financial coach, email reginaldduval@gmail.com