Want to share this Commentary with a loved one? You can download a shareable PDF version right here. You graduated from school, perfected your resume, aced the interview, and landed a good job with a decent salary. Well done! It’s an exciting new journey, but you probably have a couple of questions. Questions like: How am I supposed to choose a healthcare plan? When do I need to start worrying about retirement? And who the heck is FICA—and why are they taking money out of my paycheck? At McRae Capital Management, we’ve spent decades guiding families toward smart financial decision…

Starting a family is a wonderful time of life. Whether you and your partner are just starting to think about it or whether your first little one is already on the way, this life stage brings a host of new responsibilities and a number of important new financial decisions. For example, what happens to your children if something happens to one or both of you? How can you secure them financially, and make sure the funds aren’t drained or squandered by the children themselves? How do your insurance needs and tax situation change, now that you have a family? And…

Retirement. Deciding when and how to retire is one of the most significant challenges you’ll ever face, usually around the time you're turning 60. The decision-making process itself can be emotional and frightening. When should we retire? Should we downsize? Should we re-balance our portfolio? Update our will? Assign a power-of-attorney? And most importantly, how do we know we’re not missing something important? Age 60 is the perfect time to start asking these questions, especially if you still plan to work for awhile. Most of the significant costs of early adulthood—college tuition for the kids, the mortgage—are behind you. You’re healthy,…

When it comes to paying for our kids’ college, we’d love to either have enough money (or conversely, so little) that we wouldn’t really feel the costs. But 18 years from now, most of us are likely to reside in that vast slice of America that somehow finds a way to afford the ever-escalating costs of higher education, but really feels the pinch. How much that pinch hurts may depend on when you can start planning and saving for college, whether you have a newborn or a teenager. It’s never too late, but the earlier you can start a conversation…

McRae Capital Management was founded in 1981 as an independent registered investment advisor to provide investment advice for families, private foundations, and company retirement plans. In the 35 years since our formation, investment management and financial planning for families has always been at the core of our business. But investment management and financial planning for families is not all we do. Not by a long shot. After all, the world is a busy place, and investors—and families—are inundated with a constant flow of info and opinions. Analysts, portfolio managers, and pundits flood the airwaves and the Internet with an endless…

Assessing your long term goals, planning accordingly, and revisiting details of your plan as each life stage comes up for you is a great general strategy for making financial planning a rewarding way of life. But not everything happens as planned, and sometimes, unfortunately, life throws us a curveball.  In reality, financial planning around divorce or a loss in the family isn't usually part of the program. Unexpected events can wreak havoc on the best-laid plans. By definition, they’re things you haven’t planned for, and they instantly expose any gaps in your overall financial planning. Worse, they often involve a…

The world has changed a bit since 1981. But 35 years later (yes, 35), McRae is the company it’s always been … and more. The year was 1981 – not the most obvious time to start an investment advisory company. The Dow Jones Industrial Average, perhaps the best known measure of the stock market, stood at 963.99 on December 31, 1980. By the time 1981 drew to a close, it had fallen to 875.00, down a little more than 9%. At mid-year, the country was in a recession, the second one of the young decade. It was the year that…

How is a considerable amount of money like a birthday cake? You can close your eyes, blow out the candles and wish your dreams come true. Or you can slice it up so there’s plenty to go around… and even keep some extra— just in case. We have all heard the ancient proverb, “You can’t have your cake and eat it, too.” While there’s usually a lot of truth in nuggets of wisdom such as this, we at McRae Capital Management take exception to this one. Fact is, you can have your cake and eat it, too. Let’s say that,…

People are usually diligent about making a substantial purchase. Why should investing be different? When it comes to making significant commitments — buying a home or vehicle, going on a big vacation, joining a club are examples—people are pretty good at doing their homework. Through our long experience, we have come to understand that people are not so good at choosing how they invest. A buyer has command of all the relevant information when it comes to his or her newly purchased home—configuration, style, size, age, condition, taxes, utilities, conveniences, amenities and, perhaps above all, why they bought where they…

There’s enough investing information being dispensed through the popular media to keep you – and your investment strategy – going around in circles. Herewith, some advice for surviving all the spin plus insights into how McRae gathers information that’s on the square. "Knowledge is power,” said Francis Bacon, the 15th century English philosopher and statesman. And it was a 17th century countryman of Bacon’s, Thomas Henry Huxley, who gave birth to the phrase we hear today, “a little knowledge is a dangerous thing.” In all likelihood, Bacon and Huxley weren’t thinking about investing. But their thoughts sure do apply to…

Putting your money into foreign stocks is like vacationing in other countries: The lure is intriguing, but where you go and how you go about it make all the difference. Most people like foreign travel. And why not? It broadens your perspective. You see things you'll never see in the U.S. You're exposed to different people and different cultures. After all, there's only one place to stroll the Champs d'Elysee on a beautiful summer day. If you want to see masterpieces by Goya and El Greco, you'll visit the Prado Museum. The glory of imperial Russia lives on in St.…

Bonds: They’re important building blocks for most portfolios, so it pays to know something about them – even if they do have an image problem. You may not know this, but in all probability bonds are an important part of your life. Bonds generate much of the income that many of our clients live on. For others, bonds are a source of return but are also like the ballast in a ship – steadying the portfolio when stocks go through periods of high volatility. Those factors mean bonds merit a closer look. The trouble is that bonds have an image…

Mutual funds are the most widely promoted investment vehicle in the world…but that doesn’t mean people know what they are— and what they’re not. Hats off to the mutual fund industry. It has done a wonderful job of promoting its product. In fact, mutual funds are easily the most widely promoted investment vehicle in the world – maybe the only investment vehicle that is so consistently hyped. You don’t, for example, see advertisements from preeminent companies such as Microsoft or Johnson & Johnson saying, “Buy our stock.” McRae Capital Management is a Registered Investment Adviser specializing in individual account management.…

"Over here we have a very nice stock. It seems to fit you— conservative, but not dated. Now, over here we have something much edgier—very tech, so ‘tomorrow looking.’ In the funds department, I can show you several designers’ collections. They’re getting rave reviews from the financial press.” No, you don’t go to a department store to invest. Not yet, anyway. But it’s no coincidence that the investment community refers to individual clients as their “retail business.” We all know that emotion plays a major role in individuals’ decision-making. When was the last time you chose an automobile strictly on…

This is a story about my life, values and philosophy – and the company I founded. -by Rod McRae In 1981 I founded McRae Capital Management. In many respects, starting this company represented the completion of one journey and the start of another. Over the years, Commentary has given voice to my philosophy and thoughts about investing, especially as it relates to life’s larger goals. For the first time, this Commentary shares the history of McRae Capital Management and some autobiographical highlights of my life – at least the ones that brought me to start the firm and build it…

Meet Spike and Slam—the nasty duo that engineers those wild stock market gyrations that drive most investors—but not you—right out of their ticker. You always suspected that there were gremlins engineering those drastic downdrafts and meteoric rises on Wall Street. In fact, you are right. The pitiful pair is Spike and Slam. Spike specializes in rallies, while Slam focuses on routs. Spike pumps things up, Slam lets the air out. They’re an impatient pair—they delight in big, fast moves …up, up, up, then down, down, down. Then up, down, up, down, down, down, up, up, up followed by more down.…

When we opened the doors of McRae Capital Management, I believed we could help individuals and small to medium-sized institutions invest their money successfully. Our company was founded on several principles that had worked for me over my years as an investment adviser. In the years since then, these principles have remained very much the same; if anything, the past 35 years have served to confirm their validity. On the occasion of our 15th anniversary, I decided to share those principles with our clients, identifying 15 tenets of successful investing. The number could be 12 or it could be 16…the exact count…

Bonds. Does any word resonate with a more satisfying or solid sound? When financial markets heave and churn, aren't bonds a harbor of solace and security? Yes... and no. Bonds were initially designed to possess those qualities, but their halos are not entirely untarnished. In fact, there may be more popularly held misconceptions about bonds than any other financial asset. Join us, then, as we seek to penetrate the myths and uncover the realities of bonds. Bonds are perfectly safe: (MYTH) If by safety you mean getting your money back at maturity, bonds are generally speaking, quite safe. But they…

It seemed like just another day in the New World. Only a transaction that would change the course of history was underway. The object was a piece of property: a coastal island. Protected from the ocean and flanked by two rivers, this island would make a fine port. And the Dutch knew a good port when they saw one. So the deal was struck. Peter Minuit would buy this island, called Manahatin for "Hill Island," from the Indians. He would pay a handsome price: goods worth 60 guilders. Thus was the island of Manhattan sold, in 1626, for $24. This…

Investment advisers manage hundreds of billions of dollars for individuals, trusts and estates, corporate retirement plans, endowments and foundations. Due to a number of factors, it is likely that their role in securities markets will continue to grow. These circumstances, together with our own role as an investment adviser, bring up a natural topic for discussion in this issue of Commentary: What is an "investment adviser?" The Investment Advisers Act of 1940 is the statute that recognized and provided for the regulation of investment advisers. That legislation defines investment advisers as "any person who, for compensation, engages in the business…