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Gary Boatman: Identify your needs, goals before investing

| Wednesday, April 10, 2013, 12:01 a.m.

It has been a very interesting week in the financial world.

Cyprus is facing a banking crisis where some larger depositors may lose their investments that they thought were government protected.

The employment numbers were only half of what was expected, and yet the unemployment rate decreased.

This was because many unemployed dropped out of the labor pool.

We only produced one third of the required jobs to keep up with the growing population.

North Korea could erupt at any moment. Retail sales for March will be reported this week and they are expected to be weak. The stock market has stalled and has not been able to establish significantly higher levels from six years ago.

I had the privilege to meet many of you at the Mon Valley Home Show during the weekend. Your concerns are all very similar. Banks are paying almost zero percent interest. Bonds, which have been great the last 10 years, will get crushed when interest rates start to rise. People are very concerned about both parties in Washington, D.C., and the Fed printing $85 billion every month.

Yes, we face many challenges — most of which are out of our control — but there is hope. First of all, we must be open-minded. If we keep doing the same things as before, should we expect different results? That would be silly. We must also believe that we can overcome the challenges. Mon Valley people are strong, hard workers who do not give up.

People have a wide variety of financial needs. Qualified, non-qualified and Roth funds must be kept separate. Some assets must produce an income stream such as your paycheck to meet everyday expenses. Some assets must be available in lump sums. This is for things such as a dream vacation or to buy a new car. All of your assets must earn enough to keep up with inflation. It is important to realize that to accomplish these very different needs, the answers are worlds apart.

One man at the home show asked me where I would invest $30,000 of his money. I told him that the answer would depend on what his goals were. I needed to know was this legacy money that he planned to leave to his heirs or was this money that he may need in six months? Would this be in a large lump sum or periodically? He kept pressing that I was not answering his question. He refused to tell me his goals. If anyone tells you where to invest without knowing your needs, run for the exits. This would not be professional advice.

There are many good companies in the financial world. However, no company has all of the best products. If you see a product producer with their name on the door or sign see how many companies they actually represent. There are hundreds of insurance companies and thousands of mutual funds and other investments. If they only have private label choices, guess which company has the right solution for your problem?

Your allegiance should be to you and your family. Do not accept poor performance or incomplete solutions just because it is easier. In today's tough economy you need to stack the deck in your favor.

Gary Boatman is a certified financial planner and local businessman who serves as president of the Monessen Chamber of Commerce.