Terry Balding & Associates - Executive

Quotes
Terry Balding has been quoted in popular publications such as Kiplinger's Personal Finance Magazine and YOUR MONEY. Following are some excerpts from Terry's statements.

Ignites
Tax Cut Proposal Would Boost Annuities' Appeal     
February 18, 2005
Terry Balding, a certified financial planner based in Wisconsin, says
waiving taxes on gains from annuities could make the products [Variable Annuities]
substantially more attractive to investors.

Currently, VAs are generally misunderstood, he says. "There's a general
perception by some older clients that annuities are bad without any
knowledge of the products," says Balding.

After Tough '04, Money Funds Looking Up
By Alison Sahoo
Terry Balding, a certified financial planner based in Wisconsin, says he’s replaced all of the money market funds in his clients’ accounts with a bond fund that buys packaged home loans with nine months left to run. It’s been yielding about 4% and comes with a checkbook that allows investors to make withdrawals, he says.

Because the fund buys short maturity instruments, he says, it won’t be devastated by a long-term rise in interest rates. 

Balding says that no matter how high money market rates rise, they’ll never be a good investment. 

That’s because money market rates will stay only a step behind inflation, he says. High rates on the products mean that inflation will also be high. And other products can offer the ability to outpace inflation.

Investment News
October 18, 2004
The fourth annual Industry Attitudes survey, conducted in September by
InvestmentNews, found that 70.8% of 144 respondents felt that the scandals,
which have dominated business headlines for the past 13 months, have hurt
the financial planning industry.

"You always wonder what's next," said Terry Balding, a financial
planner at an eponymous Sun Prairie, Wis., firm that manages about $25
million in assets. "You can't help but wonder who has some skeletons in
their closets that you haven't heard about."

Like 65.7% of the survey's 144 respondents, he has stopped using
particular mutual funds, or fund groups, tainted by the scandals, and it is
likely to be a while before he feels comfortable going back to them again,
if ever.

"It's going to cause us go back and do more due diligence," said Mr.
Balding, who won't use funds run by AIM Management Group Inc. in Houston and
Putnam Investments LLC in Boston, in part because of their involvement in
the scandals.

"I'm talking about more due diligence than we would have done in the
past, because at one time, those two firms were trusted," he said.

Senior Market Advisor Archives 
September 2004 
A Simple Illustration

"We rarely use illustration software that involves some sort of fancy needs analysis," says Terry Balding CFP, principal with Terry Balding and Associates, based in Sun Prairie, Wis. "We find that it will either confuse the client, or they won't like something they see and will insist it be changed even if it's not in their best interest to do so." 

Like many advisors, Balding prefers to illustrate his points with markers and legal pads during his sales calls. 

"Illustrating with a simple yellow legal pad works much better for us," he explains. "We make sure what we say is proper, simple for the client to understand, and that it can be backed up. For these reasons we don't have many compliance issues." 

But after the unprecedented bull market and resulting downturn of the last few years, even the most seasoned professionals need some help. Although he might shun insurance illustration software, Balding uses similar technology in other areas of his business. For example, he considers his asset allocation software a must-have sales tool. It easily explains the basic concept behind asset allocation and helps properly distribute his clients' current assets, enabling him to build well-diversified portfolios from the ground up. 

"Like many illustration products now on the market, we've found that if clients were right in their thinking, this program affirms it," Balding says. "But if they were wrong in their investment strategy, it tells them why and helps to educate them. Most importantly, it does it with visual aids and other media, rather than only numbers."

"We've found that if you put a picture in front of clients, they'll get it in 10 seconds," Balding concludes. "If you put 20 pages of insurance documentation in front of them, it puts them to sleep." 

Investment News
August 30, 2004
Usually, the parents need to set up a special needs trust with an
attorney so they can leave an inheritance and support for any benefits not
covered by government programs.

"Such an account will give the child options in life, some extra
spending money, maybe a computer," said Terry Balding of Terry Balding &
Associates in Sun Prairie, Wis. His firm manages $15 million in client
assets and has helped several clients with disabled children.

Finding an experienced attorney to set up a special needs trust can be
a challenge, Mr. Balding said. Families need an estate-planning specialist
who focuses on these trusts, he said.

The goal is to help the parents prepare their estate so it will take
care of their child when they are gone and do so without the parents going
broke while they are still alive, Mr. Balding said.

Mr. Balding said he received training through continuing education classes and spent
time with an attorney who specializes in special needs.

It is also key to remember that in many cases, we're not talking about
a "child," he said. Often these are adults who have special needs that their
parents are trying to meet each day, he added.

Wall Street Journal
July 2004
Meanwhile, the companies behind the partnerships are wooing financial
planners at seminars and conferences. Their strategy: "the same old
pitch we heard" the last time around, says Terry Balding, a certified
financial planner in Sun Prairie, Wis. "You, the planner, can generate
8% commission on these things." Mr. Balding sold DPPs back in the '80s.
He refuses to these days, however.

"They can be a nightmare," says Mr. Balding, who lost clients during the
last partnership bubble. "Some perform remarkably well, but the problem
is some don't."

Seattle Times
Sunday, May 18, 2003 
U.S. stock mutual funds attracted a net $14 billion last month, the biggest inflow in a year, amid optimism about the success of the war in Iraq, according to Lipper. The Standard & Poor's 500 Index is up 18 percent since March 11, luring investors back to the equities markets, analysts said. "People want back in," said Terry Balding, a financial planner in Sun Prairie, Wis. "They don't want to miss this." All types of stock funds had gains during the month, including those investing in...

The Wall Street Journal Sunday
Journal Sentinel
July 28, 2002
A margin call is one reason you should never borrow the maximum you can tap. Be conservative, because even this beaten-down market has plenty of room to keep falling. 
"I'd be much more confident borrowing 20%-25% [of the value of the holdings]," says Terry Balding, a certified financial planner in Sun Prairie, Wis.




On Wall Street
September 2001
"Some brokers don't spend nearly enough time listening," he [Leo Pusateri] says. "We were given two ears and one mouth, so we should listen twice as much as we talk." 
Terry Balding, an independent advisor in Sun Prairie, Wis., agrees. "I start by learning about them, and from there I go with the flow and adapt myself to what they're saying. It might be developing a financial plan, or deciding where to invest $10,000. Essentially, I let them say everything that's on their mind."




IRA Junction
September 2000
Termination fee: You pay this fee when you close your account and/or transfer it to another firm, says Certified Financial Planner Terry Balding, of Terry Balding & Associates in Sun Prairie, Wis. "Everybody charges a termination fee," he said. 
Typically, surrender charges are assessed as a percentage of assets. "They can be dandies," Balding says. He said he's seen cases where in the first year, the surrender charge for an annuity was 30 percent of assets. 




Investing
March 2000
Decimal prices for stocks are on the way for U.S. markets, and for many investors, it's about time.

"I can't wait for it to happen," said Terry Balding, a certified financial planner with Terry Balding & Associates in Sun Prairie, Wis. "The clarity should be fantastic for the investor, that's the main thing."

"If you tell investors a stock is trading at 20-1/2 to 20-5/8, OK, it is," Balding said. "There's no real comprehension of what that is or why that is." But tell someone they can buy at $20.50 and sell at $20.65 and they'll get it, he said. 




Quarterly Report - Money Matters
January 27, 2000
…Others advise against putting all your eggs in one basket. "Basically, they should invest about 10 percent of what they make," advised Terry Balding of Harbour Investments in Sun Prairie. "They obviously should diversify their portfolios." Balding, who has been quoted in Kiplinger’s, Forbes, Your Money, Business Week and most recently on CNNfn.com, said people should plan to update their financial plans annually. …the contributions for the Roth IRA are post-tax, growth is tax free, there are no minimum required distributions during your lifetime and no maximum age for making contributions. "I love them, especially when you’re in a 401(k) that has limited matching," Balding said, adding that any type of investor can never have too much tax-free money. "It’s going to be important some day to have a lot of tax-free money," Balding added….The sooner you start planning, saving and investing for your retirement, the better off you will be in retirement... "Do something and do it now – literally," Balding advised. "Even if it’s a small amount of money." Two examples that Balding offered were the Roth IRA or a mutual fund. "Even $25 in a mutual fund or a Roth is something," he added. That small amount can be built on, and built up, over time. "That slow approach allows people to have a string of small successes," Balding said, and those successes can be built upon. 




Personal Finance
December 30, 1999
How long do you need to keep tax forms? Your W-2s? Credit card and ATM receipts? Financial advisers say many of their customers aren’t sure how to answer those questions.

"The biggest fear people have is, they don’t know what they have to keep,” said Terry Balding, a financial planner who runs Terry Balding & Associates in the Madison suburb of Sun Prairie, Wis. The people he sees run the gamut from pack rats to puritanical receipt pruners, but they all benefit from advice on how to keep proper records, Balding said. "It helps tremendously.”

Ask yourself one question
Balding lets a one-liner serve as his guiding light. "What’s the worst thing that could happen to me if I throw this away?” he asks himself every time he picks up a piece of paper.

It’s tempting to keep everything. But that doesn’t help you sort out your finances at all, and you could fill file cabinet after file cabinet with dross. End result? You and your finances end up more confused.

Throw a record away if it isn’t important or has outlived its usefulness. Though Balding keeps year-end financial statements, he throws away quarterly investment reports if they reconcile with his records of what he’s bought and sold. "If I throw away a mutual fund statement, what happens? Gee, I can call and get another one. Throw it away,” he advises. 




Retirement Planning
September 9, 1999
Some [IRA] plans either agree to continue contributions after an employee reaches their own contribution limit, or they restrict the percentage of their salary that employees contribute to 15 percent -- which again makes "front-loading" a non-issue for all but the highest paid employees. 

"This isn't a problem for many people today since a lot of people contribute 15 percent of their salary and it's not quite there (at the $10,000 mark)," said Terry Balding, a CFP and 401(k) specialist in Sun Prairie, Wis. "But it may become a bigger problem very soon, as incomes continue going up." 




Kiplinger’s Personal Finance Magazine
August 1999
"You can never have enough money to retire on," says Don Benisch. But the 56-year-old farmer and woodworker from Marshall, Wis., doesn’t like laboring over the management of his retirement portfolio. He prefers to stand back and let the funds work for themselves. "I don’t like to pay too much attention to my funds," he says. "I just like to draw the cream off the top to live on." That kind of hands-off approach demands sharp fund picking and a savvy mix of funds that will protect a retirement account from hazards ranging from inflation to plummeting stock prices. So on the advice of Terry Balding, a financial planner, Benisch invested a portion of his portfolio in high-yield bond funds – portfolio diversifiers that gush with current income. 



Financial Planning
March 1999
Terry Balding, a planner in Madison, Wis., argues that mutual funds aren’t necessarily becoming a smaller part of the broker-dealer business. Actual sales are increasing, but shifting so that fund sales fall under most broker-dealers’ advisory programs, rather than in their traditional commission account columns. 




Journal of Financial Planning
February 1999
Many clients of Terry A. Balding, CFP, of Sun Prairie, Wisconsin, have as much as 30 percent of their portfolio invested internationally. Half of that exposure is in the form of equities, the other half in international bond funds. Despite that high exposure, Balding says his clients have not balked, primarily because the bond side—all investment grade and no junk—has eased some of the pain caused by the equities. "In fact, when the market declined this year, our international bond holdings did very well," says Balding.





Financial Planning
February 1999
Terry Balding, a CFP practitioner in Sun Prairie, Wis., uses the Web every day to find information related to his practice. His favorite search tool is Lycos. "When I do the search through Yahoo!, I’ll miss a lot of sites," he says. "When I do it with Lycos, I get more accurate responses." 




Financial Planning
January 1999
Performance and style are certainly more important to Terry Balding, a financial planner in Sun Prairie, Wis. Balding recently began using funds from BlackRock and Wachovia, something he wouldn’t have done just a few months ago. "I was looking for a good international bond fund, someone who produced outstanding results," Balding says. He ran a routine screen using Morningstar’s Principia database and up popped a fund offered by BlackRock, as well as one offered by New York investment bank Goldman Sachs. He had never heard of BlackRock before, but it didn’t put him off that it was a bank fund. 
"I search for funds that do a great job and I don’t care who runs them," he says. "The fund did 9.78% [in 1997] and is up 9.43 through the end of September [1998]. With 10,000 mutual funds today, it’s just not an issue. Some advisers see the bank as competition. For me, it’s a different way of doing things. My job is to produce portfolios that give a balance of return and risk. From that point of view, there is no bias."

One characteristic of many bank funds that Balding prizes is their size. If you have not heard of a fund family, chances are pretty good the portfolios are small – a distinct advantage in most asset classes.

"The Wachovia Special Values, a small-cap value fund, did 29.08 [in 1997] and is off –11.07% year-to-date [through October]," Balding says. "It’s number two in its category for the last three years and number six over the last five years. It also has only $60 million in assets. Quantitative Equity, a large-cap value fund, did 32.24% [in 1997] and is up 0.88% [through October 1998] – another nice fund, good performance and only $68 million in size."




Ticker
January 1999
The low correlation between equities and high-yield debt is one factor that attracts Sun Prairie, Wis. based Terry Balding, a CFP with Harbor Investments, to high-yield funds for his clients. He praises high-yield’s ability to "take the bumps out of the road." When stocks aren’t doing well, he says, junk investments often see gains. He adds, "They tend to have less interest rate volatility than, say, government bond funds." 




Retirement Roundtable
1999
Terry Balding was given five different cases and made recommendations on each one. 



Your Credit Union
October 1998
"Most of my clients who are working in retirement are doing so to have something to do," says Terry Balding, a certified financial planner based in Sun Prairie, Wis. "It's not that they need the money. They need a purpose in life. That's more important than any of the financial issues. It gives them a reason to get up in the morning." 




Investment News
Vol.2, No. 36, September 21, 1998
"With every year of incredible returns, people got more and more aggressive, even the ones who called themselves conservative at first," says Terry Balding, whose firm in Sun Prairie, Wisc., supervises $7 million. 




Financial Planning
September 1998
"If you have a fund that’s large in size, it’s like a large animal," says Terry Balding, a certified financial planner in Sun Prairie, Wisc. "It can’t move anywhere quickly. Smaller funds are more nimble."
Balding says that when choosing small-cap funds, he screens out any fund with more than $1 billion in assets. Similarly, he eliminates any mid- and large-cap funds over $10 billion.

"Take a manager who did a great job with a $300 million fund. When all of a sudden you put $1 billion in, the same ideas don’t work. You can’t go back and triple your investment in the same company. The laws prohibit it."

Balding says he pulled his money out of the Kaufmann Fund last year after its assets soared from $965 million in 1994 to $6 billion at the end of 1997. "When it went to 400 stocks in the portfolio to make the fund work, it became a concern," he says. "They’re advertising like crazy. They obviously want to build that fund and make money." Balding pulled the approximately $500,000 he had in the fund. Balding continues to be wary of a fund’s growth, especially its meteoric rise after getting favorable press for performance. "I tell my clients, ‘If you see an article on one of your funds in Money magazine, expect we’ll be selling it soon,’ " he declares.




YOUR MONEY
February/March 1994
Start your post-holiday debt-slashing a little at a time. "When paying off debt, start by making an additional payment on your smallest debt," suggests CFP Terry Balding. "This additional payment could be any amount: $10, $100, etc. When the smallest debt is paid off, apply all payments that were made on that debt to the next smallest debt. Repeat until all debts are paid."