Should you manage your finances by yourself?

by Shelton on August 19th, 2014

filed under Finances

Is it ideal to manage one’s funds personally rather than entrust it to someone else who will act as a financial advisor?

Though this practice is not common in this part of the world, it is usually better to allow a professional manage your funds, particularly if you do not understand the secrets of the market or investment.

Depending, however, on what you intend to achieve and the standard you desire in your finances, seeking a professional advice once in a while (if not all the time) may be helpful in realising you goals.

The size of your financial portfolio could as well determine whether you need a financial advisor or not. If you have a pretty large portfolio it will be nice you get one to help you organise your portfolio and give proper attention to your finances. You can either decide against it if you are used to handling larger sums of money and you are confident that you have gathered enough skills to begin to handle it on your own.

The level of your financial know-how, is another thing to consider in seeking the service of a financial advisor. If you are a bit financially savvy you can manage your financial portfolio by yourself. If you however think you are not competent enough to manage your finances and investments, the seek the services of an advisor while you carefully follow his advice however, bearing in mind that your advisor is a certified and competent one.

You can get competent advisor from recommendation of friends, family members and colleagues who are their clients and have been successful in managing their finances.

You should consider your time schedule since financial matters need good time for assessment, evaluation and monitoring and if you think you have too much on your hands because of your busy schedule you can consider the services of a financial advisor.

When you need to take a critical decision employing the service of a financial advisor may become very necessary especially when you are taking a critical decision in your life such as investing a huge sum of money in a business venture, real estate or when considering retiring.

When thinking about investing big in a business venture you will need the advice of your advisor to guide you into the business especially a business you don’t have an insight to.

This is no different for investing in real estate as you will need professional advise on what amount to invest on a property, the location to get the property and the prospect of such investment.

This service is also crucial when taking a critical decision such as retirement. You will need a financial advisor to help you plan you life after retirement. Usually retirees get large sums of money from their retirement funds and other sources such as savings and it will require careful plan to ensure that these funds last long so that you can lead a modest life after retirement.

Moody’s Raises Outlook on Ally Financial (ALLY) to Positive

by Shelton on August 19th, 2014

filed under Car Lending

Moodys Investors Service affirmed the Ba3 corporate family and B1 senior unsecured ratings of Ally Financial (NYSE: ALLY) and revised the outlook for the ratings to positive from stable.

Moodys affirmed Allys ratings and revised its rating outlook to positive based on the companys progress toward sustained improvements in profitability and repayment of government assistance received during the financial crisis.

Allys operating performance is improving, driven by lower borrowing and operating costs. Allys liability management actions and continued transition to deposit funding have lowered the firms cost of funds and strengthened its net interest margin, which measured 2.53% for the first quarter of 2014, up from 2.07% one year earlier. Moodys expects that Allys margins will continue to benefit from repayment of higher-cost indebtedness and growth in deposits, though competitive pressure on assets yields represents a headwind. The companys efforts to streamline its business resulted in a $70 million year-over-year reduction in controllable expenses in the first quarter, leading to an adjusted efficiency ratio of 55%, down from 64% for 2013. Ally is working to achieve additional efficiency gains that Moodys expects will result in a further improvement to the companys operating performance.

Ally has made significant progress repaying government support. In January, the US Treasury privately placed $3 billion of Ally common stock and in April, Ally completed a $2.6 billion IPO on the NYSE. To date, the US government has received $17.8 billion on its $17.2 billion extension of aid to Ally during the financial crisis. The US Treasurys equity stake in Ally was reduced to 16% after the transactions. The share sales and IPO expanded and diversified Allys investor base which, in Moodys view, contributes to improved access to capital, governance and transparency. Moodys expects that Ally will maintain good capital discipline as it pursues strategies to provide higher returns to shareholders.

Allys ratings and outlook are supported by its position as a leading provider of US dealer and retail auto finance, its effective liquidity management and adequate capitalization. A credit concern is strong competition that could potentially weaken Allys franchise positioning and underwriting discipline. Bank and captive finance competitors have already eroded Allys penetration of GM and Chrysler dealer financing and its financing share of GM and Chrysler retail auto sales. Ally has diversified its originations to include more leasing and used car lending, and it has modestly expanded lower credit-tier originations, helping to both drive volumes and preserve average asset yields. However, Moodys expects that these shifts in origination mix will lead to higher credit losses over time.

Allys rating could be upgraded if the company sustainably strengthens profitability (toward a 1% return on assets) while demonstrating disciplined underwriting and maintaining strong franchise positioning, and maintains adequate liquidity and capital levels (at least 9% tangible common equity/tangible managed assets).