Dear Towerpoint,

Utility stocks are no longer for widows and orphans:

Last Monday, Reuters reported that PG&E was preparing to file for bankruptcy protection, due primarily to "potentially crushing" liabilities stemming from this past summer's enormously destructive and deadly wildfire season, including the company's alleged role in November's Camp Fire, the deadliest and most destructive wildfire in the history of California. PG&E stock, which was trading for over $48/share before Thanksgiving, was crushed, closing this past Friday for $7 and change.

While we do not have enough room in this space to opine on the myriad of lessons to be taken from these horrible circumstances, we do want to focus on three intertwined investment ideals, all of which are essential to growing and protecting your net worth:

  1. Just because a stock is considered blue chip does not mean it will stay blue chip.
  2. Owning individual stocks is inherently more risky than owning diversified funds.
  3. Consciously holding a concentrated individual stock position is much more akin to speculation than it is to prudent investing.

Polaroid. Washington Mutual. GM. WorldCom. AIG. Texaco. Circuit City. Lehman Brothers. Sears. The blue chip bankruptcy list goes on and on. The cause and pace of a precipitous decline can happen as quickly as it did for PG&E - a controversy; a headline; a change in trends; a cut in a profit forecast or dividend; the obsolescence of a core technology; a criminal act. It is by no means impossible for the mighty to fall hard.

Quoting author and investor Nick Murray:

You can get rich by under-diversifying. But, you cannot stay rich by under-diversifying.

And finally, please read and consider the following excerpt, taken from Chapter 10 of Book 1 of Adam Smith's masterpiece, The Wealth of Nations:

In summary, please let what happened to PG&E's stock serve as just another example and reminder: Do not fall in love with any one stock, as no one company nor stock is bulletproof; and, strongly consider diversification strategies that will help you better protect yourself and your net worth if you own a concentrated position. Gambling just is not worth it.

PG&E's pending bankruptcy was not the only recent story that has dominated the headlines, as the 24/7 news cycle over the past two weeks was very active:

Locally at Towerpoint Wealth, we are keeping our compliance saw very sharp. A BIG thank you goes out to Leigh Emery, IACCP® and Tom Glamuzina, CIMA® of Dynasty Financial Partners for their on-site visit last week. Their attention to detail in working with us to conduct a comprehensive compliance review was excellent, as our partnership with Dynasty continues to be both fruitful and beneficial - we feel fortunate to leverage their expertise in helping us properly manage our ever-increasing compliance obligations in a challenging regulatory environment.

Leigh and Tom (along with Dynasty's compliance department team) provide us ongoing support, practical guidance, and real-world solutions to complex compliance issues, helping Towerpoint Wealth follow best practices regarding registration requirements, annual reviews, vendor due diligence and verifications, client profiling and documentation, cybersecurity and technology solutions, as well as office policies and procedures.

The fact remains: The world is a very complicated place, and we encourage you to call (916-405-9140), email (, or Tweet (@twrpointwealth) with any concerns, questions, or needs you have. We continue to be here for you, and look forward to connecting with, helping, and being a direct, fully independent, and objective expert financial resource for you.

- Joseph, Jonathan, and the entire Towerpoint Wealth team

Government Shutdown 2019
* No IPOs. Court cases delayed. Transit services shut down. * Airport security screeners could quit en masse, grounding flights. The federal courts could stop hearing civil cases. City bu...
Read Story
Concentrated Stock
As part of your overall investment strategy, it is important to determine whether you have a concentrated equity position in your portfolio and, if you do, to evaluate the potential risks...
Read Story
Towerpoint Wealth Tax Articles
Americans may get their refunds during the shutdown, but the upcoming tax filing season is likely to be one of the rockiest in decades as the Internal Revenue Service grapples with a majo...
Read Story
We're just about to enter 2018 tax-filing season. But already the IRS has issued new federal income tax brackets for 2019. Confused? That's completely understandable. But while you're pre...
Read Story
Towerpoint Wealth Favorite Articles
Jack Bogle, dead at age 89. Mr. Bogle had near-legendary status in the American investment community, largely because of two towering achievements: He introduced the first index mutual fu...
Read Story
How much are you paying your financial advisor? Read more HERE .
Read Story
Give your internet experience a jolt of fresh energy with these easily overlooked features, options, and shortcuts for Google's browser. Click HERE to read the FastCompany article.
Read Story
Towerpoint Wealth Recommended Apps
Download the only one-stop app that delivers food, drinks and more with the tap of a button! Just plug in your address and dishes up all the local restaurants and stores that...
Read Story