Rancho Santa Fe National Completes Merger With Indian Wells-Based Bank
Many people who are investing strictly for retirement income need to extend their time horizon and plan to invest in growth for the rest of their lives.
That’s the consensus of two local financial analysts recently interviewed.
“With advances in medical technology, a lot of people are going to spend almost as much time in retirement as they spent working,” said E. Scott Miller, vice president-investments at Salomon Smith Barney’s La Jolla office. “They may live to be 90, so it may not be prudent to get extremely conservative and hold a portfolio that is totally bonds.”
It’s also important to allocate money among a variety of investment vehicles such as stocks, bonds and certificates of deposit, he said.
Both he and Escondido-based Richard Venegas, a CPA and certified financial planner, said a good rule of thumb for asset allocation is to subtract your age from 100 to get the percentage of the portfolio that should be invested in stocks. In other words, someone who is 60 should have 40 percent of their portfolio in stocks and 60 percent in bonds and cash.
“The next decision to make is what your tolerance for risk is,” Venegas said. “If you can’t handle a lot of volatility and risk, go with the large blue-chip stocks.”
Both investment advisers cautioned against believing that all money should be placed in bonds or bond mutual funds to produce maximum retirement income. While their day-to-day price fluctuations are negligible, inflation will significantly reduce the purchasing power of bond income over a period of just a few years.
One alternative is to own income-producing stocks that have a high-dividend yield, such as REITs or preferred stock, Miller said.
Venegas, on the other hand, said that while he likes the income from REITs with the hedge against inflation that real estate brings, preferred stocks are a hybrid investment that tries unsuccessfully to both grow and produce income.
Both of them said setting realistic goals is one of the most important factors in investing.
“You can’t have somebody who wants to retire five years from now, double his money but take no risk,” Venegas said.
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Merger Completed: Rancho Santa Fe National Bank and First Community Bank of the Desert, based in Indian Wells, have merged, the president of the combined company said.
The merger creates a $318 million bank holding company operating in North County and the desert communities of the Coachella Valley in Riverside County, said James A. Boyce, president and CEO. It’s called First Community Bancorp.
Under terms of the merger agreement approved by shareholders last month, each share of First Community was exchanged for 0.30 shares of the new First Community Bancorp and each Rancho Santa Fe Bank share was exchanged for one share of the new holding company, Boyce said. The combined company is now listed on the Nasdaq under the symbol FCBP. Each bank will operate under its own name with Rancho having branches in Rancho Santa Fe, San Diego, Escondido and Carlsbad and First Community having branches in Palm Springs, Indian Wells, Cathedral City, Yucca Valley, Joshua Tree and Twentynine Palms, Boyce said.
Bank Notes: Commercial real estate loan buyer First Commercial Corp. of San Diego has launched a Web site, FirstLiquidity.com, to serve mortgage lending and investment proprofessionals. Yvonne Jackson, first vice president of Community First National Bank in El Cajon, has been selected “Women in Business Advocate of the Year” by the San Diego office of the U.S. Small Business Administration. Point Loma Credit Union of San Diego and National City Federal Credit Union have merged, creating an institution with $333 million in assets. The new entity will operate under the Point Loma Credit Union banner.
