The Incomplete Tale of Ken Moraif
The Plano, Texas-based RIA has a history of touting successful investment calls. A deeper analysis, however, reveals a more nuanced story.
Ken Moraif has built one of the country’s biggest RIAs highlighting his seemingly well-timed, buying and selling of stocks in radio ads, at conferences, and in the press. But there are omissions.
Moraif, CEO and senior retirement planner of Retirement Planners of America, has been named to Barron’s Top 100 Independent Wealth Advisors list for the past eight years and in 2019 was named a Financial Times Top 300 Advisor.
His Plano, Texas-based RIA manages more than $4 billion in assets for over 8,000 households, focusing on retail and high-net-worth investors, with 13 offices in Texas, California, Arizona, and Oklahoma.
Moraif hosts The Money Matters With Ken Moraif Radio Show, which first aired in 1996. The one-hour “paid, commercial programming,” broadcasts in Dallas, Houston, Austin, Los Angeles, and Phoenix.
On the program, he recommends that listeners attend his “no cost, no obligation” seminars held at hotels. During the Covid-19 pandemic, he has been steering listeners toward virtual seminars where they can learn more about his firm as well as topics including cybersecurity, social security, and retirement strategies.
Moraif’s 2015 book, Buy, Hold, and SELL! The Investment Strategy That Could Save You From the Next Market Crash, includes a chapter titled The Trouble With Buy-Hold: Why It’s Dangerous to Your Financial Health. Moraif espouses a “buy and protect” strategy, which is different than the “buy and hold” strategy recommended by the likes of Jack Bogle and Benjamin Graham.
“We buy investments, hold them when the market trends upward, and protect them when the market is dropping. Our objective mathematical strategy sounds an alarm to get out of the market when it starts to fall,” Moraif’s website states. The company cautions that its strategies and investments “may have unique and significant tax implications.”
Moraif isn’t shy about promoting winning calls. His company bio boasts in a large font: “The Financial Advisor that called the 2008 stock market crash!” Here is his 2007 call to sell and 2009 call to buy. Moraif continues to talk these up.
His website makes no mention of a June 2016 appearance on CNBC when with the Dow above 17,800 Moraif predicted that the index would fall to “around 11,500.” The Dow never fell to 17,000 after that appearance.
Six days after this story was published, the company responded with an email that said in part, “Retirement Planners of America’s top priority is our over 9,000 clients—not making all details of our proprietary investment strategy public information. Most, if not all, of the information you have asked for has been publicly communicated for years in our weekly Market Alert emails, on Ken’s radio show and in national media interviews.” RIA Intel attempted to reach Moraif by email and phone in the two days before this story ran.
In February, as stocks were falling amid mounting concerns about the new coronavirus, Moraif said “we have to kind of temper our zeal for panicking given the situation we are encountering now.” He added, “what this does speak to is the importance of diversification.”
By March, as the market tumbled further, Moraif’s diversification strategy no longer included stocks. When RIA Intel wrote that month about Moraif’s “drastic move” to jettison stocks from client portfolios, he said, “since we work primarily with people who are retired or retiring soon, we feel the risk for our clients is too high at this time, so we exited all equities for all of our clients on March 10.”
Moraif – who devotes a chapter in his book to the utility of the 200-day moving average and describes his approach as a form of “stop-loss” investing – soon looked clairvoyant. The Dow quickly tumbled 25% by March 23, the day the market bottomed.
In a video posted a day later, Moraif remained steadfastly bearish. “All I can tell you is we are so thankful that we have our strategy and that we are not sitting in the markets right now. Despite the rally we saw today, it is still a very, very risky place, we believe, and therefore we’re happy that you are not in that and that you are safely in the money market fund and not experiencing the losses that we think are going to come, and that have already come, since we did sell.”
In an April 7 Wall Street Journal article, Moraif said “this is slowly degrading like the Titanic,” adding that “the people who are buying right now don’t believe how bad this really is.” He confirmed that in addition to stocks, his clients were out of bonds, and only in cash. Moraif’s firm charges an annual fee based on assets managed “generally equal to 1.25%.”
Biblical references soon followed as stocks powered higher.
“The rally we’ve seen has been tremendous. We believe that this was a God send [sic] for people who did not get out, and they should be considering getting out now, if they haven’t. Now, we try to stay away from biblical references, but this reminds us a great deal of Noah’s Ark, and those of you who are clients, you’re on the ark with us, and there’s a great financial storm coming,” shows a transcript on Moraif’s website of comments he made in a video posted May 1.
“And, so, if you have friends, if you have family that are on the ark with us, help us help them. Send them our way; at least send them to our website. Have them attend our seminars online, our virtual seminars,” he continued.
In a video posted May 15, Moraif said, “We want to sit out all this risk and wait until we have more clarity, wait until we know what’s going to happen…We’re still sticking to our game plan of staying out until our buy signal comes and when our buy signal comes we’re still planning on only going in with only 10% of your equity allocation you might have.”
Moraif posted a video on Friday, June 5, in which he said a buy signal prompted his firm to purchase equities on June 4, a day before stocks staged a big rally. “So, we’re glad we hit our buy signal. We’re glad we did buy, and we’re glad we’re tiptoeing in.”
From March 10, when Moraif sold, to June 4, when he bought, the Dow rose 5% and the S&P 500 gained 8%.
The company’s email market alert archive shows his much-ballyhooed 2007 and 2009 calls but no other email alerts for a decade – until May 13, 2019. Just 12 days earlier, Moraif’s firm announced that it had changed its name, effective immediately, “rebranding” it from Money Matters With Ken Moraif to Retirement Planners of America. The company said the new name “better reflects” its “commitment to the 8,900 households” it serves.
However, with the new website, years of email alerts are not accessible.
In January 2020, Moraif said, “We do a fearless forecast every year and out of the 12 forecasts we’ve done, we’ve gotten eight where we’ve nailed the Dow or been so close that it was a very close miss.” In February, Moraif said, “Now, our strategy isn’t perfect. I don’t want to say that. We also said in December of eighteen to sell. It turned out not be a bear market.” Details about both forecasts cannot be found on his website.
Moraif’s Amazon author page teases the beginning of multiple 2017 blog posts. However, each link takes the reader to the Moneymatters.net homepage.
Using Archive.org, one can glimpse Moneymatters.net as it appeared in previous years. Moraif issued a sell alert in December 2018 amid a market swoon. Stocks soon soared. (Today, Moneymatters.net promotes Retirement Planners of America, Moraif’s radio show, and his podcast.)
“A full listing of our long-term market entrances and exits would clearly allow someone to calculate our proprietary investment strategy. We don’t feel it is advantageous for us to go into the details of what we view as a successful model for our clients so our competitors can replicate it. We believe that we go above and beyond by sharing what we do with tens of thousands of people every week,” Moraif wrote through a spokesperson.
He continued, “When Money Matters with Ken Moraif rebranded as Retirement Planners of America on May 1, 2019, we launched a new website with new content that reflected the new brand. Our old website had so much content that was outdated that we decided that it would be better to start over rather than to revise hundreds of pages and potentially miss something. We chose to keep the 2007 and 2009 calls because those are very significant calls in our company’s history and are discussed at length in my book, Buy, Hold, and SELL.”
Moraif’s profile page lists his business experience dating back to 1980. One job isn’t mentioned. In 2009, he joined Cambridge Investment Research, Inc. A year later he voluntarily resigned after his employer received a deficiency letter from regulators, noting that Moraif’s “statements and advertising material were inconsistent with FINRA and SEC rules and regulations.” (Since this story was published, the company contacted RIA Intel to indicate that Cambridge Investment Research has been added to Moraif’s bio.)
The financial industry has come far in terms of professionalism and transparency, with trust in American financial organizations rising last year to its highest level in more than a decade. The bad news: two out of three people don’t trust financial institutions. More can be done to narrow the trust gap between advisors and clients. But if advisors flaunt their market victories while omitting what’s happened between them, the gap may not close any time soon.
This story was updated to include comments from Retirement Planners of America.