Wealth Management Blog

Market Turbulence Amid Coronavirus Concerns

February 25, 2020

Global equity markets have experienced a pullback following heightened fears of the spread of coronavirus (COVID-19). This has left some investors wondering what actions they need to take (if any) with their portfolios. History has shown that equity markets typically rebound quickly in the event of a viral epidemic driven sell-off. The pullbacks have historically been short-lived and have typically been followed by a continued upward trend. 1 [+] Read More

Yield Curve Inversion and Recession Threats

August 15, 2019

Concerns over an inverted yield curve combined with the threat of higher tariffs around the globe have created some equity market volatility over the past few weeks. The ups and downs of equity market volatility can certainly be unnerving for investors, but volatility in and of itself is not necessarily a bad thing nor is it necessarily a signal of an upcoming recession. In fact, since 1980 the S&P 500 has suffered an average intra-year decline of 13.9% while the market has had positive returns in 29 of those 39 years.1 [+] Read More

End of Year Market Volatility

December 18, 2018

The recent pullback in global stock markets has caused some concern that the bull market in equities is winding down. There is even some concern that this pullback is among the initial signs of an upcoming recession. To gain some better historical perspective on the recent movement in the stock market, let’s take a look at historical intra-year market declines versus calendar year returns.1 [+] Read More

Mid-Term Election Year Volatility

October 26, 2018

Historically, equity markets have been very volatile in mid-term election years. Since 1962, the S&P 500 has had an average intra-year pullback of 19% in mid-term election years.1 In fact, equity market returns have historically been very tepid before Election Day in early November. In mid-term election years since 1950, the market has returned an average of just 0.96% in the first 10 months of the year, but markets have typically rebounded in the final 2 months of the year, returning an average of 4.24% across November and December. 2 The recent market pullback has wiped out 2018 gains and the S&P 500 is now roughly flat for the year. Again, historically the first 10 months of a mid-term election year are typically flat only to see a relief rally in the final 2 months of the year once the results of the election are known with certainty. Will history repeat itself in 2018? While it is nearly impossible to forecast stock market returns over a specific time frame (particularly for a brief 2-month window), there are reasons to be optimistic going forward: Corporate earnings remain strong3: 81% of the 140 companies in the S&P 500 that have reported third quarter earnings (as of October 23, 2018) posted earnings per share that beat Wall Street expectations, with only 10.7% of companies reporting earnings below expectations. Over the last 25 years, an average of 64% of companies reported earnings that beat Wall Street estimates with 21% of companies missing expectations.4 [+] Read More

BlackRock Checks-In on European Risk & The Week in Review

September 27, 2018

A Check-in on European Risk Fears of a fiscal showdown between Italy’s new government and the European Union (EU) have roiled Italian assets this year – and renewed concerns about EU cohesion. How worried are we? We see a limited risk of near-term flare-ups but are skeptical about the Italian government’s commitment to fiscal discipline and Europe’s ability to cope with the next downturn. We see better risk-return tradeoffs in non-EU assets. Italian assets have taken a hit this year. The selloff was sparked by fears that Italy’s populist government would breach the EU’s key budget deficit limit of 3% of gross domestic product (GDP), as the two major parties in the new governing coalition had vowed to cut taxes and boost welfare spending in their campaign. Italian 10-year government bond yields spiked after the March election, while local stocks fell. See the chart above. Italian assets have recouped some losses recently, only after Rome repeatedly assured it would respect EU rules in its soon-to-be released budget. We see scope for a further recovery in Italian asset prices, but do not see them returning to pre-election levels anytime soon. Why? A number of structural factors are weighing down both Italian and European assets. This helps explain why European stocks have underperformed other global developed markets in 2018. BlackRock's Budget Base Case [+] Read More

Lord Abbett Shares Reminders on October Deadlines for Retirement Planning

September 20, 2018

If you miss or ignore any of these important, applicable dates, you could hurt your retirement finances. As summer comes to an end, don’t forget that October ushers in some critical deadlines—some of which carry penalties. To learn more about these deadlines and the dates to put on your calendar, read on. Also note that while this is not IRA-specific, October 15 is generally the last day to file an individual income tax return that’s on extension. October 1—Simple IRA Establishment This is the last date in which an employer can establish a SIMPLE IRA plan, effective for 2018. Those plans established after October 1 would not be effective until January 1, 2019, at the earliest. Notably, an exception applies for a newly established business. If you’re a new employer that started your business after October 1, you can establish a SIMPLE IRA plan for the plan year by the end of the same calendar year as soon as administratively feasible after your business came into existence. [+] Read More

4 Ways the New Tax Law Can Reduce Your 2018 Taxable Income

September 19, 2018

A recent survey from the American Institute of CPAs found that 63% of individuals who either have $250,000 in investable assets and/or $200,000 in household income were likely to tweak 2018 financial planning strategies as a result of the new tax law. Most of the respondents indicated that ‘tweaking’ their financial plans would be in an effort to reduce taxable income, and the 2018 Tax Cut and Jobs Act offers a few new methods to do just that.¹ Here are four: Lump Your Charitable Contributions Together – in the new tax law, the charitable giving deduction has remained in place for taxpayers who itemize. The thing is, however, that many taxpayers are expected to take the standard deduction in 2018 instead of itemizing, since it has jumped to $12,000 for individuals and $24,000 for married couples. One method to get over the standard deduction, however, would be what many CPAs call “bunching,” or making a few years’ worth of charitable donations in a single year. That way, you could itemize your deductions in one year, and perhaps take the standard deduction the next. [+] Read More

Investing When the Market is at an All-Time High

September 18, 2018

Should You Be Concerned About the Height of the Market? US equity markets have been trading at or near all-time highs recently as the S&P 500 and Nasdaq Composite both reached new highs multiple times in August.1 This news has led some skeptics to believe that a US stock market at a record high level could be a cause for concern. Does reaching an all-time high mean that the market is more likely to decline in the near future? After all, reaching an all-time high means we could be at the peak of the market and we could now be poised for a sell-off. Before we get too caught up in the hype though, let’s take a look back at what market highs have shown historically. Looking at the month-by-month returns of the S&P 500 (including dividends) from 1900 through July 2018, 276 of all months in this time period ended at all-time highs as compared to the monthly close of all previous months.2 Interestingly enough, of these 275 months ending at all-time highs prior to July 2018, 258 of them, or 93.8%, were followed by at least one new month-end all-time high at some point in the next year. 98.2% of all-time highs were followed by at least one new all-time high within the next 5 years and 99.3% of all-time highs were followed by at least one new all-time high within the next 10 years. [+] Read More

How Should You Handle Roth IRA, HSA, and 401k Savings? – Doug’s Quiz Corner

September 14, 2018

Saving for Retirement and Potential Health Care Costs Your friend Jody has recently started a new job and she has several options for saving for her retirement and future health care costs. Jody’s new employer offers a 401(k) with a match of up to 3% of her salary. They also offer a Health Savings Account (HSA) option. Jody lives in a state that does not tax withdrawals from HSAs for qualified medical expenses and contributions to HSAs may be deducted from taxable income for state income tax purposes. In addition, Jody also has a Roth IRA which she is using to save for her retirement. Jody is in very good health and would prefer to have a health plan that limited her upfront health care costs while allowing her to save for future expenses. She is comfortable with a high deductible plan. She is financially secure and doesn’t plan on touching the money in her Roth IRA until retirement. Assume Jody meets the eligibility requirements to participate in her employers 401(k) program, enroll in a Health Saving Account, and simultaneously has enough to contribute to a Roth IRA. [+] Read More

Nuveen Sees Economic Growth Picking Up, Believes It Should Help Stock Prices

September 13, 2018

Trade issues may continue to cause trouble but shouldn’t derail the bull market or end the economic expansion. Investor sentiment was mixed last week. Negatives included concerns about market liquidity, sparked by the rising value of the U.S. dollar and fears of contagion from some emerging markets. Ongoing trade issues also posed a general concern, particularly fears surrounding a potential new round of U.S./Chinese tariffs. On the positive side, investors focused on strong U.S. economic data that pointed to accelerating growth. The negatives won in the end, as the S&P 500 Index fell 1% for the week, after rising during eight of the nine previous trading weeks. Liquidity Concerns Appear Overstated Some investors are growing more concerned about shrinking liquidity as the Federal Reserve raises rates and shrinks its balance sheet, the value of the dollar climbs and select emerging markets such as Turkey and Argentina experience currency crises. Of all of these factors, we are most concerned about the rising dollar. The increase is not overly problematic by itself, but we would be more worried if interest rates were higher and rising more quickly and/or if economic growth were decelerating. On balance, we recognize that market liquidity is growing more constrained and the current economic cycle and equity bull market are in their later stages. But we believe such concerns are overwrought. The global banking system remains healthy and global monetary policy is still relatively easy, which suggests that a liquidity squeeze isn’t in the cards. [+] Read More

Investing Isn’t Always About Retirement Planning

September 5, 2018

When we talk about saving and investing for the future, the conversation usually steers quickly towards retirement planning – IRAs, 401(k)s, pensions, Roth IRAs, and so on. After all, retirement is when all of your careful saving, well-intentioned investing, and hard work pays off. It’s when you’re finally supposed to be able to live the good life. But investing isn’t always about retirement planning. Nor should it be. While it’s true that many people share the same goal of retiring with financial security, there are myriad of other life goals that require careful saving, planning, and investment returns. J.P. Morgan Asset Management created a graphic that effectively illustrates this point: [+] Read More

Should You Invest Your Entire Investment Portfolio in a Single Management Strategy?

September 4, 2018

We’ve all heard the term “don’t put all your eggs in one basket”. Of course, this concept can be easily applied to investing. Many sophisticated investors understand that investing in only one stock, or only one asset class, or only one anything is risky. However, the question of whether or not you should invest in just one money manager is rarely directly addressed. A key objective of diversified investing is to build a portfolio that is spread across multiple asset classes in an effort to lower the overall volatility of the portfolio. If you invest your entire portfolio in one single stock it’s clear that your entire portfolio will be tied to the fortunes, and therefore risk of that one company. Adding additional investments to the portfolio can lower the overall volatility and risk of the portfolio, especially if you are adding additional holdings with low correlations to one another. In other words, if your portfolio zigs, you want to add something that zags to get the most effective diversification benefit. To take this further, if your portfolio is made up entirely of one large cap telecom stock, adding a second and third large cap telecom stock may give you little in the way diversification benefit if each of these companies have similar factors that drive their returns. Ideally, a portfolio will be well diversified among different sectors. That way, if one sector is performing poorly, this poor performance may be offset by other sectors with stronger performance. Likewise, geographical diversification is important to help mitigate the impact of a poorly performing market. [+] Read More

Nuveen Sees Investors Looking Past Risks to Bid Stocks to New Highs

August 30, 2018

We see threats to equities, but we don't believe this bull market is over. Last week featured multiple negative political headlines for President Donald Trump that questioned the stability of his administration. The news was also dominated by signs of increased trade tensions between the U.S. and China, as well as statements from Federal Reserve Chair Jerome Powell that interest rate hikes were likely to continue. Despite the noise, however, investors continued moving money into stocks, causing the current bull market to become the longest in history and the S&P 500 Index to reach new record highs by the end of last week. It is natural to ask what risks will likely cause the bull market to end, as equity prices again reach new highs and the roller coaster action that has dominated markets since February appears to be over (at least for now). Rising protectionism appears to be the biggest theat. From a rational perspective, we think this risk should fade since trade restrictions are ultimately a lose-lose proposition. And the United States appears more willing to negotiate than President Trump’s tough rhetoric would indicate. Trade uncertainty remains a wildcard, but we still believe that an all-out trade war is unlikely. [+] Read More

How to Successfully Roll Over Your 401(k)

August 29, 2018

When a person leaves a job to retire or to join another employer, there are often decisions about what to do with your 401(k). Should you leave it where it is, and just not mess with it? Should you roll it over to your new employer’s plan? Should you roll it into an IRA? Those three questions, in fact, present three distinct options for an investor to potentially choose from. In this post, we’ll examine each option, detail the pros and cons, and in the process, hope to provide you a road map for how to successfully manage your 401(k). After all, there’s no reason for an investor to not do something with their 401(k) because it just seems too hard to move without incurring penalties. Our biggest suggestion though is that – unless it’s absolutely necessary – you resist the temptation to cash out. Cashing out of a 401(k) and taking it as a distribution means potentially incurring a sizable tax burden, and if you are under the age of 59 ½ your distribution will also be subject to an early distribution penalty of 10% unless an exemption (such as medical costs) exists. [+] Read More

Lord Abbett Dives Into the Roth Recharacterization Repeal in the New Tax Act

August 23, 2018

Recharacterization of Roth IRA conversions from traditional IRAs and 401(k)s has been repealed, but recharacterizing Roth contributions is still permitted. When Congress passed the Tax Reform Act of 1997, what was originally referred to as “IRA Plus” became known as Roth IRA after its primary sponsor, Senator William Roth (Del.). Two decades later, Roth IRAs continue to grow in popularity and assets, especially with younger investors. More than 30% of Roth IRA investors are younger than 40, while cumulative assets have grown to more than $660 billion as of December 31, 2016 (latest available), according to the Investment Company Institute. [+] Read More

Financial Best Practices for New Parents

August 22, 2018

Having a baby (or babies!) and starting a family means so many exciting, happy, but also unknown things. For first time parents, in particular, it means navigating the often head-spinning tasks of feeding, caring for, and cleaning a baby while also working, taking care of the house, and if you’re lucky, sleeping. For most new parents, there’s not enough time in any day to get everything done, and by the end of every day you’re exhausted. Making time for budgeting, financial planning, and taking steps to prepare for the child’s future can often seem so far out of reach. But at the end of the day, it must be done. A recent study found that in the first year alone, the cost of raising a baby can run upward of $21,000 – and that’s not even factoring-in any unexpected illnesses or conditions an infant might have early-on, which are quite common. From the time the baby is born until he or she turns 18, the total cost of upbringing can range from $260,000 (“no-frills”) to $745,000.¹ In short, it’s no financial walk in the park. [+] Read More

Should Investors Stress Over an Inverted Yield Curve?

August 21, 2018

Despite Apple topping $1 trillion in market value, the unemployment rate continuing to climb down, and a multitude of other positive market indicators, the Treasury yield curve has begun worrying some market analysts. That said, we don’t feel that investors should worry too much about an inverted yield curve. Here’s why… The Treasury Yield Curve as an Indicator of Recession The Treasury yield curve is typically upward sloping where long-term yields are higher than short-term yields. The longer the time to maturity, the higher the risk to the bondholder since the longer-term bonds have a longer time horizon and are therefore exposed to more potential changes in interest rates than short-term bonds. This forces investors in long term bonds to seek higher yields in exchange for accepting the added risk of a longer maturity bond. What is the Treasury yield curve? The U.S. Treasury Yield Curve compares the yields of short-term Treasury bills (those with terms of less than a year) with long-term Treasure notes and bonds (notes have terms of two, three, five, and 10 years while bonds have terms of 20 or 30 years). Yields always move in the opposite direction of Treasury bond prices because low demand drives the price below the face value while high demand drives the price above face value. The yield curve becomes inverted when short-term yields are higher than long-term yields. An inverted yield curve does not happen very often, but it has preceded every recession in the U.S. for the last 50 years.1 What Causes an Inverted Yield Curve? [+] Read More

Evaluating the Most Efficient Way to Save for a College Education – Doug’s Quiz Corner

August 17, 2018

What Are the Advantages of Using a Roth IRA vs. traditional IRA vs. a 529 Plan When Saving for College Costs? Consider this Scenario: Your friends Dan and Ashley have a son who will start college in 7 years. They would like to save some money for his college fund, but they are unsure about the best way to do so. Right now they have $10,000 in cash set aside for this purpose. Over the next few years, they’d like to continue saving more money for his college education. To make the most of what they’ve already saved, they’re considering putting the $10,000 into a 529 plan, into a traditional IRA ($5,000 into Dan’s and $5,000 into Ashley’s), into a Roth IRA ($5,000 into Dan’s and $5,000 into Ashley’s) or doing some combination of these options. Assume that Dan and Ashley will receive a full state tax deduction on a $10,000 contribution into a 529 plan. Also assume that they meet eligibility requirements to contribute $5,000 each into their traditional IRAs and/or Roth IRAs. [+] Read More

JP Morgan Releases New Guide to the Markets for 3Q 2018

August 16, 2018

Reviewing the Guide to the Markets to Understand the Current Investment Environment J.P. Morgan's Guide to the Markets for the third quarter of 2018 is now available for your review. Inside you'll find deeper insight into the current investment environment and what the investment team at JP Morgan is keeping an eye on right now. On page 19 you'll see two charts (Real GDP & Components of GDP) that show how the economic expansion is continuing at a slow but steady pace. On page 25 you'll see a chart that displays how unemployment continues to fall, which JP Morgan believes should drive up wages. And on page 7 you'll see three charts that show how although earnings headwinds should be behind us, future growth may be muted. [+] Read More

It’s a Family Affair: Talking to Your Family about Financial Planning

August 15, 2018

The “Godfather of Soul,” James Brown, had a noble vision for how he wanted his assets distributed after his passing. His will had set aside $2 million for his grandchildren’s education, and he would also set aside millions of dollars for the education of underprivileged children in Georgia and South Carolina. Eleven years after his passing, not a penny has gone to these beneficiaries of his will. The reason: ongoing legal battles, as family members challenge Mr. Brown’s will in court and multiple parties argue over the assets in his estate. More than a dozen lawsuits have been filed since Mr. Brown passed away in 2006, and one of them involves nine of Mr. Brown’s children and grandchildren suing the estate’s administrator as well as Mr. Brown’s widow, Tommie Rae Hynie.[1] James Brown carefully crafted his estate plan to focus on education and his community, yet his wishes are arguably yet to be fulfilled. It leaves one to wonder: what if Mr. Brown had gathered his entire family together, had very frank and candid discussions about his estate plan, and told his family explicitly that they were not to challenge his wishes. Where would his estate be today? [+] Read More

Dorsey Wright Releases Manager Insights for Q2 2018 Review

August 9, 2018

U.S. equities continued to rise during the second quarter. Both large cap stocks (S&P 500) and small cap stocks (Russell 2000) finished the quarter in positive territory. The same can’t be said for International stocks though. There have been quite a few head winds for international equities, and that caused both developed and emerging markets stocks to perform poorly this quarter. Heading in to the start of the year, the U.S. Dollar was in an established downtrend and that was really helping push international equity prices higher. That changed in late April, and the U.S. Dollar spent May and June in a strong rally that really had a negative impact on foreign equities. Both developed markets (EAFE) and emerging markets finished down for the quarter. We are also seeing a big rotation our of Latin America, which is one of the areas that was such a strong performer last year. While this is unfolding you should expect the character of our international holdings to change and be reallocated in areas that are holding up better. A declining U.S. Dollar isn’t a prerequisite for international stocks to do well, but when there is a sharp reversal like we saw this quarter it takes everyone time to adapt to the changes. [+] Read More

The Investment Benefit of Women-Led Businesses

August 8, 2018

A recent study of 22,000 publicly traded companies found a correlation between profitability and women in leadership roles. Specifically, when companies increased leadership positions for women from 0% to 30%, profitability increased by 15%. In the private technology sector, it was found that women-led companies were not only more efficient, but also brought in a 35% higher return on investment.[1] But statistics also show that the business world has yet to fully bridge the benefits of women in leadership roles with actual participation and investment. Recent data showed that less than 2% of all venture capital goes to female founders and fewer than 8% of investors are women. And even though American, women-owned businesses represent 28% of American enterprises – while employing 7.7 million people[1] – in the publicly-traded sphere women only hold 5% of CEO positions at S&P 500 companies.[2] [+] Read More

Nuveen Reports Fundamentals Helping Stock Prices Push Higher

August 2, 2018

U.S. Indices Are Mixed, While Corporate Earnings Draw Headlines Investors focused last week on a moderate easing of trade tensions and a solid second quarter gross domestic product report. Corporate earnings also drew headlines, particularly troubled results that ravaged Facebook’s stock price. U.S. indices were mixed, although the S&P 500 Index posted a fourth weekly gain, rising 0.6%. The energy, industrials and financial sectors were the best-performing areas, while technology and consumer discretionary came under pressure. Highlights Strong economic growth and stellar corporate earnings continue to provide reasons for investors to bid stock prices higher. Trade tensions eased a bit last week, but uncertainty over policy is keeping financial markets in check. We expect the equity market to maintain its current trading range until trade tensions ease. [+] Read More

Writing Your Will – Ensuring Your Wishes are Known and Followed

August 1, 2018

Our estate planning hats are on this week, and we have two fundamental but essential questions for readers: (1) Do you have a will? and (2) If you do, have you updated it in the last year? If the answer to either of those questions is no, we have five reasons it should be yes: Don’t Let State Laws Determine Who Gets Your Assets – when a person passes, and it is determined that he/she did not have a written will, then state laws will usually determine how the person’s property will be distributed. Though the state will generally opt to distribute property amongst family and close relatives, the fact that the state is making the decisions is problem enough. You work hard for the assets you accumulate over a lifetime. It should be up to you how those assets are distributed. [+] Read More

BlackRock Reports on China's Currency, Domestic GDP Data, and the Fed's View of the Economy

July 26, 2018

Should China's Currency Worry Markets? A slide in the Chinese yuan is sparking fears of a sharper devaluation that could rattle global markets. Are the worries justified? We see the yuan depreciating moderately in response to slower growth, financial deleveraging and escalating trade tensions. We expect China to rely mostly on fiscal and monetary tools, rather than the currency, to manage any growth slowdown in the second half. The Chinese currency posted its biggest monthly fall against the U.S. dollar on record in June - just as the trade tussle between China and the U.S. heated up. The yuan has slid 4% so far this year, with the fall accelerating since mid-June when U.S. President Donald Trump announced a 25% tariff on $50 billion of Chinese imports. See the blue line in the chart above. We do not see China resorting to a 2015-style devaluation to cushion the blow. Back then, a lack of market confidence in China’s policy framework contributed to capital flight (see the green bars), spooking global markets. Today, China has stricter capital controls in place – and improved coordination between policymakers. We believe this should give the government confidence to allow the yuan to gradually slide lower. [+] Read More

4 Healthy Financial Habits Everyone Should Have

July 25, 2018

Oftentimes when it comes to investing, there are habits/tasks we know we should do, and habits/tasks that we’d maybe prefer to do. Saving 20% of every paycheck and keeping cool during volatile markets are examples of things we should do. Splurging on a trip to Europe and selling stocks to “wait out” the downside volatility might be examples of things we’d prefer to do. For many savers and investors, there is a constant tension between these two, even though we know that the clearest path to long-term success is saving more, spending less, and investing prudently. Much like losing weight, the formula for success is fundamentally simple – but the execution and follow-through can be painstakingly hard. The fundamental question, then, is: what can we do to shift our behavior? What can we do to form better, lasting habits that lead to long-term financial success? [+] Read More

Is it Better to Save for Retirement or Pay Off Student Loans? – Doug’s Quiz Corner

July 20, 2018

Determining Priorities When Saving for Retirement and Paying Off Student Debt Consider this Scenario: Your friend Stanley has recently completed college and has just started a new job. Stanley has $40,000 in student loans to pay off at an interest rate of 7%. Stanley’s starting salary at his new job is $50,000 per year. Additionally, his employer offers a 401(k) match of 2% of salary. Stanley understands the importance of saving for retirement and would like to save as much as possible toward his future. Stanley also understands that he is $40,000 in debt and he would like to pay off his student loans as quickly as possible. He isn’t certain how he should prioritize his budget though, and he’s heard a lot of conflicting advice. When he asks you, what would you recommend: Should he focus on paying off his student debt before investing for his retirement? Or should he save as much as he can toward retirement before paying off his student loan debt? What is the probably the best way to prioritize investing versus paying off student loan debt? [+] Read More

Main Management's Q2 2018 Market Recap

July 19, 2018

Volatility Softening; Rate Hikes The second quarter of 2018 saw a marked decline in volatility from the first quarter. The prevailing feeling in the US equity markets was decidedly more positive. On the whole, the economic picture in the United States improved from the first quarter. Inflation is nearing the Fed’s target of 2% for the Core Personal Consumption Expenditures reading. The manufacturing PMI readings in the U.S. show that the sector continues to expand. The labor market also remains very tight but wage growth remains below 3%. The unemployment rate fell to 3.8% in May, the lowest level in 18 years and the non-farm payrolls have averaged a gain of 207,000 jobs so far this year. On the back of this strong data, estimates for second quarter GDP range from 3-5%, up strongly from the 2.2% estimated for the first quarter. The data is indicating that first quarter was likely more of an anomaly than a trend. The Federal Open Market Committee raised rates for a 7th time in June and conveyed a more hawkish view which indicates that 2 more rate hikes are likely in store for the rest of 2018. [+] Read More

Understanding the Basics of ESG Investing

July 18, 2018

For readers who are unfamiliar with – and maybe curious about – the concept of ESG (Environmental, Social, and Governance) investing, look no further. In this post, we’ll answer basic questions about what ESG investing is, how it came about, the pros and cons, and why it may or may not be right for you. [+] Read More

J.P. Morgan Shares Market Insights for Q3 2018

July 12, 2018

J.P. Morgan Releases the 3Q 2018 Guide to the Markets JP Morgan's Guide to the Markets for the third quarter of 2018 is now available for review. Comprised of 64 in-depth pages of charts that examine a variety of financial and economic topics, the guide illustrates: Sources of earnings per share growth Economic growth and the composition of GDP Fixed income yields and returns Global economic and earnings growth Global commercial real estate, and Local investing and global opportunities [+] Read More

How Jobs and Financial Markets Intersect

July 11, 2018

How important are jobs and the unemployment numbers to financial markets? So important that strict rules were put in place over 30 years ago in an effort to prevent the numbers from being prematurely released to the public. Generally speaking, the only people with access to the numbers – before their official release – are the staff of the agency issuing the data, and the President of the United States and his executive team. Since the jobs numbers are considered “market-moving data,” it makes sense that the data should be treated, in a sense, like insider information. Here’s how it works: The Bureau of Labor Statistics (BLS) releases its monthly employment report on the first Friday of the month, at 8:30 AM. But the night before, the president and several senior administration officials — including the Treasury secretary and the chairman of the Council of Economic Advisers — are briefed on the numbers. By rule, no one can discuss the numbers at all before the official release at 8:30 AM. In fact, the data is considered so sensitive that staffers are supposed to wait until a full hour after the release to make any public comments about it. [+] Read More

Performance Reporting: Does It Really Matter?

July 10, 2018

When you’re validating a money manager recommendation, chances are high that you’re looking for information regarding the managers performance against its own benchmark over time. While it’s up to the manager to provide this information to a third-party reporting database, many managers elect to do so, in part because it helps with transparency of their product and allows users to review the fundamentals of their strategy and to compare results alongside the appropriate chosen benchmark. Of the money managers that choose to report their performance, they typically report the investment performance of their products to institutional databases such as Morningstar, eVestment, and Informa Investment Solutions, among others. Subscribers to these databases can then compare the reported performance of thousands of different investment products and use custom filters and searches to narrow down a potential search for a product that best fits what they are looking for. By comparing managers who report to a database like this, a researcher may be able to whittle a universe of hundreds or even thousands of products down to just a handful of strategies that meet the investor’s specific criteria. But what if an investment manager doesn’t report the performance of their products to a database? [+] Read More

Lord Abbett Wants to Make Sure You Don't Overlook These Retirement Planning Milestones

July 5, 2018

Planning for Retirement? Don't Overlook These Milestones With millions of Americans owning tax-advantaged retirement accounts, totaling $28 trillion in assets, in many types of accounts—such as a 401(k), 403(b), 457, and an IRA (Roth, traditional, SIMPLE, SEP, SAR SEP, rollover, inherited, etc.), each with their own rules—it’s little surprise that slip-ups and or oversights occur all too frequently. Misunderstanding or outright ignoring a number of key dates, for example, can be costly—in terms of financial penalties and/or lawyers and accountant fees, not to mention considerable time to amend the errors. [+] Read More

The Shaky State of Social Security

July 4, 2018

If there’s a good word to describe the state of Social Security in America, it might be something like “uncertain.” And that’s a far cry from the reliable, dependable safety net that many retirees and future retirees have come to expect of the program. Many readers probably know where this is going – the familiar narrative that Social Security is underfunded, may run out of money soon, and may not be there for future generations. Even still, as the checks continue rolling in, the idea that Social Security is in trouble has a feeling of being far-fetched. For many, it feels like an issue that may indeed be true but doesn’t necessarily apply to you specifically. First signed into effect by President Roosevelt on August 14, 1935, the Social Security Act created a social insurance program designed to pay retired workers over the age of 65 continuing income after retirement. Since then, tens of millions of people have received benefits through the Social Security Act. Yet, the program was wrought with challenges from the start, and experienced financial peril as early as 1977.¹ And, despite attempts to keep it solvent, the Social Security program faces a major long-term shortfall. Surprisingly though, a large number of Americans seem unaware of this looming failure. [+] Read More

BlackRock Says Investors Should Prepare for Trade Wars, Not Panic

June 28, 2018

Trade Wars: Don't Panic, Prepare Trade tensions are here to stay. Even without a full-blown trade war, escalating frictions could weigh on business confidence – and growth. Economic fundamentals are still running strong and underpinning our risk-on view in the short term, but we advocate building increased resilience into portfolios as macro uncertainty rises. Economic tensions between China and the U.S. have shot up, confirmed by our BlackRock Geopolitical Risk Indicator. This has coincided with an out performance of quality stocks, as the chart shows. Investors appear to be heeding risks, trade included. Trade risks are not limited to China. The prospects of a North American Free Trade Agreement (NAFTA) deal have deteriorated. The European Union (EU) and others have retaliated against U.S. steel and aluminum tariffs, while the U.S. has threatened to impose tariffs on cars imported from the EU. [+] Read More

Do You Live in One of the Wealthiest Parts of the Country?

June 27, 2018

For nearly 20 years WrapManager has been headquartered in the San Francisco Bay Area, which is notoriously (based on hard data) one of the most expensive areas in the world. And while we are a nation-wide investment manager, it comes as little surprise (to us at least) that 21 of the 100 wealthiest cities in the US are in California, with most them in the San Francisco Bay Area. This fun fact may have some readers now wondering what the 100 wealthiest cities/communities are, and whether you might live in one of them! (It left us quite curious.) Well, thanks to a Bloomberg analysis of 2016 US Census data, now you can find out. [+] Read More

Nuveen Sees Investors Looking Past Geopolitics, But Trade Remains a Wildcard

June 21, 2018

While Last Week Was Very Eventful, Investors Shrugged Off Most of the Developments That Drove Headlines President Trump’s comments at the G7 meeting the previous weekend generated a lot of criticism, but investors mostly ignored any possible implications. Similarly, the U.S./North Korea summit appeared to open the way for further dialogue, but did not move the markets. Likewise, the Federal Reserve’s interest rate increase last week had already been baked into market expectations. Stock prices did decline on Friday in reaction to the U.S. announcing it would impose tariffs on Chinese goods, but equity markets were mostly flat to mixed for the week as a whole. Highlights Investors mostly ignored the U.S./North Korea summit and last week’s Fed meeting. But rising trade risks are weighing on sentiment. U.S. growth is accelerating, as is inflation. This should prompt the Fed to continue increasing rates. We see several possible risks to stocks, but believe equities should continue to outperform bonds over the next year. [+] Read More

What History Tells Us about Tariffs and the Threat of Trade War

June 20, 2018

The Tariff Act of 1930, otherwise known as the Smoot-Hawley Tariff, was signed into law by President Herbert Hoover…even as nearly 1,000 economists warned of its dire consequences. The law slapped nearly 900 American duties on imported goods and was done in an effort to boost domestic spending and to protect American companies. Sound familiar? While virtuous in its design, the outcome of the Smoot-Hawley tariffs was far from virtuous. Instead of protecting the US economy, the tariffs arguably helped fuel the Great Depression. Back in 1930, European countries responded to the Smoot-Hawley tariffs by retaliating with tariffs of their own, creating an all-out trade war that produced no clear winners. The Great Depression left no part of the US economy unscathed. Fast forward to 2018, and we find ourselves in a situation somewhat similar to the one we saw in 1930, with the US threatening – or outright imposing – tariffs on some of our biggest trading partners, in an effort to protect American companies. There is little doubt amongst economists that China does, indeed, have unfair advantages and strict requirements for American companies doing business there. Change is arguably needed. The question is, will we have to endure a trade war to get it? [+] Read More

Introducing the WrapManager SAIRSHA Global All Cap ESG Portfolio

June 19, 2018

Some investors wish to align their personal values with their investment portfolio, but there have traditionally been several stumbling blocks for investors looking to assemble a diversified ESG (Environmental, Social, and Governance) portfolio. Fortunately, WrapManager now offers an innovative ESG investment solution which seeks to provide diversification among asset classes, market capitalization, country of domicile, and ESG methodology. What are ESG criteria? Environmental, Social, and Governance (ESG) criteria is a set of standards for company’s operations that socially conscious investors can use to screen investments. Environmental criteria look at how a company performs as a steward of the natural environment. Social criteria examine how a company manages relationships with its employees, suppliers, customers, and the communities where it operates. Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights. [+] Read More

How Does a Stock Split Impact the Cost Basis of Shares? – Doug’s Quiz Corner

June 15, 2018

Understanding the Cost Basis Impact of Stock Splits & Reverse Stock Splits Consider this Scenario Your friend Bill owns a stock that just went through a 2-for-1 stock split and another stock that had a 3-for-4 reverse stock split. He is unsure how these actions will impact his cost basis per share for these stocks. Stock Split: A stock split is a corporate action that takes places when a company divides its existing shares into multiples shares to boost the shares liquidity. Although the number of shares outstanding increases by a specific multiple (such as 2-for-1 or 3-for-1) the total value of the shares held by a shareholder does not change. So, if you held 3 shares and the company held a 2-for-1 stock split you would now hold 6 shares, but the total original value would not change. Reverse Stock Split: A reverse stock split is a corporate action that happens when a company reduces the total number of its outstanding shares. A reverse stock split decreases the number of a company’s outstanding shares by a specific multiple (such as 1-for-5 or 1-for-10) and simultaneously increases the price per share. These are also known as a stock consolidation or share rollback. So, if you held 5 shares valued at $20 each and the company held a 1-for-5 reverse stock split, you would now hold 1 share valued at $100. A company may have their stock go through a stock split in order to make the stock seem more affordable to smaller investors. A company may have their stock go through a reverse split in order to meet the minimum share price for inclusion on a particular stock exchange. [+] Read More

Lord Abbett Shares More Tips on Trusts for IRA and 401(k) Holders - Part 2 of 2

June 14, 2018

Here’s the nitty-gritty on naming a trust beneficiary, plus insights on trust mechanics and taxation, and why bequeathing a Roth IRA appeals to many investors. Owners of a 401(k) plan or IRA account, depending on their estate and legacy-planning goals, have the option to name a trust as a beneficiary instead of an individual (e.g., spouse, child, grandchild, etc.). In last week’s column, I covered the strict, complicated, and cumbersome IRS rules to be followed so that the oldest trust beneficiary can use his/her own life expectancy to determine post-death payouts, including the requirement that the trust qualify as a “look-through.” So long as the trust qualifies, the “stretch” technique (whereby payments can be “stretched” out over a period of time) can be utilized. Instead, assuming the trust qualifies as a “look-through,” you must use the life expectancy of the oldest trust beneficiary for required minimum distributions (RMDs). For this reason, anyone naming multiple trust beneficiaries ideally should see that they are close in age. Further, if any of the trust beneficiaries is not an individual (e.g., estate, charity), there would be no designated beneficiary for distribution purposes, even if the trust qualifies as a look-through; thus, trust beneficiaries would not be able to stretch post-death RMDs over the life expectancy of the oldest beneficiary. If the trust fails to qualify as a look-through, then it has no life expectancy. Generally, the entire account must be distributed to the trust within five years. [+] Read More

Stronger or Weaker Dollar – Which is Better?

June 13, 2018

The dollar debate between investors, economists, and politicians has been rolling on for years. Is a stronger dollar or a weaker dollar better for the US economy and the stock market? Doing research on this question will turn up views from every corner of opinion with no definitive answer. The reality: the dollar debate is complicated, and it depends on who you ask. Opinions within the current administration even appear to be somewhat split on the issue. Treasury Secretary Steve Mnuchin said in January that dollar weakness was “not a concern,” and President Trump has hinted in the past that he prefers a weak dollar. These views appear to differ from Larry Kudlow’s, who now heads the National Economic Council. Kudlow stated recently on CNBC’s “Closing Bell” that “a great country needs a strong currency” and that he favored a strong and steady dollar. So, which is it? [+] Read More

Lord Abbett Talks About Designating a Trust as an IRA Beneficiary - Part 1 of 2

June 7, 2018

Such a strategy can be beneficial, but be sure to consult an experienced attorney and tax professional to navigate the maze of rules. In the first of a two-part series, money manager Lord Abbett tackles some of the complexities of designating a trust as an IRA beneficiary. Increasingly, clients are relying on their advisors for advanced beneficiary-planning strategies, such as naming a trust as the beneficiary of a retirement account. Designating a "look-through" trust as an IRA beneficiary can be tricky and complicated, with potentially serious tax consequences if done incorrectly. Advisors and their clients need to be aware of the nuances and appropriateness of these arrangements. Typically, qualified retirement plans and IRAs are not subject to probate. Instead, retirement assets are distributed according to account owners’ current beneficiary designation. Naming rules are very liberal, thus offering IRA owners a number of options in designating a beneficiary; in fact, any individual and/or non-individual (charity, estate, or trust) can be a named beneficiary. But if IRA assets are moved into the trust, either while the account owner is alive or at death, a distribution subject to income tax has occurred. Tip: Never move IRA assets into the trust. Doing so will result in a taxable event on the entire IRA balance. Instead, name a trust as beneficiary on the IRA beneficiary form. Why would the owner of an IRA want or need to name a trust, rather than a person, as his or her beneficiary? [+] Read More

It’s the 2nd Longest Economic Expansion in U.S. History – How Long Can It Last?

June 6, 2018

Through April of this year, this economic expansion is now 106 months old. If the US economy continues to grow through May – which seems all but assured – it would make this economic expansion the second longest in US history. Looking out even further, if the economy continues to grow through July 2019, it would become the longest period of growth in the history of the country. There’s a real chance it could happen – in a recent poll of global fund managers by Bank of America Merrill Lynch, only 13% of them thought a recession was likely in the near term. Using Corporate America (earnings) as in indicator, the numbers also support the case for more growth: in Q1 2018, the blended earnings growth rate for S&P 500 companies is 24.5% as of this writing, which would mark the highest earnings growth rate the economy has seen in nearly eight years. [+] Read More

Introducing the MILES Bond Portfolio

June 5, 2018

Investing on your own in fixed income markets can be extremely challenging. Unlike the stock market where equities trade thousands of times throughout the day on a public exchange, the bond market is notoriously difficult to navigate because trades are not placed on an exchange, they are instead placed over the counter and even the most liquid bonds available may only change hands a few times per day. Even if an investor is able gain a grasp on the fair value of a particular bond, building out a diversified portfolio of bonds is an entirely different challenge given that the minimum investment for one particular bond could be $10,000 (or more). And even if you think you’ve found the perfect bonds for you it can be challenging and time consuming to find sellers willing to sell those bonds to you at your preferred price. Investing in Fixed Income via Mutual Funds and ETFs Investing in fixed income through a mutual fund or traditional ETF solves many of these problems. Rather than purchasing an individual bond, a mutual fund or ETF buyer is purchasing a basket of bonds. By making one purchase they gain exposure to hundreds or even thousands of bonds. [+] Read More

Nuveen Sees Equities Treading Water, Although Fundamentals Look Solid

May 31, 2018

Equities Prices Are Likely to Continue Churning, But Should Eventually Move Higher Equity markets struggled to gain clear direction last week. Investors focused on geopolitical issues, particularly U.S./China trade negotiations and the on-again-off-again prospects for a summit with North Korea. Other issues included the sustainability of the U.S. and global economic expansions, rising bond yields, the spike in oil prices and Federal Reserve policy. The S&P 500 Index rose 0.3% for the week. Income-oriented sectors, technology and consumer discretionary led the way, while energy and materials were laggards. Treasury markets also gained ground as the 10-year Treasury yield fell back below 3%. [+] Read More

Avoiding Slow Failure in Retirement Planning

May 30, 2018

Editor’s Note: This article was written for the WrapManager Wealth Management blog by guest author Justin Sibears, a Portfolio Manager at Newfound Research. More information about Justin and Newfound can be found at the bottom of the article. Slow failure in investing happens when portfolio returns are insufficient to generate the growth needed to meet your objectives. No one event causes this type of failure. Rather, it slowly builds over time. Think death by a thousand papercuts or your home slowly being destroyed from the inside by termites. Traditionally, this type of slow failure was probably the result of taking too little risk. Oversized allocations to cash, which as an asset class has barely kept up with inflation over the last 90 years, are particularly likely to be a culprit in this respect. [+] Read More

J.P. Morgan Shares Global Equity Views for 2Q 2018

May 24, 2018

Taking Stock of Trends, Opportunities, and Risks At first glance, the current environment remains rather favorable for equity investors. Profitability is strong and continues to rise around the world, interest rates are still very low in most countries and valuations don’t yet look excessive, for the most part. But after an exceptionally positive 2017 and a rip-roaring start to 2018, investors have become more nervous, fearing that a breakdown in international trade relations or a monetary policy mistake could bring this economic cycle to an end. Volatility has returned to markets, with investors more inclined to punish perceived disappointments rather than celebrate successes. [+] Read More

Are Stocks Attractively Valued?

May 22, 2018

Over the past couple of years, the S&P 500 Forward P/E ratio has been above its 25-year average. This has led some market commentators to warn that equities aren’t attractively valued. A Price to Earnings (P/E) ratio is a valuation measure that shows how much investors are willing to pay for a dollar of a company’s earnings. For example, a company that has a stock price of $30 and earnings per share of $2 would have a P/E ratio of 15 ($30/$2 = 15). A reading above the long-term average is typically interpreted to mean that stocks are expensive relative to the historical average. Similarly, a reading below the long-term average is typically interpreted to mean that stocks are cheap relative to the historical average. The recent pullback in equities to start the year coupled with continued strong earnings growth has left the S&P 500 Forward P/E ratio at 16.1x at the end of April 2018. The 25-year average S&P 500 Forward P/E ratio is exactly 16.1x. This marks the first time in over 2 years that this reading has not been above the 25-year average. [+] Read More

How Does Exchange-Rate Risk Impact the Purchase and Coupon Payments of Foreign Bonds? – Doug’s Quiz Corner

May 18, 2018

Tackling Currency Risk When Purchasing Foreign Bonds Consider this Scenario Your friend Lucy is a US resident who bought a British bond at par with a £10,000 value at maturity. The bond was exactly one year from maturity at the time she purchased it and it pays a 2% semi-annual coupon. There are two coupon payments remaining including the payment at maturity. [+] Read More

BlackRock Weekly Commentary Asks Is This As Good As It Gets?

May 17, 2018

An Unusual Earnings Season With many developed market firms having reported first-quarter results, we can say without doubt it’s been an unusual earnings season. Strong beats were met with little investor cheer. The worry: Earnings are close to a peak. Yet we see more room for earnings to climb this year and next, and reaffirm our overweight to U.S. equities. [+] Read More

Legacy Planning with Donor Advised Funds

May 16, 2018

If part of your legacy and estate planning involves giving to charity, you may want to consider Donor Advised Funds (DAF). DAFs are not generally telegraphed as a solution for investors with charitable inclinations, but perhaps they should be – DAFs offer a unique approach to giving assets, potentially growing your assets, and then donating them to the charity (or charities) of your choosing – all in a tax efficient manner. So What Are Donor Advised Funds Exactly? The IRS defines them as a fund or account operated by a charitable, 501(c)(3) organization, which is known as a “sponsoring organization.” Once a Donor Advised Fund is established at a sponsoring organization, contributions are made to the account by individual donors. These contributions can range from anything to cash, or mutual funds, or commercial or residential real estate, to life insurance policies and more. Once the donor makes the contribution, the sponsoring organization has legal control over it, but the donor is generally entitled to an immediate tax deduction associated with the charitable contributions and would also maintain control over the investment management and distribution of funds from the account. [+] Read More

Nuveen Feels Reasons for Optimism Outweigh Reasons for Caution

May 10, 2018

Reasons for Optimism Slightly Outweigh Reasons for Caution Corporate earnings were in focus for much of last week. Results continued to come in stronger than expected and earnings are on track for their best quarter since 2010. But concerns remain that earnings growth may have peaked in the current cycle. Investors also focused on economic data, including another drop in U.S. unemployment and indications that global growth momentum may be slowing. Amid these crosscurrents, stocks were mixed, with the S&P 500 Index dropping 0.2% for the week. Technology was a standout performer, while telecommunications and healthcare lagged. Upside and Downside Risks May Result in Ongoing Volatility We do not believe that we are close to the end of the current cycle of global economic expansion, but the endgame may develop more quickly than many investors expect. At this point, it appears that upside and downside risks for the economy and financial markets may be pretty well balanced. [+] Read More

Don’t Confuse 401(k) Withdrawals with 401(k) Rollovers – It Could Cost You

May 9, 2018

One of the reasons investing gets confusing for most people is that there are too many rules, requirements, products/options, and terms. The website “Investopedia” claims to have a “comprehensive financial dictionary with over 13,000 terms and counting.” Insanity! The world of retirement planning – which is just a subset of investing – is not much better. But the definitions do matter. A 401(k) withdrawal, for example, could mean paying penalties and taxes that could cost you dearly if done wrong, or done at the wrong time. A 401(k) rollover, on the other hand, could provide you with several benefits and advantages for moving your retirement plan in the right direction. In this case, a single word makes all the difference – and not knowing it could cost you. [+] Read More

Should You Still Own REITs in a Rising Interest Rate Environment?

May 8, 2018

When interest rates spiked in early 2018, income related investments such as Real Estate Investment Trusts (REITs) experienced a sell off. The FTSE NAREIT Equity REIT Index returned a negative 8.2% in the first quarter of 2018.¹ Income producing investments will frequently experience a sell-off in the face of a sudden spike in interest rates. Does this mean that you should not own REITS when interest rates increase? [+] Read More

Lord Abbett Weighs in on Appreciating Net Unrealized Appreciation

May 3, 2018

Net unrealized appreciation allows for favorable tax treatment of withdrawals of an employer's stock - but understanding the rules is crucial. Of all the various ways to reduce one’s taxes in retirement, net unrealized appreciation (NUA) is often misunderstood or overlooked altogether. The rules may be complicated, but a plan participant who owns company stock and is separating from service or retiring should be aware of NUA before rolling his/her retirement account into an IRA or a new employer’s plan. Net unrealized appreciation of employer stock held in an employer-sponsored retirement plan permits gains that occurred inside the plan to be taxed outside the plan (e.g., brokerage account) at preferential long-term capital gains rates. [+] Read More

The Quick and Easy Guide to Roth IRAs

May 2, 2018

With Tax Day just behind us, it seems like a good opportunity to focus on the type of retirement income the IRS almost never meddles with: tax-exempt income! Tax-exempt income is any income that is not subject to federal, state, and/or local income. In this case, income sources that are considered to have been previously taxed and therefore, not subject to further taxation. So, here’s your “what you need to know” guide for Roth IRAs. What is a Roth IRA? A Roth IRA is a retirement account that has three essential features: The owner’s contributions are not tax-deductible; BUT, the assets in the account grow tax free over time; AND, the distributions taken from the account, generally speaking, are also tax-free once the owner reaches retirement age. [+] Read More

A Comparison of Perspectives: Nuveen & BlackRock Share Weekly Investing Outlooks

April 26, 2018

As market volatility continues to be a focus point for investors, money managers are keeping a close eye on key market indicators. This week we share the market commentaries presented by Robert C. Doll, CFA, the Senior Portfolio Manager and Chief Equity Strategist at Nuveen Asset Management, and Richard Turnill, the Global Chief Investment Strategist at BlackRock. While their analyses highlight many of the same economic and market factors, their interpretations have distinct flavors. Doll feels that while the “equity markets have been buffeted by a number of credible threats so far in 2018,” it “shouldn’t be enough to actually cause a bear market,” yet, “these risks will need to ease before stocks can regain their footing.” Interestingly, Turnill feels that “the market environment in 2018 has returned to a more ‘normal’ mix of lower returns and higher volatility,” which “reflects rising economic uncertainty and less room for growth to exceed expectations,” but should not “spell the end of the equity bull market, now in its ninth year.” Continue reading for a more detailed analysis of the current market from both Nuveen Asset Management and BlackRock Investment Institute. [+] Read More

Sell in May and Go Away?

April 24, 2018

With the month of May approaching, it’s the time of year when we’re reminded of the old Wall Street saying, “sell in May and go away.” In theory, this suggests that an investor can sell out of the stock market on May 1st and get back into the market on November 1st to avoid the months where equity returns are typically depressed. While the saying “sell in May and go away” may be catchy, is it actually sound investment advice? Over the 50 years prior to 2016, during the 6-month period from May 1st through October 31st, U.S. stocks returned an average of 2.68%, while the 6-month period of November 1st through April 30th, U.S. stocks returned an average of 8.08%.[1] [+] Read More

Tax Reform Favors Charitable Giving From IRAs Finds Lord Abbett

April 19, 2018

Qualified charitable distributions (QCD) are poised to become even more popular under the new tax law. While the Tax Cuts and Jobs Act (TCJA) generally doubled the standard deduction, while eliminating many itemized deductions, financial advisors will want to update their clients on the potential tax-saving benefits of qualified charitable deductions (QCDs) now that they have been made permanent. Remember that a charitable contribution is itself an itemized deduction, so most taxpayers will no longer receive the full deduction value—unless all other itemized deductions exceed the standard deduction amount. In other words, far fewer taxpayers will itemize, thus fewer taxpayers will be able to take advantage of the deduction for charitable giving. [+] Read More

Rethink your Retirement Strategy with Goals-Based Wealth Management

April 17, 2018

An axiom you hear often in the financial world is that “every person’s financial situation is different.” That’s undoubtedly true. What you don’t hear often enough is that every person’s financial goals are different. Goals often tend to get stripped down and over-simplified in the planning process. For example, having a goal of “long-term growth” or “to retire at 65” is useful, but it is not specific enough to build a comprehensive plan around. The end result is that over-simplified goals often result in over-simplified retirement plans. Goals-based wealth management is designed to help investors avoid the over-simplification trap. The idea is try to be as specific as possible about each outcome you want in retirement. Just about everyone wants long-term growth. But does everyone want a mountain home in Colorado and to help with the down payment on their grandchildren’s homes? Probably not. Digging into the details matters, and usually reveals quite a lot about what your goals really are for retirement. Once you’ve made a list of goals that’s unique to you, your financial advisor can work backwards to make sure your investment plan addresses each one head-on. [+] Read More

Understanding How the U.S. Taxes Foreign Dividend Payments: Doug’s Quiz Corner

April 13, 2018

How Do Tax Credits and Tax Deductions Work for Foreign Dividend Payments? Your friend Emily made an investment in the stock of a company that is based outside of the U.S. This investment was made in her taxable individual account. She received $100 in dividends for this stock (net of foreign tax withholding) last year. She had no other investments in companies outside the U.S. [+] Read More

Main Management Reviews Q1 Market Volatility and Its Impact on the Uncertainty Index

April 12, 2018

Taking A Look Back at Major Market Milestones of First Quarter 2018 The first quarter of 2018 was anything but a continuation of the market behavior we saw in 2017. After historically low volatility and positive total returns for each of the 12 months in 2017, January continued the trend of higher markets with nearly historic lows in volatility. Then came February. Registering volatility levels below 15 for the month of January, the CBOE Volatility Index (VIX) spiked 116% on February 5, the highest daily move ever recorded. On that same day, the Dow Jones Industrial Average plunged 1,175 points, or -4.6%, its largest single-day point decline in history and the worst day performance-wise since August 2011. The volatility spike was so violent that it even resulted in the shutdown of a widely-traded inverse VIX product. [+] Read More

The True Cost of Homeownership

April 11, 2018

The act of buying a first home is often framed as a wonderful, life-changing experience. And to be sure, it almost always is. But it’s the process of buying the home that’s not always so picture-perfect, and in fact usually comes with an odd set of juxtaposed emotions: joy and frustration, surprise and shock, relief and anxiety, a feeling of stability but then also a feeling of uncertainty. In short, it’s somewhat of a wild ride for first-time homebuyers! Much of the ‘negative’ side of the emotion equation stems from a common source: unexpected costs. Many first-time homebuyers simply aren’t aware of the extensive list of fees and costs associated with buying a home, which is why a recent survey by TD Bank found that nearly 50% of homebuyers incurred more than $2,000 in unexpected charges during the home buying process. 10% of those surveyed said they spent at least $5,000 more than expected.[1] [+] Read More

How to Research a Money Manager

April 10, 2018

The age of the internet has given us a lot of good information, and it’s made research easier for the average person. Wondering who won the Oscar for Best Picture in 2017, what happens to muscles as you age, or how to train a cat? The answers are just a few keystrokes away. As information becomes more and more accessible, it’s become easier and easier to learn how to DIY thousands of activities that used to be regulated to the realm of learned experts (ie. car repair, investment management, and self-diagnoses). Even for those things that you choose to outsource to an expert – and there are more than a few things that are still worth outsourcing to a trustworthy expert – there is a huge amount of power in understanding (at least the basics) how their processes work. [+] Read More

J.P. Morgan Releases 2Q 2018 Guide to the Markets

April 5, 2018

J.P. Morgan Quarterly Guide to the Markets Now Available JP Morgan's Guide to the Markets (GTM) for the second quarter of 2018 is now available for your review. The comprehensive 71-page includes detailed charts illustrating: S&P valuation measures The length and strength of economic expansions Interest rates and inflation [+] Read More

Should You Be Concerned About Rising Interest Rates?

April 3, 2018

With interest rates spiking unexpectedly in early 2018 and the Fed poised to continue raising interest rates throughout 2018, some bond investors have become very concerned about experiencing negative returns in their bond holdings. While rising rates will have a negative impact on the price return of a bond investment, this impact can be offset by the positive impact of coupon income. A rising rate environment isn’t necessarily bad for bond investors in the long run because it will lead to higher coupon payments in the future. As interest rates rise, investors will demand higher coupon payments from newly issued bonds. Also, coupon payments from existing bonds can be reinvested in these newer, higher yielding bonds. [+] Read More

Nuveen Believes Market Fundamentals Remain Solid Over the Long-Term

March 29, 2018

Are investors overly pessimistic about downside market risks? While fundamentals haven’t changed significantly, volatility has picked up recently and stocks have been trading in a broad range between their early February highs and the low established in last month’s correction. The U.S. and global economies appear on sound footing, inflation pressures appear contained, the labor market remains strong, corporate earnings are solid and interest rates have been rising only modestly. Given this divergence between our views and market behavior, we think it makes sense to focus on why we think some risks may be overstated. Read a summary of Nuveen Asset Management's weekly investment commentary below, or download as a PDF. [+] Read More

Managing Health Care Costs in Retirement

March 28, 2018

It’s the retirement planning topic that, candidly, cannot be overstated or discussed enough: planning for healthcare costs. Crucial as this subject is, it arguably does not receive a proportionate amount of attention in retirement planning conversations around the country – which is ironic, given that retirees over the age of 65 are likely to spend a sizable percentage (~13% according to J.P. Morgan) of their total retirement income on healthcare. Let’s jump right into the numbers. AARP has created a useful calculator for estimating healthcare costs in retirement, which you can access here: Estimate Your Healthcare Costs in Retirement. [+] Read More

JP Morgan Examines Economic Growth and Employment

March 22, 2018

JP Morgan's weekly update offers investors an at-a-glance summary of economic news and reports.This week's update looks at: • Economic growth • Corporate profits • Employment • Changes at The Fed Read an excerpt from this week's update below, or download JP Morgan's complete economic commentary. [+] Read More

How Does Loss Aversion Affect Your Investment Goals?

March 20, 2018

Many readers have probably heard the axiom that investors “loathe losses about twice as much as they enjoy gains.” This notion that losses loom larger than gains is a behavioral finance idea known as “loss aversion,” and it’s been around since 1979 when two economists, Kahneman Tversky, formalized the idea in a paper called Prospect Theory. To give you an idea of just how widely accepted the idea of loss aversion is, Prospect Theory is the most cited paper in all of economics and the third most cited paper in psychology. [+] Read More

What’s the Best Way to Make Tax Efficient Gifts to Adult Children? – Doug’s Quiz Corner

March 16, 2018

Quizmaster, Doug Hutchinson, presents his quiz for the month. Here, Doug helps you navigate tax efficient gifting strategies to help a friend transfer wealth to his adult son for school tuition and a future home purchase. Consider this Scenario: Your friend Gus is considering helping his son, Walter, with the cost of paying tuition and purchasing a new home over the next couple of years. Walter has two years of school left (including this year) and he is planning to purchase a home next year. [+] Read More

Nuveen Weighs the Effect of Trade Tariffs & Investors Bidding Up Stock Prices

March 15, 2018

Investors look past trade risks as stocks gain ground... President Trump’s proclamation of 10 - 25% trade tariffs dominated most of the financial headlines last week, but investors looked past the negatives to bid up stock prices. The S&P 500 Index rose 3.6% last week. Half of that gain came on Friday, following a strong labor market report that showed jobs increases and stable wages. For the week, industrials, financials, technology and materials were all up over 4%, while utilities lagged. Treasury yields also rose last week in the face of stronger economic data. Read a summary of Nuveen Asset Management's weekly market review below, or download the entire investment commentary as a PDF. [+] Read More

US Economy: The Current State of Affairs

March 14, 2018

When it comes to the current state of the US economy, it is difficult to find many problems. In fact, the data and trends appear to support the case for continued growth in the coming year – both for the economy and for corporations. Below, we dig into the data. Let’s start with the classic growth measure, GDP growth. According to the Bureau of Economic Analysis, a “second estimate” of US Real GDP growth in Q4 2017 showed an annual growth rate of 2.5%, which marked a slight but not significant drop from Q3 2017’s 3.2%. [+] Read More

In Their Own Words: Dorsey Wright Explains Selective International Investing Through Their Systematic Relative Strength Strategy

March 13, 2018

Although the US is arguably the largest and most diverse economy in the world, international diversification, where appropriate, might be to able help reduce the overall risk in your portfolio by investing non-correlated assets. While diversification does not guarantee profit or protect against loss in declining markets, international investing can be an important component of a well-diversified portfolio. [+] Read More

BlackRock Evaluates Short-Term Treasuries

March 8, 2018

Long on Short Bonds... The steady increase in shorter-maturity bond yields provides a thicker cushion against concerns around further rises in interest rates. Interest rates would need to jump more than one percentage point to wipe out a year of income in the two-year Treasury note. This is nearly double the cushion on offer two years ago – and far larger than the thin insulation provided by longer-term bonds today. We believe the short end offers relatively compelling income along with a healthy buffer against the prospects of further increases in yields. Read an excerpt of BlackRock's commentary below, or download the complete commentary now. [+] Read More

How Living Longer Should Impact Retirement Planning

March 7, 2018

If your financial advisor insisted on creating an investment plan that projected you and/or your spouse to live past 100, you might be skeptical. Few people at or near retirement expect to live to be 100. But retirees would be wise to start thinking that way! The Social Security Administration finds about one out of every four 65-year-olds today will live past age 90, and one out of 10 will live past age 95. There’s also a 4% chance one person in a couple will live past 100. That’s a low percentage, sure. But it is still a possibility very much worth planning for. [+] Read More

Brookmont Capital Management Named Top Guns Manager by Informa Investment Solutions

March 1, 2018

Brookmont Capital Management has been awarded a Top Guns designation by Informa Investment Solutions’ PSN manager database, North America’s longest-running database of investment managers. The Brookmont Dividend Equity Strategy was ranked as the #1 US Large-Cap Value Manager, #3 US Large-Cap Manager, and #5 US Equity Manager for the 10-year performance of the Dividend Equity Strategy. Learn more about the announcement, along with the measurement criteria used to determine the ranking, below or download the complete announcement as a PDF. [+] Read More

The Pros and Cons of Target Date Funds in Retirement Planning

February 28, 2018

Target date funds have been around for over 20 years, but over the last several years they have seemingly become a mainstay of 401(k) plans. For novice investors and those just starting out, the ‘target date’ feature of choosing a retirement date and “setting and forgetting” an investment strategy has understandable appeal. But for investors with larger amounts of assets under management and more complex financial situations and retirement needs, target date funds may not do the trick. Below we’ll explore some of the positive features and drawbacks of target date funds. [+] Read More

Nuveen Evaluates Environment for Market Growth, Volatility

February 22, 2018

Stocks recover ground as the focus returns to fundamentals... Stocks rebounded last week as investors appeared to return their focus to improving economic growth and solid corporate earnings. The S&P 500 Index jumped 4.4% and experienced its best week in more than five years. While stocks remain down for the month, they are back in positive territory for the year. Volatility also declined last week as markets calmed down slightly. Treasury yields rose last week as the yield curve flattened. At one point, the 10-year Treasury yield climbed to 2.94% before declining. While we may see further market volatility, it appears the worst of the recent correction is in the rear view mirror Read a summary of Nuveen Asset Management's weekly market review below, or download the entire investment commentary as a PDF. [+] Read More

Aging in Place: Retirement Planning for Home Care Costs

February 20, 2018

In the context of retirement planning, most people are naturally drawn to talking about travel, hobbies, grandchildren, and leisure activities. And for good reason – that’s what retirement is supposed to be all about! There is a necessary distinction between retirement and retirement planning, however. Planning must go beyond the ‘fun’ items and consider all expenses we may incur over time and throughout life. One of those expenses – and a major one – is the cost of health and home care later in life. [+] Read More

Stock Market Volatility: Could These Be Future Considerations for Investors?

February 16, 2018

Money Managers continue to reflect on the market volatility from last week, lessons learned, and consider what's to come. This week's post is another compilation of articles from three different money managers. Lord Abbett's day-by-day recap of last week's market ups and downs. Senior Portfolio Manager Bob Doll shares Nuveen's outlook on market volatility and other factors investors should consider, while Federated Investors focuses in on dividend investing in 2018. Lord Abbett and Company Nuveen Asset Management Federated Investors [+] Read More

Evaluating the Relationship Between Bond Investments and Rising Interest Rates: Doug’s Quiz Corner

February 16, 2018

What Happens to Bond Investments When Interest Rates Go Up? Consider this scenario: Your friend Bob is concerned about what rising interest rates could do to his bond portfolio. He asks for your assistance in evaluating his bond holdings. In his current bond portfolio, he has the following holdings: $10,000 face value AA rated municipal bond that matures in 3 months and is currently trading slightly below par. $15,000 of a mutual fund that holds investment grade, floating rate bonds. $20,000 of a short-term, investment grade corporate bond ETF which tracks a broad index of hundreds of bonds. $3,000 of a high yield bond ETF that tracks a high yield index of hundreds of bonds. Bob has a long investment horizon ahead of him and he won’t need any of the funds invested in his bond portfolio for many years. To top it off, Bob also has another $100,000 of his portfolio invested in various equity market investments. [+] Read More

Updated: JP Morgan Guide to the Markets for 1Q 2018

February 15, 2018

Updated with 4Q 2017 Data JP Morgan's updated Guide to the Markets for the first quarter of 2018 now includes financial data for 4Q 2017, including: S&P500 Earnings Per Share (EPS) Corporate earnings: capex vs. payouts Cash flow and corporate debt for S&P 500 companies This 71-page guide is full of charts that provide key insights into the labor market, housing, corporate debt and other key financial topics. Download J.P. Morgan's updated Guide to Markets for 1Q 2018, or continue reading to learn more about the information it contains. [+] Read More

The Cost of Having a Child

February 14, 2018

There are numerous planning considerations involved when starting or expanding your family -- lifestyle, career, living space…the list goes on. Arguably the financial component is near the top of the list. Most people planning for family know that it will impact their finances, but to what extent? Using data compiled by the U.S. Department of Agriculture (USDA), the estimated cost for a married couple on the West Coast (with a combined income greater than $107,000) to raise two children would be a somewhat startling $775,620. Dig-in a little further, and the data suggests that around $166,000 would go towards education/child care. The family could also spend upwards of $110,000 on food alone. The data and estimates are based on a study performed by the Department of Agriculture titled “Expenditures on Children by Families, 2015”. The USDA created a fascinating and free calculator that anyone can use to run the numbers for starting a family. You simply tell the calculator how many children you have or want, your income level, whether you’re single or married, and what region of the country you live in. And that’s it! The calculator does the rest. [+] Read More

How Inflation and Interest Rate Fears Could Have Been to Blame for Recent Market Volatility

February 8, 2018

Inflation worries caused by a single economic report have led to increasing concern that the economy may be overheated. A rapidly expanding economy could lead the Fed to increase interest rates at a faster than expected pace. The January Unemployment Report from the Bureau of Labor Statistics showed an increase in average hourly wages of 9 cents, pushing the annual increase to 2.9% from 2.6%. A couple points of caution on this report are needed. First, it is possible that some or even most of the wage increase is due to 18 states raising their minimum wage as of January 1st. If that is the case, this will likely be a one-time bump in average wages rather than a sustained trend higher. Second, there could be a temporary weather impact on this report (which won’t repeat once the weather gets warmer). Some workers were not able to work full-time because they couldn’t make it to work on certain bad weather days. If these workers were lower paid workers, that would push up the aggregate average hourly wage for January because the lower paid workers worked fewer hours. We’ll need to wait for the February, March, and April reports to see if the increase in average hourly wages is a trend or if the January report is just a blip on the radar. [+] Read More

Money Manager Commentary: Why Was the Market So Volatile This Week?

February 8, 2018

Money Managers have had plenty to say about the market volatility that started last week. That’s why this week we’re doing something different. The post below is a compilation of five different commentaries. As usual, you can read the excerpt below, or click the link to download the full version of each of the individual commentaries. Keep reading to see what the following money managers say about this week’s volatility. Lord Abbett and Company Cambiar Investors Nuveen Asset Management Federated Investors ClearBridge Investments [+] Read More

Financial Goals: The Importance of Salary Negotiations

February 7, 2018

Most readers have been down this road before. Work hard in your job and in your career, and you get to a point where it’s time to ask for a promotion or a raise (or both!). As workers and professionals, it is not outlandish to think of ourselves as assets just like stocks or real estate – we have a market value, and often times that market value increases over time because the company makes a profit or the property is in high demand. In that sense, salary negotiations are not all that different from stock investing – investors often pay a premium to own a good company, just as a company should pay a premium to have a valuable team member on staff. Negotiating a higher salary means asking for a fair value where the value is due. But there is another, crucial factor that gives importance to salary negotiations: Making more money can mean more aggressively pursuing our long-term financial and retirement goals. [+] Read More

BlackRock Commentary: An Upside U.S. Growth Surprise

January 31, 2018

A tax overhaul in the U.S. could spill over to benefit the global economy. The U.S. tax overhaul and higher expected federal spending points to faster growth just as the expansion enters its ninth year. This represents a of sea change from U.S. fiscal policy’s long drag on growth and bodes well for the synchronized, global expansion. Read an excerpt of BlackRock's evaluation below, or download the complete commentary now. [+] Read More

How to Financially Plan for Natural Disasters and Other Unexpected Events

January 31, 2018

2017 was a historic year for multiple reasons, but perhaps none more impactful than in the context of natural disasters here in the United States. 2017 was a record year when it came to cumulative damages from “weather events,” with the total cost reaching $306.2 billion. This number shattered the previous record set in 2005 of $214.8 billion, which was disproportionately caused by Hurricane Katrina in New Orleans. When people think about 2017 in terms of natural disasters, Hurricane Harvey, Irma, Maria, and the California wildfires probably come immediately to mind. But there were also hail storms in Colorado and Minnesota, drought and fire in the Plains states, three sizable tornado outbreaks, and flooding in California last February. The National Oceanic and Atmospheric Administration created this insightful graphic detailing the major weather events, many of which may still come as a surprise. In all, there were 16 weather events whose damages exceeded $1 billion. [+] Read More

Nuveen Evaluates Rising Risks, Recommends Pro-Growth Bias

January 25, 2018

We are not yet seeing warning signs that would signal a correction... Over the past 18 months, investor sentiment appears to have come full circle. In mid-2016, deflation fears reigned and investors seemed eager to embrace negative news. Since that time, however, optimism toward economic growth, earnings growth and stock market prospects have become the main investment themes. The most recent example of this trend is the incredibly positive reaction to last month’s tax bill, which has caused investors and analysts to forecast increasingly higher earnings results even as valuations are growing less attractive. Such an environment causes us to take pause and examine the risks. Earnings expectations are quite high. While we think they can still be met, the higher expectations rise, the harder it will be for results to beat estimates. Read a summary of insights from Nuveen Asset Management's Senior Portfolio Manager and Chief Equity Strategist Bob Doll below, or download the entire investment commentary as a PDF. [+] Read More

Why High Income Earners Can Still Benefit from a Budget

January 23, 2018

A high-income earner can benefit from a having a budget much like a professional athlete can benefit from having a personal trainer – even though the extra help and attention may not be completely necessary, it can serve to make a good situation even better. Much better. Consider that, simply put, two goals of closely maintaining a budget are to: Minimize waste Maximize efficiency Isn’t that what everyone wants when it comes to your hard-earned dollars? Let’s start with minimizing waste. One of the first steps in creating a budget is to itemize each and every monthly expense you incur. Mortgage payments, insurance, cable and internet, phones, memberships, subscriptions, utilities, food, entertainment, and so on. When was the last time you sat down and closely scrutinized all of these expenses? Doing so could very well reveal fat that needs trimming. [+] Read More

Navigating Your Finances Through Divorce

January 22, 2018

There’s really no way to sugarcoat it – though relationships are often filled with love and beauty, they can also be complicated and sometimes difficult to sustain over time. In recent years, January has earned the dubious honor of being nicknamed “Divorce Month,” as analysis of divorce filings between 2008 and 2011 revealed a spike in divorces in January through March.1 Life changes like divorce or separation almost always call for major financial adjustments, which can often feel like insult to injury. But it doesn’t have to be that way – working with your financial advisor can help you work through the process professionally, and can also prevent emotion from sifting into financial decision-making. That’s key to eliminating some of the financial consequences of divorce. [+] Read More

When is the Right Time to Hire a Tactical Money Manager?

January 19, 2018

Let’s start with a more basic question: what is a tactical money manager? To answer that, an investor must first understand “tactical asset allocation,” which is an active management portfolio strategy that aims to capitalize on certain anomalies and/or events in the markets. Many tactical money managers try to actively trade around such anomalies to gain a leg-up and produce what’s known as ‘alpha’ in a portfolio. Often times, the tactical money manager sees a situation in the market – whether it be bullish or bearish – and attempts to navigate a portfolio through it, with the aim of making a profit or avoiding a loss. In many cases, the manager may allocate back to the original asset mix once the ‘event’ passes, but not always. [+] Read More

Calculating the Impact of Expense Ratios on Returns: Doug's Quiz Corner

January 19, 2018

How Does An Expense Ratio Impact Returns? Consider this scenario: Your friend Martha has just invested $100,000 in a mutual fund that has an expense ratio of 1.50%. She has discovered an alternative investment that is very similar to the mutual fund she purchased but has an expense ratio of 1%. She is considering switching to the lower cost investment but isn’t sure if 50 basis points in an expense ratio will make much of a difference in her returns going forward. Assume both investments return 8% per year, each year for the next 10 years before expenses. What is the difference in ending dollar value between the mutual fund with an expense ratio of 1.5% and the alternative investment with an expense ratio of 1% at the end of 10 years? [+] Read More

BlackRock Evaluates Tax Overhaul Winners and Losers

January 18, 2018

Investors need to look beneath the surface to identify the longer-term winners... The Tax Cuts and Jobs Act is poised to boost a U.S. economy already running at full capacity. A windfall from lower taxes and incentives for capital expenditure could spur more consumer and business spending and corporate deal-making. A likely convergence in tax rates could create winners and losers, rippling across sectors and companies. Read an excerpt of BlackRock's evaluation below, or download the complete commentary. [+] Read More

Financial Planning for…Pet Owners?

January 17, 2018

For about 85 million Americans, owning a pet is a joy and marvel of everyday life. Indeed, according to the 2017 - 2018 National Pet Owners Survey, about 68% of US households own a pet. This marks a remarkable 56% increase from pet ownership levels in 1988, the first year the survey was conducted. That’s a lot of furry and fuzzy (and fishy and flighty) friends across the country. Many of these pets are considered a part of the family because of the companionship they offer. According to a 2015 poll, 95% of pet owners in America think of their animal as a member of the family; even going so far as to buy them birthday presents! This perhaps explains why for many, no amount of money can replace the happiness and health benefits of owning a pet. [+] Read More

JP Morgan Guide to the Markets for 1Q 2018

January 11, 2018

JP Morgan Quarterly Guide to the Markets JP Morgan’s Guide to the Markets for the first quarter of 2018 is now available for your review. The comprehensive 71-page guide includes 65 pages of charts illustrating: Trends across equities, the economy, the fixed income sector and international investing Returns and valuations by style and by sector Fixed income yields and returns Annual returns and intra-year declines of the S&P 500 Investor allocation by region The power of compounding The retirement savings gap [+] Read More

A New Era of 401(k) Millionaires

January 10, 2018

Fidelity Investments recently produced research that unveiled a surging population of 401(k) millionaires: women. According to Fidelity’s findings, the share of women who have accumulated $1 million or more in retirement plans has doubled over the last 12 years (based on data from 15 million retirement plan participants in Fidelity 401(k) accounts). As of the end of September 2017, about 20% of Fidelity’s 401(k) millionaires were women, which is up from less than 10% in the same period in 2005. What does it take to grow a 401(k) to $1 million and above? Many things, but if we were to narrow it to just three, it would be: consistent saving, smart investing, and time. The women in Fidelity’s research have leveraged all three to become millionaires. [+] Read More

The Final Tax Bill – Special Report

December 28, 2017

On December 22, 2017, President Trump signed into law the tax legislation known as the “Tax Bill.” The majority of the tax law’s provisions go into effect in January with just a handful delayed until 2019 or after. The signature provision of the law – and where the biggest tax cut was dealt – fell to corporations, where the tax rate was cut from 35% to 21%. A cut this sizable could have a direct impact on corporate earnings, which could flow-through to stock prices in the near to medium term. [+] Read More

JP Morgan Recaps Year-End Economic Data

December 28, 2017

JP Morgan's weekly update offers a snapshot of changes in the economy and potential implications for investors. This week's investment themes include: • Earnings growth, coupled with slowly rising interest rates, makes stocks look attractive in relative terms. • High-yield bonds look more attractive than Treasuries, but a diversified approach to fixed income investing seems appropriate given Fed tightening. • International exposure is warranted given growth prospects abroad, and a weaker dollar can enhance foreign returns. [+] Read More

Have you heard of the “January Effect”?

December 27, 2017

You many have heard people speak about the "January Effect," but what does it actually mean? In short, the January Effect is a concept suggesting that the first month of the year tends to experience a seasonal increase in stock prices. Some even take the anomaly a step further, suggesting that a positive January means a positive calendar year. With January around the corner, does the “January Effect” concept hold water? Let’s investigate. [+] Read More

Nuveen Reviews 2017 Predictions and Looks Ahead to 2018

December 21, 2017

As the year draws to a close, it appears more of our predictions are correct than not... We have been describing 2017 as a “Year of Transition." We expected improving economic growth, accelerating corporate earnings and rising interest rates. We also predicted rising volatility amid equity market leadership changes. Depending on movements of a few basis points for the 10-year Treasury yield, we are likely to get either 7 or 7½ of our 10 predictions correct. Read an excerpt of Nuveen's 2017's predictions in review, or download the entire investment commentary as a PDF. [+] Read More

Test Your Knowledge on Treasury Inflation Protected Securities (TIPS) Bonds - Doug's Quiz Corner

December 15, 2017

Protecting Principal Against Inflation via TIPS Your friend Karen is concerned about inflation increasing so she purchases $1,000 of a Treasury Inflation Protected Securities (TIPS) bond with a semi-annual coupon payment of 2%. TIPS are unique in that the principal amount ($1,000 in this case) will increase with inflation. For example, if there was 3% inflation over the first six months of the bond, the principal amount would adjust to $1,030 ($1,000 x 1.03 = $1,030). Karen isn't quite certain how the semi-annual coupon payments on TIPS work, so she asks for your help. She thinks inflation will be 2% over the first 6 months of owning the bond and 3.25% for the six months following. What is the total amount of coupon payments would she get from her TIPS bond over the first year under this scenario? $20 $20.53 $20.73 $20.80 (Answer below...) What are Treasury Inflation Protected Securities (TIPS)? According to Investopedia treasury inflation protected securities (TIPS) refer to a treasury security that is indexed to inflation to protect investors from the negative effects of inflation. TIPS are backed by the U.S. government and their par value rises with inflation - as measured by the Consumer Price Index - while the interest rate remains fixed. [+] Read More

BlackRock Shares Its Outlook on Global Investing in 2018

December 14, 2017

We see stable global growth with room to run... Setting the scene: the eurozone is enjoying its fastest economic expansion since 2011. EM (Emerging Markets) growth looks self-sustaining, even if powerhouse China slows more than markets currently expect. The breadth of the global recovery has expanded: Manufacturing figures are up in about 80% of countries, a share that has steadily increased over the past year. And U.S. tax cuts could provide a decent dose of fiscal stimulus. The caveat? Consensus expectations have mostly caught up with our GPS for G7 economies over the past year. See the "More growth, less upside" chart on page 3. This suggests less investor drive to play catch-up and embrace the positive growth outlook. Overall, we see very steady growth, coupled with still subdued inflation and low interest rates, as positive for risk assets — but with returns more muted. We expect global economic growth to chug along in 2018, but see less room for upside surprises to lift markets. Read an excerpt of BlackRock's key views below, or view the entire Global Investing Outlook for 2018. [+] Read More

Pros and Cons of Dividend Investment Strategies

December 13, 2017

Should an investor consider owning dividend stocks? If so, why? And when? In this piece, we delve into the realm of dividend stock strategies. We’ll look at why dividend stock strategies are important, how they can fit into a broader investment strategy, and why investors may want to consider them now. What is a Dividend Investment Strategy? Let’s start with the basics. Generally speaking, a dividend investment strategy is an investment strategy tailored to invest in dividend-paying companies. Asset managers who specialize in owning dividend-paying stocks often have different criteria for the types of companies they want to own. For example, some managers may want to own companies that pay a healthy size dividend, while others may care more about the company having a history of increasing their dividend payments over time. Or, perhaps the manager is looking for companies with a long history of consistent dividend payments versus companies that only recently started paying dividends to shareholders. [+] Read More

What Will the Final Tax Legislation Look Like?

December 11, 2017

The Senate and the House have passed their own versions of tax reform, but the work of making tax reform law is far from over. From here – and perhaps over the next few weeks – a conference committee of House and Senate Republicans will convene to try and iron out the differences between the two bills. This reconciliation process is no layup, but conference committee proceedings also rarely fail. The bigger question at hand may not be if Republicans can get tax reform done. But rather: can Republicans have a bill on the president’s desk by Christmas? Time will tell. As the debate rolls on in Congress, we thought it’d be a good opportunity to look at some of the key features of the bills – what they have in common, and where the biggest differences lie. [+] Read More

Lord Abbett Shares Year-End Retirement Checklist

December 7, 2017

Review your retirement plans to maximize potential savings for you and your family... Lord Abbett's 2017 Retirement Tips - Year End Checklist includes important information for anyone who turned age 50 or 70½ in 2017, and for investors taking required minimum distributions (RMDs). The article also addresses common retirement investing questions such as: - Can you make IRA contributions if you participate in an employer-sponsored retirement plan? - What can you do to optimize the tax implications of converting a traditional IRA to a Roth IRA in 2017? - Did you make a nondeductible (aftertax) IRA contribution? - If you are subject to RMDs, have you included the value of all your IRAs in the calculation? Continue reading to review some of Lord Abbett's year-end retirement tips, or download the complete checklist and review your retirement plan. [+] Read More

Are You the Beneficiary of an IRA? You May Need to Take a Required Minimum Distribution

December 6, 2017

When most investors/retirees think of Required Minimum Distributions (RMDs), they think of turning 70 ½ and having to take mandatory distributions from an IRA. The federal government allows savers to make tax deductible contributions (with tax deferred growth) to IRAs/401(k)s/qualified retirement plans throughout their working lives, but the party ends when folks turn 70 ½. Uncle Sam eventually gets his cut. There’s one feature of RMDs, however, that is less widely known. That is, if the account owner passes away and there is still a balance in the qualified retirement account, it is the responsibility of the beneficiary to take the required distributions, whether that be the spouse, a child, a charity, a trust, and so on. Not taking the required distributions can result in a 50% excise tax penalty on the amount not withdrawn, so it’s important to understand these rules. We’ll break them down more clearly for you, below. [+] Read More

Presenting WrapManager's Q4 2017 Top International Equity Money Manager Picks Report

November 30, 2017

While the United States represents the largest single contributor to global GDP, 75% of the world’s GDP is taking place across our borders in other countries. That means that from an investing standpoint, an international equity strategy can help diversify your portfolio and take advantage of the many investment opportunities available outside of the U.S. Though we have seen that historically there have been market cycles where international equities outperform U.S. equities[1], there can be a tendency for many American investors to have a home bias that favors domestic investment and largely ignores non-U.S. opportunities. [+] Read More

The Retirement Question Advisors Forget to Ask

November 29, 2017

Investor education materials focused on retirement planning tend to try and answer the essential questions: how do you get yourself retirement-ready from a savings and investment standpoint? And, when are you planning to retire? These are the critical questions that define everything from how much you defer to your company retirement plan to how you structure your portfolio. In short, digging into these questions creates a solid foundation for retirement planning. But the question missing from this foundation is arguably just as critical to the planning process, yet it often gets left out. That question is: Where do you plan on retiring? [+] Read More

Lord Abbett Explores Yield Curve Effect on US Stocks

November 23, 2017

In part one of a two-part Market View, Lord Abbett explored investor concerns about the ongoing flattening of the yield curve. A flat two-year–10-year U.S. Treasury yield curve suggests an expectation of falling short-term interest rates, or an extended period of very low short-term rates, corresponding to presumptions of a weak U.S. economy and disappointing corporate earnings. In turn, those developments would have negative implications for U.S. equity prices. To address those concerns, Lord Abbett turned to Giulio Martini, Lord Abbett Partner and Director of Strategic Asset Allocation for his views on the yield curve and its relationship to economic growth, corporate profits, and, ultimately, U.S. equity prices. Read on for an introduction to Martini's analysis, or view the entire document here. [+] Read More

How Your Wealth Manager Can Help You with Major Life Changes

November 22, 2017

Life changes come in many forms. Some are joyous occasions—marriage, the birth of a new child, a job promotion, sending a child to college, selling or starting a business, or one of our mainstays, retirement. Other times life changes are more challenging. These might include the passing of a family member, an unexpected illness, divorce, or sending a child to college. Yes, we purposely mentioned college twice! (While wonderful, we know college can be very expensive for parents and sometimes a heartbreaking transition). [+] Read More

After Tax Yield: Doug’s Quiz Corner

November 17, 2017

Quizmaster, Doug Hutchinson, presents his quiz for the month. Here, Doug discusses a strategy for getting a higher after tax yield. Consider this Scenario: Your friends George and Kathy are analyzing the holdings in their taxable joint account. They own $100,000 of an ETF that holds taxable bonds. This ETF has a yield of 2.30%. Assume George and Kathy have a federal tax rate of 28% and a state tax rate of 5%. George and Kathy are considering replacing the taxable bond ETF with a municipal bond ETF that has a yield of 1.85%. Assume that the dividends for this municipal bond ETF are exempt from Federal and State taxes. Does it make sense for George and Kathy to replace the taxable bond ETF with the municipal bond ETF in their taxable joint account? [+] Read More

Nuveen Looks Ahead to Future of the Bull Market, Tax Reform in 2018

November 16, 2017

The bull market in equities is aging but remains very much intact... For more than a year now, equity markets have enjoyed an unusual combination of low volatility and near-uninterrupted price gains due to a combination of accelerating economic growth, improving earnings, accommodative monetary policy and still-low inflation. Economic growth should continue to improve, but expectations have risen, which means positive surprises will be harder to come by. At the same time, central bank policy is slowly tightening, which could contribute to market volatility. Additionally, accelerating growth and tighter policy may finally trigger an uptick in inflation, especially in wage inflation given the low level of unemployment. Should this occur, we expect bond yields will climb, which could jolt other financial assets including equity markets. We don’t expect yields to rise unimpeded, but an ascending period of peaks and troughs looks likely. Read an excerpt of the complete commentary below, then download the entire investment commentary as a PDF. [+] Read More

Tax Planning: Don’t Forget Your Required Minimum Distributions

November 15, 2017

Republicans on Capitol Hill are currently working to make major changes to the tax code, but one tax rule does not seem likely to change anytime soon: required minimum distributions (RMDs). For most of our lives, investors have the benefit of saving into IRAs, 401(k)s, 403(b)s, etc. with tax-deductible contributions and tax-free growth, but eventually the day comes when Uncle Sam gets his cut. That starting point when the IRS requires you to withdraw from your IRA or other retirement account for is by April 1 of the year following the calendar year in which you reach age 70½ (which is 6 months after your 70th birthday). For example, if you are retired and you turned 70 on June 30, 2017, then December 30, 2017 marks the day you reach 70 ½. That means you must take your first RMD for 2017 by April 1, 2018. Every year thereafter, you have until December 31 to get it done. [+] Read More

BlackRock Asks: Where Is the US Dollar Headed?

November 9, 2017

We see a mildly stronger U.S. dollar (USD) ahead... A key U.S. dollar index has depreciated roughly 7% this year. Some are betting on further declines; speculative short positioning is at three-and-a-half year highs in the futures market. We believe this positioning buildup led to an April break in the usual positive correlation between the USD and the U.S. yield premium over other developed markets. Yet we see the USD’s broad uptrend since mid-2014 slowly resuming as monetary policy divergence re-emerges. The Fed is normalizing rates while the European Central Bank and Bank of Japan maintain easier policies, and the positive correlation between the USD and yield premium has returned. Read an excerpt of Richard Turnill's weekly commentary below, or view the entire BlackRock weekly investment commentary here. [+] Read More

Working and Claiming Social Security...At the Same Time

November 8, 2017

The traditional arch of a person’s financial life is generally to work, save, retire, collect Social Security and/or pension, and make withdrawals from IRAs/investment accounts to supplement retirement income. It’s a traditional arch, but it is also a steadfast one. However, did you know that you could actually continue working and collect Social Security at the same time? There are rules and stipulations for doing so, which we will get into below, but the short answer is that you can! This is good news, particularly given that an increasing percentage of people are choosing to work later into life, for a variety of reasons but mostly because they enjoy working and want to stay involved: [+] Read More

Lord Abbett Reviews 2018 Retirement Plan Limits

November 2, 2017

The Internal Revenue Service (IRS) has released their retirement plan limits for 2018. Lord Abbett believes the information provided to be an accurate statement of current rules; however, prospective investors should consult with an investment professional and/or tax advisor. Read on for a summary of changes, or view the entire document here. [+] Read More

Tax Prep: Gifting Strategies

November 1, 2017

With less than two months left in the year, time is running out to take actions that will apply to the 2017 tax year. By ‘actions’ we mean things like charitable giving, tax loss harvesting, and in the case of this post, gifting. Gifting and estate planning can be complex undertakings, due to the myriad of rules, strategies, and even loopholes involved. But the concept of gifting by itself can be rather simple: in 2017, you can give any number of people (it doesn’t matter how many) up to $14,000 in cash or other property without triggering any gift tax. If you include your spouse in the gift, that number jumps to $28,000. An example with actual numbers should underscore just how impactful gifting can be. Say for example that you and your spouse make annual gifts of $28,000 to each of your three children and seven grandchildren. Over a period of 5 years, you will have gifted $1,400,000 – which also reduces the value of your estate for tax planning purposes by $1,400,000. Assuming the federal estate tax rate of 40%, that could mean saving $560,000 in estate taxes (40% x $1,400,000). [+] Read More

Nuveen Asks What Matters and What Doesn’t for Equities?

October 26, 2017

Investors remain calm as equity prices move higher against a backdrop of very low volatility... Investor attention remained focused on Washington, D.C. last week. The Senate passed a budget resolution, while President Trump is set to announce who he will select as the next head of the Federal Reserve. These factors, combined with ongoing solid economic data, allowed the so-called reflation trade to continue as higher-risk financial assets gained ground. U.S. equities notched their sixth consecutive week of gains... Read an excerpt of the complete commentary below, or download the entire investment commentary as a PDF. [+] Read More

What is Tax Loss Harvesting?

October 25, 2017

The White House released an outline for major tax reform in September. There are some ambitious goals in the plan: reduce seven individual tax brackets down to three, lower the corporate tax rate by 15%, eliminate the estate tax, nearly double the standard deduction while eliminating most itemized deductions, and much more. There could be some major changes ahead. But since so much remains up in the air as Congress debates the issue and actually writes the new law, it may not be worth diving into the details just yet. Instead, we’ll focus on a tax issue that is fast approaching for many investors: tax loss harvesting in preparation for your next tax filing. [+] Read More

Traditional vs Roth IRA Strategies: Doug’s Quiz Corner

October 20, 2017

Quizmaster, Doug Hutchinson, presents his quiz for the month. Here, Doug compares traditional IRA versus Roth IRA contribution strategies. Consider this Scenario: Your friend Max would like to contribute money to a retirement account and he is determining whether to contribute to a traditional IRA or a Roth IRA. Assume Max is eligible to contribute to either of these options. Max has a current income tax rate of 25% and he expects to face an income tax rate of 25% after he retires. [+] Read More

Dorsey Wright Evaluates Low Volatility, Global Investments

October 19, 2017

The lack of volatility is puzzling considering current events... This year, one of the big market stories has been the lack of volatility. Pullbacks have been incredibly shallow as the market has been grinding upward this year. As of the end of the quarter, it had been about 10 months since the S&P 500 had experienced a 3% drawdown or larger. The extremely low volatility is bringing more investors back to stocks, and making investors less fearful of equities. These are both good things for momentum, which is performing well this year. Read the entire Dorsey Wright Q3 market commentary here. [+] Read More

High Earners Still Need an Investment Plan

October 18, 2017

What does it take to be a top income earner in the United States? We found some data recently that breaks it down, telling us just how much you’d need to earn in order to give you a place at the top. Here are some of the numbers by age. In other words, you’d need to earn this much each year to be a top 1% earner in the US:1 Age 35: $291,000 Age 45: $458,000 Age 55: $453,000 Age 64: $473,000 Having a high income may seem like it’s an automatic for also having financial security, but it isn’t. High earners still need an investment plan. Making a lot of money also often means having high living expenses, which makes management all the more important. Case in point: multi-millionaires who find themselves bankrupt far too early in retirement – and sometimes even before they retire. We’re going to pick on professional athletes here, for two reasons: 1) they often qualify to be top 1% earners in their active years; and, 2) there are numerous instances where financial mismanagement led to bad outcomes. [+] Read More

Protecting Your Online Identity: Simple Steps for Better Internet Security

October 13, 2017

In light of the increased security concerns caused by the Equifax data breach and the increased extent of the Yahoo data breach, we feel it is important to remind clients of ways that you can protect yourself from identity theft and other data theft. Below are four easy steps that you can take today to help protect your internet security. [+] Read More

JP Morgan Guide to the Markets for 4Q 2017 Released

October 12, 2017

JP Morgan Reviews Investing Opportunities & Rate Expectations JP Morgan’s Guide to the Markets for fourth quarter 2017 is now available. This comprehensive, 60+ page guide includes insightful charts illustrating: Corporate profits and financials Fixed income sector returns Local investing and global opportunities Federal funds rate expectations [+] Read More

Do You Have a Retirement Income Plan? Most Retirees Don’t

October 11, 2017

The key word in the title of this article is “income.” Many retirees believe they may have a retirement plan (at least generally speaking), but when it comes to having a retirement income plan, the numbers don’t look so good. According to new research from LIMRA Secure Retirement Institute, “only 35% of retired clients and 38% of pre-retirees who work with an adviser have a formal written retirement income plan (emphasis ours).”1 Do you have one? Not having a formal, written retirement plan and retirement income plan may decrease the confidence many retirees feel about having enough money in retirement. Unfortunately, with decades of retirement education and growth in the advisor business, retirees are not getting much more confident about retirement security. According to the Employee Benefits Research Institute, in 1993, only 18% of workers felt “very confident” about being able to afford a comfortable retirement. Fast forward to 2016, and there are still only 18% of workers who feel “very confident.”2 When considering that the Dow Jones Industrial Average has risen more than 500% over the period from January 1993 to December 2016, one would think that retirement confidence would be higher. But something is clearly amiss. [+] Read More

JP Morgan Assesses Future Asset Allocation

October 5, 2017

Given our positive view on growth, we maintain a pro-risk tilt in our asset allocation. As the U.S. economy moves into late cycle, we are naturally more attuned to any dip in higher frequency data, but currently we see little risk of recession in the next 12 months. As a result, we remain overweight (OW) stock-bond and underweight (UW) duration—albeit with slightly lower conviction in light of the failure of inflation expectations to advance alongside other macro data. Correlation across regional indices remains low, favoring broad diversification across global equity markets. But at the margin our most favored regions remain the eurozone and Japan, ahead of the U.S. and emerging markets, with the UK our least preferred region. In bond markets we expect yields to grind higher over the fourth quarter and see U.S. Treasuries outperforming most other sovereign markets, in particular German Bunds, which look vulnerable given the robust level of eurozone growth. Elsewhere we remain neutral on credit, real estate and commodities, and UW cash. In a distinctly mature credit cycle, returns from credit will come from carry rather than capital appreciation; nevertheless, we expect credit to outperform government bonds even if it lags stocks. Overall, we take a pro-risk stance in our portfolios but are mindful that with the economic cycle maturing, liquidity and diversification are paramount. Read the entire market commentary here. [+] Read More

How Do You Know it’s Time to Hire a Wealth Manager?

October 4, 2017

For some investors, hiring a wealth manager is a no-brainer. Whether it’s because finance and investing was not your chosen profession, or because you enjoy spending time doing other things, managing your financial life may feel like something best handled by a professional. Easy enough. For others, the decision to hire a wealth manager or financial advisor is not as clear-cut. There are “do-it-yourselfers” who prefer self-managing; people who keep all of their retirement assets at the bank or in the old company 401(k) plan; and even those who want to hire an advisor but simply don’t understand enough about the wealth management profession to know where to start (if that’s you, start here.) [+] Read More

An Initial Look at Trump’s Tax Reform Framework

September 28, 2017

After campaigning hard for the importance of tax reform, President Trump and his advisors released an early stage tax code change framework on Wednesday, September 27. From his podium in Indianapolis, IN, Trump explained that his framework would cut taxes for businesses and individuals and potentially deliver a “middle class miracle.”[1] As he put it, “…we will cut taxes for the everyday, hardworking Americans…”[2] While the House and Senate will still have significant work to do to in order to finalize the tax plan and craft new legislation, the initial review of Trump’s framework has some substantial changes to the current tax law, which could represent the largest tax reform change passed in 30 years.[3] [+] Read More

ClearBridge Investments Looks Beyond FAANGs to Semiconductors

September 28, 2017

Tremendous growth in software functionality has only been enabled by tremendous growth in semiconductor performance... U.S. equity market returns over the last several years has been driven by the performance of a select group of large cap information technology and Internet stocks that have come to be known as the FAANGs, for Facebook, Amazon.com, Apple, Netflix and Google (now known as Alphabet). Our investment teams have shared concerns about the crowding effect that the outlier performance of this group has created. While these companies possess unique business models and maintain strong long-term growth potential, we believe more attractive current opportunities may be found in looking beyond the FAANGs to other areas of technology, such as semiconductors. Read an excerpt of the complete commentary below, or download the entire investment commentary as a PDF. [+] Read More

Fair Weather Money Manager Fan? What Data Tells Us about Short-Term Investments

September 27, 2017

Just about every sports fan knows the joy of rooting for your favorite team when things are going well, when the wins pile up. But the opposite can also be true – in those years when your team is “rebuilding” (which is really a euphemism for losing all the time), it’s easy to jump ship and wait it out elsewhere. If you think sports fans are fickle or “fair weather,” investors arguably take it to an entirely new level. The research firm DALBAR tracked how often investors “switch teams,” or how often they move from mutual fund to mutual fund and/or strategy to strategy. They collected some fascinating data in the research process, and we’ll dig into their findings below. [+] Read More

Accepting Bond Tender Offers: Doug’s Quiz Corner

September 22, 2017

Quizmaster, Doug Hutchinson, presents his quiz for the month. Here, Doug discusses the complexities of bond tender offers. Consider this Scenario: Your friend Patricia has received tender offers on two bonds that she owns. A tender offer is a formal offer to buy bonds from the current holders at a specified price. [+] Read More

Nuveen Expresses Confidence in Bull Market

September 21, 2017

Despite Roadblocks, Expect the Bull Market to Continue... Following a down week for stocks, investors adopted a risk-on approach, moving back into equities. While the damage from Hurricane Irma was devastating in terms of human costs, the economic impact was less severe than feared. The S&P 500 Index rose 1.6% last week and all major U.S. indices reached new highs. As part of the broader outperformance trend among risk assets, Treasuries were weaker across the yield curve last week, the dollar rose slightly, gold prices fell and oil moved higher. Read an excerpt of the complete commentary below, or download the complete commentary as a PDF. [+] Read More

The Financial Risks of Cognitive Decline

September 20, 2017

When it comes to investment planning and setting up plans for life in retirement, it would be wonderful if we could just focus on growth, investment, spending, and financial security for you and your family. Those are the exciting features of planning that – while not always easy to work through – are challenges that are rewarding to solve. But proper investment planning should also include addressing issues that are often difficult for families to discuss. One of those issues is cognitive decline. According to State Street Global Advisors, only about 39% of investors believe they have a suitable plan if their decision-making ability becomes diminished. That number may be low because of the following statistic: while 85% of advisors report encouraging their clients to have a plan in case of cognitive decline, only 41% of investors think they actually need one. [+] Read More

BlackRock Sizes Up Hurricane Relief and the Fiscal Cliff

September 14, 2017

We see more political uncertainty ahead... Washington averted an imminent fiscal crisis, but the result could be a steep fiscal cliff in December or early 2018. We see heightened political uncertainty toward year-end as the U.S. Congress must revisit lifting the federal borrowing limit and funding the government. We could see this delaying and reducing the scope of any tax reform. Read an excerpt of Richard Turnill's weekly commentary below, or view the entire weekly investment commentary here. [+] Read More

Retirement Investing: Needs vs. Wants

September 13, 2017

The conventional wisdom is that once a person retires, they should pare back exposure to stocks and focus instead on a more balanced, conservative approach. Perhaps the most-used description for this type of retirement strategy is “capital preservation.” But what if, somewhat contrary to intuition, capital preservation actually meant that investors needed to maintain a significant allocation to stocks? This is where retirees may have the tendency to mix-up their investment needs vs. wants. Retirees tend to want steady, conservative returns, which makes the argument for allocating more to bonds and cash. But what retirees may actually need is long-term growth to account for cash flow needs and rising expenses over time, which makes the case for allocating more to growth assets, like stocks. [+] Read More

Concerned About the Equifax Breach? Here’s How to Freeze Your Credit

September 11, 2017

Over the past few days we’ve had many clients mention their concerns about the Equifax data breach, which got us talking about how to protect your credit if it’s possible your personal information is at risk. And, as the number of impacted Americans continues to grow, it’s worth knowing what options you have to protect yourself from fraud. Equifax built a Cybersecurity Incident website for you to see if your personal information has been impacted - check to see if your security was impacted here. While some people are considering Equifax’s own credit monitoring service, another option that you have is to freeze your credit across all three major reporting agencies. But what does that mean, and how do you do it? A Quick Explanation Freezing your credit basically places restrictions on who can view your credit report. Once your credit is frozen only yourself, existing lenders, or their debt collectors will be able to see it, according to federal regulators. (Government agencies carrying out a search warrant or subpoena are still able to access your credit records as well.) [+] Read More

Nuveen Estimates Hurricane Harvey’s Impact, Risks Ahead

September 7, 2017

We advocate sticking with a pro-growth investment stance... The devastation caused by Hurricane Harvey dominated the news last week. From an economic perspective, damage to the region’s energy infrastructure is likely to cause local disruptions and contribute to a temporary increase in gasoline prices. But we expect the broader economic and market effect to be limited. Equity prices rose for a second straight week, with the S&P 500 Index up 1.4%. Health care, technology and industrials led the way, while financials and bond proxies such as telecommunications and utilities fared the worst. Read an excerpt of the complete commentary below, or download the complete commentary as a PDF. [+] Read More

What Investors Need to Know About the Disposition Effect

September 6, 2017

Part of being an astute investor involves hours of analyzing the capital markets, actively researching the companies and strategies you invest in, and staying up to speed on current events. That’s plenty of work on its own. But there is another aspect to smart investing that generally receives less attention but is arguably equally important. It involves studying ourselves – our behaviors and tendencies as investors, how and why we make investment decisions, and how those decisions may impact our returns over time. Most of this research falls within the field of Behavioral Finance, which challenges the assumption that “individuals act rationally and consider all available information in the decision-making process.”1 Investors rarely do those things, and that’s why studying behavioral finance can be so beneficial. The general thinking is that the more we understand the decision-making process, the better equipped we can be to help investors avoid common mistakes while simultaneously establishing guidelines for a disciplined investment process. [+] Read More

5 Things to Know about Health Savings Accounts

August 30, 2017

With all the hoopla about health care over the last several months, you may have heard the term “Health Savings Account” tossed around here and there. In short, Health Savings Accounts (HSAs) are tax-exempt accounts available for people in certain high-deductible health plans. Since people with high deductible health plans by definition incur significant out-of-pocket expenses before the insurance kicks-in, HSAs allow them to plan ahead by socking away money in a tax advantaged way.2 Think of it as having a savings account for your medical needs. As we will cover below, however, HSAs are not for everyone, and there are other features you should understand if you’re exploring them as part of your plan. Here are five of those features: [+] Read More

Nuveen Weighs Effect of Political Uncertainty on Stocks

August 24, 2017

Escalating Political Uncertainty Drags on Stocks As last week began, attention was focused on attempts to dial back tensions between the United States and North Korea. As the week progressed, investor focus turned to the backlash over President Trump’s comments in the wake of the violence in Charlottesville. Despite good economic and earnings news, the negatives won out and stock prices fell for a second week, with the S&P 500 Index dropping -0.6%. Global financial markets are enduring a bumpy phase, largely due to rising geopolitical tensions and domestic political uncertainty. While the damage to equity markets and other risk assets has so far been minor, investors are focusing on potential downside risks that could trigger additional damage. Read an excerpt of the complete commentary below, or download the entire investment commentary as a PDF. [+] Read More

What If You Have to Retire Earlier Than Expected?

August 23, 2017

Life is full of detours and unknowns, and in many cases retirement planning is too. Sometimes people are forced to change jobs, to give financial help to family members in need, or to buckle down and save less during an economic downturn. But other times the detours are welcomed ones: a person relocates for a better paying job, gets the opportunity to do contract work during retirement for extra income, or maintains good enough health to work later into life. The bottom line is that retirement planning is different for everyone. The path to retirement we ultimately take may not be the one we originally planned. [+] Read More

BlackRock Evaluates Indifferent Investor Sentiment

August 17, 2017

Investor sentiment shows more signs of fatigue than euphoria... Equity markets have greeted positive earnings reports largely with indifference. Investor sentiment shows more signs of fatigue than euphoria, even as stock markets have repeatedly reached new highs this year. Yet we see solid fundamentals and returns in the second half, with the latter largely tracking earnings growth. Read an excerpt of Richard Turnill's weekly commentary below, or view the entire weekly investment commentary here. [+] Read More

Foreign Investments Return: Doug’s Quiz Corner

August 15, 2017

Quizmaster, Doug Hutchinson, presents his quiz for the month. Here, Doug discusses returns on foreign investments. [+] Read More

Do Men and Women Invest Differently?

August 15, 2017

There are countless studies out there trying to answer questions about how – and why – men and women invest differently. Do men tend to take more risks? Are women better at committing to a long-term strategy? Should advisors take different approaches with men and women as a result? A comprehensive study performed by Merrill Lynch offers a somewhat surprising, but also no-nonsense explanation when it comes to finance and investing—men and women aren't all that different. Human beings, no matter what their gender, all share a common trait that can affect how we make investment decisions – our emotions. On the other hand, the strengths of a good investor, such as patience, analytical attention to detail, and long-term focus are common across both men and women. In this post, we will take a look at some of the findings of Merrill Lynch’s research paper, titled “Women and Investing: A Behavioral Finance Perspective.” Perhaps the most important finding of them all, however, comes straight from the lead researcher and Head of Behavioral Finance at Merrill Lynch Wealth Management, Michael Liersch: “What should really drive investment decisions are your financial priorities, and those are very personal. They have nothing to do with gender.” [+] Read More

Nuveen Evaluates Economic Growth, Recession Risk

August 10, 2017

Risks Appear Tilted to the Upside for Stocks Although economic data was positive and earnings continued to be strong, U.S. equities were mixed last week. Markets appear to be in a holding pattern, with investors waiting for more news on Federal Reserve balance sheet normalization and tax policy. For several months, volatility has remained low while equity prices have grinded unevenly higher. This has prompted many investors to look for signposts that could cause a change in direction. Possible dangers could include the end of emergency zero-interest-rate policies, high global debt levels, slow productivity growth or political instability caused by such issues as widening income inequality or rising protectionism. Read an excerpt of the complete commentary below, or download the entire investment commentary as a PDF. [+] Read More

What is the Federal Reserve?

August 9, 2017

The Federal Reserve (Fed) met on July 25 and 26 with little fanfare, since they did not end up raising interest rates. In a statement, the Fed said the job market continues to strengthen, but inflation remains somewhat of a concern. Inflation metrics have fallen below the 2% threshold the Fed considers healthy, and as such the central bank will be “monitoring inflation developments closely.” The Fed gets quite a bit of media attention, and it got us thinking: for many normal investors and retirees, the Federal Reserve is probably an institution shrouded in mystery. What is the Federal Reserve? How did they come into existence? Are they as important as everyone says they are?1 There is no way we can cover all of that ground in this post, but we figured offering four little-known facts about the Federal Reserve could at least help readers get to know the institution a bit better. Here they are: [+] Read More

Millennial Investors and Investing Psychology

August 3, 2017

Most investors would readily admit that past experiences in the markets tend to influence their decision-making over time. At best, our mistakes can inform us what to avoid in the future. At worst, we allow certain experiences to create unproductive biases in our mindset. A good example of such a bias could be the tendency of Depression-era investors to avoid stocks altogether following that time period, given the scars left behind from such a difficult experience. The problem with such a bias, can be the creation of an even bigger opportunity cost in its wake—the opportunity cost of not participating in the gains that followed. [+] Read More

BlackRock Digs Into the Metals and Mining Rally

August 3, 2017

We see stability in commodities prices but are selective in related stocks and bonds. Industrial metals have generally outperformed their commodity peers this year, with copper prices hitting a two-year high last week. A big reason for the rally: production has been falling from last year’s levels. This is a result of firms cutting capital expenditures after multi-year price slides. Read an excerpt of Richard Turnill's weekly commentary below, or view the entire weekly investment commentary here. [+] Read More

Geneva Reviews Fixed Income and Dividend Investing

July 27, 2017

"Dividend‐ growth stocks remain more attractive than most high‐dividend‐yield stocks..." Investor and consumer confidence remained optimistic in the second quarter as capital markets continued an upward advance and volatility remained dampened. The global economy continued to gain momentum as all the world’s largest economies showed signs of growth while the U.S. consumer remained in good shape. Despite an encouraging backdrop there are some areas that continue to struggle such as traditional retail and energy, which we will continue to monitor as we construct our portfolios. [+] Read More

Announcing: WrapManager's Q3 2017 Top Equity Money Manager Picks

July 26, 2017

There are thousands of money manager strategies out there, but not every money manager is a good fit for every investor. If you’re trying to find the money managers or investment strategies that are right for you – and that could help you reach your investment goals – you might feel totally overwhelmed going through all the different options. We’d like to help clear some of the confusion for you. Each quarter WrapManager’s Investment Policy Committee (IPC) compiles a short list of money manager picks in order to help investors like you discover and evaluate different money manager strategies. These investment strategies encompass a wide range of asset classes and investment disciplines so you are introduced to as many new strategies as possible. This quarter, the WrapManager IPC has selected four strategies. [+] Read More

Main Management Reviews Market Performance in 2Q 2017

July 20, 2017

"Some Highs Despite Low and Slow Economy..." The second quarter of 2017 saw markets make new highs despite lackluster economic data. The Trump administration has seen strong market performance but has been unable to get two of its main goals coming into the inauguration – healthcare and tax reform – off the ground. This lack of action caused some hesitation in the markets, and when coupled with uninspiring economic data, has resulted in a more uncertain outlook heading into the second half of the year. [+] Read More

How “Familiarity Bias” May Impact Your Investment Decision-Making

July 18, 2017

It’s no secret that investors have a tendency to "get in their own way” when it comes to making investment decisions. As we have written before, you may not be your own best financial planner. The idea that investors often make emotional or ill-informed decisions is not an attribute that is just widely-known and accepted—there is actually an entire field of research devoted to it. This field of research is known as Behavioral Economics or Behavioral Finance, and people in the field study “inherent biases that plague individual investors.” These biases are often ones that are difficult for individual investors to come to terms with and overcome. Robert Stammers, the Director of Education for the CFA (Chartered Financial Analyst) Institute, frames the role of investor behavior on decision-making into three behavioral biases: overconfidence, familiarity, and anchoring.1 We will focus on the familiarity bias here. [+] Read More

Anticipating Inverse ETF Returns: Doug’s Quiz Corner

July 18, 2017

Quizmaster, Doug Hutchinson, presents his quiz for the month. Here, Doug teaches a lesson on antcipating inverse ETF returns. Consider this Scenario: Your friend Gary is feeling bearish on the stock market so he purchased $10,000 of an inverse ETF. The inverse ETF he purchased aims to return the opposite of the daily return of the S&P 500 (for example, if the S&P 500 goes down 1% on a given day, the inverse ETF should go up 1% on that day). There are several reasons why an inverse ETF may not be exactly the inverse of the index on a given day (expense ratio of the ETF, tracking error, trading costs, etc.) but for the purposes of this example, assume that Gary’s inverse ETF returns exactly the inverse of the daily returns of the S&P 500. [+] Read More

12 Ways to Define the Investment Goals that Matter to You

July 13, 2017

Being a prudent saver and a savvy investor can help you accumulate the assets you need for retirement. In some cases, that can mean a formula as simple as saving 20% of all your lifetime earnings and hiring a trusted adviser to build you a diversified investment portfolio. But for those who want to take the planning process a step further, it can be beneficial to define the investment goals that matter to you. This exercise can provide you clarity to answer not the question of how to save and where to save, but why to save. [+] Read More

Federated Investors Hopeful About Stocks’ Summer Doldrums

July 13, 2017

While extremely low headline volatility of late may be putting some investors to sleep, beneath the surface, there has been a healthy and ongoing rotation among market sectors that should continue into the fall, pulling the S&P 500 ever higher toward our near-term 2,500 and long-term 3,000 targets. The reasons are three-fold: the economic backdrop is still solid; credit and liquidity conditions remain good; and politics and the Fed appear set to work together and revive the “Trump trade” in coming months. So stay long stocks. Add to industrials, financials and health care. And don’t abandon tech yet—there’s more to come in the next 12 months. Continue reading for additional insights: [+] Read More

Plan Now for Education Later: 529 College Savings Plans

June 29, 2017

With the cost of education continuing to rise, and the requirements for minimum workforce entry showing no likelihood of decreasing the importance of a post-secondary education, it’s more important than ever that college costs are considered and incorporated into your budget as early as possible. For all the readers who have children, grandchildren, nieces and nephews who are a constant source of excitement and joy, making sure these children get a world-class education is of paramount importance. But paying for college is a completely different ballgame. [+] Read More

BlackRock Examines Momentum Trading in 2017

June 29, 2017

We like momentum in today’s economic environment, even if its performance could be prone to short-lived reversals. The momentum style factor — stocks that are trending higher in price — has been on a tear in 2017. Sustained above-trend economic growth and solid earnings prospects could help extend the gains, but it may be a bumpy ride. Momentum has historically outrun the broader market, but with periodic sharp drops. The biggest dips in its relative performance have coincided with recessions and financial crises. Our research shows momentum tends to perform best during steady economic expansions — and we see this cycle having ample room to run. Read the three key points of BlackRock's weekly commentary below, or view the entire three-page weekly investment commentary now. [+] Read More

What is Probate? Why & How to Avoid It

June 22, 2017

Back in mid-May, I wrote an estate planning article about the late artist and global music phenomenon, Prince. The objective of the piece, amongst other things, was to bring to light the problems, expenses, and hardships that can result when a high net worth individual does not adequately prepare an estate plan. In Prince’s case, he did not even have a last will. What followed in Prince’s case was nothing short of troubling. More than 45 people came forward to the court claiming to be related to Prince as a spouse, child, sibling, or some other relative. Prince’s estate then spent over a year in probate court, and at the end of the day it has been reported that his $200 million estate is expected to be cut in half by federal and estate taxes. Can you imagine paying $100 million in taxes? It’s unfathomable! In all likelihood, this outcome could have largely been avoided with some sound financial and legal advice during Prince’s lifetime. [+] Read More

Nuveen Decodes Mixed Economic Signals

June 22, 2017

Economic Data and Confidence Levels Offer Mixed Signals In recent months, we have seen increased softness in so-called “hard” economic data, including retail sales, automotive production and employment. At the same time, “soft” data such as business confidence measures point to an expectation of economic acceleration. In our experience, these disconnects typically result in a move in the soft data, suggesting confidence measures could be due for a setback. Should this happen, it could provide a headwind for equity prices. Key Points: Economic data has trailed off in recent weeks, but we see reasons to expect a renewed acceleration. In the near-term, confidence levels could diminish, providing a headwind for stocks. Nevertheless, we believe it makes sense to maintain a pro-growth investment stance. Read an excerpt of the complete commentary below, or download the entire investment commentary as a PDF . [+] Read More

Which is Less Volatile, Stocks or Bonds? Doug's Quiz Corner

June 20, 2017

Quizmaster, Doug Hutchinson, presents his quiz for the month. Here, Doug explores portfolio volatility. Consider this Scenario: Your friend Margaret has recently inherited some money and is considering how to invest it. Her current portfolio is invested exclusively in long term US Government bonds. She is leaning toward investing the inheritance in more long-term US Government bonds, but her friend Tiffany has suggested that Margaret invest this inheritance in a diversified portfolio of stocks instead of buying more bonds. The inheritance will make up 10% of her total portfolio. Margaret isn’t so sure and she tells Tiffany, “I’m not comfortable with volatility in my portfolio. I want to have as little volatility as possible. So I’m leaning toward just adding more long-term US Government bonds since bonds typically have less volatility than stocks.” If her goal is to have as little volatility as possible in her portfolio – which investment option for the addition, is most likely to achieve Margaret’s goal: 1) more long-term US Government bonds of the same duration as her existing holidngs or 2) a diversified portfolio of stocks? [+] Read More

JP Morgan Evaluates Implications of an Interest Rate Hike

June 15, 2017

After a brutal recession and a painfully slow recovery, the U.S. economy no longer needs emergency measures of support from the U.S. Federal Reserve. Policymakers began the process of normalizing monetary policy at the end of 2015, and although the Fed is raising rates because the economy is healthier, the prospect of higher interest rates has created consternation and angst among some investors. While the Fed’s own projections are for a slow and gradual rate hike cycle, futures pricing suggests that the market thinks interetst rate hikes may be a bit slower. Although the gap between the Fed’s projections and the market’s view has narrowed, there is still room for surprises and volatility. The key thing to watch will be how market expectations adjust to the Fed’s new forecasts, as a Fed that hikes more quickly than the market expects could lead to upward pressure on the U.S. dollar and a de facto tightening for the U.S. economy. Read the entire commentary here. [+] Read More

When it Comes to Retirement Planning, What’s the Difference Between Needs and Wants?

June 14, 2017

Retirement planning involves more than just saving money in a 401(k) or putting away cash in IRAs here and there. An investor has to consider many other factors: living expenses and cash flow needs throughout one’s lifetime (as well as a spouse’s lifetime, if applicable), health care spending and how that can change over time, Social Security timing decisions, estate planning, and tax strategies. It can be a lot of work. When it comes to planning for living expenses and cash flow needs (spending), one beneficial exercise can be to categorize your assets/goals into 'needs,' 'wants,' and 'legacy' items. The next step would be to think about how your retirement plan can be used to fund each category, starting with your needs first. [+] Read More

BlackRock Evaluates Emerging Markets and European Equities

June 8, 2017

When contrarian becomes consensus... Many investors have flocked to emerging market (EM) and European equities this year, as money has broadly flowed back into risk assets. Our analysis suggests these equity trades are becoming consensus, and EM and European stocks are no longer the contrarian trades that they were for much of 2016. Read the three key points of BlackRock's weekly commentary below, or view the entire four-page weekly investment commentary now. [+] Read More

Chasing Heat? You May Get Burned.

June 7, 2017

The Information Technology sector has been on a roll so far in 2017. The returns for the sector year-to-date are nothing short of eye-opening: as of May 30, Information Technology has returned just over 20%, which puts it fairly far ahead of the next best performer, Consumer Discretionary (+11.52%). By comparison, the broad S&P 500 index is up a much lesser +7.7%, which while strong is still pretty modest compared to technology’s run.1 This strong performance has some investors scrambling to beef-up their investment portfolio’s technology holdings, in an effort to ‘join the party’ so to speak. But investors should take pause before rushing to buy more technology stocks. Doing so would essentially mean “chasing heat,” which is just another version of market timing– a tactic that is not necessarily advisable for the long-term investor. [+] Read More

Nuveen Evaluates Investor Skepticism

June 1, 2017

Global Equity Prices Should Trend Unevenly Higher Many investors remain uneasy about the global macro backdrop, despite accelerating global economic growth, low inflation, accommodative global monetary policy and solid corporate earnings. Concerns about possible recession and deflation remain, and many investors are continuing a flight to quality, which is causing global bond yields to remain at exceptionally low levels. At the same time, disappointing U.S. economic data and mounting concerns over political instability in Washington, D.C. have held back equity prices and the value of the U.S. dollar. Read an excerpt of the complete commentary below, or download the entire investment commentary as a PDF. [+] Read More

The 4-Step Action Plan if You’re Worried About Your Investment Portfolio

May 31, 2017

It is an interesting time in the United States’ sociopolitical sphere, to say the least. But lucky for you, this article isn’t about politics, a social movement, or anything in the news for that matter. It is about what to do if you start to get worried about how the equities and/or bond markets may react to ongoing developments and potential controversies. In the current environment, it is the uncertainty that has many investors on edge. For some, every day may feel like it has the potential for some breaking story that sinks markets. To help address any concern investors may have, we present a 4-step action plan for what to do when you’re worried about your investment portfolio. [+] Read More

Cambiar Investors Reflects on 1st Quarter 2017

May 25, 2017

The year 2016 marked the first year since the Global Financial Crisis (GFC) of 2008-09 when value investing decisively beat growth investing as a category, with value-style returns exceeding growth style returns by roughly 10 percentage points in most capitalization categories last year. Value stock indices are heavily populated by financial companies, which tend to be very sensitive to interest rate trends. Unsurprisingly, financials, bond yields, and value stocks as a category leapt forward in sync following U.S. elections, and subsequently lagged in relative performance terms when the upward momentum in bond yields topped out in early January, perhaps reassessing how much real change can be wrought. Whether or not value stocks truly “over-performed” in late 2016 or just needed to consolidate gains remains to be seen, but the change in market conditions in the first quarter suggests at least one of these narratives is true. Right around the Trump inauguration in January, market conditions flipped, and big cap growth stocks (which had lagged in late 2016) went on a tear while value names did little. The flip back from value to growth was most pronounced in small caps (growth benchmarks up over 5%, value indices down fractionally); that said, growth issues outpaced their value counterparts by a factor of 1.5x to 2.0x in most broader indexes. [+] Read More

Investor Psychology: Why You May Not Be Your Own Best Financial Planner

May 24, 2017

Dr. Meir Statman is a professor of finance (with a focus on behavioral finance) at Santa Clara University. You might say he is a foremost expert on how emotions can affect financial decision-making for managers and investors. His most recent book, “Finance for Normal People: How Investors and Markets Behave,” is pretty much a dead giveaway for where his life’s work is focused. So, when Dr. Statman pens an article in the Wall St. Journal titled, “How Emotions Get in the Way of Smart Investing,” it is probably worth a close look. Indeed, the relationship between human emotions and investing is a complicated one – and it’s one that many experts would agree is at odds. Few would disagree with this general idea: investors who can remove emotion from the investing equation have a better chance of doing well over time versus those who cannot. As Warren Buffet succinctly puts it, “it’s an easy game if you can control your emotions.” [+] Read More

JP Morgan Considers Inflation's Next Phase

May 18, 2017

Around the globe, a synchronized upturn in nominal growth is underway, including an upturn in inflation. Global monetary policy is responding in kind. The Federal Reserve (Fed) is increasingly confident that inflation will hit its target rate and has begun accelerating its cautious rate-tightening cycle; the pendulum is gradually swinging toward tightening at other developed market (DM) central banks. The investing community’s perception of inflation risk has swung during the current expansion from fear of an inflationary surge after the Great Recession to fear of global deflation when oil prices collapsed and, since last year, back to a reflation theme, again accompanied by worries that some economies, particularly the U.S., could overshoot their central banks’ targets. By contrast, throughout these periods, inflation itself (at least excluding volatile energy and food prices) has displayed surprising stability. How far will reflation go in the U.S. and other developed market economies? How can we forecast inflation? Read the entire market commentary here. [+] Read More

Leaving a Legacy That Spans Generations

May 16, 2017

When most people think of the late artist Prince, they think about a global music phenomenon with unforgettable pop hits and an unforgettable persona. That’s how he should be remembered. But what many people do not realize is that Prince’s fortune – the estate he worked tirelessly to create over time – is currently being battled out in the courts amongst a slew of relatives, “alleged heirs,” lawyers and advisors. Prince passed away over a year ago (April 21, 2016), yet his estate is still very much unsettled.1 The reason for the ongoing court battles and legal headaches? Prince didn’t have a will. [+] Read More

Is it Better to Fund College Expenses from a Taxable Joint Account or an IRA? - Doug's Quiz Corner

May 16, 2017

Quizmaster Doug Hutchinson presents his monthly wealth management test. This month he quizzes your knowledge on whether it’s better to pay for college expenses from a taxable joint account or an IRA. Consider this Scenario: Your friends Rick and Andrea have a granddaughter, Alexis, who is getting close to college age. Rick and Andrea would like to help out with college expenses and they are considering two options to fund a tax deferred investment account for Alexis' college expenses. [+] Read More

JP Morgan Shares Their Guide to the Markets for 2Q 2017

May 11, 2017

JP Morgan Quarterly Guide to the Markets JP Morgan’s Guide to the Markets for the second quarter of 2017 is now available. The comprehensive guide includes pages of charts illustrating: Returns and valuations by style and by sector Fixed income yields and returns Annual returns and intra-year declines of the S&P 500 [+] Read More

When the Stock Market Gets Volatile, Smart Investors Do This

May 10, 2017

There’s a popular saying that people often use to characterize or describe human behavior: “we are our own worst enemies.” This phrase probably wasn’t created with the original intent of describing investor behavior, but one thing’s for sure—it often hits the nail on the head. You have probably read before that investors’ emotions often get in the way of sound long-term decision making. During times of pronounced market volatility or downturns, investors often get worried (understandably) about sustaining too many losses, and they will alter their long-term strategy as a result. In other words, experiencing declines in the market often leads to the feeling of needing to “do something to stop the losses,” which means making knee-jerk reactions. Research shows, however, that those knee-jerk reactions can cost investors quite a bit over the long-term. [+] Read More

Brandes Reviews the Q2 2017 Opportunities in International Equities

May 4, 2017

Is your portfolio well-positioned to take advantage of international opportunities? Brandes Investment Partners believes there are compelling reasons why now is the time to cast a longer look at international equities. Including: Access to more opportunities Diversification potential Return reversion potential [+] Read More

Newfound Research Wins Award for Best ETF Strategist from ETF.com

May 3, 2017

Congratulations to Newfound Research for winning the 2016 award for Best ETF Strategist with their QuBe portfolios. Editor’s Note: WrapManager does not provide direct investment access to the QuBe portfolios. WrapManager provides investment access to several other Newfound products, including the Risk Managed Sector Series. After the announcement of the winners of the 2016 ETF.com awards WrapManager spoke with Newfound Research about their place in the rankings. Answers were provided by Justin Sibears the Portfolio Manager at Newfound. A frequent speaker on industry panels and contributor to ETF Trends, Justin holds a Master of Science in Computational Finance and a Master of Business Administration from Carnegie Mellon University as a well as a BBA in Mathematics and Finance from the University of Notre Dame. [+] Read More

Common Financial Credentials: What is a CFP, CWS, and CFA?

May 2, 2017

Once you’ve realized that hiring a financial advisor is worth it, the next step is choosing the right one for you. When you began your search you may have noticed that there is a wide variety of different acronyms that come after their name. For investors of all types, the alphabet soup of financial credentials can be confusing, especially if you’re searching for a wealth manager or financial advisor with a particular skill set. Read on to learn about the difference between a Certified Financial Planner®, a Certified Wealth Strategist®, and a Chartered Financial Analyst®. [+] Read More

JP Morgan Sees Potential in Europe, Emerging Markets

April 27, 2017

In the first quarter of 2016, investors feared that weak conditions in many emerging markets, commodities and global manufacturing would deteriorate into a full blown recession across the developed world and China. As stock markets struggled, equity investors overwhelmingly preferred defensive stocks and gave an unusually generous discount to companies vulnerable to weak economic activity and low interest rates. But the recession never arrived. Reduced fiscal austerity and continued easy monetary policy, coupled with greater confidence in the industrial sector and increased bank lending, have reignited global growth. Commodity prices have rallied, and the outlook for corporate profits now appears better than it has in several years. Though equity markets have moved quickly to price in the welcomed shift, we still see opportunities, especially outside the U.S., after many years of substantial returns for the S&P 500. Read the entire market commentary here. [+] Read More

3 New Money Manager Strategies to Consider for 2nd Quarter 2017

April 26, 2017

The WrapManager Top Equity Money Manager Picks Report for second quarter 2017 includes three different money managers with diverse strategies. As we do every quarter, the WrapManager Investment Policy Committee (IPC) has selected three money manager strategies to highlight as an opportunity for you to learn about money managers that you may not be familiar with, as well strategy types that may be of interest to you. This quarter, the IPC has selected three strategies to highlight, including: A concentrated growth approach seeking to invest in market leading companies. A small cap equity strategy that focuses on stock selection. A mid cap value portfolio that seeks to invest in companies with favorable valuations. [+] Read More

BlackRock Releases 2Q 2017 Global Investing Outlook

April 20, 2017

Global growth expectations are on the rise, and we see room for more upside surprises... Reflation is going global. The signs include a rebound in inflation expectations, a bottoming out in core inflation and wages, and a synchronized pick-up in economic activity indicators and corporate earnings estimates. Read the key points of BlackRock's analysis below. Or, download the complete commentary (PDF). [+] Read More

Tax Efficient Giving with Appreciated Stock Donations - Doug's Quiz Corner

April 18, 2017

Quizmaster, Doug Hutchinson, presents his quiz for the month. Here, Doug explores donating appreciated stock versus selling the stock and donating the cash. [+] Read More

What's the Difference Between a Roth and Traditional IRA?

April 18, 2017

Both a Roth IRA and Traditional IRA (Individual Retirement Account) can potentially help meet your retirement savings goals. The main difference between the two is: with a Roth IRA, taxes are paid upfront, whereas contributions to a Traditional IRA are made “pre-tax,” and reduce taxable income for the year. Age and income are two significant factors to consider when choosing a Roth or Traditional IRA. Couples or individuals in a low tax bracket as well as younger people may be better off with a Roth. Earnings grow tax-free, and contributions can be withdrawn at any time without penalty. Individuals or couples in a higher tax bracket may choose a Traditional IRA to reduce their taxable income, or because their income is too high to qualify for a Roth. A Traditional IRA is also a good choice for people who expect to be in a lower tax bracket during retirement. [+] Read More

Is Hiring A Financial Advisor Worth It?

April 12, 2017

Editor's Note: This post was originally published July 2016 and was updated in April 2017 with new information for your benefit. Investors often gauge a financial advisor’s value by measuring what’s tangible: short-term performance and financial advisor fees. However a study conducted by Benjamin Cummings of St. Joseph’s University finds there is a positive correlation between hiring a financial advisor and seeing positive impact on your net worth. The study places value on the intangible benefits a good financial advisor can provide you. Investors should not hire a financial advisor based solely on performance and fees, as doing so would overlook the positive value financial advisors can contribute through intangible benefits – acting as a sounding board for investment ideas, providing you guidance during volatile times in the market and helping you sleep at night. These benefits are valuable to not only your financial health, but also your personal health. [+] Read More

Nuveen Believes the Political Backdrop Can Support Growth

April 12, 2017

Economic Growth, Not Politics, Is Probably the Biggest Risk For some time, we have argued that equities and other risk assets looked overextended following their strong run-up since the election. In recent weeks, equities have been trading sideways and government bond prices have recovered. More than politics, the economy probably presents a more probable roadblock for equities. We think economic sentiment may be too high and elevated confidence may make investors vulnerable to downside economic surprises. To be sure, we are not expecting a significant economic slowdown, but the nearly non-stop pace of positive economic data is unlikely to continue. At some point, a setback will likely be triggered by a manufacturing decline, soft oil prices, weakening data from China or some other factor, which could spark a risk-off phase. Nevertheless, we remain constructive in the medium and long-term toward risk assets, but are growing increasingly cautious about the short-term outlook. Read an excerpt of the complete commentary below, or download the entire investment commentary as a PDF. [+] Read More

Nuveen Observes Equities Sag as Political Optimism Returns to Earth

April 5, 2017

Where Can Investors Find Value in These Markets? Stocks experienced their largest one-week decline since the election, as the S&P 500 Index fell 1.4%.1 Most losses occurred on Tuesday when it became clear that the Republican health care plan was facing trouble, signaling that President Trump’s pro-growth economic agenda could falter. Small cap stocks, financials and industrials fared the worst last week, with utilities and REITs gaining ground. Treasury prices rallied for a second straight week, while the U.S. dollar fell for the third week. Read an excerpt of the complete commentary below, or download the entire investment commentary as a PDF. [+] Read More

What is ESG Investing and Does It Make Financial Sense?

April 4, 2017

Corporations in America are aware that public perception is important. That’s why many companies have made strides in recent years to emphasize their efforts in caring for the environment, providing equal opportunities to employees, and being active contributors to small communities. It’s PR 101 for building trust and goodwill towards a brand, which can ultimately help drive sales. [+] Read More

How Will Rising Interest Rates Affect Your Investment Portfolio?

March 30, 2017

On March 15, the Federal Reserve raised interest rates for the first time in 2017. Federal Reserve Chairman Janet Yellen moved the benchmark interest rate a quarter percentage point higher, to a range of 0.75% to 1%, and the Fed indicated that the market could expect two more rate increases this year.1 So what does this all mean for you? The answer depends on whether you look at it from a standpoint of being a borrower, a saver, or an investor. Later in this post, we’ll take a look at all three scenarios. But first, here’s a bit of background as to what an interest rate increase actually is, and why they occur. [+] Read More

Lord Abbett: Why HSAs Matter More Than Ever

March 29, 2017

Many experts expect healthcare costs will continue to rise, making it important that advisors help their clients plan ahead. According to the Kaiser Family Foundation, health care has become somewhat less affordable, even among those with health insurance. Since 2015, larger shares of people with health insurance say they have a difficult time affording their healthcare costs: from 27% to 37% for premiums; 34% to 43% for deductibles; and from 24% to 31% for copays and prescription drugs. Some experts estimate that a 65-year-old couple who retired in 2016 will need $260,000 to cover just healthcare costs in their golden years—6% more than the previous year's estimate of $245,000. That’s the highest estimate since such projections started in 2002, and chances are repealing and replacing the Affordable Care Act, not to mention the high cost of pharmaceuticals, could push retiree healthcare costs even higher. All of which highlights the need for advisors to discuss with clients the flexibility and power of Health Savings Accounts (HSAs). Read on for a summary of their analysis, or view the entire document here. [+] Read More

The Retirement Dilemma for High Income Earners

March 28, 2017

High income earners often find themselves in a bit of a quandary when it comes to retirement planning. Individuals making over $132,000 and married couples making over $194,000 are not eligible to contribute to a Roth IRA.1 For 401(k)s, the annual contribution limit of $18,000 ($24,000 for those over 50)2 is simply not enough for someone who made, say, $250,000 per year during their working years. Saving $18,000 a year is probably not sufficient for someone at that income level to maintain the same standard of living in retirement. Of course, this does not mean that high income earners should shy away from contributing to 401(k)s or other employer-sponsored retirement plans. The more a person can contribute to a tax-deferred plan, the better. But for high income earners, saving enough so that you can replace your income in retirement means turning to other methods and savings vehicles to reach your goals. Here are three potential options. [+] Read More

What is a Good Strategic Value Dividend Strategy Under Trump? - Federated Investors

March 21, 2017

Our first and primary answer to the client question of what one can expect from investment in a Strategic Value Dividend product is the opportunity for a high and rising income stream from high-quality business assets. For our more stock market-oriented clients, our answer is that we have historically delivered broad market returns, plus or minus, depending on the measurement period, but with a notably lower standard deviation. Both of those propositions were in effect prior to the US Presidential election; both remain in effect today. That being said, the world is now quite different than it was on November 8. How has this reality affected our companies? In short, not much, but let’s review some of the possible “talking points” involving the new administration’s policies. Keep in mind that all of these proposals are, for now, just media speculation and Sunday talk show fodder. But let’s tally up the potential pros and cons. [+] Read More

Savings Checkpoint! How to Know if You’re Saving Enough

March 15, 2017

Retirement and financial planning can essentially be broken down into three phases: Saving Investment Distribution (Retirement Income) For many people, that means spending our working years making an income to provide for our families and to save for retirement. We then invest our savings in hopes of achieving a rate of return over time, to grow the assets and provide for our retirement. And finally, we devise strategies to generate retirement income from our savings. [+] Read More

JP Morgan: The Importance of Immigration

March 14, 2017

In the early days of the new administration, no issue has been more controversial than immigration. The president’s statements on building a wall on the U.S.'s southern border, his actions on banning travel from specific countries and his heightened focus on deporting illegal aliens have generated a negative response from his opponents and a positive reaction from some of his supporters. As with our entire 100 days of change series, we will try to steer clear of political arguments. Policies in this area do have significant implications for both the economy and, ultimately, financial markets. So what actions has the president taken and advocated, how might these affect both illegal and legal immigration and what could this mean for growth, inflation and investment returns? Read the entire market commentary here. [+] Read More

Retiring in America: 3 Practical Tips to Help Set Your Course

March 13, 2017

Retirement planning in America is no simple task. Whether it’s navigating the ever-shifting tax code, factoring-in the rising cost of healthcare, or devising income strategies from various sources like Social Security and retirement investment accounts, investors have many decisions to make and potential strategies to pursue. So, amidst the many complexities involved with retirement planning, it’s useful to take a step back and think about retirement planning in simpler terms. In other words, start with a basic framework first, and then grind down into the details from there. Here are 3 practical tips for setting a solid course for your retirement. [+] Read More

Do You Have to Pay Capital Gains Tax on Mutual Funds? - Doug's Quiz Corner

March 10, 2017

Quizmaster, Doug Hutchinson, presents his quiz for the month. Here, Doug explores how to manage capital gains tax on mutual funds. Consider this Scenario: Your friend Joe is preparing his tax returns and is confused as to why he owes taxes on a mutual fund position that he hasn’t sold and went down in value from the purchase price. "I bought $100,000 worth of a mutual fund on October 1st at $10.00 per share in a taxable brokerage account. On December 1st I received a capital gains distribution from the mutual fund. At the end of the year the mutual fund was worth $9.90 per share." "I didn't sell any shares of the mutual fund after I bought them and the price per share has gone down in value since I bought the mutual fund. Why would I owe taxes in this scenario?" What is a potential reason why Joe would owe taxes in this scenario? [+] Read More

Nuveen: Where to Find Value in 2017

March 6, 2017

Where Can Investors Find Value in These Markets? The recent behavior of equity and bond markets creates a conundrum for investors. Equity markets are rallying based largely on expectations for stronger economic growth, while bond yields have been falling and seem priced for economic stagnation. Which signal is correct? The economic environment may grow more complicated in time, but for now we expect acceleration to continue. Read an excerpt of the complete commentary below, or download the entire investment commentary as a PDF. [+] Read More

3 Reasons You Need A Fiduciary

February 28, 2017

In the realm of investment advice, all it takes is seeing the definition of “fiduciary standard” to understand why it’s so important: Fiduciary - “a Financial Advisor held to a ‘Fiduciary Standard’ occupies a position of special trust and confidence when working with a client. As a Fiduciary, the financial advisor is required to act with undivided loyalty to the client. This includes disclosure of how a financial advisor is to be compensated and any corresponding conflicts of interest." Put simply, abiding by the Fiduciary Standard means putting your clients’ interests first. Most investors might read the above definition and think, wasn’t this the rule the entire time? It should be that simple, right? Not necessarily. [+] Read More

Legg Mason: 7 Reasons to Choose Active Management

February 27, 2017

While index investments have their place, it’s important to recognize what actively managed strategies can do for investors — especially in the current environment, where the risks embedded in passive strategies loom large. Market surprises in 2016 underlined the difficulty in predicting what’s coming next. The long run of gains since the financial crisis that buoyed passive strategies may not necessarily be the arc of the future. [+] Read More

7 Tips for Strategic Tax Planning and Filing

February 23, 2017

Editor's Note: This article was originally published in March 2015 and has been updated to include new tips for tax filing year 2016. “In this world nothing can be said to be certain, except death and taxes.” It’s February, which means tax time is just around the corner, and you’ve probably seen lots of articles quoting Benjamin Franklin’s historic quip, but taxes don’t have to be as bad as all that. Whether you’ve already started your taxes, outsourced the entire process to a tax professional, or are waiting until the last minute, small things make a big difference when it comes time to do your filing. These seven strategic tax tips have been selected to help you get the most possible out of your tax filing. So, instead of dreading doing your taxes, maybe this is the year where some extra research could help you save a bit more. Or perhaps you’ll set a goal to finish your taxes earlier than you’ve ever finished them before. So, grab the tax bulls by the horns! And use these seven strategic tips to potentially make your life easier. [+] Read More

Doug's Quiz Corner: Familiarity Bias

February 21, 2017

Quizmaster, Doug Hutchinson, presents his quiz for the month. Here, Doug discusses the pitfalls of familiarity bias. Consider this Scenario: Your friend Jake is considering different investment options and he asks for your advice. "I'm thinking about investing my retirement account in a tech sector equity strategy. I've worked in the tech industry for years and I know the space well so that is the area of the stock market that I'm most comfortable with." "I'm also thinking about investing some funds in my personal brokerage account in the equity of a local Fortune 500 Company. I know a couple of people in my circle of friends who work there so I feel comfortable investing in that company's stock." What feedback should you give Jake about his investment decision making process? [+] Read More

BlackRock: Tax Reform and Trump Trades

February 20, 2017

We see potential for volatility in the coming months as more reform details emerge. Richard Turnill, BlackRock’s Global Chief Investment Strategist, discusses tax reform and the reflation trade. Turnhill was previously Chief Investment Strategist for BlackRock’s fixed income and active equity businesses, and has also led the Global Equity investment team. Read an excerpt of his weekly commentary below, or view the entire weekly investment commentary here. [+] Read More

Katie’s LINC Presentation and the Time She Flew

February 17, 2017

If you’ve ever called WrapManager and been welcomed with a crisp British accent, you’ve had the good fortune to speak with Katie O’Connor, Director of Client Services, over the phone. In her role, Katie works to ensure that our team is utilizing the best technology available today. By combining this technology with a white glove client experience, Katie has helped our customer service approach one to be admired and shared within the industry. As she says, “[because we use] the best technology to deliver a white glove customer service, advisors from around the country want to learn from our experience. And that’s why TD Ameritrade invited me to participate on a panel at their annual National LINC conference [which is for financial advisors] in San Diego this year.” The panel discussion “Leverage Workflows in Your CRM” focused on how financial advisors who use best practices in their customer relationship management (CRM) tool can provide better service to their clients. After the panel, we sat down with Katie to hear more about why this topic and this conference, should matter to WrapManager clients. [+] Read More

The Case for International Diversification

February 14, 2017

If it feels like the United States has been delivering good (but not gangbusters) economic growth and solid stock market returns since 2009, it’s because it has been – at least relative to some other parts of the world. Europe has continued to struggle with GDP growth and cannot seem to fully shake its sovereign debt issues; Japan has experienced weak growth and lackluster inflation for years; Britain is taking the significant and potentially risky step of leaving the European Union; and Emerging Markets growth has slowed. In a world of political and economic uncertainty, the United States often feels like the best house on the investing block. For those reasons – and because the US is arguably the largest and most diverse economy in the world – many investors prefer to keep their money close to home. In many ways it makes sense, and for the last few years it has likely been a beneficial strategy. But as Russ Koesterich of Blackrock (the largest money manager in the world1) smartly points out, “the tendency to invest close to home is understandable, [but] it may not be optimal,” adding that “US outperformance isn’t pre-ordained.” [+] Read More

JP Morgan Trade Policy Chess

February 13, 2017

President Trump’s first few weeks in office have been busy on many fronts. However, for investors, his statements on trade policy maybe the most consequential. JP Morgan's Chief Global Strategist Dr. David Kelly, CFA, explains the differences and similarities among a tariff, a value-added tax (VAT) and a cash-flow tax with border adjustments (BAT) and how they might apply to Mexico. He then examines the effects of each for the U.S. economy, consumers and investors. Read the entire market commentary here. [+] Read More

Relationships Strengthen Your Financial Plan

February 8, 2017

If you were asked to give only one answer to the question, “What do you think is the most important quality in a healthy relationship?” what would you say? Our answer: communication. There are, no doubt, other important and necessary qualities in a healthy relationship, like trust, honesty, and commitment to a common goal or end. But it all boils down to the ability to communicate freely and openly. Good communication means being on the same page and working as a team, which in turn makes problem-solving less difficult – and maybe even fun. Think about instances in your workplace or with your spouse/partner where strong communication made everyone happier, more confident, and more productive. There are probably a lot of breakthrough moments that come to mind! Why wouldn’t the same strengths of communication apply to financial planning? Well, they do. [+] Read More

BlackRock: Returns in a Reflationary Environment

February 7, 2017

We have largely maintained our assumptions for equity returns while increasing those for fixed income. Richard Turnill, BlackRock’s Global Chief Investment Strategist, gives us the week in review. Turnhill was previously Chief Investment Strategist for BlackRock’s fixed income and active equity businesses, and has also led the Global Equity investment team. Read an excerpt of his weekly commentary below, or view the entire weekly investment commentary here. [+] Read More

Active vs. Passive Management and What it Means for Your Portfolio

February 1, 2017

There’s been a growing debate surrounding the rise in popularity of “passive investing” as an alternative to active management. Passive investing often refers to the use of ETFs or indexing strategies to mimic a certain benchmark – in short, it essentially allows the investor to simply ‘set and forget’ their investment strategy. Here, we’ll take a look at potential flaws with the passive approach – flaws that many investors may not be considering. But first, it is worthwhile to examine why some investors are reconsidering the value of active management. [+] Read More

Lord Abbett Stocks: Don’t Sweat the Post-Trump

January 31, 2017

Concerns about U.S. equity valuations reflect perceptions that the market has fully priced in prospects for earnings acceleration. But analysts' forecasts for 2017 are nearly unchanged from September 2016. U.S. companies are set to report their strongest profit growth in two years for the fourth quarter of 2016, based on consensus Wall Street analyst estimates. Continuing their recovery from a yearlong decline in quarterly profits, companies in the broad U.S.-market representative S&P 500 Index are expected to report their bottom lines grew by 3.4% in the fourth quarter of 2016, the fastest rate of growth since a 4.6% increase in the fourth quarter of 2014. This quarter’s growth is an improvement from the 3% increase witnessed in the third quarter, and growth is projected to accelerate over the course of 2017. Read on for a summary of their analysis, or view the entire document here. [+] Read More

What's the Difference Between Financial Advisors and Money Managers?

January 25, 2017

Editor’s Note: This post was originally published in December 2015 and updated January 2017. While financial advisors and money managers have many commonalities, and are complementary to one another, the two jobs are very different and are rarely held by one individual. Financial advisors – also referred to as wealth managers, financial planners and investment advisors – understand the specifics of their client’s financial lives and create a detailed, comprehensive investment plan that is best positioned to help you reach your financial goals. Money managers on the other hand spend their time focusing on successfully managing the strategies that your portfolio is invested in. WrapManager's eBook, Guide to Researching Money Managers, discusses this topic in more detail, but we believe your financial advisor and your money managers should be different people. This allows for additional checks and balances that wouldn’t exist if one person performed both jobs. After all, no self-respecting chef would disparage their own food! [+] Read More

Nuveen Weekly Commentary January 2017

January 24, 2017

Investors Await Clarity on Tax and Spending Policies Equity markets were mixed last week, with the S&P 500 Index down fractionally.1 Investors grew more wary about President-elect Trump’s increasing scrutiny of specific corporate policies and a possible push forhigher tariffs. The health care sector suffered due to drug pricing concerns, while retail sectors were hurt by generally disappointing earnings results. Read an excerpt of the complete commentary below, or the entire weekly investment commentary as a PDF. [+] Read More

What to Expect from the Markets Under President Trump

January 19, 2017

On January 20, President-elect Trump will become President Trump. If his campaign rhetoric plays out, we should expect many changes to government and the rules that govern business. Trump has vowed broad-based tax reform, a repeal of executive orders and a roll back of financial, healthcare, and energy regulations (amongst many other things).1 For investors, the election alone does not change the investment landscape – it’s about what happens next. No matter what your political views, it is important to stay attune to policy proposals that surface after the inauguration, and track their progress through the halls of Congress. If that seems like a lot to take-on, don’t worry – WrapManager is here to help! [+] Read More

Robo Advisors vs. Traditional Advisors: Should the Differences Matter to You?

January 17, 2017

Over the past few years, there’s been a technology-related buzz in the financial industry, but it’s not about the latest ‘app’ from Silicon Valley or about Snapchat’s IPO. It’s about a fairly new approach to managing money through “robo-advisors.” These “advisors” are essentially online programs that use computer algorithms – instead of real investment managers and human advice – to make portfolio allocations over time. It sounds futuristic and perhaps promising, but there’s a problem. Robo-advisors generally only perform one function: allocating a portfolio. That may be fine for a new or novice investor that does not have complex financial needs – someone who may only be looking for a diversified portfolio in a cookie cutter format (conservative, aggressive, or somewhere in between). [+] Read More

Doug's Quiz Corner: College Savings

January 17, 2017

Quizmaster, Doug Hutchinson, presents his quiz for the month. Here, Doug discusses strategies for saving for college. Consider this Scenario: Your friends Martha and Jack are planning on setting up a college savings investment plan for their toddler, Max. They are examining a few different options for this investment plan and have asked for your help. One option they are considering is to start contributing now with a $4,000 initial contribution and then adding $1,000 per year for the next 17 years. Assume the contributions occur at the beginning of each year including the first year. The other option they are considering is to start contributing 5 years from now with a $5,000 initial contribution and then adding $1,500 per year for the next 12 years. Assume the contributions occur at the beginning of each year including the first year. Assume the investments return 7% per year for each of the 17 years. Also assume that Martha and Jack are using a tax deferred investment account. Which option will lead to the highest value at the end of 17 years when Max is ready to start college? [+] Read More

Legg Mason 2017 Annual Outlook

January 16, 2017

Things didn’t always go as expected in 2016. The U.S. election, U.K. Brexit vote and the Fed’s U-turn on rates took many investors by surprise. Yet worries about volatility proved unfounded. Some asset classes posted solid gains, defying pessimism and showing that opportunity can arise despite the many real risks. With that in mind, we asked our investment managers to identify what could happen if things go right in 2017... [+] Read More

4 Signs You’re Getting White Glove Service from Your Financial Advisor

January 11, 2017

Editor’s Note: This post was originally published in April 2014 and updated January 2017. A financial advisor’s job, at minimum, is to create an investment strategy based on your economic situation and goals. But that’s a bit like saying the job of a dancer is to move their body to music. Some do it better than others. A good financial advisor should take the time to get to know you and your family, and spend as much time as it takes to get a firm understanding of your financial situation, goals, retirement income needs, estate planning needs, risk tolerance, etc. The result should be a comprehensive financial plan that considers multiple outcomes and gives an expectation of how much income you can expect to have in retirement. [+] Read More

Announcing: WrapManager's Q1 2017 Top Equity Money Manager Picks

January 10, 2017

There are thousands of money managers out there. If you’re trying to figure out which one (or ones) is right for you to help you reach your investment goals, you may feel overwhelmed by all the options. Where do you begin researching and what criteria do you consider? We’d like to help. Each quarter, WrapManager’s Investment Policy Committee (IPC) compiles a list of top money manager picks in order to help investors discover and evaluate money manager strategies. These encompass a wide range of asset classes and investment disciplines. [+] Read More

Federated Investors 2017 Outlook

January 9, 2017

Stephen Auth, CFA and Chief Investment Officer, Equities, shares his expectations for 2017 including: The effect of the Trump administration and Republican Congress Fiscal stimulus vs. structural reform A new phase for the bull market "Climbing the Wall of Hope" through 2018. A selection is provided below, or you can download the complete commentary as a PDF. [+] Read More

Common Retirement Planning Problems – And How to Overcome Them

January 4, 2017

With retirement planning, there is always the need to plan for the “unexpected”: emergency needs, potential home repairs, major medical situations, and so on. But there are also several expected—and fairly predictable—expenses that many investors may not fully take into account. This is not necessarily because of lack of planning, but more so because these expenses can be somewhat academic and less easily understood. [+] Read More

BlackRock 2017 Investing Outlook

January 2, 2017

Global growth expectations appear to be picking up after an extended slide... BlackRock expects U.S.-led reflation (rising nominal growth, wages and inflation) to accelerate, and sees fiscal expansion gradually replacing monetary policy as an economic growth and market driver around the world. They discuss these topics, as well as the impact of technological change, the risk of a China credit bubble and the dynamics of investor risk appetite, in their 2017 Investing Outlook. Read the key points of BlackRock's analysis. Or, download the complete commentary (PDF). [+] Read More

Use Goal-Based Investing to Invest with Precision

December 28, 2016

There is an emerging concept in health care known as “precision medicine.” According to the National Institutes of Health, “precision medicine is an emerging approach for disease treatment and prevention that takes into account individual variability in environment, lifestyle and genes for each person.” In other words, instead of treating an illness with a blanket, ‘one-size-fits-all’ approach, every individual is viewed as unique—which means their treatments are customized. [+] Read More

Lord Abbett: Investing in Dividend Payers and Growers

December 26, 2016

We continue to believe investors will be well-served to focus on dividend growth. As bond yields begin to compete with equities, we recommend an ecumenical approach to equity income and growth in dividends. One of the major impediments to using stocks for yield has been the earnings recession over the last five quarters. The continuation of that trend would have undermined the stability of the dividend payout. The market, however, has now withstood the effects of a stronger dollar on multinational earnings and withstood the energy sector’s adjustment to oil at $50 per barrel. And the S&P 500 is finally growing earnings again, year over year. Read on for a summary of their analysis, or view the entire document here. [+] Read More

Spending in Retirement: 4 Factors to Consider

December 21, 2016

When you encounter articles focused on retirement planning, the subject matter is generally about how to invest—what strategies are good for growth vs. income, what products are useful for different investment and tax objectives, and so on. Often left out are insights about how to spend, which is an equally—if not more—important aspect of planning. An investment plan that does not adequately account for how cash flow needs and expenses change over time could put an investor at risk of running out of money too early. [+] Read More

Nuveen Weekly Commentary December 2016

December 19, 2016

Investors Focus on Positives, Ignoring Negatives Investor sentiment remained skewed positive last week, helping equity markets rally sharply. The S&P 500 Index surged 3.1%, as the focus remained on prospects for better economic growth, tax reform and potential fiscal stimulus in 2017. For the week, small caps and financials led the way, while health care stocks lagged. Read an excerpt of the complete commentary below, or view the entire weekly investment commentary as a PDF. [+] Read More

Your 2016 IRA Checklist: 4 Actions to Take Before Year-End

December 13, 2016

With less than a month left in the year, time is running out to make adjustments to your IRAs that count towards this tax year. Here is a short checklist of IRA actions to consider before year-end, but please note that this list is by no means comprehensive. We would strongly recommend reaching out to a financial advisor between now and the end of the year to make sure you’re in good shape going into the New Year. [+] Read More

Doug's Quiz Corner: Tax Efficient withdrawals

December 13, 2016

Quizmaster, Doug Hutchinson, presents his quiz for the month. Here, Doug discusses strategies for tax efficient withdrawals. Consider this Scenario: Your friend Robert is a retiree who is facing an unexpected expense of $4,000. To meet this unexpected expense, he will need to take a withdrawal from either his taxable investment account or his tax deferred Individual Retirement Account (IRA). Robert’s taxable account and his IRA are the same size and have the same allocation of investments. Robert faces an income tax rate of 25%. Assume any capital gains realized in a taxable account are long term gains and are taxed at 15%. Assume his cost basis of holdings in his taxable account is 10% below the potential sale price of the holdings. Assume Robert is 72 years old and has already fulfilled his Required Minimum Distribution (RMD) for his IRA for the year. Robert asks you: “Should I take the $4,000 withdrawal from my taxable account or from my IRA? Or should I be indifferent on where the $4,000 is coming from?” [+] Read More

JP Morgan Investment Outlook 2017

December 12, 2016

Economic warming and political warnings... Short-term interest rates remain extremely low given the relative health of both the U.S. and global economies. 2017 should be a year of global economic warming but also one of growing risks. However, with cash paying less than nothing in real terms in most of the world, investors should still be overweight long-term assets, with a tilt toward those that should do best in a world with somewhat stronger growth, higher inflation and higher interest rates. [+] Read More

3 Social Security Myths Debunked

December 7, 2016

For many investors and retirees, the task of navigating Social Security is often a tricky (and sometimes confusing) undertaking. In fact, it is complex to the point that Fidelity Investments recently brought to light several “myths” about Social Security, which are really misunderstandings more than anything else. In several surveys, Fidelity found that investors had misconceptions about some of the key features and rules surrounding Social Security Retirement Benefits. These misconceptions can cost retirees money over time, so it’s important to work with a financial advisor when making the important decisions about when and how to take your benefit. [+] Read More

BlackRock Update November 2016

December 5, 2016

U.S. equity indexes hit records; U.S. dollar index surges to nearly 14-year highs. Richard Turnill, BlackRock’s Global Chief Investment Strategist, summarizes the week highlights news to watch in the week ahead. Read an excerpt of his weekly commentary below, or download the complete commentary as a PDF. [+] Read More

Are You Sacrificing Retirement Savings for College Expenses?

November 30, 2016

If the answer is “yes,” you are among the 67% of parents who said that saving for their kids’ college education is more important than saving for retirement, according to an August 2016 T. Rowe Price Survey. The survey also produced some other insightful, “you’re not alone” data: T. Rowe Price found that 28% of parents have student loan debt (either for their kids or themselves), and 5% have student loan debt for both. The survey also revealed the average amount of student debt for parents that participated in the study was $27,078 – and that’s just for the parents themselves. The average amount of student loans for their kids was $10,768.1 [+] Read More

Federated Strategic Value Dividend Investing

November 28, 2016

Daniel Peris, Ph.D., CFA and Head of Strategic Value Dividend Team, answers questions about the the Federated Strategic Value Dividend Strategy including: Overview of the Federated Strategic Value Dividend Strategy How the strategy is performing in the current rising-rate environment What is the outlook and positioning strategy over the next 3 to 6 months [+] Read More

The Findings of Polen Capital's “10,000 Portfolios Project”

November 22, 2016

Have you ever wondered whether your portfolio was optimally allocated or not? Or, in other words, do you ever sit back and think: “is there a better way I could have invested my portfolio over the last 20 years?” With the benefit of hindsight, we know that there is almost always a “better way” we could have invested. But unfortunately we do not have the benefit of hindsight with investing! We can only take the information we have available and make what we think are the best decisions possible for our long-term goals. [+] Read More

Lord Abbett 2017 Global Investing Outlook

November 21, 2016

How Policy and Politics Shape the Global Outlook for 2017 As the dust settles from the U.S. presidential election, what might investors expect in the coming year? New U.S. leadership working with a Republican-unified Congress likely will have a meaningful impact on U.S. investment values, especially if legislation involving infrastructure spending, repatriation of U.S. corporate foreign cash, and tax reform become early priorities in 2017. Just as influential will be macro factors that weigh on global growth and interest rates. The uncertainties of the “Brexit” process, as the United Kingdom negotiates its separation from the European Union (EU), the related tilt toward protectionism in many nations, the pursuit of currency weakness by major non-U.S. economies, and continued “lower for longer” interest-rate policy should combine to support interest in U.S. investments. Differences between the U.S. economy and many advanced economies with regard to monetary policy, currency movement, and economic growth may define investor preferences among many asset classes in 2017. Here, we survey what 2017 may bring for major global economies—and key U.S. investment categories. Read on for a summary of their analysis, or view the entire document here. [+] Read More

7 Things You Should Know About 529 Plans

November 17, 2016

Let’s start with the basics: what is a 529 Plan? Many investors may already be aware, but in layman’s terms, a 529 plan is a state or educational institution-sponsored college savings program (also applies to post-secondary education). 529 plans are not for everyone, but when utilized they can provide several advantageous benefits for those hoping to save for college. Here, we try to give you a comprehensive view of those benefits, as well as a few important considerations: [+] Read More

Doug's Quiz Corner: Tax-Efficient Charitable Donations

November 15, 2016

Quizmaster, Doug Hutchinson, presents his quiz for the month. Here, Doug discusses strategies for tax efficient investing. Consider this Scenario: Your friend Elizabeth would like to donate to her favorite charity before the end of the year. Elizabeth is debating whether to donate appreciated securities or to donate by liquidating a different security at a loss (and realizing a tax benefit by doing so) and then donating the proceeds from the sale of that security. She owns $2,000 worth of ticker ABC at a cost basis of $1,500. She purchased this investment over a year ago. Assume that the appreciated stock is fully deductible. She owns $2,000 worth of ticker XYZ at a cost basis of $2,200. She has $200 in realized short-term gains from a different investment. Assume she has an income tax rate of 30% and a long term capital gains rate of 15%. What is the most tax efficient option to donate $2,000 to her favorite charity? [+] Read More

BlackRock: Trump's Impact on the Stock Market

November 14, 2016

Donald Trump’s unexpected election win points to uncertainty ahead. Donald Trump’s unexpected election victory brings market and policy uncertainty in the short run. Trump’s agenda lacks detail and departs from the Republican Party tradition on trade, security and entitlements. Tapping into a backlash against the Washington status quo, he has often appeared at war with his own party and has surrounded himself with less-known advisors. We expect an initial sell-off in risk assets and flight to perceived safe havens. We see emerging markets as particularly vulnerable due to their reliance on exports and investor sentiment. We expect steeper yield curves and see health care stocks outperforming due to likely reduced regulation under Trump. Read on for an excerpt of Blackrock Investment Institute's commentary, or view the entire document here. [+] Read More

Announcing: WrapManager's Q4 2016 Top Equity Money Manager Picks

November 10, 2016

The Beneficiary Designation that Many Investors Forget

November 9, 2016

In a recent post, we reminded investors of the importance of naming and reviewing beneficiaries – especially as the holidays approach. The end of the year is filled with (good) distractions, so now is a great time to double check your investment accounts. It can give you one more thing to be thankful for – that your hard earned assets will be distributed to your family, consistent with your wishes. In our previous post, we mainly focused on retirement accounts, like 401(k)s and IRAs. Retirement accounts, life insurance policies, and annuities all have beneficiary designations. You can just fill out a form to indicate how and to whom you want your assets dispersed, in a fairly straightforward and easy process. But what about taxable accounts like a brokerage account or joint tenants with rights of survivorship (JTWROS) accounts? These types of accounts are common amongst investors, yet there is no beneficiary designation attached to them. That’s where establishing a “transfer on death” (TOD) registration comes into play. [+] Read More

Gifting Rules Associated with 529 Plans

November 7, 2016

In a recent post on 529 plans titled, “Helping You Understand the Basics of 529 Plans,” we discussed some features of 529 plans work and whether they might make sense as part of your comprehensive financial plan. [+] Read More

Blackrock: Impact of the 2016 Election on Investing

November 3, 2016

Unusually consequential election challenges the post-crisis status quo. The 2016 U.S. election campaign has been unique in many ways, but the underlying dynamics are not. These are partly driven by widening income inequality across the world, in our view, a trend that has accelerated after the financial crisis and subsequent policy responses. Related is a growing perception that the benefits of trade and globalization have only accrued to a few. Whoever moves into the White House will have to address these issues, and we could see fiscal expansion directed at improving infrastructure and measures aimed at redistributing prosperity. We expect similar themes and outcomes to play out in key European elections next year. Read on for an excerpt of Blackrock Investment Institute's commentary, or view the entire document here. [+] Read More

Helping You Understand the Basics of 529 Plans

November 3, 2016

529 plans are college savings plans sponsored by state or educational institutions. Congress created them in 1996 to provide a tax-advantaged way for people to save for college or other post-secondary education. There are numerous features of 529 plans and a wide variety of options when it comes to choosing one, so it’s prudent to consult a financial planner before making a decision. Below are some questions to help you understand the basics of 529 plans to help you get started. Who qualifies for a 529 Plan? Any U.S. citizen over the age of 18 and of any income level can open a 529 plan, and the beneficiary of the plan can be anyone with a Social Security number or tax I.D. The beneficiary can be a future college student of any age—the plan isn’t necessarily limited to people under the age of 18 who haven’t attended college yet. The owner of the 529 plan may also change the beneficiary (for example, to a different family member) if they wish. How do 529 plans work? Contributions to 529 plans are after tax, but the earnings grow tax-free on the federal level and may also qualify for state tax deductions. Once the beneficiary goes to college or a qualified post-secondary institution, distributions from the 529 plan that are used for qualified education expenses are not subject to federal tax. [+] Read More

How Irrevocable Life Insurance Trust Can Fit into Your Estate Plan

November 2, 2016

At WrapManager, our focus is on helping you build an investment plan that can provide for you and your family—hopefully for generations to come. That means part of our work focuses on estate planning, and making sure our clients are thinking about what strategies are needed to plan for the distant future. For 2016, if your value of your estate is less than $5,545,000, then your estate tax planning process may consist of mostly fundamental estate planning—having a will, making sure your beneficiaries are in order, and maybe setting up trusts so you can control how your assets are distributed after death. WrapManager has put together this estate planning guide to help you get started.1 [+] Read More

Federated Investors 3Q2016 Market Commentary

October 31, 2016

With 2016’s all-important final quarter at the doorstep and third quarter data continuing to trickle in, hopes for a sharp second-half rebound have begun to fade.The Atlanta Fed’s closely watched GDP Now forecast for growth in the July-September quarter ended September at 2.4%, well below the 3.5% estimate at the end of August. At the same time, no one is seriously talking recession, just more of the same: muddling along while awaiting the key event of the year: the presidential and congressional elections. [+] Read More

3 Tips for Reducing Your Taxable Income in 2016

October 26, 2016

With the end of the year fast approaching and holiday season just a few weeks away, time is running out for investors to “make moves” that could benefit the filing of 2016 taxes next April. Here are three tips to consider as we head into the end of the year. All of these provide a win-win for investors of reducing your taxable income and providing a meaningful benefit to your household: [+] Read More

JP Morgan Guide to the Markets 4Q 2016

October 24, 2016

JP Morgan Quarterly Guide to the Markets JP Morgan’s Guide to the Markets for the fourth quarter of 2016 is now available. This comprehensive guide includes pages of charts to illustrate the latest information about equities, investing opportunities, fixed income yields and returns, international markets and historical asset class performance. [+] Read More

The Contrarian Nature of Bearish Forecasts

October 19, 2016

There seems this growing feeling that the market is on shaky ground. As an investor, you may feel it too: the presidential election is unique to the point of being wild, Europe appears to be in disarray, corporate profits have seen better days, GDP growth in the U.S. has been lower than average. Perhaps that is why a recent Bloomberg survey of forecasters said they expect the S&P 500 to finish the year 1% lower. They cited some of the concerns mentioned above, but also pointed to negative sentiment tied to rising interest rates, elevated stock valuations, and the aging business cycle.1 The question for investors is: is it time to rethink portfolio strategy, perhaps favoring a defensive posture? [+] Read More

JP Morgan Market Insights 2016: An Election of Extremes

October 17, 2016

JP Morgan Assets analyzes: Why economic angst has contributed to a frustrated electorate Why our base case of de facto divided government is what ultimately matters most for markets What history tells us about market behavior before, during and after presidential elections Why either a President Trump or Clinton will likely face a recession in his/her first term, and how investors should think about their portfolios given where we are in the economic cycle Read the entire market commentary here. [+] Read More

Doug's Quiz Corner: Tax Efficient Investing

October 10, 2016

Quizmaster, Doug Hutchinson, presents his quiz for the month. Here, Doug discusses strategies for tax efficient investing. Consider this Scenario: Your friend Stacy is considering purchasing the following investments: A high yield bond with a 8% coupon that is currently trading at $100 A tax exempt municipal bond with a 2.5% coupon that is currently trading at $100 An actively managed mutual fund with high turnover that typically generates short-term capital gains Stacy has enough funds available in her traditional Individual Retirement Account (IRA) and her taxable individual account to purchase 1 or 2 of these investments in either account. Stacy asks you “I’d like to purchase all three of these investments, but which account should I put each of these investments in? I’d like to be as tax efficient as possible.” [+] Read More

Don’t Neglect Naming Beneficiaries

October 5, 2016

The end of the year is fast approaching, which means the holiday season and family-time are also near. Life tends to get busy and time tends to move quickly once November hits, so if there’s an ideal time to review your estate plan, now could be it. There are several elements to thorough estate planning, but in this post we want to focus on the important—but often overlooked—step of reviewing your beneficiary designations. [+] Read More

Lord Abbett: Implications of Presidential Candidates' Economic Policies

October 3, 2016

The S&P 500 Index has correctly predicted 19 of the past 22 presidential elections and every election since 1985... Amid unprecedented political polarization, lackluster growth, persistently low interest rates, and mounting geopolitical tensions, investors are grappling with allocation decisions as what may be the most contentious presidential election in their lifetime approaches. Politics aside, the next president will be pressed to boost growth, trade, innovation, and jobs in a slow economy transformed by globalization and technology. Note: The purpose of this special report is to help investors evaluate the potential investment implications of the presidential candidates’ most salient economic policies. It is not intended to take sides but rather to shed light on how, historically, markets and sectors have performed before and after past elections, and how various interests might be affected by current proposals, which might prompt consideration of the possible investment decisions to be made. Read on for an excerpt of Lord Abbett's engaging commentary, or view the entire document here. [+] Read More

Does Your Advisor Avoid Talking about Performance?

September 28, 2016

Monitoring the performance of an investment portfolio is a tricky task. On one hand, many investors would benefit from not becoming overly focused on performance. Doing so tends to lead to an unhealthy focus on short-term volatility/price movements, which can easily lead to an investor making a knee-jerk, emotional decision that runs counter to their long-term goals. [+] Read More

3 Things to Know About the Generation Skipping Transfer Tax - GSTT

September 21, 2016

For readers unfamiliar with the generation skipping transfer tax (GSTT), in its simplest form it is what it sounds like – a transfer tax that is triggered when an individual (transferor) bequeaths all or a portion of an estate to a person (skip person) that is two or more generations below them, with an age difference of 37 ½ years or more. The simplest and perhaps most common example would be a grandparent leaving assets to a grandchild.1 [+] Read More

Are Tax Exempt Municipal Bonds Better Than Corporate Bonds? - Doug's Quiz Corner

September 13, 2016

Quizmaster, Doug Hutchinson, presents his quiz for the month. Here, Doug considers whether tax-exempt municipal bonds are a better investment than corporate bonds. Consider this Scenario: Your friend Ricky is considering purchasing a bond and is deciding between a taxable corporate bond and a tax-exempt municipal bond. The taxable bond has a yield to maturity of 4.10% and the tax-exempt municipal bond has a yield to maturity of 3%. Assume both bonds have a similar credit quality and a similar maturity. Assume that Ricky has a federal tax rate of 25% and a state tax rate of 5% and assume that the interest from the tax exempt municipal bond is exempt from both federal and state income tax. Which bond will give Ricky the higher after tax yield to maturity?? [+] Read More

BlackRock Weekly Update September 2016

September 12, 2016

September interest rate increase looks less likely... Richard Turnill, BlackRock’s Global Chief Investment Strategist, gives us the week in review. Turnhill was previously Chief Investment Strategist for BlackRock’s fixed income and active equity businesses, and has also led the Global Equity investment team. Read an excerpt of his weekly commentary below, or view the entire weekly investment commentary here. [+] Read More

The ‘Bear Market’ Chatter is Rising: What Should You Do?

September 8, 2016

If you’re starting to get the feeling that the mutterings of a next bear market are growing, it’s because in many senses they are. A recent Bloomberg article noted that some high profile market forecasters—among them Goldman Sachs and Bill Gross—were raising warning signs about rising stocks and bonds. [+] Read More

Brexit's Effect on Europe: Legg Mason Chart of the Week

September 7, 2016

The Bottom Line Uncertainty about Brexit’s impact may have rippled through financial markets, but so far the biggest economies in continental Europe seem to have taken it in stride. The latest PMI data—reflecting purchasing managers’ answers to a range of questions about business conditions—suggests growth could continue expanding at a slow but steady pace. Coming in at 53.3, the Eurozone Flash Composite PMI for August, was better than expected—and the highest in seven months.1 [+] Read More

“Phasing Out”: The Art of the Gradual Retirement

August 31, 2016

Many retirees or those pondering retirement know: sometimes it’s difficult to let go. After spending decades being hard-wired to go to work week-in and week-out—and in many cases enjoying it—just retiring cold turkey can be a lot to process. That’s why many people opt to “phase out” instead, incrementally weaning themselves away from work and towards retirement. Call it, a “gradual retirement.” [+] Read More

How Team Sports Can Affect Retirement Planning

August 25, 2016

The Olympics ended with a spectacular closing ceremony, the event showed competition is alive and well and the United States topped the medal table once again! Thinking about sports does not generally equate to thoughts about retirement or saving for retirement, but a new TD Ameritrade study demonstrates how the two can actually be closely related. The findings of the study may surprise you. [+] Read More

Polen Capital Reports 2Q 2016 Performance

August 23, 2016

We have a clear investment discipline and a clear compass... After delivering a strong first quarter performance, Polen Capital Management's Focus Growth Portfolio returned -2.62% gross of fees in second quarter 2016. The Russell 1000 Growth and S&P 500 indicies returned 0.61% and 2.46% respectively. Read on for an excerpt of Polen Capital's 2Q 2016 commentary, or view the entire document here. [+] Read More

As A New President Rises, Will the Markets Follow?

August 16, 2016

The U.S. presidential election has capitalized the news media, social media, and pop culture for nearly a year now, and we still have several months before the campaign's end and the voters have their say. Here at WrapManager, we don’t take a political stance on elections, but we do track market trends and activity and the election environment can have an effect on the stock market. It’s interesting to look back at how politics have affected financial markets in the past. Though we can’t predict what might happen this time around, looking back can help us identify previous trends. [+] Read More

Doug's Quiz Corner: Early IRA Withdrawal

August 16, 2016

Quizmaster, Doug Hutchinson, presents his quiz for the month. Here, Doug provides a an example to show the cost of taking an early withdraw from your IRA. Consider this Scenario: Your friend Ken is entering a Fantasy Football tournament and is considering funding his entry fee by taking an early withdrawal of $2,000 from his Traditional IRA. Assume Ken has a federal income tax rate of 28% and a state income tax rate of 6%. Assume Ken will face an early withdrawal penalty of 10% (there are certain situations where an early withdrawal can be taken without the 10% penalty, but for the purpose of this example assume that Ken faces the early withdrawal penalty of 10%). Ken is 25 years old and is planning to retire in 40 years at age 65. Assume that his IRA will return 7% each year for the next 40 years. What would be the total cost of Ken’s early withdrawal considering both the immediate penalties/taxes and the growth in his IRA that he will miss due to taking an early withdrawal? [+] Read More

2 Key Social Security Strategies Legislated Away: What You Need to Know

August 9, 2016

Two strategies designed to maximize Social Security retirement benefits just got cut, but it doesn’t mean your benefits have to shrink too (more on that later). Effective May 1, the U.S. government adopted rules that will bar the "file and suspend strategy" for people born after April 30, 1950, putting an end to a unique strategy for drawing Social Security that helped many retirees boost their lifetime benefits significantly. [+] Read More

BlackRock Weekly Update August 2016

August 9, 2016

The worst of the U.S. profits recession appears to be over... Richard Turnill, BlackRock’s Global Chief Investment Strategist, gives us the week in review. Turnhill was previously Chief Investment Strategist for BlackRock’s fixed income and active equity businesses, and has also led the Global Equity investment team. Read an excerpt of his weekly commentary below, or view the entire weekly investment commentary here. [+] Read More

There’s Still Time: Backdoor Roth Conversions

August 3, 2016

Two years ago we wrote an article about how high income earners—who are generally excluded from Roth IRAs because of income levels—could still technically contribute to Roth IRAs if they used the right methods. We wrote that “high income earners could make non-deductible contributions to a Traditional IRA (non-deductible IRA), then take that money and move it into a Roth IRA.” This method allowed income earners access to the benefits of the Roth IRA, which notably are: the ability to grow your money tax-free and also make tax-free withdrawals. [+] Read More

Nuveen Weekly Commentary July 2016

July 26, 2016

We Expect Modest Economic and Earnings Improvements Robert C. Doll, CRA, Senior Portfolio Manager, Chief Equity Strategist serves serves as a leading member of the equities investing team for Nuveen Asset Management, providing reasoned analysis through equity portfolio management and ongoing market commentary. [+] Read More

401(k) Diversification– Doug's Quiz Corner

July 18, 2016

Quizmaster, Doug Hutchinson, presents his quiz for the month. This time the topic is 401(k) diversification. Keep reading to find out if Gina is going down the right path with her strategy. [+] Read More

Announcing: WrapManager's Q3 2016 Top Equity Money Manager Picks

July 18, 2016

BlackRock Commentary Midyear 2016

July 12, 2016

With half the year over, BlackRock's commentary delivers an overview for the rest of the year. Read the excerpt here, or download the full BlackRock Midyear 2016 Golobal Investment Outlook report. Markets are torn between anxiety over the fallout from the UK’s vote to exit the European Union and the prospect of a strengthening U.S. economy. Downside risks to global growth point to a U.S. Federal Reserve on hold — and reinforce our view of low global interest rates for long. Our key views: Outlook Forum: At a mid-June gathering of some 90 BlackRock portfolio managers and executives, we had vigorous debates on the outlook for a rebound in U.S. inflation, the prospect of a turnaround in beaten-down emerging markets (EMs) and the woes afflicting the global financial sector. Themes: We updated our three themes for this year: 1) We are living in a low-return world; 2) Monetary policy has been a key driver of asset prices — but its effectiveness looks to be waning; 3) We see more volatility ahead as Brexit-related anxiety weighs on Europe’s economy and the business cycle matures. Risks: We see geopolitical uncertainties and a renewed rise in the U.S. dollar as near-term risks, and populism as a medium-term challenge for trade, growth and markets. A potential surprise: a rally in risk assets prompted by investors shifting out of cash and low-yielding assets in search of higher returns. Markets: We have turned more positive on most fixed income due to elevated geopolitical risks and easy monetary policy in a low-growth world. We like income, including investment-grade credit and EM debt. We are cautious on equities, particularly in Europe, given the turn in risk sentiment and poor profit growth. We prefer dividend growers and quality companies. We like gold as a portfolio diversifier. To learn more about BlackRock and other Money Managers, give us a call at 1-800-541-7774 or contact us here to speak with one of WrapManager's Wealth Managers. Download Full Commmentary Here Get Free Research Reports about Blackrock Inc [+] Read More

Can You Improve Returns by Checking Your Investment Portfolio Less?

July 6, 2016

Maybe! Recent research from Columbia Business School suggests that it’s possible. Researchers found that checking an investment or retirement portfolio too frequently could result in lower returns.* That’s because investors who are overly driven by day-to-day fluctuations will often feel more emotionally compelled to make changes, which may ultimately veer them off course. The study cited that investors making decisions too often may “rebalance their holdings to get out of stocks that are dropping and miss out when they go back up.” [+] Read More

JP Morgan Market Bulletin: Brexit - a Shock for Markets, or a Crisis?

June 28, 2016

Excerpt from the June 24, 2016 JP Morgan Market Bulletin. Click here to read the entire bulletin. [+] Read More

Cambiar Investors Insight: Brexit Results

June 28, 2016

Cambiar Investors provides insights on the Brexit results. Their commentary can be read in full here. [+] Read More

Federated Investors - Brexit Update June 24

June 28, 2016

Philip Orlando, CFA, from Federated Investors, shares his comments on Brexit. Read a section below from "Orlando's Outlook" or click here to read the entire commentary. Bottom Line In an extraordinary overnight development, the U.K. voted 52% to 48% to leave the European Union. Prime Minister David Cameron, who supported the Remain camp, immediately fell on his sword, announcing he will resign in October after a transition period to select a new [+] Read More

4 Things You May Not Know About Your 401(k)

June 22, 2016

Allow us ‘cut to the chase’ on one thing when it comes to 401(k)s: they are almost always valuable tools for retirement planning, for those who can access them. 401(k)s have been bedrocks of retirement planning for a long time and could remain so for years to come.(Click here to get the ebook, 5 Ways to Enhance Your Retirement Planning Strategy). If you’re working and have access to one, do everything you can to max it out and invest it according to your risk tolerance and long-term objectives. It’s hard to imagine regretting that type of planning. [+] Read More

The “Never Ending” Story of the Stretch IRA

June 15, 2016

At least we hope it’s a never ending story. About two years ago, we wrote an article about the government potentially ending the Stretch IRA. Back then, there was a proposal being floated that would require non-spousal beneficiaries to receive and pay taxes on IRA distributions within five years of the IRA owner’s passing. The law never materialized, and Stretch IRAs are still a great potential tool for preserving wealth over generations. But here we are two years later, and the proposal is back again—this time as part of the 2017 White House budget. The administration is seeking to accomplish the same thing it couldn’t accomplish back in 2014, to “require non-spouse beneficiaries of deceased IRA owners and retirement plan participants to take inherited distributions over no more than five years.” In layman’s terms, it means that if you inherit an IRA from someone you weren’t married to, you have to distribute all of the funds within a 5-year period, and possibly be responsible for all the associated taxes. Today, a non-spouse person that inherits an IRA can “stretch” out their distributions over a lifetime, in hopes of reaping the long-term growth benefits of a tax-deferred IRA. In the proposed law’s defense, IRAs were never designed to be “legacy” accounts – they were designed to give people the opportunity to save for retirement in a tax advantaged way, and then use that money for retirement. Once the retiree passes away, the tax break should theoretically end – and the concept of a Stretch IRA runs counter to that. As long as it remains on the table, however, investors who have inherited an IRA would be wise to consider it as part of their investment plan. It’s difficult to argue against leaving assets in a tax deferred growth account for as long as possible. [+] Read More

Factors in Bond Performance: Time or Interest Rates?– Doug's Quiz Corner

June 15, 2016

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The ABLE Act: How Can It Fit In With Your Financial Planning?

June 8, 2016

The Achieving a Better Life Experience (ABLE) Act is still fairly new; it was signed into law in December of 2014, so many people are still unaware of what it is and how it can be used.1 In fact, only a few states will have their programs up and running in 2016. The bill’s intent is to ease the financial burdens faced by individuals with disabilities by making tax-free savings accounts available that can cover expenses such as housing, transportation, and education. Let’s take a closer look at the ABLE Act and how it might be helpful to you with your financial planning. [+] Read More

Lord Abbett Market Review - May 2016

June 7, 2016

U.S. STOCKS: SMALL- AND MID-CAPS’ HOME-COURT ADVANTAGE For those concerned about developments overseas, U.S. small- and mid-cap stocks, which are positioned to benefit from strength in domestic consumer spending, may be worth considering. Bracing for “Brexit”? Challenged by China? You’re not alone. A scan of recent headlines underscores the challenges in the global investment landscape. The United Kingdom is facing a fractious vote (June 23) on whether to leave the European Union. China is grappling with a slowing economy. The eurozone is hindered by sluggish growth and the prospect of more fiscal drama with Greece. Japan is trying to jump-start its moribund economy and counter deflation. The list goes on. [+] Read More

Planning for Taxes in Retirement

June 2, 2016

Planning for a multi-decade retirement requires planning and tax planning should be one of your major considerations. Wise retirement investors create a plan that will provide adequate income year after year, but if you don’t take taxes into consideration, your income may be significantly reduced over the long run. [+] Read More

Federated Investors - Recommendations For Uncertain Times

May 31, 2016

Federated Investor's Chief Investment Officer, Equities, Stephen F Auth, CFA, oversees all of Federated's equity and asset allocation products globally. Below you'll find an excerpt from the week of May, 24 2016. If you're interested in reading the full report, download it here. [+] Read More

The Definition of Fiduciary Matters: Here’s Why

May 25, 2016

On Wednesday, April 6, the U.S. Department of Labor finalized what they’re calling the “rule to address conflicts of interest in retirement advice.” Many advisors have been concerned about what the rules would actually entail, and how it might affect their business models. According to a survey of 485 financial advisors conducted by Fidelity, 73% are concerned the rule will have a negative impact on the way they do business. In short, the rule states that any advisor/broker that handles retirement accounts must adhere to the fiduciary standard (to note: WrapManager already adheres to the fiduciary standard, so we do not anticipate any significant changes to how we operate). That means that no matter what the product involved—stocks, annuities, mutual funds, separately managed accounts, or commission products—the advisor must by law put the client’s best interests ahead of their own. Before the law, certain brokers and types of advisors could recommend a product as long as it was “suitable” for their clients. [+] Read More

JP Morgan - 1Q16 earnings update: Beating estimates, but not yet growing

May 24, 2016

In brief: Following the 2015 decline, S&P 500 earnings per share (EPS) fell -6.7% in the first quarter.1 Companies beat earnings estimates but missed revenue estimates. We maintain our view that the headwinds weighing on aggregate earnings— energy prices and a stronger dollar—will dissipate over the course of 2016, leading to mildly positive earnings growth for the year. However, we are keeping an eye on rising wages, which have the potential to press on earnings and margins just as other headwinds subside. When it comes to choosing the best metric for evaluating earnings, we prefer operating earnings, as they offer the cleanest view into a company’s day-today business. If the gradual earnings recovery that we anticipate occurs during the second half of 2016, we see some upside for U.S. equities. [+] Read More

How Can I Participate in Socially Responsible Investing?

May 18, 2016

Saving for your own retirement could be called a socially responsible, self-sustaining endeavor. By planning for your own future, you put yourself in a position to help others instead of depending on others. But many people find that they want to take their generosity to another level with Socially Responsible Investing (SRI).1 Socially Responsible Investing is a strategy used by investors who are looking to promote ideals and values they feel strongly about. For example, an investor who feels strongly about education reform might invest in Microsoft but avoid Berkshire Hathaway. That’s because the Gates Foundation2 actively supports education reform and Buffett’s Sherwood Foundation3 actively opposes education reform. Whatever your personal ideals, you can find ways to invest that will promote those concepts. According to Forbes, SRI increased more than 76% to $6.57 trillion in managed assets during the period between 2012 and 2014.4 If you’d like to put your money where your heart is, you can participate in Socially Responsible Investing in the following ways: [+] Read More

Meaningful Diversification and Mutual Funds – Doug's Quiz Corner

May 18, 2016

Quizmaster, Doug Hutchinson, has come up with another great quiz. This time he discusses creating a meaningful and balanced diversification strategy. Good luck! Consider this scenario: Your friend Ben has been saving money and he has $10,000 that he would like to invest. Ben owns 47 different mutual funds and he is considering investing his $10,000 in a 48th mutual fund. "My goal is to be diversified," Ben tells you. "You can never have too much of a good thing so adding the 48th mutual fund to my portfolio will get me evenmore diversified. The more holdings I have, the greater the diversification benefit that I'll receive." Is it reasonable to expect that Ben will get a meaningful diversification benefit by adding a 48th mutual fund to his portfolio? [+] Read More

Getting the Better of Market Volatility in Your Retirement Plan

May 11, 2016

The market endured a bumpy start to the year, but it also displayed strong resilience over the last few weeks to rally back into positive territory. Investors should use this experience to remember an important lesson: even when market volatility seems pronounced and temptations run high to shift away from stocks, the market can also overcome the short-term headwinds and recover quickly. The first three months of the year offer us a case and point: Figure 1. S&P 500 Year-to-Date (the lapses in the graph are trading holidays) [+] Read More

3 Actions You Should Take to Examine Your Investment Fees

May 9, 2016

Federated Investors - Horror is a Relative Term

May 3, 2016

Federated Investor's Senior Equity Strategist, Linda Duessel, offers a Weekly Update. Below your find an excerpt from the week of April 22, 2016. If you're interested in reading the full report, download it here. [+] Read More

Polen Capital Management - Ongoing Fundamental Strength

April 26, 2016

Polen Capital Management's Focus Growth Portfolio continues to deliver solid double‐digit earnings per share growth, which is quite distinct from the broader market right now. Read their quarterly commentary to learn how their team believes this strong ongoing earnings per share growth will continue to support strong long‐term investment returns. [+] Read More

How Marital Status Affects Retirement Benefits

April 20, 2016

Changes in marital status can have a big impact on your retirement planning. Retirement account balances, eligibility for pensions, and even Social Security benefits can all be affected by divorce or death. It’s a common misperception that living singly will be half as expensive as living as a couple. In fact, expenses generally drop only about 20% due to housing, insurance, and other costs. What can you do now to prepare for the possibility that your marital status may change later on? Let’s take a look at the ways retirement benefits could be affected. [+] Read More

ETF Currency – Doug’s Quiz Corner

April 13, 2016

Quizmaster, Doug Hutchinson, has come up with another great quiz. This time he tests our knowledge of how currency risk can impact an investment. Good luck! Consider this scenario: Your friend Katrina bought $10,000 of an Exchange Traded Fund (ETF) that tracks the performance of an index of Japanese equities. [+] Read More

A Useful Investment Tool for Retirees: The Monte Carlo Simulation

April 13, 2016

When it comes to investing and retirement planning, there’s one certainty everyone must address as part of their planning: there are a lot of uncertainties. Of course, as an investor you’ve known that all along. Market returns are unpredictable in any given year. But it doesn’t end there – investors sometimes miss the other, lesser emphasized variables that create different kinds of uncertainties over time. We’re talking about factors like: you and your spouses’ life expectancies, the inflation rate over time, and the levels of cash flows you expect to take over your lifetime. All of these factors impact how your portfolio value will change over time. [+] Read More

5 Ways Going Back to Work Affects Your Retirement Income Strategy

April 6, 2016

Retirement sometimes means being busier than ever, and for some that’s because you have re-entered the workforce with a new passion or a new project (the income is nice too). If you’ve returned to work or are thinking about it, it’s important to consider how your additional retirement income could affect other parts of your investment plan. Walk through these five questions with your financial advisor to see how you might be affected. 1) How Will the Income Affect My Social Security Retirement Benefits? If you are already collecting Social Security retirement benefits, and you are below the normal retirement age (between 66 and 67 for those born after 1943), then your benefits will likely be reduced depending on how much income you are making. The law states that for every $2 you earn above the annual limit ($15,720 for 2016), you get $1 less of Social Security benefits. This is known as the “earnings test.” [+] Read More

ClearBridge Investments - Q1 2016 Commentary

April 5, 2016

ClearBridge Investment's Hersh Cohen comments on the first quarter of 2016 regarding rallying oil prices and investor caution approaching the election. [+] Read More

Is Passive Investing a Flawed Approach?

March 30, 2016

Passive investing – which is also categorized as index investing or simply ‘investing in Exchange Traded Funds (ETFs)’ – has gained popularity in recent years within the investment community. In 2015 alone, roughly $150 billion moved out of mutual funds while $150 billion moved into ETFs (according the Thomson Reuters). It is probably a coincidence that the money moving in and out was nearly the same, but that’s not the point anyway. What is clear is that ETFs are gaining popularity while enthusiasm for mutual funds is fading, and this is a trend that has been going on for years.1 Performance and fees are probably two key drivers of the sea change. Over the last 20+ years, the percentage of active managers (mutual funds and otherwise) that outperform passive indexes can range anywhere from 10% to 80%, but from year to year the actual number fluctuates widely.2 If an investor has a manager or managers that have a couple of years underperforming their benchmark (usually an index), the investor might grow tired of paying management fees and decide to take a passive approach instead. The theory behind taking a passive approach is fairly simple – it offers the investor less in management fees with index-like returns. But does it? There are two little-discussed flaws with the passive approach that can be influential (and detrimental) to performance. [+] Read More

Federated Investors - March Madness

March 29, 2016

Federated Investors' Senior Equity Strategist, Linda Duessel comments on the election, market volatility, stabilization in the U.S. Manufacturing sector and more in her Weekly Update. "This was a meeting-packed 5-day mad race crisscrossing North Carolina, with visits in Charlotte, Winston-Salem, Greensboro, Raleigh, Wilmington back to Raleigh…then Winston-Salem and finishing in Lake Norman. Everywhere we went the weather was perfect, the food was fabulous and the advisers and end clients were so welcoming. We were there on Tuesday’s primary election date. People were mostly amused by this madcap political season. An adviser in Greensboro suggested that once the nominees are selected, their debate should be pay per view. “It would be unbelievable…huge!” Certainly over the weekend the political rhetoric and menace reached a fever pitch and yet, somehow investors are not concerned. Trump is to blame, MoveOn is to blame, Congress is to blame…take a number. How this isn’t a bigger overhang on stocks is beyond me. [+] Read More

How to Keep Your Retirement On Track

March 23, 2016

Starting to save for retirement is an important first step toward achieving your goals. That said, retirement planning can seem overwhelming at times. The timeframe is long, and the future seems unclear. As you create a plan and develop your investment portfolio, however, you’ll see how having a solid plan can make you feel more confident about the future and ensure that you have attractive options available to you. Creating a plan is just the first step, however. After you have a plan in place there are still actions you should take on a regular basis to keep you on the right track, steadily pressing forward to your ultimate goal: a successful retirement. The following tips can help you to keep your retirement on track. [+] Read More

Money Manager Benchmarking - 4 Things to Know

March 16, 2016

Let’s start with an example. Say you hire a money manager on January 1 of a New Year, and your objective is to give that manager one-year to prove his or her worth. After one year, the manager produces a +20% return for your investment portfolio. That’s fantastic, right? Not necessarily! What if that manager’s focus/approach was to manage a portfolio of global stocks, but the MSCI World (an index that tracks global stocks) was up +40% that year? In that case, his or her performance was not so great comparatively. That’s an example of how you can use ‘benchmarking’ as an investment tool—it gives you a metric to measure a manager’s performance on the basis for which you hired them. Looking at the performance of different asset classes can help make the point clearer. [+] Read More

J.P. Morgan's David Kelly on the Current Economic Environment

March 15, 2016

J.P. Morgan's Chief Strategist, David Kelly, addresses the liklihood of a recession in the current, emotionally charged market enviroment. Read the full transcript of his commentary below. "Hello. This is David Kelly. I’m Chief Strategist here at J.P. Morgan Funds. In finance, almost as much as in politics, the most passionate and least reflective voices receive the most attention. A slump in Chinese stocks and the Chinese currency at the start of the year triggered a global stock market selloff. This, together with lower oil prices and some pretty weak numbers on global manufacturing, prompted many loud voices to say that the U.S. is either already in recession or is falling into one with near certainty. These dire predictions, in turn, have frightened many investors who remember the pain of seeing the stock market fall in half in the last two recessions. However, in this emotionally charged atmosphere, there are four key aspects of the current economic and financial environment that investors need to appreciate: [+] Read More

Tax Aversion – Doug’s Quiz Corner

March 9, 2016

Quizmaster, Doug Hutchinson, has come up with another great quiz for us regarding how tax aversion can sometimes lead investors to make sub-optimal investment decisions. Good luck! Consider this scenario: Your friend Jeff owns a mutual fund worth $100,000 in his taxable account. Jeff has been considering selling the mutual fund and replacing it with a similar investment with lower fees (and, therefore better projected net of fees returns). However, Jeff is leaning toward not selling his mutual fund because his cost basis on the mutual fund is $75,000, so selling it would create a taxable gain of $25,000. [+] Read More

Republican or Democrat: Which Political Party is Better for the Economy?

March 9, 2016

The recent market volatility has shifted focus away from the upcoming presidential election (a little), but there’s still not a day that passes without at least a few hours of campaign coverage. Take the build-up to November as you will, but we think we can all agree that until the actual results are in, it’s more rhetoric and political posturing than anything else. A topic du jour for political posturing is…you guessed it… the economy! Both parties try to persuade voters that their policies are better for the economy and the markets, so we decided to take a closer look at how the economy and stock market have performed under different kinds of leadership. As you review some of the findings below, please keep in mind we do not favor one party over the other—our primary goal is to help our clients reach their long-term goals, and how we view politics personally should not (and does not) play a role in the investment plans we create and manage. Also, the findings below should not set any kind of expectation for future returns depending on who wins. If anything, you should view the findings below as little more than ‘interesting cocktail party facts!’ So…Republicans or Democrats – Who’s Better for the Economy? Two Princeton economists performed some comprehensive research on the matter, in a paper titled “Presidents and the U.S. Economy: An Econometric Exploration.” For all of the interesting discoveries they make in the process, perhaps the biggest takeaway is that political party doesn’t seem to matter all that much The economy and stocks tend to perform better when a Democrat is in power, but Messrs. Blinder and Watson make it clear in their paper that gaining an edge in economic and stock market performance is more arbitrary than policy related: “It appears that the Democratic edge stems mainly from more benign oil shocks, superior [productivity] performance, and perhaps greater defense spending and faster growth abroad.” The analysis looked at a 64-year period starting with President Harry Truman and ending with President Barack Obama, which includes seven complete Democratic terms and nine Republican ones. Some findings: [+] Read More

Polen Capital Management - Outperforming the Indices

March 2, 2016

Polen Capital Management's Focus Growth Portfolio was able to outperform the market again in 2015. Read their quarterly commentary to learn how leveraging Alphabet Inc.'s (formerly Google) weak 2014 share price helped them achieve that feat. [+] Read More

The Best and Worst States to Retire – Retirement Lifestyle Planning

March 1, 2016

Whether you’re hoping to move closer to family, downsize your home, or live in a place you’ve always dreamed of, many people choose to relocate during retirement. In fact, relocating can be an effective part of your retirement lifestyle planning, especially if you consider the financial implications of your new chosen home state. As you make decisions about relocating, you can use each state’s tax rules to your advantage to potentially save thousands of dollars. Perhaps, more importantly, you can benefit even more if you can find a state with tax rules that align well with your personal retirement goals. If you’re leaving a large sum of cash to you children, you might consider choosing a state with very low estate taxes. [+] Read More

The "Diversification" that Few People Talk About

February 24, 2016

The benefits of investment diversification have long been known, heralded, and applied to portfolio management. And that’s not likely to change going forward either – it seems highly unlikely that sometime in the future we’ll look back on diversification as some kind of antiquated investment tool that no longer works effectively. That’s because asset prices have been volatile for as long as anyone can remember, and they move in all different directions at different times. While diversification and asset allocation do not ensure a profit or guarantee against loss, the theory of diversification that “everyone talks about” is if you own a portion of each asset class in your portfolio, you can attempt to neutralize the impact of individual price changes—smoothing out returns with lower volatility. [+] Read More

What’s the Cost of a Successful Retirement?

February 17, 2016

Discussions about retirement planning usually begin with a basic question: What’s the cost of a successful retirement? If everyone had the same expenses, the same family situation, and the same retirement goals and aspirations, there could be a one-size-fits-all answer to this question. But each person’s situation is unique. That said, there are certainly rules of thumb that can be extremely helpful when it comes to retirement planning. Using general guidelines—with a healthy helping of personalization—you can answer the very important question of how much you will need to have a successful retirement. Let’s first take a look at general guidelines, and then we’ll look at the ways each person needs to personalize retirement planning to fit their unique situations. Rules of Thumb Everyone can begin their retirement calculations from a few basic rules of thumb and then personalize from there. The following guidelines can help you get a rough, generalized estimate of what you’ll need for a successful retirement. [+] Read More

Federated Investors - Weekly Update

February 16, 2016

Federated Investor's Senior Equity Strategist, Linda Duessel, provides her insight on this year's market volatility in Federated's weekly update, Main Street is Calmer than Wall Street for a Change. "I spent most of the week in San Diego, where I wasn’t prepared for the 80-degree temperatures and blinding sunshine, leaving my sunglasses at home (living in cold and cloudy Pittsburgh, I only associate sunglasses with summertime). Well, a chill adviser gave me hers! It’s all chill here. Walking along the water, there is a young man practicing tai chi—be calm, find your center. He’s not worried. Further along my walk is a tarot card reader having an intense discussion with a couple—I’m not eavesdropping but I think the discussion is personal and not about the markets. And a little further down is a vendor selling dream catchers—ever heard of them? Off to meetings with advisers, one lamented, “What do you tell clients?! They look at the screens and say ‘blankety blank blank.’ ” [+] Read More

ETF Tracking Error – Doug’s Quiz Corner

February 10, 2016

Quizmaster, Doug Hutchinson, has come up with another great quiz for us regarding the factors that may cause the performance of an ETF to differ from the performance of an index. [+] Read More

Buckle Up for Market Volatility this Year

February 10, 2016

Volatility has persisted throughout the start of 2016, to the point where it almost feels relentless. Coping with volatility is rarely easy for investors, and the fact that we’ve experienced the worst 10-day start to a calendar year1 has many wondering if it makes sense to shift away from equities for now. No one can say with certainty whether the stock market will recover quickly and finish the year positive. But what we can control is how a portfolio is allocated in a volatile environment. For investors, we think it is less about: “should I go to cash and/or be more defensive?” and more about: “is my portfolio diversified sufficiently (to help reduce volatility), and should I consider including a tactical strategy in place designed to take defensive action in a prolonged downturn?” In other words, we think it is more important to have confidence in your asset allocation versus trying to forecast what's ahead for the markets. [+] Read More

What's the difference between the Fiduciary Standard and the Suitability Standard?

February 3, 2016

Here’s a fact about financial advisors (NOT Investment Advisors) that may surprise you: they do not necessarily have to act with your best interests in mind. Please, take a moment to shake your head in disbelief. It’s ok. Actually, it’s not ok! The way the law exists today, advisors and brokers can be classified in one of two ways. Either they give you investment advice according to the fiduciary standard, or they adhere to what's known as the suitability standard. It’s the latter one that can be problematic, and it’s also the growing subject of legal debate as the White House and Department of Labor consider new rules. Below, we broke down what you need to know now and what to look for ahead. [+] Read More

Federated Investors - Q4 Strategic Value Dividend Commentary

January 26, 2016

The Federated Strategic Value Dividend Q4 Commentary reviews the end of 2015 including an assessment of the uncertainty caused by oil prices, interest rates, manufacturing activity and a slowing China. "Market Overview Concerns over energy, manufacturing and China helped snuff out a budding Santa Claus rally, with the three major domestic equity indexes closing down on the month and the big two—the S&P 500 and the Dow Jones—also down for the year. December’s performance was representative of the entire year, as encouraging news on jobs, autos and consumers once again battled unsettling news on oil prices, manufacturing activity and a slowing China, leaving investors uncertain about the future. [+] Read More

Announcing: WrapManager's Q1 2016 Top Equity Money Manager Picks

January 21, 2016

There are literally thousands of money managers out there. If you’re trying to figure out which one (or ones) is right for you to help you reach your investment goals, you may feel overwhelmed by all the options. Where do you begin researching and what criteria do you consider? We’d like to help. Each quarter, WrapManager’s Investment Policy Committee (IPC) compiles a list of top money manager picks in order to help investors discover and evaluate money manager strategies. These encompass a wide range of asset classes and investment disciplines. [+] Read More

Concerned about Market Volatility? Time to Reassess Your Risk Tolerance

January 20, 2016

The stock market has gotten off to one its worst starts ever for a year—on last Friday alone, the S&P 500 and the Dow Jones were both down over 2%,1 and for the year the Dow has already declined over 1,400 points. Both indices are down some 8% for the year,2 and it’s still just January! Fears over China’s slowdown, cratering oil prices, and iffy corporate profits have many investors worried about what lies ahead. In fact, a recent survey conducted by the American College showed that over 60% of retirement income specialist’s clients were concerned about the recent market volatility and their retirement security.2 Does January’s market volatility have you concerned too? [+] Read More

Human Capital and Your Investment Portfolio - Doug's Quiz Corner

January 13, 2016

Quizmaster, Doug Hutchinson, has come up with another great quiz for us regarding the potential effect of human capital on your investment strategy. Good luck! [+] Read More

Lower Your Taxes in 2016: Take Advantage of Tax Deductions and Credits

January 13, 2016

A new year is a fresh slate in many ways, including the way you manage your taxes. There are numerous tax deductions and tax credits available to taxpayers who know about them and use them. The problem is that many taxpayers either don’t pay attention to them or don’t prepare to use them. Most of these deductions and credits require that you track expenses and keep receipts. These are easy things to do if you create a strategy and system for tracking expenses. Make a goal in 2016 to take advantage of tax deductions and tax credits. You may be able to lower your overall taxes by doing so. The following tax deductions and tax credits are often overlooked. See if you qualify for any of them. By making a plan now for the coming year, you may be able to take advantage of more tax deductions and credits. Long Term Care Insurance Premiums You may be able to deduct premiums paid for qualified Long Term Care (LTC) insurance policies from you 2016 taxes. Some LTC policies qualify as “medical expenses” according to the IRS itemization definition. Talk with your tax adviser about the possibility of deducting these expenses; in many cases you can deduct them to the extent that your total medical expenses exceed 10% of your adjusted gross income. [+] Read More

ClearBridge Investments - 4th Quarter Review

January 12, 2016

ClearBridge Investments, a Legg Mason company, addresses 2015 market volatility in their 4th quarter market overview and outlook. [+] Read More

Federated Investors - 2016 Outlook

January 7, 2016

Federated Investor's Senior Equity Strategist, Linda A. Duesse discusses oil prices, earnings, election years, the Santa Claus Rally (SCR) and more in her 2016 Outlook. "As an indecisive year draws to a close —the S&P 500 crossed the flat line a in 2015—the market record 26 times remains in a difficult position. While the seasonal backdrop is certainly supportive through January, daily, weekly and monthly momentum indicators are not oversold and continue to weaken. Individuals continue to dump equity funds, market breadth remains narrow, the rally off the August lows failed to generate the internal surge often seen in the early innings of a durable advance, and credit conditions are still suggesting caution, with high-yield spreads ending 2015 at their highest level in nearly 3 years. The macro backdrop isn’t great either. Global growth is slowing, while in the U.S., real GDP remains stuck in a 2%-2.5% rut. Ironically, the ability of companies to make money in this environment may be supportive of this frustrating norm. While the top line of developed-market companies has been rising much slower than in previous recoveries, profits have grown at a very decent pace, a result of operating leverage that has grown steadily over the last quarter century. In other words, companies have learned to generate profits in a low-growth environment and have been successful at expanding margins. One of the key reasons, Empirical Research says, is the improved use of capital, i.e., with returns on capital improving, margins can improve without the capital intensity typical of past cycles. A consequence is that a capital-light business model comes with a capital spending-light recovery, which means the accelerator effect on GDP from that spending will be muted and the recovery is destined to remain sluggish. [+] Read More

Time to Reassess Your Financial Advisor? 4 Warning Signs to Watch For

January 5, 2016

The beginning of the year is a good time to closely review your investment plan and make an assessment of how well it’s working for your family. Are you on track to meet your goals? Is your advisor managing your investment portfolio pursuant to your needs (producing sufficient income and/or growth)? And above all, are you happy with the service? A good rule of thumb in our opinion is that if you think your overall experience can be better, then it should be better. There’s really no need to ‘settle’ when it comes to choosing a financial advisor you can trust and who meets your expectations. You’ve worked hard to build your nest egg, and you deserve an advisor who can help you grow it and meet your retirement income needs over time. Here are four warnings signs that your current advisor may not be that person. [+] Read More

What's Ahead for Investors in 2016?

December 30, 2015

When you think about it, investing is a lot like life: some years are great, some less so, but at the end of the day it’s of utmost importance to keep looking forward. In both endeavors we learn from our triumphs and mistakes, and we use that knowledge to keep getting better as we go. 2015 was a lot like 2011: a year when the stock market was rather volatile and did not offer much by way of positive returns.1 The U.S. and global economy grew but earnings felt some downward pressure from the Energy sector;2 the Federal Reserve raised interest rates for the first time in nearly 10 years;3 the Chinese economy started to show signs of slowing; Europe is showing signs of recovery, but remains fragile. Nothing seems alarming or wrong with the global economy – it just has that “middle of the road” feeling. But it could get better from here. Below, we’ll use charts to take a look at where the markets stand now and how economic growth is shaping up around the world, and we’ll offer some insights as to what might be ahead for investors in 2016. The message overall: stay positive. [+] Read More

Estate Planning 101: Helping You Get Started

December 23, 2015

We’ll admit it: creating a comprehensive estate plan is not the easiest thing in the world to do. In fact, it usually involves a great deal of time, planning, and in some cases can come with a price tag. But that does not make estate planning any less important to your financial future! Spending adequate time on your estate plan can mean having your assets distributed the way you want them distributed, and it can save your family time and money and help them avoid the hardships that often accompany estate settlements where plan documents are unclear (or non-existent). Enter Estate Planning 101, your guide to the estate planning basics you need to get started. Creating a comprehensive estate plan takes time, and your plan is subject to change over the years as your family and financial circumstances change. Our goal is to give you a starting point by outlining some of the basics. What is an Estate Plan? An estate plan creates a documented approach for how your assets should be distributed after you pass away (or become unable to make your own financial decisions). Many folks may believe that an estate plan is only necessary for the very wealthy, but that is not necessarily the case at all. [+] Read More

Conjunction Probabilities and Behavioral Finance – Doug’s Quiz Corner

December 16, 2015

Quizmaster, Doug Hutchinson has come up with another great quiz. This month, he demonstrates how cognitive bias can influence our perspectives and decisions. Good luck! Consider the following scenario: Laura is a recent graduate of UC Berkeley where she majored in English and Environmental Studies. As a student, Laura was very concerned with social justice issues and environmental issues. She is an avid reader and a vegetarian. Indicate which of the following cases is most probable? Which case is the least probable? A) Laura works in the banking industry B) Laura works as a librarian C) Laura works as a librarian, takes yoga classes, and is a member of the Sierra Club D) Laura works in the banking industry and is a member of the Sierra Club [+] Read More

7 Tips to Reduce Taxable Income Through Charitable Giving

December 16, 2015

Charitable giving reached an all-time high in 2014,1 with Americans giving $358.38 billion to charities, according to National Philanthropic Trust.2 Giving feels good, but the benefits of giving don’t end there. You can also reduce your taxable income through charitable giving by making sure you follow the tax guidelines for charitable donations. If you haven’t yet done so, you can join the millions of Americans who donate to charity and receive a reward for themselves: a lower overall tax bill. In order to make a difference in your taxes, follow these 7 guidelines: Choose Qualified Charities. Not all charities qualify for tax deductions. If you’re unsure about a charity’s status, ask to see their letter from the IRS or search online at the IRS Exempt Organization Select Check website. If you’re donating to a church, mosque, synagogue, or temple, keep in mind that religious charities are considered de facto charitable organizations, even if they’re not on the IRS list. [+] Read More

Eagle Asset Management Market Perspective - Patience

December 15, 2015

Eagle Asset Management's Richard Skeppstrom urges patience in this month's Market Perspective. "When things don’t seem normal, we’re prone to action. Yes, we’ll wait around a bit expecting the familiar to return but we aren’t a patient species: somewhere between dogs and finches. The urge to do something overwhelms caution at some point. I believe we (the markets) are there. We’ve given up on the return of familiar. The genetic playbook is calling for action. Morgan Stanley is feeling it: The company just fired 25 percent of its fixed-income folks. Conclusion: Fixed income is crippled forever or Christmas is the best season for job searches? The epic merger boom: Zero organic growth is bad for my CEO pay or Goldman Sachs deserves more deal fees The U.S. Federal Reserve’s profound dithering over 25 basis points: Evidence of a desire to do something or a Fed out of options? [+] Read More

Potential Tax Benefits of Switching to a Separately Managed Account

December 8, 2015

Previously, we discussed ways to reduce your taxable income by maximizing your contributions to tax-deferred accounts like 401(k)s and SEP IRAs. This is a great tax strategy, but it’s not the only strategy for you to consider. We’d like to continue that discussion with another strategy for reducing your taxable income: switching from mutual funds to separately managed accounts (SMAs). After all, in the end, it’s not how much you earn that matters most. What matters is how much you manage to keep. Before we get into the tax advantages of Separately Managed Accounts, let’s define them and learn about how they’re different from Mutual Funds. [+] Read More

New eBook! Guide to Researching Money Managers

December 2, 2015

Money managers and the underlying investments can act as the fuel for your investment plan, propelling you toward your retirement goals and the future you’ve planned for yourself. Therefore, it’s important to choose your money manager carefully. There are some general rules of thumb that will help you to find the right strategy mix to help make your goals a reality. Finding a money manager can be time-consuming, however, and there are many other things you would rather be doing. Fortunately, financial advisors can serve two functions: they can create and monitor your investment plan, and they can also research money managers for you. Our new eBook, Guide to Researching Money Managers, will discuss the following topics that can help you better understand steps you can take when researching money managers: What's the Difference Between a Money Manager and a Financial Advisor? In short, money managers manage and financial advisors advise. Financial advisors understand individuals’ financial situations and create unique investment plans while money managers spend their time managing portfolio strategies. This section will go into more detail about the differences. [+] Read More

Did You Know? Interesting Facts about the Federal Reserve

December 1, 2015

For all the media coverage garnered by the Federal Reserve (Fed) and the potential for interest rate hikes, you rarely encounter basic explanations of how the Fed actually functions. Simple questions, like: How and when was the Federal Reserve formed, and for what reason? How are meetings structured/scheduled, and what are the guidelines for making decisions? The Federal Reserve is arguably the most watched financial institution in the world, yet we’d venture to say that even many expert advisors are unaware of some of the basic ins-and-outs of how it works. We’ll cover a few of those here. (In)Frequently Asked Questions about the Federal Reserve How and when was the Federal Reserve formed, and for what reason? [+] Read More

Reduce Taxable Income: Maximize Contributions to Tax-Deferred Accounts

November 25, 2015

Tax bills are on the rise: it now takes the average American until April 24th each year to work enough to pay off his or her share of local, state, and federal taxes, as calculated by the nonpartisan Tax Foundation.1 With proper planning, however, you can reduce your income tax burden by maximizing contributions to tax-deferred accounts. This is a common tax-reducing strategy, but investors often underuse it. [+] Read More

Eagle Asset Management - Volatility Examined

November 23, 2015

Richard Skeppstrom, of Eagle Asset Management's Strategic Return Portfolio, analyzes recent market volatility in Eagle's November Market Perspective. "As the third quarter came to a close, equity markets were a stumble away from panic. Bankruptcy concerns were playing havoc in the commodity space while technicians nervously watched for a Dow sell signal. If the Dow had closed below the August trough of 15666: a blood bath. I wrote that I was comfortable with my equity allocation and would just wait and see, ignoble action possibly resembling chicken excrement. Of course, my reluctance to do anything was a reliable buy signal. Don Hayes, the longstanding strategist at fondly remembered Wheat First Securities, used to say the markets will do whatever they can to confound the most. The rebound this month certainly qualifies. Not only has the market staged a striking rebound, but also sector leadership completely reversed. Energy and commodities – hated a few weeks ago – have led while healthcare has lagged. [+] Read More

Social Security Changes: How the Budget Agreement Affects Retirement Plans

November 18, 2015

Investor concerns about another government shutdown were eased in late October, when Congressional leaders passed a bipartisan agreement that will provide relief from sequester cuts and avoid unnecessary debt defaults1 (yes, we just wrote the words ‘bipartisan’ and ‘agreement’ in the same sentence). A closer look at the budget agreement, however, revealed some changes to Social Security rules that will close the window – at least for now - on some unique Social Security Retirement Benefit ‘strategies’ that we’ve written about before. The End of the “File and Suspend” Strategy The first is the File and Suspend Strategy. Before this budget agreement, the file and suspend option allowed one person in a married couple to file for their benefit (thereby allowing the spouse to claim their benefit) but then immediately suspend it – allowing that future benefit to increase. You file, your spouse claims, then you suspend. [+] Read More

Leveraged ETFs - Doug's Quiz Corner

November 18, 2015

Quizmaster Doug Hutchinson has come up with another great quiz that explores the compounding effect of leveraged ETFs. Let’s see what the math has to say. [+] Read More

A Different Way of Looking at Market Volatility

November 11, 2015

Recent market volatility has likely raised fresh doubts with some investors about where the market is headed from here. The S&P 500 and the Dow Jones both fell over 10% in just a few trading days late in August,1 and concerning headlines about growth in China have persisted over the last few weeks (though the market has recovered a bit over that time). But don’t let the volatility lure you away from your long-term investment strategy. As investors, it’s tempting to experience declines (especially when they happen quickly like in August), and to want to react—to take your portfolio more defensive or to sell out of stocks altogether. It’s human nature, but it can also hurt more than it helps. The repercussions of ‘reacting’ can indeed have a significant impact on the investment returns you generate over time. Take a moment to study the chart below. As you can see, with $10,000 invested over 20 years, you would have over $65,000 had you stayed invested even throughout two bear markets. But if you missed just the 10 best days over that time, you would have an eyebrow-raising $30,000 less. That’s more than half of what you could have earned, in just 10 days! Miss the 40 best days, and you actually end up losing money. [+] Read More

ClearBridge Advisors - Market Risk and Opportunity

November 10, 2015

ClearBridge Investments, a Legg Mason company, provides their Q3 commentary with discussion of the challenges and opportunities that exist within such a volatile market. "Market Commentary “Nothing any good isn’t hard.” – F. Scott Fitzgerald Memories of painful experiences are often a critical and adaptive part of living, in that painful memories can keep you out of harm’s way by minimizing repeat mistakes. The challenge, however, is that memories are highly subjective, and with the passage of time you often forget how intense something felt at the time. In the realm of physical pain, my biggest outlet for stress is training and competing in triathlons with my wife and several colleagues from ClearBridge. They are all better than me, which is painful enough, but I often don’t have enough time to fully prepare for the longer events. This inevitably leads me to swear off competing again, until I ultimately find myself standing in a cold body of water at the beginning of another grueling physical experience. In all seriousness, I love competing, and the rewards of doing so from a health and emotional perspective far outweigh short bouts of physical pain that are soon enough forgotten. [+] Read More

Cambiar Investors International ADR

November 9, 2015

While market concerns had investors scrambling for the exists, Cambiar Investors took advantage of the market weakness in Q3 to deploy capital into a number of new investments. Read their Q3 2015 commentary below. "Market Review After fairly muted performance for the first half of 2015, global equities sold off in the third quarter. In contrast to prior pullbacks that were often met with buyers stepping in to buy the dips, investor sentiment towards stocks deteriorated considerably in the quarter. A popular Wall Street phrase is “stocks climb a wall of worry” – referring to the tendency for equity markets to overcome a host of negative factors and move higher. Yet is seems the wall got too high in the quarter. Global growth fears (led by China), increasing uncertainty of U.S. monetary policy, and continued pressure in Emerging Markets were just some of the concerns that had investors scrambling for the exits. While all of these factors warrant careful consideration, it is Cambiar’s view that the correction in the quarter was of the “shoot first/ask questions later” variety, vs. fundamentally driven. Given our value orientation, such reflexive selling can provide attractive entry points; to that extent, Cambiar used the market weakness to deploy capital into a number of new investments during the quarter. [+] Read More

Emerging Markets and Commodities: Have They Reached a Bottom?

November 4, 2015

2015 has been a challenging year so far for many asset classes, but Emerging Markets and Commodities are two categories in particular that have felt pronounced downward pressure throughout. Emerging Markets (as measured by the iShares Emerging Markets Index ETF, ticker EEM) are down around 10% year-to-date through October 20,1 and commodities have fared even worse—in the third quarter prices cratered, with Brent Crude Oil and West Texas Intermediate down -23.6% and -23.7%, respectively, and with copper -10.7%, gold -5%, and silver -7.5% all losing ground as well.2 The questions on many investors’ minds are: is the slump over? Are these attractive levels to buy-in to Emerging Markets and commodities? [+] Read More

Federated Investors - International Market Commentary

November 3, 2015

Federated Investor's Q3 international strategic value dividend account commentary reivews the affect of August volatility and the ability of their strategy to provide a substantially higher-than-market yield and long-term dividend growth. "Market Overview" Equity markets pulled off their August low but were still down on the month, closing out their worst quarter in four years as investor fears over China, lower oil and a potential global slowdown outweighed generally better economic data at home.The Federal Reserve added to the uncertainty and volatility, choosing to put off liftoff at its September meeting, rattling the markets even though futures had put the odds of a move at well below even. [+] Read More

Announcing: WrapManager's Q4 2015 Top Equity Money Manager Picks

October 28, 2015

There are literally thousands of money managers out there. If you’re trying to figure out which one (or ones) is right for you to help you reach your investment goals, you may feel overwhelmed by all the options. Where do you begin researching and what criteria do you consider? We’d like to help. Each quarter, Wrap Manager’s Investment Policy Committee (IPC) compiles a list of top money manager picks in order to help investors discover and evaluate money manager strategies. These encompass a wide range of asset classes and investment disciplines. [+] Read More

Eagle Asset Management - Interest Rates and Equity Markets

October 27, 2015

Eagle Asset Management's Richard Skeppstrom reviews the Fed's interest rate decision and discusses current equity markets in this month's market perspective. "Interest-rate constipation U.S. economic growth was nearly 4 percent in the second quarter and the U.S. Federal Reserve decided to leave rates at 0. It was rumored to be a close call but labor conditions aren’t perfect: too many aren’t looking for work, international markets are unsettled and infl ation remains just below target. I didn’t believe 0.25 percent made any difference anyway but equities weren’t thrilled. You might think that after watching these things for 20-some years, I’d know if the news were good or bad; however, I’m not even sure what the news was in this case. Some countries aren’t well-run? Some people would rather not work? In any case, the Fed still believes it imprudent to pay interest on savings. Congrats to the borrowers. [+] Read More

Small- and Large-Scale Retirement Lifestyle Planning Considerations

October 21, 2015

For many people approaching retirement age, there may be trepidation about how to properly plan for your retirement lifestyle. Unfortunately, without having a trusted advisor along for the ride, the journey toward retirement can feel a lot like planning a trip to the moon without an engineer. There are many unknown aspects about what will happen once you actually retire. How will your new-found freedom affect your spending habits? What will be the state of the economy at that point in time? Will you stay where you are, or travel, or permanently relocate? Hire an Advisor A good first step to successful retirement lifestyle planning is to find a financial advisor that can help to answer questions you have about how your investments can work for you as you approach retirement and beyond. As your employment situation changes, your income will fluctuate and the tax laws regarding your income will also likely change. A knowledgeable advisor will be able to tell you which changes will directly impact you based on your current situation, in conjunction with your CPA, can help formulate a plan to take advantage of the best tax breaks and plan investments accordingly. [+] Read More

How Do U.S. Presidential Elections Affect the Stock Market?

October 14, 2015

National politics are set to take center stage of media coverage, gripping the minds and TV sets of many American households. With political TV ad spending expected to eclipse $4.4 billion in this cycle,1 however, and with politicians on both sides jockeying early for a chance to secure the nomination, it feels like the elections are already upon us. With over a year to go for the presidential election, we’d advise you to buckle up – because it’s only going to get more intense from here. To note, WrapManager is not taking a political stance with regard to elections – whether Democrats or Republicans control the White House and/or Congress is up to the voters. Our concern is the market and the economy, which while affected by politics, is not wholly controlled by it – there are plenty of other variables to consider. In the past, election outcomes have formed patterns in the stock market, which may offer us clues for what to expect as the race takes shape. We’ll take a look at a few of those below. [+] Read More

Harvesting Losses - Doug's Quiz Corner

October 13, 2015

Quizmaster Doug Hutchinson has come up with another great quiz that explores the effect of harvesting losses. Let’s see what the math has to say. Good luck! First, a definition of tax loss harvesting. Tax Loss Harvesting is the practice of selling a security that has experienced a loss. By realizing, or "harvesting" a loss, investors are able to offset taxes on gains. The sold security may be held in cash or replaced by a similar one (keeping in mind wash sale rules), to help maintain the optimal asset allocation. [+] Read More

Earnings Tumbled - Should You Worry About Your Investment Portfolio?

October 7, 2015

Corporate earnings had a rough go of it in the second quarter—total earnings for S&P 500 companies were down -2.1% from the same period last year, on -3.4% lower revenues.1 It would be one thing if earnings were falling while revenues went up, which would indicate companies may have spent more over the quarter on fixed investments, more hires, or higher wages, for example. But the data clearly shows that top line revenues are falling alongside earnings, which means there could be an issue with softening demand. As you can see from the chart below, earnings also fell from the fourth quarter of 2014 to the first quarter of 2015. With earnings getting weaker as market volatility increases and China worries build, investors may wonder if a more cautious portfolio strategy is warranted from here. [+] Read More

Cash Vs. Mortgage in Your Retirement Lifestyle Planning

October 6, 2015

Many people approaching retirement consider where they will live during their retirement years. Relocating to a more affordable or comfortable area could be an important part of your retirement lifestyle planning. Even if you plan to remain in your current home, however, your family nest egg will be influenced by your home financing. Cash vs. Mortgage Different schools of thought exist about whether it’s best to pay off your home and live debt free or carry a mortgage during your retirement years. It seems like a simple decision, but several factors complicate this decision. Further, there isn’t a one-size-fits-all answer to this question. Depending on your personal retirement lifestyle planning goals and your current situation, one of these options will likely be more advantageous than another. Your financial advisor can help you sort out the ramifications of whether to pay off your mortgage, carry a loan, or consider a reverse mortgage. [+] Read More

Eagle Asset Management - Market Volatility Perspective

September 30, 2015

Eagle Asset Management's Richard Skeppstrom says we're in no danger of a recession and asks investors not to panic. Continuing market volatility and the possibility of a slight increase in interest rates do not necessarily spell disaster. "Don't Panic The market’s momentum was ebbing with the slowing of global growth. The return of volatility was inevitable and corrections are a fact. People panic for a reason; there’s generally no shortage of reasons and happily there are very few good ones. Unfortunately, in the last 15 years, we’ve had two wrenching stock collapses and they remain fresh in everyone’s minds. In the first, the U.S. Federal Reserve tightened to rein in the tech bubble (that it had ignored/blessed) and associated nonsense but there’d been too much excess and the economy fell into recession. In the second, the Fed tightened to rein in the housing bubble (that it created) and associated nonsense but there’d been too much excess and the banking system nearly collapsed, dragging the economy into the Great Recession. [+] Read More

Your Retirement Planning Strategy: The Key Players

September 29, 2015

When it comes to a retirement planning strategy, no person is an island. The decisions you make regarding your retirement will affect other people, and their plans will affect your strategy. Therefore, it’s critical to consult with members of your family, your spouse, professionals you work closely with, and your financial advisor as you develop your retirement planning strategy. Let’s take a closer look at the reasons behind this collaborative approach to your retirement plan. Work with Your Spouse If you're married, the most important person you should consult with on your retirement plan is your spouse. Together, you have tackled financial issues for years, and together you’ll plan for the future. Whether or not your spouse has worked in the past will greatly impact your retirement planning strategy. How much will your spouse collect in Social Security payments? Does your spouse have a pension, 401(k), or IRA that you’ll need to factor into your strategy? How is your spouse’s health? Will your spouse’s health care impact your future financial needs? [+] Read More

Managing Market Risk with Long-Term Investing

September 23, 2015

After recent financial ups and downs, managing market risk is on investors’ minds. Volatility in the markets can make people nervous, but it’s important to remember that risk is always present when it comes to investing. Even conservative investments like certificates of deposit (CDs) carry the risk of inflation. And yet, investing is a very important component for growing your wealth over time. How much should you worry about managing market risk? What can you do when the market becomes exceptionally volatile? [+] Read More

How Rising Interest Rates Affect Stocks and Bonds

September 16, 2015

Recent stock market volatility has given way to renewed curiosity over when the Federal Reserve (Fed) will start to raise interest rates in the U.S. A recently released poll by the National Association of Business Economics showed that just 37% of surveyed economists believed the Fed would hike rates in September, meaning that a majority of those surveyed think it will come even later in the year (if not next year).1 The question on many investors minds, however, isn’t so much when the Fed will start to raise interest rates, but how it will affect the economy and the stock market. Theoretically, as the Fed starts to raise interest rates, it becomes incrementally more costly for businesses and individuals to borrow money—meaning that economic activity could feel some headwinds over time. Investors often worry that rising interest rates could thus mean choking off the already fragile economic expansion, and that a slowing economy could mean falling stock prices. [+] Read More

Advisor Fees and Mutual Fund Expenses - Doug's Quiz Corner

September 16, 2015

Quizmaster Doug Hutchinson has come up with another great quiz that explores advisor fees and mutual fund expenses to consider when choosing an advisor. Let’s see what the math has to say. Good luck! Consider the following scenario: Sam, Frank, and Kathy use different financial advisors. Each financial advisor has a different fee structure. Sam pays a flat fee of 1% to his advisor. There are no other fees associated with his account. Frank pays his advisor a fee of 0.9%. The advisor invests Frank's assets in a mutual fund with an expense ratio of 1.6%. Kathy pays her advisor a flat fee of 0.75%. Her advisor invests Kathy's assets in a mutual fund with an expense ratio of 1.25%. [+] Read More

We Go the Extra (3,000) Mile!

September 9, 2015

One of the many aspects of WrapManager that I love so much is the diversity of our clients from a geographic standpoint. We have clients all over the country. Given that WrapManager is headquartered in San Francisco, however, we do not have the opportunity to see a lot of our clients in person as much as we would like. Because of this WrapManager has always strived to be at the forefront from a technology standpoint, especially when it comes to services like Go to Meeting or Join Me, to allow us to bring our clients onto our computers for quarterly reviews. I commonly say that using a service like Join Me allows a client to feel like they are looking over my shoulder at my computer screen together with me. We have local clients that even prefer to utilize this technology during our quarterly reviews because it allows them to see our screen comfortable in their own home. [+] Read More

How the Affordable Care Act May Affect Doctors' Retirement Plans

September 8, 2015

No matter what your political views on the Affordable Care Act, it is at least agreeable that the new law is changing the nature and structure of healthcare in this country – who is eligible (everyone), how it gets paid for, how insurance companies and hospitals negotiate rates, and so on. If you’re a doctor reading this article, then you know first-hand how the new law has changed the way you do business, and you might even be anticipating more changes in the future. Do one or all three of the situations below apply to you? Quality metrics put in place under the Affordable Care Act are taking up an increasing share of your time, detracting from the amount of time you can spend seeing patients (making more revenue) and attending to your personal matters (like your finances)1 [+] Read More

ClearBridge Investments Commentary - Large Cap Growth Portfolios

September 2, 2015

ClearBridge Investment's Peter Bourbeau and Margaret Vitrano provide their perspective on the second quarter discussing their large cap growth portfolios. "As with stocks, the U.S. economy continued its slow march forward through the second quarter. Employment continued to lead the way, with payrolls increasing by an average of 221,000 per month, and the unemployment rate declining to 5.3%, its lowest level since April 2008. Consumer spending and new and existing home sales showed healthy improvement in May, while consumer confidence bounced back late in the quarter. The CEO of a major retailer we spoke with during the quarter indicated that consumers are now feeling good enough about their finances to expand purchases from basic staples to higher-priced apparel and home furnishings. Offsetting those gains were disappointing reports on GDP growth, with the final revision to first-quarter data showing that the economy contracted by 0.2% in the three months of the year, as well as industrial production. [+] Read More

Thinking of Changing Your Portfolio Strategy? Read this First

September 1, 2015

The last few years have been fairly “steady as she goes” for the U.S. stock market—the bull market had gone over 1,400 calendar days without a 10% correction, which marked the third longest such streak in half a century.1 But that changed very quickly from August 18 – 25, when the market fell over 11% in just six trading days.2 The steepness of the drop and its rapid onset left many investors concerned, perhaps even wondering if this was the beginning of another prolonged downturn like 2008. If you’re considering making changes to your portfolio out of concern over the volatility, or for one of the four reasons below, we’d encourage you to take a moment to gain some perspective before making a big change. If your long-term goals have not changed, but you are considering making significant changes to your asset allocation, there is a chance emotion may be getting in the way. [+] Read More

Cambiar Investors Commentary - China, Greece, and Interest Rates

August 27, 2015

Cambiar Investor's Q2 2015 market commentary discusses China, interest rates, and what it all means so far this year. "The Waiting Game Financial market returns were quiet in the second quarter, seemingly waiting for some kind of definitive signal that never arrived. The S&P 500 Index, MSCI EAFE Index, and MSCI Emerging Markets Index were each essentially flat for the quarter, with relatively limited volatility. The former two had each about a 3% gain going into the last 10 days of the quarter, but surrendered their gains as Greece threatened (for the fifth time in as many years) an uncontrolled debt default and exit from the Euro system. The Greek's gamesmanship was once again cauterized by international financial agencies only after the Greeks were very bluntly threatened back with the same medicine. This suggests that European authorities are no longer concerned that a Greek Eurozone exit would be a systemically destabilizing event. [+] Read More

Medicare Changes and Your Retirement Plan

August 26, 2015

Back in 2013, we wrote about the differences between Medicare Parts A and B, as well as supplementary coverage options to help readers with their retirement planning. Given recent legislative changes to Medicare, we feel it’s time to revisit the topic. Discussing medical costs and coverage with your financial advisor is wise because medical costs can constitute a sizable portion of post-retirement budgets. As changes are made to programs like Medicare, it’s important to stay abreast of developments and integrate changes in to your wealth planning strategy. One of the difficult aspects of planning for the future is trying to anticipate unknowns such as medical costs. You never know if you’ll enjoy perfect health in the coming year or if you’ll find yourself at the doctor’s office frequently. Insurance like Medicare helps to temper the risk of the unknown, but you should still be prepared for out-of-pocket costs. [+] Read More

Brookmont Capital Dividend Equity Strategy Commentary

August 25, 2015

Brookmont Capital's Dividend Equity Strategy provides their Second Quarter report covering perspective on foreign markets, more assumptions on interest rates and how they positioned their portfolio in response. “The markets struggled to move higher during the second quarter due to a conflux of bad news from foreign markets and earnings disappointments from several domestic companies. The markets took their biggest hit during the month of June as fears about Greece, China’s economy, and second quarter earnings announcements led to widespread sales activity. The Dividend Equity Strategy was repositioned during the second quarter in anticipation of increasing risk in the equity markets. Valuations were becoming stretched based on expected earnings growth and consensus assumptions that the Federal Reserve will raise short-term interest rates during the second half of the year. During the second quarter we reduced our position in mid-cap stocks by 50% and now represent only 16% of the portfolio. This is our lowest weighting in small and mid-cap stocks since early 2009. This market sector outperforms during the early stages of an economic recovery and has historically underperformed when interest rates rise and the market cycle has peaked. [+] Read More

What to do about Creeping Market Volatility

August 20, 2015

We recently wrote a post addressing volatility in China – in just one months’ time (mid-June to mid-July), the market there lost one third of its value.1 The wild swing in Chinese equities did not necessarily send shock waves through the global markets (which remain slightly positive on the year), but it did effectively raise eyebrows amongst investors curious if the downside volatility could be contagious. They might have a point. If you consider the ongoing Greece sovereign debt crisis, the persistent geopolitical threat posed by ISIS, concern over slowing growth rates in China, and the relative calm in the domestic equities markets (S&P 500) over the last few years, it feels like there could be an opening for increased volatility. Taking a look at the chart below, you can see that from 2012 – 2014, the market has had very few 5+% pullbacks, which draws a sharp contrast to the previous three years and to history in general. Indeed, moderate pullbacks happen frequently even in normal times. [+] Read More

Eagle's Skeppstrom on Greece and China's Woes

August 19, 2015

Eagle Asset Management's Richard Skeppstrom provides his colorful perspective on the recent market events including Greece, China and his candid friends. “Confused situation, imperfect advice One of my closest friends reached out to me on Father’s Day to say he thinks I am a better father than stock-picker. I was touched. And then more recently, another very dear friend said he enjoyed my writing but wished I’d say something. Lovely friends. Most folks just don’t care enough to give you such thinly veiled criticisms. [+] Read More

Granite Investment Partners - Interest Rates, Market Volatility

August 13, 2015

Granite Investment Partners provides their reflections on the second quarter. Topics discussed are mixed economic data, weaker GDP growth and the question on everyone's mind, when the Fed will raise interest rates. "Reflections Market remains little changed amidst volatility The market remained largely range-bound in the quarter and for the year. The S&P 500 index ended the quarter basically flat, gaining +0.28%, bringing year-to-date total return for the first half of 2015 to +1.23%. Investors remain in somewhat of a holding pattern as they continue to monitor signals from the Federal Reserve in anticipation of the end of the prolonged period of easy domestic monetary policy. Market consensus has shifted expectations for the first rate hike forward into September, albeit with a fair amount of uncertainty due to conflicting economic data signals. [+] Read More

Will China's Market Volatility Affect Your Investment Portfolio?

August 12, 2015

China’s stock market was down over a third from mid-June to mid-July, wiping out almost $4 trillion in value. The market had risen some 150% over a year ending in June 1—so it’s actually still up from where it started in January 2—but nevertheless it has made for quite a media spectacle. [+] Read More

How to Reduce Your Exposure to Cybersecurity Threats

August 11, 2015

At WrapManager, we take your data security very seriously. With all the media coverage of data breaches in the media today, we wanted to provide information that could help reduce your risk of being compromised with a short list of suggested ways to protect yourself while still enjoying the ease of managing your life using email and the internet. Here are few things you can do to improve your cybersecurity: Consider making requests regarding your account by phone and make sure there is a verification process in place at your financial institution for withdrawal of funds; [+] Read More

5 Ways to Reduce Estate Taxes

August 6, 2015

Estate taxes are a hot-topic amongst both political parties and often big news when they are brought to the forefront of campaigns. While the parties battle back and forth, there are still some ways you can potentially reduce the impact of taxes on your estate. Using an estate planning checklist is a good place to start, as it helps you map out your estate planning strategy. Rather than take estate planning advice from just anyone, consider what you really want to do with your money and look for estate planning tips that are tailored to the plans, goals, and ideas you have. Here are five potential ways to lower your estate tax bill. [+] Read More

Clearbridge Investments - Multi Cap Growth Q2

August 4, 2015

Clearbridge's Richard Freeman and Evan Bauman, provide their perspective on the second quarter discussing views on market volatility, focus sectors, and interest rates. "Market overview and outlook U.S. stocks traded in a tight range during the second quarter, with the major indexes ending largely unchanged. The large cap S&P 500 Index gained 0.28% for the quarter, the small cap Russell 2000 Index added 0.42%, while the broad market Russell 3000 Index gained 0.14%. Volatility remained low as investors awaited a clear signal from the Federal Reserve on when it will commence raising short-term interest rates. The S&P 500 sustained its longest stretch without a 2% daily move up or down since 2007. That more than six-month stint was snapped on June 29 when the index fell 2.09% following the breakdown of talks between Greece and its creditors. The sharp drop – the largest for the S&P 500 since April 2014 – pared gains for most equity benchmarks. [+] Read More

Boomerang Kids and Your Retirement Plan

July 30, 2015

More and more adult children are living with their parents and grandparents, according to a Pew Research study. The 2013 study shows that nearly three in ten young adults ages 25 to 34 (29%) have lived with their parents in recent years, and 78% of these boomerang children say they’re satisfied with their living arrangements.1 Even if the adult children and their parents or grandparents are satisfied with the day-to-day living arrangements; it’s imperative that you examine how this situation is affecting your retirement plan. Supporting adult children can certainly take a toll on your retirement planning by potentially throwing off your timeline or the amount of money you are able to save. Your financial advisor can help you to see how the figures add up in your current situation. However, only you can strike a balance for your family between providing enough support to set your children on a productive course without undermining your own financial well-being. As you work to strike that balance, consider the following: [+] Read More

Federated - Strategic Value Dividend Q2 Commentary

July 29, 2015

Federated has released their second quarter, managed account commentary for their Strategic Value Dividend portfolio. "Market Overview The major equity indexes slipped in June, as generally better-than-expected data on the U.S. economy gave way to worries late in the month over a possible Greek default, exit from the euro or both.The bulk of the monthly decline, which saw the S&P 500, Dow and NASDAQ fall a respective 2.1%, 2.2% and 1.6%, came on June 29, when a strong risk-off trade sent global equity markets tumbling as the Greek issue came to a head. June’s losses were enough to push the S&P to a virtually flat total return for the quarter. [+] Read More

Geneva Advisors - Market Volatility

July 23, 2015

Geneva provides its second quarter market overview for 2015. They discuss geopolitical risks effect on volatility, global economic positioning and their optimism for the future. “Market Overview U.S. equities generated modest gains in the second quarter. Improving economic data, continued easy global monetary policy and increased merger and acquisition activity combined to help sustain higher equity prices.Geopolitical risks, however, now including those in Greece and China, caused increased market volatility. [+] Read More

Top Equity Money Manager Picks - Q3 2015

July 22, 2015

To help investors discover and evaluate money manager strategies, WrapManager’s Investment Policy Committee highlights certain strategies each quarter. These encompass a wide range of asset classes and investment disciplines. Here are this quarter’s strategies: [+] Read More

Gradual Retirement Planning

July 15, 2015

There is no doubt that Americans are working longer than ever before. Of those ages 65 and older, about 18% are still working. This is a stark contrast to the 10.8% of the same age who worked in 1985. 1 For some, this is good news as plenty of people view working late in life as a means of keeping active. In retirement planning terms, many are choosing what is called a “gradual retirement” - a retirement plan to ease into life as a retiree. The movement toward gradual retirement has gained steam in recent years and it may soon become the new normal. [+] Read More

Eagle Asset Management - Interest Rates and Your Retirement Plan

July 9, 2015

Eagle Asset Management's Richard Skeppstrom provides his market perspective for July. "Prudence is restraining growth? Second-quarter domestic economic growth has not bounced as much as expected. That’s curious because the weather has improved and the collapse in the price of oil put money in folks’ pockets. I’ve read in a few different places that we are saving the money that we would have spent on fuel. Saving? Like, not spending? Frankly, I’d dismissed the whole notion as absurd. Americans spend. However, that was until I saw a brief note describing Larry Fink’s theory on the matter. He’s the maestro of BlackRock and I pay attention when he speaks (he manages a few trillion dollars more than me). Mr. Fink believes very low interest rates are forcing people to save more for retirement. That’s entirely logical but hard to embrace since we (a large swath of the adult population) have ignored the economic realities of retirement for as long as I can remember. [+] Read More

Mutual Fund Taxation: How to Deal with a 7-Year Bull Market

July 8, 2015

It’s been quite a bull run for stocks, and the benefits are many for those who have been heavily invested in the stock market these last seven years.1 However, there is a downside to such a run, taxes on capital gains distributions. Over the past several years, the amount of capital gains has steadily increased, and the increase will likely continue as long as the stock market continues to rally. This leads investors to wonder what they can do to decrease their tax burden. Before we talk about possible strategies, let’s take a look at the situation. After several years of gains, funds began making payouts, just small payouts at first and gradually larger and larger percentages per share. These payouts qualify as taxable gains, and as such, they are taxable. Additionally, payouts lead to outflows when what you really want to do is preserve your capital. Capital gains don’t often fit into investors’ long-term wealth strategies, so it’s wise to know what other options are available to you. [+] Read More

3 Reasons for International Diversification in Your Portfolio

June 29, 2015

Another day, another headline about a potential Greek exit from the eurozone. The “negotiations” between European leaders and Greece over the past few days have ended in (sometimes quite bitter) stalemates, and Greece is running out of time to secure their next bailout. They owe the International Monetary Fund €1.53 billion by June 30,1 and it does not appear as though they have the cash needed to pay up. So what does this mean for investors and your portfolios? If Greece does not strike a deal with other members of the eurozone very soon, it could mean a messy exit from the currency bloc and could have rippling effects on Europe and the global economy. As investors, it is one thing to think about how Greece’s economy would fare on its own without the support of Europe (might not be too pretty), and entirely another to mull the rippling effects that a “Grexit” could have on the rest of the world. [+] Read More

Eagle Asset Management's Perspective on Rate Increases

June 25, 2015

Eagle Asset Management's Richard Skeppstrom discusses the Fed's approach to debt and credit in this month's Market Perspective. "Betwixt and between The easy money’s been made. That’s not gloomy talk. It’s not controversial. It’s not a recommendation to do anything. It’s a fact. You can expect high returns from stocks when margins are depressed, valuations are low, interest rates can be slashed and the U.S. Federal Reserve is about to juice the system. But that’s simply not where we are now. We are in a new market where the returns will be lower, fewer things will work and volatility will be higher. We will be in this environment for the foreseeable future. This is sort of like getting older. As they say, it’s better than the alternative. Cheer up. [+] Read More

Federated Investors - Strategic Value Dividend Commentary

June 24, 2015

Federated Investors discusses consumer spending and speculates on the potential "snapback" in the coming quarter. "Market Overview The month closed with the first revision to the first-quarter flash estimate of the U.S. gross domestic product (GDP), showing the economy entered contraction territory. A wider trade deficit, smaller inventory build and a downward tweak to already modest consumer spending drove the decline, putting real GDP at -0.7% annualized. The report was hardly surprising to the markets, which actually had been expecting a little worse. The bigger question is how much of a snapback to expect in the current quarter. [+] Read More

The Impact of Rising Interest Rates on Your Portfolio

June 17, 2015

You’ve probably heard it more than once in the last few months: the Federal Reserve appears likely to commence “lift-off” of interest rates at some point later this year. Some analysts believe the first rate hike could come this June, others point to September. At the end of the day, no one really knows for sure when that first hike will come (even the Fed is reluctant to commit to a defined timeframe). But there does seem to be consensus around one view: it will eventually happen. Source: Federal Reserve, FactSet, J.P. Morgan Asset Management. Market expectations are the federal funds rates priced into the fed futured market as of the date of the March 2015 FOMC meeting. *Forecases of 17 Federal Open Market Committee (FOMC) participants, midpoints of central tendency except for federal funds rate which is a median estimate. Data are as of April 30, 2015 Click to view larger image So what does that mean for investors? Do rising interest rates spell trouble for equities and the fixed income markets? Is now the time to adjust your investment portfolio? Using history and hard data as a guide, we’ll take a closer look. [+] Read More

Pre-tax or After-tax Retirement Investment? - Doug's Quiz Corner

June 17, 2015

Quizmaster Doug Hutchinson has come up with another great quiz that explores pre-tax and after-tax options for retirement investing. Let’s see what the math has to say. Good luck! [+] Read More

Cambiar Investors Commentary - Q1 2015

June 11, 2015

In Cambiar Investors' First Quarter Market Commentary, they discuss a wide array of world events effecting their positions. “The first part of 2015 saw global financial returns transposed versus the back half of 2014. Following a peculiar 2014 where U.S. blue chip stocks generated the only significantly positive returns in U.S. dollar terms, conditions have so far reversed in 2015, with international returns faring better than U.S. returns in both local currency and dollarized terms. [+] Read More

Eagle Asset Management May 2015 Market Perspective

June 10, 2015

Eagle Asset Management portfolio manager, Richard Skeppstrom, provides his May market perspective. "A Catch-22: The powerful earnings advance will peter out without better economic growth but the Fed will raise rates if the economy accelerates." Richard Skeppstrom, manager for Eagle's Strategic Return Portfolio, comments on his view of the U.S. Market's neutral state. [+] Read More

ClearBridge Investments - Market Review Q1 2015

June 3, 2015

Legg-Mason ClearBridge's Senior Portfolio Manager, John Goode, provides his first quarter market review. "Tales from the Past and the Future Perspective about the future requires speculation about developments over a time period which often is not helpful for near and intermediate term investment decisions. However, there are times in history when it is necessary to step out on a thin intellectual limb and try to make sense of some of the very big developments that may be especially important over the next 7-10 years. In doing this, it is necessary to look back in time to understand how we got here and where we might be going. [+] Read More

JP Morgan - Q1 2015 Earnings Recap

June 2, 2015

JP Morgan's First Quarter Market Bulletin for 2015 provides a recap of the earnings season. "In Brief • We estimate that first quarter 2015 earnings-per-share (EPS) declined by 5.0% on a year-over-year (y/y) basis. Similar to the prior quarter, this was primarily due to lower oil prices and the stronger U.S. dollar (USD). • Excluding the energy sector, S&P 500 EPS grew by 9.1%, in-line with historical trends. We also estimate that the stronger U.S. dollar resulted in an average EPS decline of 5% for the most multinational non-energy companies. [+] Read More

Geneva Advisors - Q1 2015 Market Perspective

May 27, 2015

Geneva Advisors provides their First Quarter Perspectives on the market. "The relative strength of the U.S. dollar has been an important force for the market in recent periods. Stock prices are near record highs and valuations of many companies are extended. A disciplined investment process, an active investment approach and a long‐term focus will continue to be critical to achieving investment objectives. [+] Read More

Brookmont - Reducing Exposure to Mid-Cap Stocks

May 20, 2015

Brookmont has made the decision to reduce mid-cap stock exposure for their Dividend Equity Strategy. "Dating back to March 2009, the Brookmont Dividend Equity Strategy has always maintained a 30%- 35% weighting in small and mid-cap stocks. It is an area of the market that includes attractive dividend-paying stocks that are often overlooked by our peers. Knowing that mid-cap stocks often lead a market recovery, we rebalanced the portfolio in February 2009 and were active buyers in mid-cap names such as Packaging Corporation of America, Tupperware, Hubbell, Heinz, and Lubrizol (the latter two stocks were eventually acquired by Warren Buffett). From 2009 through 2013, it was not uncommon for our mid-cap holdings to produce one-year returns as high as 115%. Knowing that these type of gains are not common, we rebalanced the portfolio on several occasions to realize these significant profits. [+] Read More

Tax Season's Over. Time to Focus on Estate Planning

May 13, 2015

Filing taxes often puts our financial lives under a microscope, and that’s a good thing – we take stock of where we stand financially and we can review strategic opportunities for how we take income, how we spend, and how we invest. With all of this information already out on the table, a sound next step is to shift focus to your estate plan. Tax and estate laws are constantly changing, so the planning process can be complex and you should enroll the help of professionals in each area as you get started. But there are also a few core elements of planning that have been fairly constant over the years, and we’ve assembled them into an estate planning checklist for you as a basic guide. [+] Read More

Adding an Asset to Your Portfolio - Doug's Quiz Corner

May 13, 2015

Quizmaster, Doug Hutchinson, has come up with a great quiz that illustrates how adding an asset with higher volatility can actually lower overall volatility of a portfolio. Let’s see what the math has to say. Good luck! Consider this scenario: Your friend Mary has a portfolio consisting of one asset, Asset A. She is considering adding a second asset to the portfolio and her new portfolio would be weighted as 50% Asset A and 50% of the new asset. She would like the new two asset portfolio to have the lowest risk (as measured by standard deviation) possible, given the other options that she is considering adding to her portfolio: Asset B and Asset C. [+] Read More

Will International Outperform US Stocks in 2015? - Cambiar Investors

May 6, 2015

Cambiar's commentary highlights a cautious view on energy and reviews the strategy's international approach following Japan's surge in Q1. [+] Read More

Federated Investors - Q1 2015 Managed Account Commentary

April 29, 2015

In their Q1 2015 International Strategic Value Dividend ADR Commentary, dividend money manger, Federated Investors, discusses their diversification strategy which can help reduce portfolio volatility. "In order to pursue its objectives of dividend yield, dividend growth and lower downside risk, the portfolio invests in high-yielding, high-quality stocks, many of which are found within mature markets and sectors that typically exhibit a low level of cyclicality." [+] Read More

Slow but Steady - Eagle Asset Management Whitepaper

April 22, 2015

Our focus isn’t on emphasizing just whether a company is good or bad but how people are reacting to it. How the sentiment changes. Fundamentals matter but how they interact with human behavior is what creates investing opportunities. Our view is: Stay in the middle of the boat, ignore the headlines and do well in some companies that people may not expect: healthcare in emerging markets or U.S. grocery stores, for example. Read more market perspectives in Eagle Asset Management's insightful whitepaper. [+] Read More

Eagle Asset Management Market Perspective

April 15, 2015

"The Fed may have axed the word patience from its commentary but I’m beginning to wonder if extreme patience may be called for." Eagle Asset Management's, Richard Skeppstrom, weighs in on the Federal Reserve's comments following the last Federal Open Market Committee meeting. [+] Read More

Volatility and Wealth Accumulation - Doug's Quiz Corner

April 15, 2015

Quizmaster, Doug Hutchinson, has come up with another great quiz for us regarding how volatility can affect wealth accumulation. Let’s see what the math has to say. [+] Read More

WrapManager’s Top Money Manager Picks 2015 Q2

April 9, 2015

Here are four money manager strategies to consider for your portfolio selected by our Investment Policy Committee, updated for the second quarter. Download the report to learn more about each. [+] Read More

Don't Be Fooled: How to Avoid Financial Scams

April 1, 2015

With April Fool’s Day upon us, you might find that your toilet paper has been replaced by duct tape, a mysterious For Sale sign has appeared in your front yard, or that your milk has been colored green with food coloring. These harmless pranks may make you smile, but there are more serious “pranks” that cross the line: financial scams. Increasingly, fraudsters are targeting senior citizens. According to a widely cited 2011 study by MetLife and the Center for Gerontology at Virginia Tech, the amount of financial loss suffered by seniors each year is estimated to be at least $2.6 billion!1 [+] Read More

How Rising Interest Rates May Affect Your Investments

March 26, 2015

After years of cash yields of nearly zero across North America and Europe,1 the Federal Reserve has indicated that it is finally moving toward moving interest rates higher. [+] Read More

How Emotions Affect Your Decisions - Doug's Quiz Corner

March 11, 2015

Quizmaster, Doug Hutchinson, has come up with another great quiz for us regarding how our emotions can influence our decisions. Let’s see where you stand. Good luck! [+] Read More

5 Ways to Reduce Your Taxable Income in 2015

March 11, 2015

Check our our post: 3 Tips for Reducing Your Taxable Income in 2016. According to J.P. Morgan, the average American pays more in taxes than they do for food, clothing, and housing…combined. And, that only applies to income taxes! For investors, the cut often runs even deeper. Not only is your earned income reduced every year, but—J.P. Morgan also reveals that taxes on your investments can reduce an 8% annual return to as low as 5.2%.1 Click for larger view [+] Read More

Dividend Growth As Part of Your Tax Planning Strategy

February 25, 2015

Income-yielding investments can be an integral part of your retirement lifestyle planning. Incorporating dividend growth investments into your retirement plan doesn’t have to be difficult. When choosing investments that will provide a steady stream of income, look beyond just fixed-income securities like bonds, CDs, and money market funds. Stocks, too, can be an important source of investment income. [+] Read More

Make Giving Part of Your Tax Planning Strategy

February 18, 2015

This year giving a monetary gift to your spouse, favorite charity or individuals you care about could be one of the best moves you make this tax season. Taking advantage of the gift tax is a smart tax planning strategy if you are in search of ways to help those you care about and save money on your annual tax bill. There are a couple of things to keep in mind when utilizing the gift tax. [+] Read More

Buy-and-Hold Versus Rebalance - Doug's Quiz Corner

February 11, 2015

Quizmaster, Doug Hutchinson has come up with another great quiz that compares buy-and-hold versus account rebalancing. Let’s see what the math has to say. Good luck! [+] Read More

Researching Money Managers

January 28, 2015

Money manager strategies can be likened to the fuel for your retirement plans. Much like gasoline in a car or wind for a sailboat, money managers can propel your investment plan forward along the way to your retirement goals. As such they need to be researched and monitored closely. How do you know if your money manager’s performance is real? What should you look for in a good money manager? What are things to watch for? While each person’s approach is different, these are important questions to ask, especially if you’re noticing any of the following with your current or prospective money manager. [+] Read More

4 Easy Steps to Planning Your Retirement Income

January 21, 2015

Transitioning from the working world into retirement brings a wealth of exciting new opportunities – having more time to spend with your family, traveling the world with a loved one, or perhaps devoting fresh time to an old (or a new!) hobby. If there’s one challenge though, it’s making sure you have sound wealth management strategies in place to support all of your income needs. The good news is that it’s a challenge you can easily address with the help of a financial advisor, and it essentially boils down to four easy steps. [+] Read More

What Falling Oil Prices Mean for Your Portfolio Strategy

January 14, 2015

Oil prices have moved around quite a bit over the last decade, but the pace and magnitude of the recent decline has investors wondering if there’s trouble ahead for the markets. Oil Prices Have Fluctuated Greatly in the Last Ten Years Click for larger view [+] Read More

Cash Drag - Doug's Quiz Corner

January 14, 2015

Quizmaster, Doug Hutchinson, has come up with another great quiz for us regarding the cash we keep in our portfolios and its effect on performance. Test your investment knowledge of how your money is invested and what makes the most sense for your situation. Good luck! [+] Read More

International Volatility in Q3 - WHV Commentary

January 7, 2015

While the US equity market performance was generally positive in the 3rd quarter, international equity markets were hampered by lackluster economic data in Europe, continued geopolitical turmoil in Ukraine, and disappointing economic growth in China. International equity manager WHV Investments, summarizes a volatile 3rd quarter in international equity markets, while suggesting that international policy makers may take actions to stimulate economic growth in the future. Download WHV's Full Commentary Here Get Free Research Reports on WHV Investments [+] Read More

Boosting Your Retirement Income in the New Year

December 31, 2014

Many people think of Social Security as a steady, if meager, contributor to their retirement income—no flexibility, but at least it shows up monthly. The truth is, however, that there are strategies you can use to maximize your Social Security income. By incorporating these strategies into your overall retirement lifestyle planning, you can provide yourself with more options during retirement. The Restricted Application for Spousal Benefits The Restricted Application for Spousal Benefits allows for one spouse to begin collecting spousal benefits even as their own retirement benefits continue to grow. If you continue to let one spouse’s benefits grow until age 70, the benefit will be quite a bit higher than it would have been if collected at age 66. [+] Read More

Welcoming a New Family Member: Retirement Lifestyle Planning

December 24, 2014

The addition of a new family member is a wonderful and life-changing event! Your new family member may be a new spouse, a new son- or daughter-in-law, a new child, or a new grandchild. Along with celebrating this new family member’s arrival, consider how you may need to make changes to your retirement lifestyle planning. The following helpful reminders can help you to start your new family member on firm financial footing. [+] Read More

Does it Still Make Sense to Diversify Your Portfolio?

December 16, 2014

As we approach the end of each year, we like to take a look back at which areas of the market outperformed others. As investors, this allows us to analyze why certain areas of the market may have done better than others, and it make us think about what we can expect looking forward into the coming year. Pulling up performance for this year-to-date (as of December 16th) shows us that US stocks as measured by the S&P 500 outperformed Europe, Asia and the Far East (EFA), and small cap stocks (IWM): Click for larger view These differences in performance may lead investors to wonder… [+] Read More

The Psychology of Gains and Losses - Doug's Quiz Corner

December 16, 2014

We are fortunate to have a brilliant CFA here at WrapManager, Doug Hutchinson. At our weekly staff meetings, he has been testing our abilities with financial quizzes. This month, he demonstrates how we make choices given our tolerance for risk. Risk Aversion Consider and choose A or B for each of the following scenarios: 1. You are asked to choose between getting $800 for sure or an 80% chance of getting $1,000 A.) Getting $800 B.) 80% chance of getting $1,000 (and a 20% chance of getting nothing) 2. You are asked to choose between losing $800 for sure or an 80% chance of losing $1,000 [+] Read More

Give the Gift of Financial Peace of Mind

December 10, 2014

The holiday season gives families the chance to get together for quality time and festivities, but it also presents you with an important opportunity – to have a constructive conversation with your family about your finances and estate plan. If you’ve been meaning to have this discussion but haven’t started it yet, the holidays are a perfect time to do it. While it may be difficult at first, the benefits to everyone will be worth it. Fidelity Investments found that 86% of parents felt peace of mind after having conversation with their children, yet only one-third of parents and children agree about the right timing for these conversations.1 [+] Read More

Estate Planning Alert - Is the Stretch IRA Going Away?

November 19, 2014

For years, Stretch IRAs have been used as estate planning tools to help pass on tax-deferred wealth even longer. By using a Stretch IRA, the IRA owner designates a younger-generation member of the family as the beneficiary of the IRA. Under current law, the beneficiary can elect to receive the RMD (required minimum distributions) based on his or her longer life expectancy. This method allows younger beneficiaries to potentially enjoy decades of tax-deferred (or in the case of Roth IRAs, tax-free) withdrawals. [+] Read More

ISIS, Ebola, Vladimir Putin! Time to Change Your Portfolio Strategy?

November 13, 2014

Over the last few months, a string of global events have tested the markets. Whether it’s the spread of Ebola, the presence of terrorist group ISIS in Iraq and Syria, or the latest in the geopolitical chess match between Russia and the West, it seems there is no shortage of events that could impact the markets and your portfolio. The natural question on many investors’ minds is: will these events affect the upward market trend and is it time to adjust my portfolio? [+] Read More

It's Time to Review Your Fixed Income Portfolio

November 13, 2014

Many investments view their fixed-income portfolio as a "safe haven" of sorts. Though each investor's goals are unique, fixed-income portfolios are often designed to help preserve principle, generate retirement income and potentially reduce overall portfolio volatility. Just like you do with stocks, it’s essential to make sure your fixed income portfolio is diversified. And although interest rates remain low,1 as Winston Churchill once said: "An optimist sees the opportunity in every difficulty."2 Take the time to work with your financial advisor to review your fixed income portfolio. Here are a few things to discuss. [+] Read More

Bill Gross’ PIMCO Departure – 4 Strategic Wealth Management Lessons

November 12, 2014

With much fanfare and a great deal of press, legendary bond investor Bill Gross shockingly announced his resignation from PIMCO on September 26, after 43 years with the company. Known as the “Bond King” for his track record managing the $222 billion PIMCO Total Return fund, Gross was leaving the company he helped found in 1971 and that he grew into a $2 trillion behemoth.1 Whatever the reasons behind his departure, it gives investors good reason to ask an important question: when the portfolio manager leaves a fund, should you remove your investments from the fund? The four considerations outlined below will help answer this important question. [+] Read More

Learning About ETF Fees - Doug’s Quiz Corner

November 11, 2014

We are fortunate to have a brilliant CFA here at WrapManager, Doug Hutchinson. At our weekly staff meetings, he has been testing our abilities with financial quizzes. These are great tests of your investment knowledge. Good luck! Scenario: ETF A has an expense ratio of 0.05% ETF B has an expense ratio of 0.20% Assume ETF A and ETF B track the same index and both track that index perfectly. So if the index returns 5%, then ETF A will return 4.95% (including the expense ratio) and ETF B will return 4.80% (including the expense ratio). Assume the index returns 5% a year for each of the next 3 years. Manager A invests $10,000 in ETF A at the start of Year 1 Manager B invests $10,000 in ETF B at the start of Year 1 What is the difference in wealth accumulation (in dollar terms) between Manager A and Manager B after 1 year? After 3 years? [+] Read More

Investor Tips for Quiet or Volatile Markets - Brookmont Capital

November 11, 2014

Dividend money manager Brookmont Capital’s third quarter commentary provides a few tips that they recommend to their clients during quiet or volatile markets. “The chart of the Dow Jones’ price history clearly indicates periods of volatility and sharp declines. It also shows periods of dramatic upward performance. We have become so focused on short-term performance that we only see a lot of trees and not the forest. If you step back and look at the graph, the forest becomes obvious and the trees fade into the background. We understand investor angst. This is your life savings and your retirement. The following bullet points are what we recommend to our clients when the markets are volatile or quiet. The rules never change.” Download Brookmont's Full Commentary Here Get Free Research Reports on Brookmont Capital Management [+] Read More

New eBook! Finding a Better Financial Advisor

November 6, 2014

How do you know whether your financial advisor has your best interest in mind or is simply doing just enough to fulfill their basic duties? This is an important question to ask yourself because the security of your future depends on your retirement lifestyle planning, investing, and wealth management strategies. While you take care of the many different aspects of your life, your financial advisor can help look after your future. This is one of the many advantages of hiring a financial advisor. But not all financial advisors act as fiduciaries, putting your best interest at the forefront of investment decisions. Your retirement plans may not be as safe as you think if you have put your trust in a financial advisor whose motives are unclear or who is incentivized to recommend certain financial products. Our new eBook, Your Guide to Finding a Better Financial Advisor, can help you understand the very important question above: how do I know whether my financial advisor has my best interest in mind? And how can you find a better financial advisor? [+] Read More

How to Fix 6 Common Retirement Mistakes

November 4, 2014

Mistakes in your retirement plan can have a big impact on your future retirement income. The good news is that there are relatively simple solutions to these kinds of mistakes. The key is to identify these mistakes before they’ve had time to become problems. Once you’ve identified them, you can take the appropriate measures to get back on track. In fact, using your financial advisor as a sounding board and involving your loved ones can help fix the following 6 common retirement mistakes. A Do-It-Yourself Mentality Many investors have a knack for taking care of themselves, whether it’s installing a new bathroom floor or investing on their own, but this do-it-yourself mentality can backfire when it comes to your retirement investment plan. [+] Read More

WrapManager's Top Money Manager Picks 2014 - Q4 Update

October 30, 2014

Here are WrapManager's Top Equity Money Manager Picks for the final quarter in 2014. Selected by our Investment Policy Committee, the report highlights certain money manager strategies for investors to consider. Download the report to learn more about: Risk-Managed - Newfound Research LLC Dividend Equity - Brookmont Capital Management Multi-Cap Growth - ClearBridge Investments Small Cap Growth - Granite Investment Partners International Equity – Cambiar Investors [+] Read More

Rising Interest Rates – Time to Adjust Your Portfolio?

October 28, 2014

Since the mid-1980s interest rates have been declining1 and have now remained low for the past few years. These low rates have made it challenging for many investors to generate the retirement income they need to reach their retirement goals. However, a recovering economy could suggest the possibility of rising interest rates by the Federal Reserve. [+] Read More

3 Early Tips for Year-End Investment Planning

October 23, 2014

Part of planning for the end of the calendar year includes a thorough review of your investment plan. One of the problems that many people face is discovering they may have not paid as much attention to investment planning as they originally thought. While the stock market has stayed fairly strong through most of 2014, it may still be a good time to re-evaluate your portfolio, especially if your goals have changed and you have yet to adjust your investment plan. Here are a few topics to cover with your Financial Advisor before year end. [+] Read More

Making Your Retirement Income Last Longer

October 22, 2014

You've finally hit the wonder years. You no longer have to pull the sheets back early in the morning to head off to work, and best of all, if hitting up the greens for a nice round of golf on a Tuesday is what you feel like doing, then that's perfectly okay. Here's a quick look at a few tips that can help your money last longer in retirement. Pay Close Attention to your Withdrawal Rate Now more than ever, having a budget and sticking to it will be of the utmost importance. If you withdraw more than your investment plan calls for, you'll find yourself dwindling down your retirement savings more quickly than anticipated. [+] Read More

Is Your Retirement Portfolio Diversified Enough for this Market?

October 21, 2014

For investors who are heavily invested in the US markets, there may have been some disappointment when they saw their returns during the six month period ending in September. The S & P 500 has shown an 8.3% return year to date as of September 30th, but some overseas markets such as India (+24.7% over the same time period) have shown higher returns.1 Portfolio diversification strategy is important for all investors. While diversification does not guarantee profit or protect against loss in declining markets, investing mainly in US stocks (or any single country or region) can be harmful to your portfolio and ability to reach your goals. The below chart demonstrates the importance of a balanced portfolio and shows how different markets and asset classes can perform well one year, and not so great the next year. [+] Read More

5-Star Mutual Funds May Not Be Your Best Option – New Study Finds

October 16, 2014

The Wall Street Journal recently asked Morningstar to conduct a study on “five-star” mutual funds, to get an idea of how many were able to maintain their top rating over 10 years (July 2004 – July 2014). What they discovered will likely surprise you. Of the 408 mutual funds reviewed, the majority of them no longer had five stars. This and another study by S&P Dow Jones Indices underscore the common fallacy that investing in a five-star mutual fund increases the likelihood of a positive long-term outcome.1 Determining which funds to invest in should go well beyond a five-star rating system. In fact, you need a financial advisor who is dedicated to your needs and specializes in independent and ongoing assessment of investment options. High net worth investors should consider separately managed accounts instead of mutual funds given potential tax and visibility benefits. [+] Read More

Year-End Investment Planning Checklist for 2014

October 15, 2014

It’s that time of year again—time to look back, review your investments and look forward to the coming year. Below are a few areas and tips to review with your Wealth Manager during your upcoming quarterly review. Be sure to provide as much information as possible so that any needed adjustments can be made to your investment plan, accounts and investments. Tax Planning Strategies Capital losses are deductible against capital gains. In 2014, up to $3,000 in net capital losses may be deducted against ordinary income. If you had net capital loss amounts in excess of $3,000, you may carry the excess forward indefinitely.1 [+] Read More

Getting Through the Next Stock Market Correction

October 14, 2014

Getting through stock market corrections begins before they happen. While it is almost impossible to predict exactly when a market correction will begin and end, there are things you can do now to help reduce the stress felt by many investors during these events. Remember that corrections are temporary and a normal part of healthy markets. You can get through any stock market correction if you have the right frame of mind, adhere to a few basic guidelines and use your financial advisor as a sounding board. Avoid Hasty Investment Decisions It’s normal to feel anxious during corrections and think about changing direction with your investments. But timing the market rarely, if ever, works. By the time you’ve made a decision to change investments, it’s possible the correction could be half over. Once you’re out of the market, the next decision is when to get back in, which is also timing the market. [+] Read More

Research Money Managers with the Money Manager Directory

October 9, 2014

WrapManager’s Money Manager Directory helps investors find and request information on money managers and their strategies. This information is often hard to find and can be biased, especially if the money manager is providing it to you themselves. Information may include: Performance information Comparison to similar investment strategies In depth strategy information How the strategy could fit into your portfolio One of our Wealth Managers will reach out to you with the information. If it’s not available, they can show alternative money manager strategies that we recommend to appropriate clients and how they could work for you. [+] Read More

Updated Guide to the Markets for Q4 - JP Morgan

October 8, 2014

JP Morgan’s quarterly Guide to the Markets provides a wealth of information about the economy, stocks, fixed income and international markets, mainly displayed in easy to understand charts and graphs. It represents a one-stop shop for information that is often hard to find and scattered among multiple sources. These are just a few pieces of information you will find in the Guide: The current state of the US and international economies Interest rates and inflation Annual returns and intra-year declines Fixed income sector returns Outlook for US, international and emerging stock markets Download the Guide Here [+] Read More

Ladies, Don’t Make this Social Security Mistake

October 7, 2014

There’s no disputing the fact that women live longer than men, but, according to a Nationwide Financial survey, only 3 percent of women wait to take their social security benefits until they’re qualified to receive the maximum amount. The decision to start receiving social security benefits at the full retirement age of 66, or even to start collecting them early at age 62, means that women can miss out on hundreds of thousands of dollars of much-needed retirement income - a social security mistake to avoid if possible. One in four women reaches the age of 92, and with rising healthcare costs, it’s increasingly important that women work with a financial advisor to create and monitor a retirement income plan. However, only 33 percent of women currently work with financial advisors. Those who don’t work with financial advisors are nearly three times as likely to report that their Social Security payments are less than they anticipated.1 [+] Read More

Keep Your Retirement Plan on Track with Quarterly Reviews

October 2, 2014

Your Financial Advisor is there to keep an eye on your investments and make adjustments to keep your finances on track. But if your journey through retirement is going to stay on track, you should regularly check in with your Financial Advisor as your life and the economy change. These reviews (at least quarterly) give you an opportunity to evaluate your goals and make adjustments to your investment and retirement income plan. They also help make sure your investment strategies are still appropriate for you. It is also a good time to take care of housekeeping items such as updating beneficiaries. Tasks like these may seem minor, but they could have a big impact on your finances if they’re neglected. It doesn’t take long to review your investment plan with your Financial Advisor. Just an hour or two per quarter can keep everyone on the same page and help you to meet your goals. [+] Read More

Social Security Strategies for Divorced Spouses

October 1, 2014

Planning for Social Security benefits is complex, and if you’re divorced, you may have wondered how spousal benefits will work for you in your retirement years. One thing is for certain: when it comes to Social Security, timing is everything. Knowing and understanding your options can help improve your retirement income plan. General Options Just as there is flexibility for married retirees, divorced retirees have several options when it comes to Social Security. Spousal benefits are generally 50% of your ex-spouse’s full retirement benefits if you file at your full retirement age (66). [+] Read More

Retirees Beware: Popular Investments You May Want to Avoid

September 30, 2014

There was once a time when investing in the markets was as simple as choosing how much money to have in stocks, versus bonds, versus cash in the bank. Since that time the investment landscape has evolved and the menu of investment options has grown, giving you several products like hedge funds, annuities, ETFs, mutual funds and private REITs. Unfortunately, many of these investments often lack transparency and come with hidden risks and inconsistent returns. Take care in analyzing these three investments as you work with your financial advisor to plan your investment portfolio and retirement income plan. [+] Read More

Two Heads are Better: Financial Planning with Your Spouse

September 25, 2014

Much like a successful marriage, the managing of your finances is like a flourishing garden. Proper care and attention can help it grow and thrive. An essential part of this is discussing and planning financial matters with your spouse. Not only can this help prepare both of you to manage the finances individually, it can actually help enhance your relationship and financial future. Make the best use of your financial advisor by having them review your finances with you both. You'll be happy you did. [+] Read More

Economy Poised for Growth, Equities Higher – Federated Investors

September 24, 2014

Dividend money manager Federated Investors’ commentary discusses why they believe the economy is poised to grow even further this year, driving equities to new highs. “2014 hardly could have started worse, with a brutal and seemingly never-ending winter bringing activity to a halt and keeping shoppers at home in much of the country. The final first-quarter estimate told the story, with real gross domestic product (GDP) contracting a much worse-than-expected 2.1%. But there’s a reason the equity market shook off the number. It was, after all, so yesterday. What today and the rest of the year look like are much different, as manufacturing and jobs appear to be accelerating, auto and retail sales are on the upswing and even housing is showing some signs of pulling out of its funk. The government’s estimate of second-quarter growth was a well-above-consensus 4.2%, in line with our view that the economy is settling onto a higher growth plane that will drive equities to new highs this year and into 2015.” Download Federated's Full Commentary Here Get Free Research Reports on Federated Investors [+] Read More

Your Checklist to Starting Retirement with Confidence

September 23, 2014

You’ve arrived at (or are fast approaching) retirement and you’ve worked hard to get here. Congratulations! We’ve prepared a list of items to consider and take care of to start your retirement with confidence. Think about this new stage in two ways: 1) Defining your goals and establishing all the great things you want to do; and, 2) Structuring your financial life so you can make it all happen Just a little bit of time and planning can help make your retirement even more enjoyable and smooth. Retirement Planning Strategy: 13 Steps for Success 1) Build an Investment Plan with Your Financial Advisor An investment plan is your ultimate guidebook for retirement – the roadmap you can reference to see where you are on your retirement journey and to help you navigate issues that arise along the way. A comprehensive investment plan should include the following features: [+] Read More

Will Rising Interest Rates Hurt Stock Performance?

September 22, 2014

In response to the 2008 global financial crisis, the Federal Reserve cut interest rates to near zero in an effort to save the economy. As the US economy strengthens, it becomes more likely the Fed will reverse course,1 and the possibility of rising interest rates has some investors worried. Higher rates imply the cost of doing business (or buying a home, for instance) could become more costly, which could hurt the economy. Does this mean that rising interest rates could mean poor stock performance ahead? If so, are adjustments to your portfolio warranted? [+] Read More

Protect Your Identity: Guarding Against Online Scams

September 17, 2014

“Phishing” attacks have been on a steady rise since 2005 and are used to steal sensitive information like Social Security numbers, bank account numbers and passwords. According to the Financial Industry Regulatory Authority (FINRA), over 70% of the phishing scams detected this year involved hackers pretending to be banks.1 Cybercrime is an unfortunate byproduct of the digital world, but there are steps you can take to protect yourself and lower your chance of falling victim to online scams, which we’ll walk through for you below. [+] Read More

3 Things Your Financial Advisor Isn’t Telling You

September 16, 2014

Your life is busy and full. You have your family and friends, your business, your hobbies and more. These fill up your days, leaving precious little time for other important cares like your finances. That's why you find a financial advisor, an expert who can steer you through the confusing world of investments, planning, and legal and tax ramifications while you focus on the other significant things in life. While you're taking care of these, your financial advisor can pay attention to the issues surrounding your investments and retirement plan. They can keep tabs on the markets, changes in legislation, investment pitfalls and opportunities, and more. That's the way it should be. Unfortunately there are financial advisors who neglect to tell you the whole story, including their fees, their shortcomings, and their loyalties. [+] Read More

WrapManager's Top Money Manager Picks 2014 - Q3 Update

September 11, 2014

WrapManager's Investment Policy Committee highlights certain money manager strategies each quarter for investors to consider. Download the report to learn more about: Risk-Managed - Newfound Research LLC Dividend Equity - Brookmont Capital Management Multi-Cap Growth - ClearBridge Investments Small Cap Growth - Granite Investment Partners International Equity – Cambiar Investors [+] Read More

Retirement Income: Which Accounts to Withdraw from First

September 10, 2014

Often times your fixed sources of income like Social Security and pensions will not fully meet your retirement income needs. This likely means you’ll need to tap into your investment accounts to increase your income. But which accounts should you draw from first, and when is the right time to take distributions? Here’s a general guide for choosing which accounts to draw down first and why. Remember, which approach you take depends on your unique situation and goals. [+] Read More

How Mid-Term Elections have Affected the Stock Market

September 9, 2014

Midterm elections are just a few months away, prompting many investors to explore the often-asked questions: how do political outcomes affect the stock market? Is it worth making any adjustments to your portfolio? We can look to past midterm elections for what may lie ahead for the markets and your investment portfolio. Why Do Midterms Affect the Market? 1. Less Legislating, More Campaigning This can be a net positive for the markets, given the lowered near-term possibility of new laws affecting the markets and the business community. [+] Read More

4 Top Money Manager Strategies 3rd Quarter

September 4, 2014

Each quarter WrapManager's Investment Policy Committee highlights 4 money manager strategies that have been ranked in the Top 1% of Performance in their respective categories since inception by Informa Investment Solutions. Dividend Equity – Brookmont Capital Management Multi-Cap Growth – ClearBridge Investments Tactical - F-Squared Investments AlphaSector® Premium Composite International Equity – WHV Investments You’ll find brief descriptions of the strategies and can request more in depth information for each. One of our Wealth Managers will reach out to you with the information, and can also show you how they would fit into your current portfolio. [+] Read More

International Money Manager of the Year: Cambiar Investors

September 3, 2014

For 10 years, the publication Investment Advisor has researched and ranked who they consider the best money managers across the country. They seek out money manager strategies that apply sustainable and repeatable investment processes, with a goal to deliver consistent performance through various business and market cycles.1 In 2014, the award for Best International/Global Equity Money Manager of the Year went to Cambiar Investors. We think it is a well-deserved accolade for Cambiar, who also took home this award in 2012.2 The consistency of their investment approach alongside their track record has earned them the highest respects from Investment Advisor, and also helped garner them a spot on WrapManager’s “Top Equity Money Manager Picks for 2014.” [+] Read More

Popular E-book Helps You Face Retirement Planning with Confidence

August 28, 2014

Retiring in today’s world can seem to be a bit of a mystery. It used to be that when you retired, your company threw you a party then sent you home with a comfortable pension and health insurance. While times have changed, that doesn’t mean your retirement has to be any less comfortable or rewarding than your parent’s. In fact, with all the investment and planning options available today, you and your financial advisor can build a goals-based retirement plan that best suits your income needs, your future plans and your family’s unique situation. Our popular e-book, 5 Ways to Enhance Your Retirement Planning Strategy So You Can Face the Future with Confidence, provides you with an understanding of five of the most effective methods of planning for your retirement. [+] Read More

Boost Your Social Security Check with These Strategies

August 27, 2014

Managing retirement income is a highly personalized endeavor. What works well for one person isn't necessarily the best solution for another. But one thing is usually true for everyone: increasing your social security income is a good thing. It turns out that your social security income amount isn't necessarily fixed. You can potentially increase social security benefits by taking advantage of one more of the following strategies. And that's definitely a good thing. [+] Read More

4 Reasons Your Retirement Plan May Need More International Exposure

August 26, 2014

U.S. investors are significantly under-allocated to international stocks, according to JP Morgan Asset Management. They found that even though 50% of the world’s equity market capitalization is found outside the US, investors have less than a third of their portfolios allocated abroad.1 This imbalance represents a significant disconnect between where the world’s growth is generated today versus where investor portfolios are allocated, and is especially magnified as investment prospects outside the US continue to improve.1 To address this investment issue, you should review your retirement plan’s international exposure with your financial advisor. Is your investment portfolio positioned for whatever growth opportunities may lie ahead in the international markets? [+] Read More

Is the Stock Market Overvalued Right Now?

August 21, 2014

The Dow Jones and the S&P 500 have hit fresh all-time highs this year, and many investors are starting to consider whether stocks are approaching “overvalued” territory. As investors, you’ve worked hard to accumulate assets and grow your portfolio over time, so it’s natural to wonder if “being overvalued” could mean it’s time to pare back your equity holdings or at least reconsider your asset allocation. But the real question to address first is: are stocks really overvalued? JP Morgan Research puts current stock valuations in perspective by taking a look at how they measure up historically. What they found is that current valuations are actually pretty close to their long-term averages, and not necessarily overvalued on a relative basis. [+] Read More

Your Comprehensive Guide to the Markets - JP Morgan Presentation

August 20, 2014

We are happy to present JP Morgan’s Third Quarter Guide to the Markets, narrated by their Chief Marketing Strategist Dr. David Kelly, CFA. This easy and comprehensive 30-minute presentation focuses on the risks and opportunities in the ongoing global recovery, including: Growth outlook for the US and international economies Interest rates and which way they are likely to go Outlook for US, international and emerging stock markets Fixed income market review “People need to invest based not on how they feel about the economy, but based on how they think, based on the facts, based on the numbers. And that’s really what the Guide to the Markets is dedicated to.” - Dr. David Kelly, JP Morgan. Watch the Presentation Here Note: JP Morgan will ask for a name and email to watch the presentation. [+] Read More

Social Security in Retirement: How Much Will You Get?

August 20, 2014

Should you count on Social Security benefits as an integral part of your retirement income plan? And how much? These are questions we hear often. There's a lot of confusion out there regarding social security benefits because misinformation abounds. With political issues, rhetoric becomes inflamed, and information is often used to sway opinion or policy. But when you're planning for retirement, misinformation is dangerous. What you need are solid answers about Social Security. Let's look at some of the most common questions surrounding Social Security in retirement. [+] Read More

Is the Stock Market Overvalued Right Now?

August 19, 2014

The Dow Jones and the S&P 500 have hit fresh all-time highs this year,1 and mutterings of stocks being “overvalued” have started to sprout in the media. As a result, you may be wondering if this means it’s time to review your current asset allocation. A closer look at the numbers, however, shows that stock valuations are actually in-line with historical averages. JP Morgan Research puts this all in perspective by analyzing current valuations and comparing them with the 25 year averages for stocks, and what they found is that they are almost the same. [+] Read More

Family Limited Partnership: Protect Your Assets and Save Money

August 14, 2014

Creating a Family Limited Partnership (FLP) as part of your estate plan can potentially save your family thousands of dollars in gift and estate taxes. FLPs also provide savings via protection of your assets from creditors – in this sense, you’re saving by not losing. For families with significant assets in businesses, real estate, or other income producing assets who are looking for effective ways to pass assets to heirs in a tax-efficient manner, Family Limited Partnerships are worth exploring. What is a Family Limited Partnership? It is a limited partnership in which (generally senior) family members contribute assets in exchange for general and limited interest, and then in turn transfer limited interest unto heirs. The partnership itself isn’t taxable – the owners of the partnership report its income on their personal tax returns, in proportion to their interests. [+] Read More

Newfound Research: The Need for Tactical Solutions Across Generations

August 13, 2014

Tactical money manager Newfound Research explains why portfolio drawdowns become more damaging as retirement nears and makes the case that baby boomers need a risk managed solution when it comes to investing. “When we think about retirement specifically, many people’s savings are extremely back-loaded. The years leading up to retirement tend to be when a person has the most earning potential and can put the most money to work in their investment portfolio. As a result, drawdowns that occur closer to retirement can be significantly more devastating than drawdowns that occur earlier in a person’s career.” Read Newfound's Full Commentary Here Get Free Research Reports on Newfound Research [+] Read More

Market Volatility is Around the Corner - Cambiar Investors

August 12, 2014

International money manager Cambiar Investors details the performance of their strategies and the global markets in their latest commentary. While remaining optimistic, they see increased stock market volatility in the second half of 2014 and stress the importance of diversification and balance within portfolios. “Looking ahead to the second half of the year, Cambiar remains optimistic about the overall positioning of the International Equity and Global Select portfolios. We continue to believe that Japan offers a compelling risk/reward opportunity, emboldened by solid execution and attractive valuations at the corporate level, as well as strengthening macroeconomic data. Cambiar is also encouraged by the recent policy actions of the ECB to combat disinflation, although an important next step will be to evaluate if these measures provide the necessary catalyst for increased lending volumes.“ Download Cambiar's Full Commentary Here Get Free Research Reports on Cambiar Investors [+] Read More

3 Steps to Take During a Stock Market Correction

August 8, 2014

For all the talk there’s been over the last two-plus years of a looming stock market correction, one has yet to take hold. The S&P 500 had a banner year in 2013, is up this year +4.15% through August 1,1 and has been in a fairly steady climb since 2012. For two years, the market has resisted a correction in the 10% - 20% range.2 In July, however, the S&P 500 posted its first monthly loss since January, and on July 31 saw its biggest point drop since April.3 It’s possible this weakness marks the beginning of a stock market correction, though no expert can know with certainty. What we do know, however, is that corrections are a normal part of bull markets, and there are steps you can take when one occurs. What to Do During a Stock Market Correction Corrections are generally defined as relatively short-lived pullbacks in the market in the 10% - 20% range, something we haven’t seen since the summer of 2012. As you can see below, over the last 34 years the market experiences average intra-year declines of -14.4%. Past Stock Market Corrections and Declines (Click chart for larger version) Source: Standard & Poor’s, FactSet, J.P. Morgan Asset Management. Returns are based on price index only and do not include dividends. Intra-year drops refers to the largest market drops from a peak to a trough during the year. For illustrative purposes only. *Returns shown are calendar year returns from 1980 to 2013 excluding 2014 which is year-to-date. Guide to the Markets – U.S. Data are as of 6/30/14. [+] Read More

Doctors Have the Hippocratic Oath - What About Financial Advisors?

August 7, 2014

The Hippocratic oath for doctors dates back 2,500 years, and it is credited to Hippocrates, the father of modern medicine. As far back as the oath reaches, it’s core meaning still remains today – a doctor must put the interests of every patient before their own.1 We think the same principle should apply to financial advisors. Someone who gives you investment advice should act in your best interests and place your interests ahead of their own. Importantly, that also means not making recommendations simply because they produce higher commissions for the advisor or their investment firm. Do Financial Advisors Have to Put Your Interests Before Their Own? Not necessarily. [+] Read More

Churchill Management Group – Is the Emperor Wearing Clothes?

July 31, 2014

“Cautiously bullish” is how money manager Churchill Management Group describes their tactical portfolios at present. Their latest commentary addresses the concern that the market may not be as wonderful as we are told. “Given that we are well past the “buy zone” off the bottom, at this stage we are examining our indicators for signs of a top, or when it will be time to protect. Fundamentally, the story has changed very little. The key driver has been the historically low interest rates causing a lift in asset values. No matter how bad U.S. economic fundamentals come in, the Fed’s ability to keep interest rates low works as the trump card that keeps investors in the stock market and prices moving higher. In simple terms, many investors are frustrated by the low returns on other investment alternatives, such as bonds, and feel forced into the stock market in hopes of increasing total returns. The laws of supply and demand then take hold, and with the increased demand for stocks, prices go up.“ Download Churchill's Full Commentary Here Get Free Research Reports on Churchill Management [+] Read More

Should You Invest in Master Limited Partnerships?

July 30, 2014

If you want to add more yield-producing investments to your portfolio, one option for you could be master limited partnerships (MLPs). They could help increase your portfolio’s overall yield and improve your retirement income strategy. MLPs – which invest largely in oil and gas assets – are experiencing a revival and currently pay attractive yields relative to traditional income producing assets, like dividend-paying stocks and US Treasuries:1 Asset Class Yield and Correlation (Click chart for larger version) Source: Newfound Research LLC. Yield on a given day is calculated using smoothed 12-month trailing dividends. Yield presented in the table is computed as of 3/31/2014. Correlation is calculated as Pearson correlation of monthly returns between the asset class ETF and the S&P 500 ETF “SPY” from ETF inception to 3/31/2014. [+] Read More

Shake-Up at Windhaven Investment Management

July 29, 2014

In 1994, Steve Cucchario founded what would later become Windhaven Investment Management, an investment advisory firm that uses actively managed ETF portfolios1 to “capture growth in rising markets while attempting to reduce exposure in declining ones.”2 Now, after 20 years running the company and serving as Chief Investment Officer, Cucchario has left for “personal reasons.”1 Investors who have assets with Windhaven or are considering investing should speak with their financial advisor about the implications of Cucchario’s departure. Windhaven’s initial success and tremendous growth came partially as a result of Cucchario’s vision and leadership, so investors must ask themselves if the future performance of the strategy is jeopardized by his departure. Will the principles that Cucchario instilled in Windhaven that led to its success also depart with him? [+] Read More

Protect Your Nest Egg: 4 Financial Scams to Watch Out For

July 26, 2014

According to a recent MetLife survey, $2.6 billion is lost each year to financial scams aimed at seniors and retirees.1 Being aware of the common financial scams is a good first step in protecting your nest egg, but hiring a financial advisor as your sounding board could be your best defense. Your advisor may have seen the scam before and can help prevent it from happening to you. 4 Common Financial Scams to Look Out For and How to Protect Yourself 1) “Reduce the Interest Rate on Your Credit Card” If an unsolicited caller says they can reduce your credit card rate and asks for your existing credit card number and personal information, hang up.2 You can always call your credit card company directly if you want to negotiate rates. It is important not to give your social security number or credit card number to anyone but the most trusted companies you have a working relationship with. [+] Read More

Enjoying Retirement: 5 Reasons to Turn Off CNBC

July 24, 2014

John Bogle, the founder of Vanguard Funds, has a piece of advice for investors: “Don’t be captivated by the siren song of the market.” Here’s a tip we’d add: turn off CNBC.1 Watching too much CNBC (and other financial news networks) can lead to information overload and result in short-term thinking and reactionary investment decisions, neither of which helps investors succeed over the long-term. As Bogle puts it, “impulse is your enemy.”1 With a nearly 24-hour financial news cycle, it’s easy to get caught up in latest trends and excitement of the market, but often what you see on CNBC is little more than dramatized financial reporting designed to invoke emotion. We think you can be a better investor by simply turning it off. Here are 5 reasons why. [+] Read More

Portfolio Strategy: 3 Must-Knows for the 2nd Half of 2014

July 17, 2014

As we enter the second half of the year, there are three main things you should be factoring-in to your portfolio strategy: 1) The Possibility of a Stock Market Correction A significant amount of time has passed since the last sizable market pullback (10% or more), and history tells us one could be on the way.1 2) You May Not Have Enough International Exposure International stocks have not rebounded as quickly as US stocks during the recovery, and the case for international growth looks strong at the moment. Yet, many US investors remain under-allocated to international equities.1 3) Adjusting Your Portfolio from a Risk-Managed Perspective This is a constant with investing, but as we enter the 5th year of this bull market it becomes increasingly important. Consider tactical money manager strategies with the ability to go to cash in the event of a prolonged market downturn.1 [+] Read More

Preparing Your Portfolio for the 2nd Half of 2014: 3 Issues to Watch

July 15, 2014

The first half of the year was positive for stocks and most of the fixed income markets, and economies around the world showed signs of continued recovery and expansion – a good start to the year.1 Global Economy Performance and Outlook (Click chart for larger version) Source: J.P. Morgan Global Economic Research, J.P. Morgan Asset Management. Forecast and aggregate data come from J.P. Morgan Global Economic Research. Historical growth data collected from FactSet Economics. Guide to the Markets – U.S. Data are as of 6/30/14. As we look ahead to the back half of the year, there are three topics many investors are wondering about. We break those down below and assess what we think the market impact could be. 3 Factors that Could Affect the Investment Landscape Will Interest Rates Start to Rise? Interest rates are currently near historical lows, and actually fell slightly in the second quarter.1 However, Federal Reserve policy discussions indicate they could potentially tick higher over the course of the year. As always, it’s important to understand how rising interest rates would affect your fixed income portfolio. [+] Read More

Will the Taxman Cometh for Your Social Security Benefits?

July 10, 2014

As you look forward to retirement, you may be picturing the easy life. Maybe you plan for the beach, maybe you will pursue a new hobby, charity work or even a new, more fulfilling career. As you are preparing to enter retirement remember that you Social security benefits can potentially be taxed and plan ahead. If you think of the six-fingered vizier Count Rugen from the movie "Princess Bride" and his egregious tax collection every time the IRS comes to mind, just remember, the IRS does not need to be scary. You do not have to be crafty to get prepared for retirement. The key is to plan ahead! How Much of Your Social Security Benefits are Taxable? The short answer is the IRS will probably want their portion. How much can vary based on how much income and the type of income. The IRS offered Publication 915 to help resolve the answer to my question "Are my social security benefits taxable?"1 [+] Read More

Newfound Risk Managed Small-Cap Sectors: A Tactical Way to Invest

July 9, 2014

“Investors do not exist in a world of ‘100 year averages.’ Instead, they live in a world of 40 year investment horizons, where significant declines can “permanently impair retirement portfolios as investors do not necessarily have ‘more time’ to make up from large losses.” This is one of the core tenets that applies to many of money manager Newfound Research’s risk managed investment strategies. One such strategy, the Newfound Risk Managed Small Cap Sectors, is designed to protect and participate: “Participate in the strong growth profile of long-only, un-levered small-capitalization equity portfolio, while still protecting capital through rules that allow the portfolio to move to a 100% cash position in order to protect against large losses.” The intended benefits to you are two-fold: capture the returns of small-cap stocks over time, while having an active, tactical money manager strategy that can move to cash if it perceives increased downside risk. [+] Read More

Feel Better About Retirement: A Certified Financial Planner Can Help

July 8, 2014

When you look for a doctor to provide care for you and your family, what qualities do you look for? Most answers are probably the same: you want someone who has a good deal of experience, who is well-educated, and who is constantly devoted to learning more about their field of expertise. Having those qualities helps you trust the person providing you care. When it comes to hiring a financial advisor, we think the same qualities apply. Your financial advisor should be someone who is experienced, well-educated in financial planning, and devoted to their practice. Having these qualities can help increase confidence that your nest egg and your financial dreams are in good hands. [+] Read More

Understanding the Benefits and Risks of Long-Term Care Insurance

July 2, 2014

Research shows that at least 70 percent of people over 65 will need long-term care services and support at some point in their lifetime.1 Does that mean you should purchase long-term care insurance? Long-term care insurance can be a significant retirement expense, but it can also help protect your nest egg in the event you need additional health care. It’s an important financial decision for you which you should discuss with your financial advisor in addition to a long term care insurance expert who will help you decide on the plan itself. To help you get started, here is a general overview of some potential benefits and risks of long-term care insurance. [+] Read More

4 Common Portfolio Risks and How to Avoid Them

July 1, 2014

A key to investing well is finding balance between opportunities for growth and the potential risks that come with them. You want to generate returns needed to meet your long-term goals while limiting the potential portfolio risks associated with downside volatility and other adverse events.1 Practically every investor faces the following four risks to their portfolio. While each risk can be addressed in specific ways, start with good planning with your financial advisor, regular updates to your investment plan and being properly diversified. Then move on to the more specific methods below. Portfolio Declines Due to Market Volatility To paraphrase Boston money manager Newfound Research, LLC, ‘investors don’t live in a world of “100 year averages.” Instead, they live in a world of 40 year investment horizons, where significant declines can permanently impair retirement portfolios as investors do not necessarily have ‘more time’ to make up from large losses.’2 [+] Read More

How to Overcome 3 Common Retirement Planning Problems

June 30, 2014

Newfound Research, LLC, a Boston-based money manager specializing in tactical asset and risk management, published some insightful research focusing on issues that affect how investors plan for retirement. What they found is that retirees are facing somewhat of an uphill climb when it comes to successful retirement planning. People are living longer, have less guaranteed income, and are being met with an increasing cost of living. Common Retirement Planning Issues (Click image for larger version) Source: Newfound Research LLC. 1 Social Security Administration, as of 2013. 2 Employee Benefit Research Institute, as of 2011. 3 Federal Reserve Bank of St. Louis, as of 2013. 4 National Center for Education Statistics, 2013 dollars, as of 2012. 5 AARP Public Policy Institute, 2013 dollars, as of 2010. 6 United States Census Bureau, 2013 dollars, as of 2013. These issues serve to underscore the need for sound and thoughtful investment planning. [+] Read More

What Military Strategy and 401K Inservice Withdrawals Have In Common

June 26, 2014

You don't have to wait until you retire to take advantage of a 401K rollover and all the benefits that come with it. A 401K inservice withdrawal can be just what you need to advance your retirement strategy and create new investment options. In fact, it's not unlike a general gathering all of his troops together, examining the mission, and positioning everyone where they'll do the most good. Just as this wise general can be ready for whatever comes his way, a 401K inservice withdrawal can enhance your retirement income strategy while you're still working, thus preparing for a promising future. 401K Rollovers While You're Still Working Many 401K plans allow you to rollover a portion (or all) of your 401K into your IRA while you're working without incurring any of the penalties associated with early withdrawals. Normally, if you're under the age of 59 1/2, a 401K withdrawal could be subject to a 10% early withdrawal penalty and be treated as ordinary income, thus raising income tax concerns. These penalties could take quite a significant bite out of your retirement savings. [+] Read More

How High Income Earners Can Still Contribute to Roth IRAs

June 25, 2014

If you have not contributed to a Roth IRA recently because your income is too high and you’re not sure you’re allowed to, read this article. There’s a way you can make non-deductible contributions to a Traditional IRA (non-deductible IRA), then take that money and move it into a Roth IRA. With this method, you can take advantage of the tax-free growth and tax-free withdrawals that a Roth IRA provides.1 There are a few steps to this process, so consulting with your financial advisor and tax professional is a good idea. How to Convert Money into a Roth IRA Let’s say your investment portfolio consists of a 401(k) and a taxable brokerage account. You max out your 401(k) every year, and you’re looking for a way to get more tax-free growth out of your investments. You are also interested in a retirement income strategy that provides you tax-free income (Roth IRA),1 but you cannot contribute to one because you make more than $191,000 (married filing jointly) per year.2 [+] Read More

Churchill Maximum Growth Strategy: Risk-Driven Investing

June 24, 2014

There are two goals of the Churchill Management Group's Maximum Growth Strategy: achieve superior returns when it sees low-risk opportunities in the markets, and protect capital when risks in the stock market are deemed high. In an attempt to maximize returns, the portfolio managers will increase equity exposure and use leveraging techniques when they sense “top-down” low risk environments. In an attempt to protect capital, they may move all or a portion of equity exposure to short-term fixed income instruments or cash equivalents when risk in the stock market is deemed high. If you’re looking for a tactical money manager strategy to manage risk in your portfolio, the Churchill Maximum Growth Strategy is one option to consider. To quickly compare Churchill to other tactical money managers and to learn more about the approach, click here.1 [+] Read More

Are Target Date Funds Hurting Your Retirement?

June 23, 2014

If you’re invested in target date funds, or your employer offers them as part of your 401(k) or another retirement plan, you may want to consider whether they are a good investment option for you. Target date funds are automated investment products that do not take into account your personal financial circumstances and needs, and they do not adapt to changing market conditions. As a result they may not be effective products for helping you reach your long-term retirement goals, and in some cases they could even add risk to your portfolio over time – hurting your retirement. Why Are Target Date Funds so Popular? The appeal of these funds is generally their “auto-pilot” feature – you pick a fund that matches your retirement date, and the fund will diversify your assets and gradually become more conservative as you near retirement.1 For this reason, some may perceive them as low risk investments, but there are issues with this view as you examine target date funds more closely. [+] Read More

A Retirement Income Strategy to Help Alleviate Your Retirement Worries

June 19, 2014

According to an April 2014 Gallup poll, 59% of Americans are concerned their nest egg is not big enough to last them through retirement. A majority (53%) is concerned about not having enough to pay medical costs in the event of a serious illness or accident, and (48%) wonder about their ability to maintain the same standard of living throughout retirement. Thankfully good retirement income planning can help alleviate these concerns, and even help prevent them from happening in the first place. [+] Read More

4 Tips for Having “The Talk” - Discussing Estate Plans with Your Family

June 17, 2014

The summer season gives families the chance to get together for quality time and fun, but it also presents you with an important opportunity – to have a constructive conversation with your family about your finances and estate plan. Fidelity Investments found that 86% of parents felt peace of mind after having conversation with their children, yet only one-third of parents and children agree about the right timing for these conversations.1 Having this talk helps in three ways: Preparation – inform your family how you want your estate handled and distributed Educational – your family members can learn about the details, their role in the plan and clear up any gray areas Comfort –peace of mind is important and knowing there’s a plan in place to help the transition go smoothly can help If you’ve been meaning to have this discussion but haven’t started it yet, make now the right time to do it. [+] Read More

Boosting Portfolio Income: Newfound Research Risk Managed Income

June 17, 2014

Many investors today are faced with the same problem: how do you generate income in your portfolio when interest rates are so low? In the current market, finding asset classes that generate income at significant enough levels can be difficult: Traditional Income Generators (Click chart for larger version) Source: Newfound Research LLC. Short-Term U.S. Treasuries represented by SHY. Short-Term Corporates represented by CSJ. MBS represented by MBB. Intermediate Term U.S. Treasuries represented by IEF. Total U.S. Bond Market represented by AGG. Long-Term U.S. Treasuries represented by TLT. Intermediate Term Corporates represented by LQD. High Yield Corporates represented by HYG. Yields computed using smoothed trailing 252-day dividends. Starting date for graph is April 2008 because that is first date yields could be computed for all of the ETFs used in the analysis. Newfound Research LLC, a Boston-based tactical money manager focused on risk management, recognizes this problem and has created a distinct solution: The Newfound Risk Managed Income Strategy. The overarching goal of the investment strategy is simple: increase portfolio income in a prudent manner, by investing in traditional equity, fixed income and alternative-income vehicles in a risk-managed framework. In a fully bearish environment, the portfolio has the ability to move entirely to cash. [+] Read More

Looking for Corporate Trustee Services? Consider Advisory Trust

June 16, 2014

High net worth investors who open a trust account have two choices when it comes to choosing a trustee, generally speaking: assign a friend/family member/associate, or hire a corporate trustee to handle the trust management duties. If you’re looking for a corporate trustee service, consider The Advisory Trust Company of Delaware. 6 Benefits of Using Advisory Trust as Your Trust Administrator1 1) A Singular Focus on Trust Administration Services At Advisory Trust, they focus solely on administering the trust, meaning you can keep your financial advisor and the money manager strategies that make up your investment plan. Some corporate trustee services require you to give them discretion over investment decisions within the trust – meaning you would have to potentially fire your financial advisor and hand over control of your portfolio to the corporate trustee. [+] Read More

Inheriting an IRA: What are Your Options?

June 13, 2014

If you are the beneficiary of a Traditional, Simple, or SEP IRA and have just inherited the assets, you have a few reasonably simple options available to you. We’ve created a guide below to help you understand your choices. Inheriting an IRA means having a new set of financial decisions, and since your financial situation is unique it’s a good idea to ask for help. Your financial advisor should be able to guide you through these options so the transition goes smoothly and you can make a choice that’s right for you. Below we break it up into two sections: spouses who have inherited IRA assets, versus non-spouses. [+] Read More

Estate Planning Strategies for IRAs: The “Per Stirpes” Designation

June 12, 2014

The “per stirpes” IRA beneficiary designation is a useful tool for ensuring your assets are distributed equally amongst your lineal descendants (children, grandchildren) or those legally adopted. It helps makes sure that each of your children receives an equal share of your assets, and that their share remains in their family in the event they are not there to inherit your assets. How the “Per Stirpes” IRA Beneficiary Option Works Say you have a $2,000,000 IRA and four children, and you want each child to receive $500,000. One of your children has three children of his own. If you set up your beneficiaries as “to my descendants that survive me, per stirpes,” your kids would each receive their $500,000, and your three grandchildren would split the $500,000 in the event they inherit the assets. Each grandchild in this case would receive one-third of the $500,000 share, or roughly $166,667 each.1 What makes the “per stirpes” designation different from assigning each child as a 25% primary beneficiary is the fact that the assets ‘flow through’ to grandchildren in the event they inherit the assets in place of one of your children. In the above example, if you had assigned each child as a 25% primary beneficiary, the $500,000 share would have been split amongst your remaining children and would not have flowed through to your grandchildren.2 [+] Read More

Are Your Social Security Retirement Benefits Taxable?

June 12, 2014

If you generate retirement income from non-Social Security sources, like an investment portfolio or rental properties, your Social Security retirement benefits are probably taxable. It’s important to keep this in mind as you work through retirement income planning with your financial advisor, so you can anticipate what the taxes are and how you should adapt your investment plan to account for them. Here’s a basic example of how it works: Let’s say you’re a married couple filing jointly, and your combined Social Security retirement benefits for 2013 were $10,000. You also received $25,000 in income from a pension, and withdrew $15,000 from your investment portfolio. To determine if your benefits may be taxable, simply take one-half of your Social Security retirement income amount, in this case $5,000, and add it to all your other sources of income: $5,000 + $25,000 + $15,000 = $45,000. If your income total exceeds $25,000 (single) or $32,000 (married filing jointly), which in this example it does, then part of your Social Security income is taxable. You would most likely have to file a return for your Social Security Benefits received on Form 1040 or 1040A.1 [+] Read More

6 Tips for Creating a Successful Retirement Plan

June 10, 2014

Let’s start with the most important one: spend plenty of time vetting financial advisors before you hire one. Take time and do your homework to find someone that has experience, a good track record, and who is a constant student of financial planning and investment strategies. Those are the qualities you want. To make the search process easier for you, narrow the field to include only Certified Financial Planners. Unlike many financial advisors, CFP® professionals are required to complete a comprehensive financial planning curriculum, pass an examination that tests their ability to apply financial planning knowledge to real life situations, and complete several years of delivering financial planning services to clients prior to being able to use the “CFP®” certification.1 [+] Read More

6 Advantages to Hiring a Corporate Trustee

June 5, 2014

Many estate and trust professionals recommend hiring a corporate trustee to carry out the terms of your trust.1 This approach makes good sense - Given the level of experience and objectivity necessary to ensure the wishes of your trust are carried out just as you envisioned, a corporate trustee is certainly an option to consider. The alternative is to choose a friend or a relative, which may save you a little money but may not deliver the same level of expertise and unbiased decision-making that you get with corporate trustee services. Here are 6 distinct advantages you can get when you hire a corporate trustee for your trust management needs:1 [+] Read More

Sell Stocks in May (or this Summer) and Go Away? Not So Fast

June 4, 2014

Does the old Wall St. adage of “sell in May and go away” really work? We will cover that in a moment, but first we think it is more important to focus on a key point – It doesn’t make sense to try and time the market over such a short period of time in the first place. A prudent investment approach should be based on your goals for your assets and a longer-term outlook for the markets, not on a historical adage and set of data that may or may not have much predictive power. A strategy that works only sometimes and has no basis on the current market environment is probably not good enough to drive investment decisions for your portfolio. The “sell in May and go away” strategy certainly did not work last year. In the May – October period, the market rallied +10%:1 S&P 500 from January 1, 2013 – December 31, 2013 (Click chart for larger version) Source: Federal Reserve Bank of St. Louis, S&P Dow Jones Indices LLC. [+] Read More

Certified Financial Planners: 7 Qualities that Set Them Apart

June 2, 2014

When you’re thinking about hiring a financial advisor, here’s one tip to keep in mind: consider hiring a Certified Financial Planner professional. This special breed of advisor is required to take classes on various aspects of financial planning and has obtained a certification recognized as the standard of excellence for competent and ethical personal financial planning. CFP® professionals must meet several certification requirements, including extensive training and experience, and they are continuously held to rigorous ethical standards. As fiduciaries, they’re also ethically bound to make recommendations in your best interest. Here are 7 things you can and should expect your CFP® professional to provide and adhere to: 1) Professional and Responsible Your financial planner should take responsibilities seriously and place your interests over personal gain. The CFP® Board’s strict Standards of Professional Conduct is designed to ensure as much. [+] Read More

Want a Globally Diversified Portfolio? Consider Cambiar Investors

May 29, 2014

For many investors, a globally diversified portfolio makes sense as part of their investment plan. Within this field, international money manager Cambiar Investors' International Equity ADR strategy combines a deep level of focus and experience in international stocks, and it has demonstrated the ability to deliver positive results over time. WrapManager included it on our “Top Equity Money Manager Picks for 2014” list, and Investment Advisor Magazine awarded Cambiar and the strategy a “2012 SMA Money Manager of the Year [Award] for International Equity.” [+] Read More

When Setting Up a Trust Account, Your Location Matters: 3 Reasons Why

May 28, 2014

There are many factors to consider when setting up a trust account – who to choose as your trustee, how to invest the assets, what guidelines to establish for distributing the assets over time, and so on. An important factor you should also consider is where to set up the trust. State laws differ in how they treat trust taxes, privacy, and protection of assets, and some are distinctly friendlier than others. States Competing for Your Trust Business In recent years, states such as Delaware, Alaska, Nevada, New Hampshire, South Dakota, and Wyoming have modified their trust laws to make them more attractive to investors looking to minimize trust taxes, shield assets from creditors, and protect an individual or family’s privacy.1 Each of those three factors plays a key role as part of a well-rounded estate planning strategy. [+] Read More

2 Steps to Help You Fight the Effects of Inflation on Your Retirement

May 23, 2014

As we get older, spending habits tend to change and some things become a bit pricier. For example, health care expenses could rise and you may decide to increase your charitable contributions instead of travelling so much. Because of these changing spending habits and price increases, inflation for several items can be higher for those over 62.1 Our advice? Plan for it! A properly designed portfolio and investment plan that accounts for rising expenses can help you plan for them before they occur. We’ll touch on how to do that below. Retirees Experience Higher Inflation Relative to Other Consumers A recent study by JP Morgan shows that since 1985, inflation has increased at a faster pace for those aged 62 and older (the grey line, CPI-E, in the chart below). Older Individuals Experience Higher Inflation (Click chart for larger version) Source: JP Morgan Asset Management. *CPI-E is an experimental index from BLS that is based on elderly households with the referenced individuals at age 62 and older. **CPI-U is also referred to as Headline CPI. Source: Based on Consumer Price Indexes, BLS, J.P. Morgan Asset Management. Data as of December 31, 2013. [+] Read More

Good Harbor Tactical Core US – A Focus on Downside Protection

May 21, 2014

Chairman, Chief Investment Officer, and Co-Founder of Good Harbor, Neil Peplinski, aptly describes the Good Harbor Tactical Core US strategy using a short quote: “Investing in the stock market is important for long-term success…but so is capital preservation during times of market stress.” [+] Read More

Outlook on Emerging Markets Investing - Lazard Asset Management

May 19, 2014

Emerging Markets money manager Lazard Asset Management believes emerging market equities are nearing a bottom and valuations represent significant opportunity. “As emerging economies exit a period of China-led growth and cheap credit, attention has turned to the economic imbalances that developed during the boom years. These imbalances and their solutions vary by country. For example, China will probably reduce investment and increase consumption while the reverse is true for Brazil. The announcement and implementation of reforms is a crucial next step, and could result in a strong upside opportunity for emerging equity markets in 2014.” Download Lazard Asset Management's Full Commentary Here Get Free Research Reports on Lazard Asset Management [+] Read More

Choosing a Trustee for Your Estate Plan: 7 Questions to Ask

May 19, 2014

Choosing a trustee is one of the most important decisions you’ll make if your estate plan includes one or more trusts. After you've reviewed your estate planning strategy, but before you appoint a trustee, it's important to evaluate whether or not the trustee can handle the duties of administration. Trustee (noun): A trustee is responsible for understanding and interpreting trust terms, distributing income and principle to the beneficiaries of the trust according to the guidelines set forth by you, preparing trust accountings, and filing tax returns – all while adhering to state and federal laws regarding appropriate standards of care. In other words, a trustee has control or powers of administration of your property and/or money in trust. For reasons that should be very clear, this means that you need to know how to choose a trustee that you trust, and that the person or entity is qualified to handle the duties. [+] Read More

Two Money Manager Strategies for the Current Market Environment

May 16, 2014

The stock market overcame some volatility early in the year but continued to trend higher. As the market has reached new all-time highs, many investors are wondering if it’s too late to put additional cash to work. Others have indicated they’re still waiting for a possible stock market correction before making any decisions. One thing remains clear – despite what happens in the market and when, it’s likely you still need your portfolio growing and generating retirement income over time. There are two types of money manager strategies that could ease concerns about where the market’s headed while positioning your portfolio for a variety of outcomes. Tactical Money Manager Strategies are designed to temper the effects of a market decline while trying to capture growth, and Dividend Income Money Manager Strategies aim to generate income while reducing volatility. Let’s take a look at both. [+] Read More

Two Portfolio Strategies for the Current Market Environment

May 15, 2014

The stock market overcame some volatility early in the year but continued to trend higher. As the market has reached new all-time highs, many investors are wondering if it’s too late to put additional cash to work. Others have indicated they’re still waiting for a possible stock market correction before making any decisions. One thing remains clear – despite what happens in the market and when, it’s likely you still need your portfolio growing and generating retirement income over time. There are two types of portfolio strategies that could ease concerns about where the market’s headed while positioning your portfolio for a variety of outcomes. Tactical Strategies are designed to temper the effects of a market decline while trying to capture growth, and Dividend Income Strategies aim to generate income while reducing volatility. Let’s take a look at both. [+] Read More

WrapManager Adds Newfound Research LLC Investment Strategies to Their Approved List

May 15, 2014

Newfound’s Tactical, Risk-Managed Strategies Available to Help Investors Achieve Investment Goals San Francisco, CA – May 9, 2014. WrapManager, Inc. (www.wrapmanager.com), an investment advisor specializing in building investment plans and recommending money managers for investors, is pleased to announce that they now offer three risk-managed investment strategies from Newfound Research LLC (www.thinknewfound.com), a quantitative asset management firm focused on tactical, ETF managed portfolios. [+] Read More

Newfound Risk Managed Global Sectors: Global Investing With an Eye on Risk

May 14, 2014

Tactical money manager strategies have caught the attention of many investors recently, given their ability to participate in rising markets while also seeking to limit capital losses when the market declines. Newfound Research LLC's Risk Managed Global Sectors is one such strategy, providing investors access to global equities through an embedded risk-management process. The Newfound Global Sectors Strategy offers the following: A tactical risk management approach - the strategy can move into 100% cash in an attempt to limit large losses1 Additional equity exposure for your portfolio, specifically geared towards global stocks Elimination of cognitive biases due to its rules-based nature1 [+] Read More

Cambiar Investors International Equity First Quarter Commentary

May 13, 2014

International money manager Cambiar Investors reviews the past quarter, as well as the performance of their International Equity ADR and Global Select money manager strategies. “Aggregate global equities posted modest gains in the first quarter – a moral victory of sorts, given the broad sell-off in stocks that occurred in January. Buyers stepped in toward the end of the quarter, and many indices needed the last week of March to get back into the black. Stocks remained resilient during the quarter, despite ongoing concerns about Emerging Markets, valuation concerns in the U.S., and the increasing political uncertainty via Russia and their activities in the Ukraine.” Download Cambiar's Full Commentary Here Get Free Research Reports on Cambiar Investors [+] Read More

2 Important Tax Deductions That May Expire in 2014

May 12, 2014

At the end of last year, 55 tax breaks1 and incentives known as “tax extenders” expired. Several of them were corporate (57%) and related to things such as research, experimentation, and energy use.2 But there are two in particular that we think could affect you if they’re not extended this year. We’re writing to make you aware of them as you develop your tax planning strategies for 2014 and beyond. 1) Deducting State Income vs. Local Sales Taxes This provision allows for taxpayers to choose between deducting state income taxes vs. state sales taxes. So, if you live in a state with a high income tax, like New York or California, you could opt to deduct your state income tax versus deducting sales taxes. The opposite would be true for a state like Florida or Texas, where there is no state income tax. In those cases, you may want to deduct state sales taxes on your return. [+] Read More

The Stretch IRA: A Wealth Preservation Strategy That’s Easy to Use

May 8, 2014

The Stretch IRA strategy is a method for lengthening the life of your IRA assets, in hopes they span multiple generations. We stress the word “method” because the Stretch IRA is not actually a product – it’s a wealth preservation strategy your beneficiaries can use to stretch the life of the IRA assets they inherit from you.1 We’ll explain how it’s done below, but first we’ll help you understand the benefits. Stretching Your IRA Can Help It Grow Tax-Deferred Longer Stretching your IRA can lower the required withdrawal amounts your heirs have to take each year, meaning the value of your IRA can grow tax-deferred longer – a benefit that can keep the IRA in the family for generations. [+] Read More

3 Estate Planning Tips to Help Your Family Avoid Probate Fees

May 7, 2014

Probate comes from the Latin phrase “to prove,” and refers to the process of proving to a court that a last will and testament is valid. It is frequently a difficult and lengthy process, and in many cases can be quite expensive. Below, we’ll outline three steps you can take to help your family avoid probate. Settling an estate is a difficult time as it is, so it’s worth it to take the right steps taking today to ensure it goes smoothly. Probate Fees Can Add Up Quickly The fees vary from state to state, but just to give you an idea, the typical probate costs on a $500,000 estate in California could range between $14,390 and $27,390. On the higher end, this could mean losing over 5% of your estate to probate fees, not to mention all the time attorneys and family members will have to spend seeing it through.1 Avoid Probate with These 3 Steps In many cases you will likely need to apply some combination of the below approaches, so it is important to speak with your financial advisor and an estate attorney to know which options are right for you. [+] Read More

401(k) Allocation Advice: Which Investments Should You Choose?

May 6, 2014

First and foremost – don’t pay extra for the advice! As part of a comprehensive investment plan, your financial advisor should provide guidance on your 401(k) asset allocation, and which investments you choose depends on how you’re allocated outside of your 401(k). You should receive a detailed analysis—and this advice—at no extra charge. If you don’t have a financial advisor, have one look at your complete financial picture including your 401(k), and see what type of advice you get. Then, repeat this exercise with two or three different financial advisors and compare each, to see which one offers the most compelling and thoughtful advice. That might be the financial advisor worth hiring. In the meantime, here are 4 sound tips for setting up your 401(k) asset allocation [+] Read More

5 Reasons You Might Need to Open a Trust Account

May 6, 2014

In order to control how your assets are passed along to your family, charities, or other entities of your choice, you can often simply make your intentions very clear in your last will and testament. But other situations are more complex and require additional planning. This is when opening a trust account can help. Here are 5 reasons you might need a trust. 1) You Want to Protect Your Assets From Creditors You can accomplish this by setting up an irrevocable trust. Under this arrangement, you relinquish control of your assets to the trust, such that you no longer legally own the assets nor can you control how they’re distributed. It’s a trade-off. Pros: A future creditor cannot satisfy judgment on assets in an irrevocable trust.1 Cons: You give up control. [+] Read More

Mickey Rooney’s Legacy: What We Can Learn About Estate Planning

May 5, 2014

When you start your career in show business at the age of 1 ½, you are bound to be a legacy. That’s what Mickey Rooney did, with an illustrious acting and performance career that spanned some 90 years and included silent comedies, Shakespeare, Judy Garland musicals, Andy Hardy stardom, television and the Broadway Theater. In 1983, the Motion Picture Academy presented Rooney with an honorary Oscar for his "60 years of versatility in a variety of memorable film performances," which complimented the 1938 special award he shared with Deanna Durbin for "bringing to the screen the spirit and personification of youth."1 Forever an icon, he will greatly be missed. In his legacy, though, we’re also reminded of the importance and value of proper estate planning. [+] Read More

Windhaven Investment Management’s 3 Strategies: Which Is Right For You?

May 1, 2014

In November 2010, Charles Schwab acquired the assets and intellectual property of Winward Investment Management (now operating under the name Windhaven Investment Management). In doing so, Schwab now offers the three Windhaven money manager strategies to its retail clients, providing a distinct approach to investing for growth and risk management. The Windhaven strategies have grown in popularity since Schwab’s acquisition, though many investors may be unsure of how each strategy differs in its approach.1 Which of the Windhaven Investment Management strategies is right for you? [+] Read More

Five Questions to Ask When Setting Up Your IRA Beneficiaries

April 30, 2014

One of the great things about setting up beneficiaries on your retirement and other investment accounts is that you can set them up virtually any way you want. You can relinquish complete control of your assets, or you can set up systems to maintain some control over how the assets are distributed. The choice is yours. When deciding how to assign beneficiaries on your retirement and other investment accounts (including your IRA beneficiaries), there are a few important considerations. Here are five questions to discuss with your financial advisor when discussing setting up your beneficiaries. [+] Read More

Retirement Planning: How Do You Plan for Things You Can’t Control?

April 28, 2014

You control many of the decisions leading into retirement: how much to save, what investments to make, how long you choose to work. But there are other factors – like market returns and policies regarding taxation, savings, and entitlements – that you can’t completely control. Or can you? The key word here is “completely” – with the right kind of investment planning, you can regain control of some of those less predictable aspects of retirement planning. Planning For Things You Can't Control (Click image for larger version) Source: The Importance of Being Earnest, J.P. Morgan Asset Management, 2013. [+] Read More

Have Extra Retirement Income? 3 Smart Ways to Use It

April 26, 2014

Does your Required Minimum Distribution (RMD) exceed your living expenses this year? Or perhaps your income from rental properties, an investment portfolio, or a pension is generating extra cash flow beyond what you need. Here are three smart ways to keep those assets working for you: 1) Re-Invest Your Assets to Help Them Grow Get more out of your money by investing extra cash in your taxable brokerage account, IRA or other retirement accounts, which you can do if you meet certain requirements. (Your financial advisor can help you determine your eligibility.) If your extra income comes from RMDs, your financial advisor may be able to help you fulfill your required distribution by transferring stocks from your IRA into your taxable account. Instead of taking that money in cash, you can fulfill your RMD and stay invested in the market. Another option may be to transfer cash or stock to a qualified charity, in which case charitable giving rules may apply. [+] Read More

Relocating for Retirement? Health Care Costs Could Matter

April 24, 2014

If you’re thinking about moving to a different state, it’s important to consider how your health care costs could change depending on where you end up. The average cost for Medicare, Medigap and nursing homes could become cheaper, or more expensive. The following two maps of the United States illustrate the average cost for each based on state. On one level, the cost of Medicare and comprehensive Medigap plans varies from state to state. Medicare and Medigap Average Annual Cost per State at Age 65 (Click image for larger version) Source: JP Morgan Asset Management. SelectQuote, 2013. Traditional Medicare costs are based on national average cost estimates for Medicare Parts A, B, D and Medigap Plan F. Vision, dental and long-term care expenses are not included. Not shown on the chart: costs for Medicare Advantage. Medicare Advantage costs may vary from less than $500 per year to more than $10,000 per year. Data for Alaska and Hawaii not available. [+] Read More

Getting Money Back: 4 Investment Expenses That May be Tax Deductible

April 23, 2014

If you had a good investment year, perhaps you had to pay a chunk of taxes on capital gains, interest, and dividends earned. Taxes are taxes, but we’re writing to show you a few ways you might be able to get some of that money back. Here are four investment-related expenses that may be tax deductible for you: 1) Financial Advisor Fees These can include investment management fees paid to your money managers or financial advisors, and can also include paid-for services like subscriptions to newsletters. 2) IRA Custodial Fees For annual or maintenance fees associated with holding your IRA at a custodian. One key item to note: these fees may only be tax deductible if you pay them with cash from an account different than your IRA. [+] Read More

Managing Your Retirement Income: What to Do During Down Markets

April 22, 2014

When mapping out the sources and timing of your retirement income payments, there’s an important risk we want to make investors aware of: withdrawing money from your portfolio during down markets. If you’re not careful, withdrawing money while the market declines can significantly impact your portfolio and your ability to meet your long-term retirement goals. This risk is especially palpable if you’re in the early stages of retirement, because it can be difficult to replenish your portfolio over time. During down markets, investors should consider adjusting their withdrawal rates and exploring other sources of retirement income. [+] Read More

Stress Testing Your Investment Portfolio

April 16, 2014

Many banking institutions now undergo annual stress tests to ensure they’re strong enough to survive another global financial crisis. Looking back, we now know that many banks appearing healthy and operational on the surface actually needed help. Had they conducted stress tests regularly, they may have just survived. As advisors, these bank stress tests and bank failures highlight a valuable lesson when it comes to investment plans—they too should be stress-tested to make sure they can endure future market volatility. Have you checked to see if your investment portfolio can survive another large market decline? Who performs annual stress tests on your portfolio to make sure you’re on the right track? * The Confidence Zone is the range of probabilities that you and your advisor select as your target range for the Probability of Success result in your Plan. Source: Money Guide Pro It’s important to know how your retirement goals and portfolio could be affected during the next market decline. Armed with this information, you can make adjustments so you’re better prepared. Go through these 4 steps to perform a stress test on your portfolio so you know you’re prepared. [+] Read More

Social Security Retirement Benefits: Your Timing Matters

April 16, 2014

Are you thinking of retiring soon, but are still unsure about when you should take Social Security retirement benefits? Here’s something you may not have known before: the Social Security retirement benefit system is set up to incentivize people to delay collecting benefits. If your financial situation enables you to delay collecting benefits, it could make a lot of sense for you to wait. Here’s a great introductory graphic that can help frame your thinking: Social Security Timing Tradeoffs (Click chart for larger version) Source: Social Security Administration, J.P. Morgan Asset Management. For illustrative purposes only. For 1955 - 1960, two months are added to the Full Retirement Age each year. [+] Read More

A Smarter Way to Structure Your Retirement Goals

April 15, 2014

Financial advisors often ask the questions: what are your retirement goals? What do you dream of accomplishing? These are important questions and are central to the investment planning process. But they are broad in scope and it can be difficult to know exactly how to answer them. An important feature of solid retirement planning is prioritizing your retirement goals into groups. Do you have enough to cover healthcare expenses? Do you want to buy a second home? Pass along a certain amount of assets to your heirs? Which goal is more important than another? [+] Read More

Managing Your Retirement: What are Your Retirement Income Sources?

April 14, 2014

JP Morgan research shows that on average, Americans age 65 and over will get two-thirds of their retirement income from Social Security and continued work/earnings. Surprisingly, only 11% of retirement income is expected to come from investment assets. For many high net worth investors, however, this number could be higher if they chose not to work or don’t have pensions or annuities. In reality, your sources of retirement income differ from other investors. Give yourself a better chance of maximizing your retirement income by knowing where it’s coming from and making sure your portfolio is structured accordingly.1 Source of Income at Retirement: Average for Age 65 and Older (Click chart for larger version) Source: EBRI (Employee Benefit Research Institute) Databook on Employee Benefits, Chapter 7. Data as of December 31, 2011. [+] Read More

Geneva All-Cap Growth Strategy: Casting a Wide Net into the Stock Market

April 11, 2014

Investors looking to diversify their portfolio across a broad spectrum of the stock market should consider money manager Geneva Advisors' All-Cap Growth Strategy. By investing in a wide range of equities meant to offer attractive capital appreciation opportunities, the strategy can provide investors broad diversification in their portfolios. [+] Read More

Transferring Wealth Made Easy: The Transfer on Death Registration

April 8, 2014

The transfer on death (TOD) account registration is a good way to establish beneficiaries on your non-retirement accounts. It ensures your assets are transferred to your chosen beneficiaries seamlessly, so your family may avoid the potentially costly, emotionally difficult, and drawn-out probate process. Why Set Up a TOD Registered Account? The TOD designation usually allows your family to bypass probate when distributing assets at your death. For instance, let’s say you have an individual brokerage account where you hold stocks and other securities, but you don’t have a TOD registration. When you pass away, those assets will likely move into probate, and legal parties will have to look to your last will and testament as a guide for how to distribute them. If the language in the will isn’t clear or there are questions, it could make an emotionally difficult time even more difficult for your heirs. The TOD registration bypasses all of that. It takes precedence over anything stated in the will, so the assets will be distributed as you want and there won’t be any questions asked. [+] Read More

Want Better Portfolio Returns with Less Risk?

April 7, 2014

In today’s investment world, there are dozens of investment products and strategies out there to choose from. It’s understandable that investors might get overwhelmed when trying to decide which option or combination of options seems like the right choice for them. But amidst all the variables, there’s one thing we encourage investors to remember and fall back on: it’s not so much about the products and strategies themselves; it’s how you allocate your portfolio across different areas of the market. The old fashioned approach still holds true: a properly diversified portfolio can provide better returns with less risk over time.1 [+] Read More

The Bull Market is 5 Years Old: Where Does it Go From Here?

April 3, 2014

March 9, 2009 marked the end of one of the worst bear markets in stock market history, and the beginning of the bull market we’re currently in. Now 5 years and +177% later,1 many investors are wondering what the future holds. Is the market now overpriced? Is the next bear market around the corner? History can often help answer these types of questions, so we’ll take a look back at past bull markets to draw insight into the current environment. How Long Do Bull Markets Last? The average span of a bull market is a little under four years, but according to JP Morgan US Chief Equity Strategist Tom Lee, “averages don’t tell you anything.”1 Here’s one reason why: Stock Market Since 1900 (S&P 500 Composite Index) (Click chart for larger version) Source: Shiller, FactSet, J.P. Morgan Asset Management. Data shown in log scale to best illustrate long-term index patterns. P/E ratios shown at price peaks and troughs use trailing four quarters of reported earnings and are shown as a one year average. Past performance is not indicative of future returns. Chart is for illustrative purposes only. Guide to the Markets – U.S. Data are as of 12/31/13. [+] Read More

Make Your Retirement Savings Last: Avoid Increasing Withdrawal Rates

April 2, 2014

Let’s say you have a $1,000,000 investment portfolio, and you’re withdrawing $40,000 of annual income to meet your retirement spending needs. Adjusting your withdrawals up to $50,000 a year doesn’t seem like a big move, and in percentage terms it’s not – you’re only increasing them from 4% to 5%. But the impact it could have on your portfolio is significant, and it can really have an adverse effect on your long-term retirement goals: [+] Read More

Specializing in Small Cap Growth: Granite Investment Partners

April 1, 2014

For investors seeking to add a small cap growth component to their diversified portfolio, or for those looking to replace their existing small cap money manager, we’d recommend considering the Granite Investment Partners Small Cap Growth Equity portfolio as an option. The Granite Small Cap Growth portfolio seeks to consistently outperform the Russell 2000 Growth Index over a full market cycle (3-5 years), while also assuming less than commensurate risk.1 To learn more about the Granite Small Cap Growth portfolio’s performance versus the Russell 2000 Growth Index, and to compare it to other small cap growth money managers, please give one of our Wealth Managers a call at 1-800-541-7774. You can also request more information by filling out this form. [+] Read More

Create Your Retirement Income Strategy with an Investment Plan

March 28, 2014

An investment plan can serve as a tool to help you create a calculated and dynamic retirement income strategy. Calculated because it takes into account important financial aspects of your life like cash flow needs, investment horizon, and risk tolerance. Dynamic because it can be adjusted as your family and financial needs change. Retirement Income Needs Shape Your Investment Plan Let’s say you are 65, in good health, and have $1,000,000 saved with a long-term goal of growth because you want to pass along assets to heirs. You’ll also need $1,000 of monthly income from the portfolio starting at age 70, to supplement Social Security retirement benefits. [+] Read More

Retirement Planning: What If You Can't Work As Long As You Want To?

March 26, 2014

Make room for more baby boomers in the workplace. From 1989 to 2012, the percent of people over age 65 in the workforce jumped from a little under 12% to 18.5%, setting a trend that’s set to continue. Between 2010 and 2020, the number of workers age 65 to 74 is expected to grow at a faster pace than any other demographic. The sheer quantity of baby boomers entering the workforce accounts for some of this growth, but it’s also being driven by cultural forces—many baby boomers really enjoy working and staying busy.1 As Wealth Managers we focus on investors’ retirement goals and the ability to meet those goals. Would your retirement goals be compromised if you weren’t able to work past a certain age? Is there a backup plan? [+] Read More

3 Ways to Control Your Expenses in Retirement

March 25, 2014

The world’s largest asset manager, BlackRock,1 conducted a survey of 17,600 investors around the globe to uncover investor perspectives on retirement. BlackRock found that nearly half of respondents had a negative outlook on their financial futures, in large part because they were unsure if their retirement savings would outlast their retirement expenses.2 Do you feel this way too? Retirement is supposed to be enjoyed, not feared, and a solid investment plan can help wipe away those concerns. As a starting point, investors can think about ways to reduce retirement expenses to help allay concerns about having sufficient retirement savings. Here are three ideas to explore. [+] Read More

Deflation and Your Investment Portfolio: Should You Be Concerned?

March 24, 2014

One of the distinguishing features of the Great Depression was marked deflation from 1930 – 1932, with prices falling precipitously (-30%) over that time.1 Deflation spiraled, and the stock market and investor portfolios tumbled with it. With recent headlines citing deflation as a concern, we’re taking a moment to remind investors about the negative effects of deflation, its present-day risk in the global economy, and what steps investors concerned about deflation can take in their portfolios. What is Deflation and How Does it Affect the Economy? Deflation occurs when prices of goods fall on a broad scale, usually due to sharp declines of money in circulation or because of a big spike in the supply of goods with little supporting demand.2 The key phrase here is “broad scale.” The prices of flat screen TVs might fall year-over-year, for instance, but that’s more likely because of productivity gains and innovation within that sliver of consumer goods than it is a broad-scale economic issue. [+] Read More

A “Wait and See” Approach Can Hurt Your Retirement

March 22, 2014

The 2008 financial crisis left many investors cautious about investing in stocks, and rightfully so. The thought of experiencing steep market declines is a recipe for losing sleep at night, and no investor wants that type of feeling about their portfolio. Investing with caution is understandable, but it’s to the point that many investors could be inadvertently hurting their retirement by choosing to remain in cash and other short term investments instead of putting their money to work. The Opportunity Cost of Waiting in Cash A recent survey by BlackRock found that nearly half of investor’s portfolios are in cash, with a relatively small proportion dedicated to longer-term investments like stocks. What’s more, half of those investors said they intend to keep that cash in their portfolios for the next 12 months, and 36% of investors said they plan on increasing their cash holdings over the course of the year.1 [+] Read More

4 Dividend Money Manager Strategies to Consider

March 19, 2014

The uncertainty surrounding the current interest rate environment has many investors rethinking their retirement income strategy. Some are considering dividend income as a way to generate additional cash for their income needs. Below are four dividend money manager strategies that invest in dividend paying stocks as a means to provide income for portfolios, while also offering the potential for equity-like returns over time. As always, we encourage investors to discuss these dividend money managers with your financial advisor before investing. (WrapManager is not affiliated with the money managers listed and has not approved for use nor entered into contracts with all of the managers. This is for informational and comparison purposes only.) [+] Read More

Selling Stocks to Generate Retirement Income? 3 Issues to Consider First

March 18, 2014

Many investors choose to sell shares of stocks in their portfolios every month, or perhaps every quarter, to raise the cash they need for retirement income. This isn’t necessarily a good or a bad method for generating retirement income, but there are three things investors should consider when taking this approach. 1) Tax Implications of Selling Stocks Investors should be mindful of realizing capital gains in their portfolios due to selling stocks. If the shares are being sold at a gain, it could mean having to foot a sizable tax bill the following year. These gains might be offset by selling stocks at a loss in the same year, but some investors may not have a lot of positions that carry a big loss—meaning you’ll be stuck with the tax bill. The current capital gains rate for investors filing jointly and making less than $457,600 is 15%, while anything above that threshold is taxed at 20%.1 [+] Read More

What is the Optimal Fixed Income Strategy in Retirement?

March 17, 2014

Many investors need to own fixed income in their portfolios to provide income and reduce volatility. But what percentage of fixed income is the ideal amount? Research conducted by BlackRock suggests that the optimal allocation to bonds actually fluctuates widely over time. Since 1900, the average optimal allocation to bonds as shown in the chart has been about 43%. But as you can see below, there were long periods when owning more bonds made sense (when the blue line is above the overall average), as well as stretches where owning much less than 43% in fixed income was considered optimal, like in the 60’s, 70’s and 80’s.1 Average Optimal Allocation to Bonds 10-Year Periods, Using 1900-2010 Annual Data, Cross-Country Averages (Click chart for larger version) Source: BlackRock [+] Read More

Profiling WHV Investment Management’s International Equity Strategy

March 14, 2014

Investors wanting to add an international (non-US) component to their portfolios should look to international money manager WHV Investments’ International Equity strategy as a viable option. The WHV International Equity strategy invests primarily in large-cap international growth stocks, with a belief that the most attractive global economic sectors can generate superior investment performance.1 As a performance benchmark, the strategy uses the MSCI EAFE Index, which represents developed markets in Europe, Australasia, and the Far East.2 To request detailed performance information on the strategy or to compare the performance of the WHV International Equity Strategy to other international strategies, please call one of our Wealth Managers at 1-800-541-7774. Alternatively, you can request the information here. [+] Read More

Holding Cash Can Protect Your Portfolio, but Can Hurt Your Retirement

March 13, 2014

According to data from BlackRock’s 2013 Investor Pulse Survey, investors of all types in the US hold 48% of their investable assets in cash, with 18% in stocks and 7% in bonds.1 Steady gains in the stock market have influenced some sidelined investors to reinvest over the last few years, but the BlackRock study makes clear that most investors remain risk averse following the most recent financial crisis. It’s understandable – many investors took a hit and don’t want to see that happen again. The cautious approach is understandable, but is being mostly in cash actually costing you in retirement? The answer: probably. [+] Read More

Emerging Markets Have Struggled Lately, But is a Turnaround Ahead?

March 13, 2014

The below chart spells it out pretty clearly—the Emerging Markets (in blue) have widely underperformed US stocks as measured by the Dow (in red) over the last two years: 2-Year Performance of Emerging Markets (EEM) vs. Dow Jones Industrial Average (DJI) Blue - Emerging Markets, Red - Dow Jones Industrial Average (Click chart for larger version) Source: Yahoo! Finance Not only have Emerging Markets been underperforming, they’ve just plain struggled. As an investor you probably see this and wonder - what’s the next move? Do I cut my losses and sell out? Or could this be a buying opportunity? [+] Read More

Is the Stock Market “January Barometer” a Cause for Concern in 2014?

March 12, 2014

The market was down 4% in January,1 and that’s left some investors wondering if they should be concerned about the “January Barometer.” This indicator is tied to that old stock market saying: “so goes January, so goes the year.” If the barometer is a reliable indicator, this could be a negative. So is it really reliable? Going back to 1979, in the 12 years the market fell in January, the market only followed along in 4 of those years – meaning the January barometer only predicted negative returns a meager 33% of the time.2 In our view, a 33% success rate just isn’t powerful enough that it should influence investment decisions. [+] Read More

4 Top Retirement Regrets and What You Can Do Now

March 10, 2014

BlackRock recently surveyed 17,600 investors across 12 countries in an effort to gather wisdom about investing and retirement. Here’s what retirees said they regretted the most: 36% said they would have started investing for retirement earlier and contributed sooner to their 401(k) at maximum levels 32% said they would have spent less 21% said they would have worked longer 12% would have sought professional advice1 If you’re still working and saving for retirement, or retired already, it’s important to take note of these four regrets so you can avoid falling into any of these categories. An investment plan can address—and even eliminate—these concerns. [+] Read More

Can Your Investment Plan Handle the Market’s Ups and Downs?

March 7, 2014

According to a recent survey conducted by BlackRock, “investors are uncertain about investing their savings, with only 35% confident that their retirement plan can cope with the ups and downs in the financial markets.”1 This leaves 65% of folks unsure of whether their portfolios can handle volatility and market declines over time, a number we think is too high. Here are two ways to feel more confident about how your portfolio is positioned. [+] Read More

Churchill Management Group’s February Market Perspective

March 6, 2014

In their February commentary, Churchill Management Group explains why they reduced equity exposure in their tactical strategies. “Starting with the first trading day of 2014, the market began a sharp correction. While an accommodative Fed has continued to fuel the stock market, recent Taper-talk (the reduction of monetary stimulus added to the economy) combined with international currency worries gave the market brief concerns. At one point during January, the Dow Jones Industrial Average had fallen 7.5% off its highs. The market has regained footing since then, although volatility has also increased. Knowing that the market is forever cyclical, the question is whether the stock market is in a Topping phase or did it just need to catch its breath before continuing the long Bull Market that began almost five years ago?” [+] Read More

Stomaching the Next Stock Market Decline: Here’s How

March 5, 2014

The market got off to a rocky start in 2014, with the S&P 500 declining by 4%.1 Between January 15 and February 3 alone, the S&P 500 fell 5.8%,2 and weakness was even greater in areas abroad like Japan3 and the Emerging Markets.4 Many investors were left wondering if the rough start was a sign of things to come. How did it make you feel? We think the recent volatility presents investors with an opportunity as well as a friendly reminder: it’s a good idea to regularly make sure your portfolio is allocated according to how comfortable you are with stock market declines and risk. [+] Read More

Investment Plans Should Factor-In Rising Health Care Costs

March 5, 2014

Total health care spending is expected to reach $4.8 trillion in 2021, up from $2.6 trillion in 2010 and $75 billion in 1970. As consumers of health care, it’s everyday investors that have to absorb these rising costs over time.1 What investors need to do: factor rising health care costs into your investment plan, so you can measure how these expenses could affect your retirement income and portfolio growth over time. An Investment Portfolio Designed to Keep Up With Rising Health Care Costs The simple fact is, most investors need growth in their portfolio to keep up with rising health care costs. This growth becomes even more critical as health care costs become a larger percentage of living expenses with age. [+] Read More

Seeking Income? Federated Strategic Value Dividend

March 4, 2014

Money manager Federated Investors’ Strategic Value Dividend managed account strategy falls into this category, and has some of the qualities an income-seeking investor is after. The strategy’s objective is to provide a high level of current income, long-term capital appreciation driven by dividend growth, and lower downside risk.2 Why Does Federated Focus on Dividend Paying Stocks? Research conducted by Federated Investors shows that over the period from July 1, 1996 to June 30, 2013, a high dividend paying stock strategy generated an average annualized total return of 10%, which is 278 basis points higher than the 7.22% annualized return realized by the S&P 500. [+] Read More

Financial Advisor Fees: Are You Paying Too Much?

February 27, 2014

Here’s a statistic that may catch your eye (or make it shed a tear): since 1980, total mutual fund assets have increased by 135 times, but the total expenses paid to equity mutual-fund managers has increased 141 times ($170.8 million to $24,143 billion).1 Have your investment fees, or the fees you pay to your financial advisor, been going up as well? 3 Actions You Should Take to Examine Your Investment Fees 1) Get a Clear Sense of What Your Investment Fees Actually Are Depending on what type of investments you have, the way you pay financial advisor fees can vary greatly. Mutual funds have “expense ratios” that might give you a good sense—but not always a clear picture—of what your fees are. [+] Read More

Don’t Hire a Financial Advisor Unless They Ask You These 7 Questions

February 26, 2014

In order to build someone a comprehensive investment plan, a financial advisor has to understand some of the intricacies of that person’s financial life, risk tolerance and goals. If a financial advisor focuses on the investments without understanding a client’s full picture, it could result in a subpar investment plan. Here are seven questions your financial advisor should have already asked you: 1) How is Your and Your Spouses Health? This question sets the stage for the length of time that a retirement plan might need to provide for you and your spouse, and it also will spur a discussion about potential medical expenses that might need to be factored into the investment plan. [+] Read More

What Investment Fees are You Paying? Use an Investment Plan to Find Out

February 25, 2014

Financial Advisors should run a detailed analysis of your current financial situation before creating an investment plan for you. Part of that analysis includes taking a look at your portfolio’s asset allocation and examining each investment’s purpose, efficacy, and cost. When was the last time you asked a third-party investment professional to take a look at your portfolio, examine its investment fees, and offer their thoughts? Get a Second Opinion on Your Current Investment Portfolio Like going to a doctor for a second opinion, it makes sense to have an investment professional (other than the one that advises you) take a look at your current portfolio and provide you with an analysis of what you pay in investment fees. [+] Read More

5 Signs Your Financial Advisor Isn’t Doing a Good Job

February 24, 2014

A good financial advisor can help you choose smart investments, map out your income needs in retirement, give you advice on estate planning, and maybe even help you save some money in taxes along the way. In other words, he or she can help you form a solid investment plan that changes with you. A not-so-good financial advisor might not do all—or any—of those things well. Here are five signs your financial advisor isn’t doing a good job. 1) The Investment Strategy is the Same for Every Client If your financial advisor is applying the same—or even just a very similar—investment strategy for every client, then chances are your unique financial situation and goals aren’t being taken into consideration. Lots of folks have similar goals, but a one-size-fits-all approach indicates that pretty much everyone has the same financial objectives, which is usually not the case. [+] Read More

3 Ways to Generate Income in Retirement

February 21, 2014

Here are three approaches to generating the desired amount of retirement income. When deciding which option – or combination of options – is right for you, we’d encourage you to seek the help of a financial advisor. 1) Get the Most Out of Your Social Security Retirement Benefits There are several strategies to consider when trying to optimize how you activate your social security retirement benefits. We’ve written about two methods in particular that may help you increase the size of your Social Security check, if executed correctly. The first is the Restricted Application for Spousal Benefits, and the other is the File and Suspend Strategy. [+] Read More

How (Not) Having a Financial Advisor Can Impact Performance

February 20, 2014

According to a study conducted by benefit consultant Aon Hewitt and advice firm Financial Engines, investors who did not use the help of a financial advisor tended to underperform with their investments. The study looked at the 401(k) returns of more than 425,000 savers from 2006 through 2010, and found that the median annual return of those who got professional help was almost 3% higher than the return for those who invested on their own, even after taking fees into account.1 Why Did Investors Without a Financial Advisor Underperform? According to the study, one of the reasons for the performance gap was that the investors who self-managed were far more likely to be too aggressive or too conservative, instead of a diversified balance of the two. [+] Read More

Planning Your Family’s Nest Egg: 4 Initial Steps

February 19, 2014

One of an investor’s main goals in retirement is to have his or her income needs met for as long as they live. But sometimes folks forget to plan for how their spouses and families will have their income needs met as well. The central question to ask yourself, and it’s a difficult one, is: “If I pass away tomorrow, will my nest egg be able to support my family’s financial needs?” Here are four steps investor’s should take to find out how prepared they are, and whether or not their nest egg is big enough to support their family’s needs. 1) Take an Inventory of All Valuable Assets This can be a rather exhausting exercise, but it’s crucial to the planning process. You should have a full list of all of your assets (property, stocks, jewelry, anything with material value) as well as your debt (if any). You can use this list when creating an investment plan, to keep track of how much everything is worth over time. Make the list once, and then have your financial advisor ask you about it regularly to make sure it’s all there and accurately valued. [+] Read More

Planning for Retirement: Life Expectancy is On the Rise

February 18, 2014

Thanks to advances in medical technology, folks are generally living longer. This is great news. But it also doubles as an action item for investors, because the longer you live, the more you’ll need saved to provide for your spending needs in retirement. The question then becomes, what is the best way to calculate your life expectancy so you can plan retirement accordingly? When Planning for Retirement, Use a Conservative Estimate for Life Expectancy Everyone can likely agree that when it comes to retirement planning, it’s better to have saved too much than too little. By making a conservative estimate of you and your spouse’s life expectancies, you encourage yourself to save more and invest for longer, so that you can secure your income and spending needs throughout a long retirement. It’s a smart approach. [+] Read More

What is Your Retirement Income Strategy?

February 14, 2014

When thinking about retirement income planning at a high level, it boils down to two main considerations: what are your retirement income sources, and what are your retirement income needs? Answering these questions is an important first step towards creating your retirement income strategy. What are Your Retirement Income Sources? We’ve written before about potential strategies to maximize social security payments, which can help to provide a supplemental boost to your retirement income. But for many investors, a main source of retirement income comes from their investment portfolios. Dividend paying stocks, dividend focused portfolio strategies, fixed income allocations, or selling stocks/portfolio holdings to raise cash are all ways investors can generate income in their investment portfolio. [+] Read More

Paying Financial Advisor Fees Should Get You These Four Services in Return

February 12, 2014

It’s important to ensure you are getting appropriate value for the financial advisor fees you pay. Ultimately, money spent on financial advice should lead to more informed decisions about how to structure investment accounts, how to allocate your portfolio, what investments make sense and what steps need to be taken to reach your financial goals. In order to justify the cost of a financial advisor, we believe investors should expect these four things in return: 1) Sound Financial Advice There is a wide range of information your financial advisor should be able to provide you, including how to structure your accounts, deciding which accounts to use for income, assisting with important financial decisions and events, and helping with your estate plan. It helps if your financial advisor is a Certified Financial Planner (CFP)—they should be able to offer advice pertaining to more areas than a normal financial advisor, including insurance and tax planning.1 [+] Read More

Looking for Simpler Investment Fees? Consider a Separately Managed Account

February 11, 2014

In a previous post, we examined various investment products and the potential investment fees associated with each. Many of those investment products—like mutual funds and annuities—may have fairly complicated fee structures. In some cases, it may be difficult to ascertain what the investment products actually cost you. We believe there is a potentially better solution for high net worth investors when it comes to investing and understanding the investment fees you’re paying. How Investment Fees Work in Separately Managed Accounts A separately managed account is one in which you give a money manager or financial advisor discretion over what investments to make on your behalf. The financial advisor or money manager may purchase individual stocks, bonds, ETFs, mutual funds, and so forth. Typically, separately managed account fees are a percentage of your assets under management which are deducted or paid every quarter. There are often no commission charges for trades, and the fees are often easier to understand than many other investments out there. [+] Read More

How Much Are You Paying in Investment Fees?

February 7, 2014

How much you’re paying in investment fees can depend on what type of investments you own and the services offered by your financial advisor. Below, we’ll break down some of the more common investments and offer you tips on how to calculate the fees you’re paying. Mutual Funds The annual fees for investing in mutual funds are known as a fund’s “expense ratio.” These are calculated by dividing the fund’s operating expenses by the average dollar value of its assets under management. Operating expenses are taken out of a fund's assets and lower the return to a fund's investors.1 There can also be other fees associated with mutual funds, such as those incurred through investor purchases, mutual fund exchanges and redemptions, investment advisory fees, marketing and distribution expenses (also known as 12b-1 fees), brokerage fees, and custodial, transfer agency, legal, and accountant’s fees.2 [+] Read More

An Investment Plan Can Help Secure Your Family’s Financial Future

February 7, 2014

An investment plan, amongst other things, can help you establish where you stand financially, how you should invest, and how and from where you should generate retirement income. But it can go further than that. An investment plan can help establish what your family’s income needs are, and help you ensure they are provided for. 3 Estate Planning Features of an Investment Plan An investment plan can help you do the following: 1) Map Out Your and Your Spouse’s Retirement Income Needs By establishing your spending needs in retirement as well as your spouses, and inputting them into an investment plan, you can keep track of how your assets stack up against your long-term income needs. [+] Read More

7 Stock Market Predictions for 2014 - Is Your Portfolio Positioned?

February 5, 2014

Two common questions investors ask themselves at the beginning of any year are: What is the stock market going to do this year? And, how should I position my portfolio as a result? To provide some insight as to what may be in store for the year, we’ve taken a look at what seven of the biggest financial institutions in the world are predicting for 2014. As you read through these, it’s important to keep in mind that your portfolio’s allocation should be based on more than just a forecast—you also need to consider your long-term goals, cash flow needs, risk tolerance, and other factors related to your investment plan. How Will the S&P 500 Perform in 2014? Morgan Stanley - S&P 500 +9%1 Morgan Stanley equity strategist Dr. Adam S. Parker thinks the S&P 500 is set to rise 9% in 2014. Morgan Stanley’s strategy recommendations are to favor small cap stocks versus large cap, and at a sector level they prefer health care to consumer staples, technology to consumer discretionary, and chemicals to industrials and energy. Within financials, they like capital-market-sensitive banks and asset managers over insurers and regional banks. [+] Read More

An Investor’s Approach to 2013-2014 Tax Planning

February 4, 2014

April 15 is fast approaching and the W-2s, 1099s, and other tax documents are starting to appear in your mailbox - it’s almost time to file. What’s more, with Congress having passed some tax law changes in 2013 - higher top marginal income tax rate (39.6%), higher capital gains rate (20%) for top earners, etc1… - there’s a possibility that your tax bill has increased from 2012. With that in mind, it could make sense to start preparing your taxes early in the event you might owe a bit more than you think. This way you’ll have additional time to decide how you want to pay. We hope the information below will help make the tax preparation experience a little better by reminding investors of a few ways they may be able to reduce their taxable income for 2013, while also offering a few pointers for thoughtful tax planning in 2014. Ways to Potentially Reduce Taxable Income for 2013 It’s too late to make tax deductible contributions to 401(k) plans or other employer-sponsored plans for the 2013 tax year. But, you might still have some alternatives—if you meet some eligibility requirements, you could potentially make a tax deductible contribution to a Traditional IRA, a SEP IRA, or a Health Savings Account, which would reduce the taxable income that you would report for the year. [+] Read More

Estate Planning Checklist: The 6 “To-Do’s” for Getting Started

February 3, 2014

Creating an estate plan involves a lot of thought and time, and in some cases may cost a bit of money. But don’t let that discourage you from establishing a comprehensive estate plan as part of your overall investment approach. The time and effort spent creating an estate plan can often mean less time and stress for your family down the road. To help you get started, we’ve outlined six estate planning tips we think are important to any estate plan. A good idea would be to go through a few of these steps on your own to accomplish the basics of estate planning, then loop in your financial advisor and/or estate planner to help you solidify it with the necessary investment accounts and legal documents. 1) List the Valuable Assets in Your Estate Generally, you want to run an inventory of all of your assets that have value greater than $100 or so. Of course you want to include your home, investment accounts, bank accounts, insurance policies and so forth, but you also want to get granular with your assets and include things like jewelry, collectibles, electronic equipment, etc… You can then go through this list and decide how you want these assets distributed as part of your estate plan.1 [+] Read More

Is Your Nest Egg Big Enough to Support Your Family?

January 31, 2014

For investors who are at or near retirement, we believe two fundamental questions should almost always be asked: “do you have enough money to support your needs for spending in retirement, and, will your family be taken care of if you pass away?” In a previous post, we wrote about how to check to make sure you have saved enough to meet your retirement income needs. Now the question turns to, “do you have enough saved to support your spouse and family as well? Start with an Estate Planning Checklist An estate planning checklist can help you get organized and have a clearer picture of how prepared you are for retirement. Running through an estate planning checklist encourages you to inventory your assets and debts, update your beneficiaries to make sure the assets go to the right places, and formalize everything through legal documentation. Once you’ve done that, you can get to answering the question posed in this piece: “is your nest egg big enough to support your family?” Investors should address this in two parts: [+] Read More

Calamos Investments - Year of the Fundamental Investor

January 30, 2014

With their first investment commentary of 2014, money manager Calamos Investments remains cautiously optimistic for the global economy and believes the U.S. is in a secular bull market. From the commentary: "Entering 2014, we expect a good year for global equity and convertible markets overall. The major global economies look positioned to show faster growth, although this positive global synchronization is occurring at varying rates and supported by diverging policies. Historically, the conditions we see today have benefited equities and convertibles, especially cyclical growth opportunities. More importantly, we are encouraged by the emergence of more fundamentally driven markets across asset classes and believe that our active approach is well suited to this environment." Download the Full Calamos Commentary Here Get Free Research Reports on Calamos Investments [+] Read More

Is This the Start of a Stock Market Correction?

January 29, 2014

The stock market felt a sting last week, with the Dow dropping 3.5% and marking its worst week since November 2011. A majority of the decline took place on Friday, when the Dow fell some 320 points, or almost 2%. The S&P 500 slid 2.6% on the week, which was its largest weekly decline since May 2012, and technology stocks followed suit as well with the NASDAQ selling off 1.7% and posting its worst week since last August. The sell-off last week has naturally caused some investors to wonder, is this pullback the start of a stock market correction? Below, we’ll address that question for you and look at past stock market corrections. Corrections Are a Normal Part of Bull Markets That’s not WrapManager making that statement - history makes it for us! As you can see in the chart below, the average intra-year decline for the S&P 500 since 1980 is 14.4%. Put another way: for the last 34 years, the average drop within a given year for the S&P 500 is 14.4%. [+] Read More

What to Do During a Stock Market Correction

January 29, 2014

If you were to ask us to answer that question in short, here’s what we would say: Remain calm, patient, and try not to make decisions based on emotion. As we've written before on stock market corrections, they can be rather unnerving, but at the same time they are a normal part of rising markets, and they’re usually short-lived. It’d be great if the market always went up in a straight line, but unfortunately it does not and there are often pullbacks along the way. So, knowing that corrections will likely occur quite a bit over time, what’s the best investment strategy for handling a stock market correction? We go back to the statement we made at the beginning of this post. Remain Calm Often times when the market starts to decline, you’ll see a lot of news headlines that invoke worry about the state of things. A top headline today on Bloomberg, for instance, read: “US Stocks Retreat Following Worst Week Since 2012.”1 That certainly doesn’t make many people feel warm and fuzzy about the market. [+] Read More

Worried You Might Outlive Your Money? Create an Investment Plan

January 27, 2014

The world’s largest asset manager, Blackrock, conducted an investor survey in 2013, asking 17,600 people in 12 countries how they felt about the markets and their personal financial situations. There are a lot of data points to consider, but one in particular stood out to us: about 50% of respondents are concerned they are going to outlive their savings.1 Many of these respondents could feel concerned simply because they don’t know where they stand. An investment plan can provide a little clarity (and perhaps a wake-up call) to investors wondering if their nest egg is going to last throughout retirement. Think of an investment plan as a manual, there to help you keep track of your progress toward building a successful retirement. What Exactly is an Investment Plan? An investment plan is a comprehensive report that takes a detailed view of an investor’s assets, liabilities, current spending needs, future spending needs, investments, asset allocation, and goals, and uses all of that information to project/estimate how “on-track” an investor is to reaching their objectives. [+] Read More

Where Are International Equity Markets Headed? - Cambiar Investors

January 27, 2014

International money manager Cambiar Investors' fourth quarter investment commentary reviews their outlook for the international equity markets and the performance of their International and Global equity portfolios. From the commentary: "Global equities continued their dramatic ascent into the fourth quarter, with many indices closing 2013 at their high of the year. A diminishing sense of crisis, coupled with growing evidence of improving economic activity, awakened investors’ animal spirits, and global equities were the direct beneficiary of this increased optimism." Download Cambiar Investors' Full Commentary Here Get Free Research Reports on Cambiar Investors [+] Read More

Federated Investors Strategic Value Dividend Commentary Fourth Quarter

January 23, 2014

Dividend money manager Federated Investors is out with their latest investment commentary, which discusses their outlook for the economy and the performance of their Strategic Value Dividend Managed Account Strategy. From the commentary: "December capped a year-long rally in U.S. stocks that saw the major indexes reach record highs.The advance was fueled by a domestic economy that, nearly five years after the recession, finally appeared to be gaining enough traction to allow the Federal Reserve to begin easing off the gas." Download Federated's Full Commentary Here Get Free Research Reports on Federated Investors [+] Read More

Determining Your Retirement Nest Egg’s “Magic Number”? Factor in These 3 Things

January 22, 2014

Before we discuss the three items, we’d like to be clear about something first and foremost—there’s nothing really “magic” about a “magic number.” Many investors place a lot of focus on setting a “magic number” (the amount of assets that, in theory, gives a person the ability to retire while maintaining the same standard of living and meeting all of their needs) and reaching it, but it’s important to understand that reaching that number in and of itself doesn’t solve every retirement income need. An investor has to constantly assess their asset levels relative to their needs throughout retirement. 3 Important Factors to Determining a Retirement Nest Egg Target 1) Be Conservative When Establishing Your Life Expectancy According to the Social Security Administration, a man reaching 65 today can expect to live, on average, until age 84. For a woman, that number is 86. But those are just averages—about one in every four 65-year-olds today will live past age 90, and one out of 10 will live past age 95. [+] Read More

Brookmont Capital Management’s Award-Winning Dividend Equity Strategy

January 17, 2014

For investors seeking income-producing alternatives to fixed income/bond investments, many turn to dividend focused strategies. WrapManager evaluates and conducts research on many dividend focused money managers, though one in particular has stood out in recent years: the Brookmont Dividend Equity Strategy. It could be a solution for an investor looking to allocate a portion of their portfolio to a dividend focused strategy. [+] Read More

Are Households Positioned to Maintain Their Standard of Living in Retirement?

January 16, 2014

During our working years, the amount of income we earn is ultimately what shapes the spending and lifestyle choices we make. Over time, we become accustomed to living a certain way and having certain resources available to us and our families. These parameters are what create a person’s standard of living. Retirement is different, of course, since we derive retirement income in different ways and from different sources. As a person makes the shift from the working world to the retirement world, an important question must be addressed: do you have the resources and assets needed to maintain the same standard of living in retirement as you did during your working years? Is your nest egg big enough? Almost Half of American Households Won’t Have Enough Retirement Income Research suggests that when it comes to maintaining a standard of living during retirement, many investors could be in trouble. [+] Read More

Zacks Investment Management and Dividend-Focused Money Managers

January 15, 2014

With uncertainty surrounding the current and future interest rate environment, some investors are seeking potential alternatives to holding bonds in their portfolios. Dividend strategies surface as a popular alternative, given they can provide income and the potential for equity-like returns. When searching for dividend strategies, many investors inquire about money manager Zacks Investment Management, which has appeared on our Monthly Top Ten Most Researched Money Managers. For investors wanting to learn more, below we’ll provide information about Zacks’ Dividend Strategy and its investment objectives. (This is for informational and comparison purposes only. WrapManager is not affiliated with Zacks Investment Management, and it has not approved for use nor entered into contracts with them.) [+] Read More

ClearBridge Multi-Cap Growth: Investors Seeking a Growth Portfolio

January 14, 2014

In today’s fast paced investment world, it’s often tempting for investors to search for the “next hot thing,” or to seek out an investment approach they think could be the future of innovative investing. But what about looking for veteran money managers whose investment disciplines have withstood the test of time? ClearBridge Investments, a money manager with 45 plus years of experience.1 Below, we’ll take a closer look at the firm and its Multi-Cap Growth strategy. [+] Read More

An Investment Plan Can Help You Monitor Spending in Retirement

January 10, 2014

An investment plan is a tool you can use to help you understand where you stand in retirement at every step of the way. Are you still on track to reach your retirement goals? How likely is it you be able to maintain your current lifestyle throughout retirement? Can you afford your current and potential healthcare costs? How much will you be able to leave behind for your loved ones? A well-constructed investment plan can give you a good sense of the answers to these questions. Instead of figuring it out as you go, you can examine a variety of outcomes to help you make more informed choices. Factoring Spending Goals into Investment Plans Before you can use an investment plan to help monitor your spending in retirement, it’s important to provide detailed answers to some fairly basic questions: what are your income needs/desired income in retirement? How might those needs change over time? [+] Read More

Charles Schwab Recommends ThomasPartners – Is It a Good Investment for You?

January 9, 2014

Many investors are increasingly seeking out alternative income sources such as dividends. Perhaps recognizing this, Charles Schwab strategically acquired dividend money manager ThomasPartners and their Dividend-Driven Income strategy to provide this investment option to their clients. [+] Read More

New Year’s Resolution: Polish Up Your Investment Plan in Four Steps

January 7, 2014

As we enter the New Year, many folks will set out to focus more attention on their health and wellbeing. Indeed, the month of January experiences almost 50% more gym membership sign ups than other months. According to the International Health, Racquet, and Sportsclub Association, “more than 12 percent of gym members join in January, compared to an average of 8.3 percent per month for the full year.”1 While improving your personal health is a wonderful goal, we are encouraging investors to put more time and energy into strengthening their financial health. Taking a fresh look at your investment plan—or creating one for the first time—is a great way to get started. Four Steps to Strengthen the Health of Your Investment Plan Taken together, the below four steps can help put you on a better path to knowing where you stand financially, relative to your long-term goals. Try you to review these four things in detail with your financial advisor. If you don’t have one, it could be a good opportunity for you to seek one out, using this process as a means to evaluate the type of job a financial advisor could do for you. [+] Read More

2014 Tax Planning Tables

January 3, 2014

Tax season is gearing up and there are various deadlines depending on your tax situation. The below report lists out important dates throughout 2014. It also contains useful 2014 tax planning tables and information for several items, including: Income tax rate schedules, alternative minimum tax (AMT), capital gains, losses, and dividends, education planning, retirement accounts, Social Security benefits, Medicare tax rates, health and long-term care, federal trust and estate income tax, estate, gift, and generation-skipping transfer tax, corporate income tax and municipal bond taxable-equivalent yields. Download the Full Report Here [+] Read More

Are Investors Really Saving Enough for Retirement?

January 2, 2014

The short answer is no, according to a recent study conducted by the Center for Retirement Research at Boston College. Data in the study suggests that the gap between what people have saved, versus what they need for retirement, is quite significant and by any measure staggering. The funding gap is $6.6 trillion.1 The study examines several reasons why many investors are underfunding their retirement, but three factors stand out as particularly influential. When reviewing these findings below, it’s important for investors to weigh them respective to their own savings and investment plans, including how much retirement income they’ll need, in order to help determine how prepared they are for retirement. Three Reasons Why Nest Eggs Aren’t Big Enough 1) Investors Aren’t Saving Enough Some investors haven’t saved enough simply because they never determined how much they actually needed for retirement. This involves speaking with a financial advisor about what your retirement income needs are, and then determining an appropriate savings level and a desired return on investments over time needed to get there. [+] Read More

Three Tips That May Help Your Money Last Longer in Retirement

January 1, 2014

For retired people or those nearing retirement, there can be less opportunity to “save more” as part of retirement planning. After all, retirement is supposed to be about working less, not more! Since working less usually means earning less and therefore saving less, it’s important to focus on good investment planning. Here are three planning ideas to consider when planning for retirement. 1) Consider a Strategy to Increase Your Social Security Check In previous blog posts, we’ve written about strategic ways to defer Social Security so as to enhance the size of your benefit checks. Two such strategies are the Restricted Application for Spousal Benefits and the File and Suspend Strategy. Click on the links to learn more. [+] Read More

Windhaven Investment Management: Managing Risk in a Down Market

December 27, 2013

Money manager Windhaven Investment Management has ranked consistently in our Monthly Top Ten Most Researched Money Managers for some time. Many investors request information about Windhaven because they are attracted to Windhaven’s stated potential ability to capture returns in up-markets, while also seeking to limit losses during market downturns. Below are some insights to help investors who are evaluating Windhaven’s investment strategies. (This is for informational and comparison purposes only. WrapManager is not affiliated with Windhaven Investment Management, and it has not approved for use nor entered into contracts with them.) Windhaven Investment Management Investment Strategies Windhaven Investment Management is a Registered Investment Advisor firm based out of Boston, MA, with over $15 billion in assets under management.1 In November 2010, Charles Schwab acquired Windhaven in an effort to broaden their investment offerings to their clients.2 Windhaven’s investment strategies include Diversified Conservative, Diversified Growth, and Diversified Aggressive, of which Diversified Growth is the most popular.3 [+] Read More

ClearBridge Investments - The Coming Global Rebalancing

December 20, 2013

Money manager ClearBridge Investments' December commentary explains their view that many things remain out of balance in today's economy and are therefore unsustainable. Over time, many of these things should adapt to a more sustainable state. "More than five years after the global financial crisis, investors continue to grapple with volatile capital markets, political and social instability in many key regions of the globe, and lackluster economic growth. Interwoven with these challenges are numerous unsustainable conditions that have kept the global economy from achieving full recovery. From our semi-optimistic perspective, the environment is improving, the result of market forces that are attempting to reconnect society and the global economy, while replacing artificial distortions with real, sustainable economic factors." Download ClearBridge Investments' Full Commentary Here Get Free Research Reports on ClearBridge Investments [+] Read More

Five Themes Shaping Investment Strategies in 2014

December 5, 2013

As we approach the New Year, it’s a good time to take a closer look at the more impactful themes and stories we think investors should consider when preparing their 2014 investment strategies. Here are five that we believe could impact the market and investor portfolios moving forward. Be sure to discuss these with your Financial Advisor to see if your investment portfolio is prepared. 1) How the Janet Yellen Federal Reserve Could Affect Your Portfolio If Janet Yellen gains Senate approval in the coming days to become the next Federal Reserve (Fed) Chair, she’ll take over on February 1.1 Investors are almost certain to watch her closely from day 1, searching for any kinds of policy-setting signals she might give. We believe the key factors to watch are how and when she intends to pare back the quantitative easing programs, better known as QE. Based on Yellen’s testimony before the Senate Banking Committee, her letters to lawmakers, and her track record, she appears in favor of continuing stimulus measures. This could mean an extension of the current quantitative easing programs with the Fed also holding their benchmark interest rate close to zero throughout all of 2014, which could be a positive for the economy and for portfolios.1 On the other hand, if market participants believe the Fed to be paring back those programs prematurely, it could be a negative event for the markets. Investors should speak with their financial advisor to find out if their portfolios are positioned with these monetary policy outcomes in mind. [+] Read More

Navigating a Sea of Liquidity and Investing in 2014 - JP Morgan

December 4, 2013

Dr. David Kelly, Chief Global Strategist at JP Morgan Funds, examines how the global central bank's expansionary monetary policies could affect investors and portfolios in 2014. "The key to successful investing is not seeing the future with some kind of mythical vision – it is seeing the present with clarity. This is truer today more than ever, in a world recovering from financial crisis, rife with political discontent, extreme monetary easing and deep-seated investor prejudice. In this quarterly publication, we try to provide clarity by looking at the big issues shaping the global economic investment environment and fostering both opportunities and risks for long-term investors." Download JP Morgan's Full Commentary Here Get Free Research Reports on JP Morgan Asset Management [+] Read More

2013 IRA Required Minimum Distribution Guidelines

November 30, 2013

With the year coming to a close, it’s important to make sure you have taken, or are set up to take, your 2013 required minimum distribution. The amount you need to take is based on the total value of all your IRA accounts. If this is the first time that you are required to take an RMD, you may have until April 1, 2014 to do so. Below is a brief guide that will hopefully answer many of your questions about taking required minimum distributions. Alternatively, you can call one of our Wealth Managers at (800) 541-7774 to potentially determine your RMD amount. Click Here to Read the Report [+] Read More

Are Annuities a Good Investment: 3 Things to Consider Before Buying an Annuity

November 27, 2013

For investors thinking about purchasing an annuity, there are two things they should do first. One, speak with a financial advisor (other than the one trying to sell you the annuity) so you can get an unbiased explanation of how the annuity contract works. Second, consider these three reasons not to buy an annuity. Reason 1: Limited Control of Your Principal, Income, and Investment Options Money in Annuities May be Locked Up Most types of annuities restrict access to your principal for a certain number of years. If you have an unforeseen need for cash and have to exit the contract early, you might have to a pay a penalty to access your money. [+] Read More

9 Steps to Researching Money Managers

November 19, 2013

Hiring a money manager is one of the more important decisions an investor can make, and it’s also a challenging one. To make matters a bit easier, we’ve outlined nine steps an investor should take to get the research and due diligence process started. [+] Read More

Planning for Retirement: 3 Steps to Help You Get Started

November 13, 2013

If you’ve recently retired or are about to, congratulations! It’s probably been a long road, and your next step is to make sure that path continues during retirement. This means it’s time to speak with your financial advisor to create, or update, a comprehensive investment plan. Here’s a brief “how to prepare for retirement” guide to help you get started. [+] Read More

3 Advantages of Hiring Money Managers versus Self-Managing

November 11, 2013

Many investors are tempted to manage their own investment accounts. Some have a great deal of interest in the stock and bond markets and enjoy the challenge. Others may want to just save money in fees. In either case, an investor shoulders the critical responsibilities of making sure their investments perform well and meet their needs for the long-term. This is a challenging task. Before deciding to self-manage, we’d consider these three benefits to hiring money managers to do it for you. Save Time and Reduce Stress Retirement should be about enjoying the fruits of your labor and reaching your lifelong goals. Self-managing investments may become a hindrance to achieving this, because the amount of time, research, and the frequency with which someone needs to make critical decisions is great. Hiring money managers places these responsibilities on someone else. [+] Read More

Dividend Equity Third Quarter Review and Outlook - Brookmont Capital Management

November 9, 2013

Dividend money manager Brookmont Capital offers a review of their dividend strategy and their near, and long-term, outlook for the markets. "In the near term we expect to see money that was previously taken out of the market due to debt ceiling fears redeployed. Aside from high yield and floating rate, bond funds are still experiencing net outflows while mutual funds are adding equity exposure. Combined with extended monthly Government purchases, equities should trend higher. Cyclical names will likely continue their momentum into year end. Consumer Discretionary, the best performing sector YTD, could face increased competition for the top spot going into year-end as consumer confidence has been shaken in light of the shutdown." Download Brookmont Capital's Full Commentary Here Get Free Research Reports on Brookmont Capital Management [+] Read More

Fundamentals of Iron Ore Remain Robust - WHV Investments

November 8, 2013

International money manager WHV Investment Management believes the fundamentals of iron ore remain robust, and their latest report explains why. "Conventional wisdom says one should invest in what China buys and avoid anything that China can produce on its own. Iron ore, one of the favored natural resources in the WHV International Equity strategy, provides an illustration of why this has worked. To fuel its continued growth, China has a seemingly insatiable demand for the high quality product of the big three iron ore miners. The companies, BHP Billiton, Rio Tinto and Vale, are focused on meeting this demand while growing profits through a combination of declining costs and increasing volumes. Both the demand and supply trends may be subject to interruptions. However, we believe that the stage is set for compelling long term returns on the WHV International Equity iron ore investments." Download WHV Investments' Full Commentary Here Get Free Research Reports on WHV Investments [+] Read More

Tips for a Successful 401(k) Rollover

November 6, 2013

When someone leaves an employer to retire or join another employer, there are often decisions about what to do with their 401(k). There are several 401(k) rollover options and it’s not always as simple as just rolling it into an IRA. Here are some tips investors should consider before making a decision about how to rollover a 401(k). Tip #1: Use the Rollover as an Opportunity to Evaluate Your Financial Plan Rolling over a 401(k) involves creating a new account and choosing new investments. An investor should also use the opportunity to review all of their investments and evaluate their long-term goals. It’s a perfect time to think about investment objectives, risk tolerance, and to determine whether current funds or money managers are meeting the plan’s needs. Think of a 401(k) rollover as an opportunity to enhance your financial plan and investments. [+] Read More

Year-End Investment Planning Checklist for 2013

November 6, 2013

2013 is shaping up to be a strong overall year for the equity markets, and has hopefully been a positive year for many readers’ investment plans as well. As the year draws to a close, it’s time to review a few year-end planning strategies and tips. This should serve as a basic guide to investors to review their tax situations and investment plans before year end. Our suggestions may not apply to all investors, so it’s important to consult a financial advisor and/or tax advisor before considering any adjustments. Tax Planning Strategies to Consider Offset Capital Gains Using a Tax-Loss Selling Strategy Investors are able to offset capital gains with capital losses. If capital losses exceed capital gains in 2013, the excess can be used to reduce taxable income, such as wages, up to an annual limit of $3,000 ($1,500 if married but filing separately). If the total net capital loss is more than the yearly limit ($3,000), taxpayers can carry over the unused portion to the next year.1 [+] Read More

Is the Market Heading Toward Another Bubble? - Churchill Management

November 6, 2013

Churchill Management Group's November commentary looks back at past market bubbles and compares them to the current market environment. "Generally after a bubble has occurred, it takes many decades for human behavior to rise up to another extreme. Amazingly, thanks to the investing public jumping back into the market, it seems possible that the NASDAQ is starting to look a little bubble-like barely a decade after its last Bubble peaked. We are calling this a “DOUBLE BUBBLE”." Download Churchill's Full Commentary Here Get Free Research Reports on Churchill Management [+] Read More

Social Security and Restricted Application for Spousal Benefits

November 2, 2013

In our previous post titled “Maximize Social Security with the File and Suspend Strategy,” we showed you a strategy that married couples might use to increase their social security retirement benefits. Not too many retirees are aware that strategies like this exist to increase social security income1, and it goes to show that with the right type of planning, people can get more out of retirement than they might think. There is another strategy known as the Restricted Application for Spousal Benefits that married couples also may use to increase the size of their social security checks. This method allows for one spouse to start collecting spousal benefits, while simultaneously having their retirement benefits grow through the accumulation of delayed retirement credits. Below we’ll explain how this works. [+] Read More

Potential Impact of a Government Shutdown on Your Portfolio Strategy

November 2, 2013

Many investors are wondering how a government shutdown could affect the stock market and their portfolio strategy. History suggests that past government shutdowns have had little effect on the market, though in 2011 the threat of a government shutdown corresponded with a stock market correction. In any case, investors should consult with their financial advisor to ensure their portfolio is properly diversified according to their financial plan. How Has the Stock Market Reacted to Past Government Shutdowns? The last two government shutdowns occurred fairly closely to one another - one lasted from November 13 - November 19, 1995, and the next one spanned from December 5, 1995 - January 6, 1996.1 The S&P 500 exhibited a bit of choppiness in that general time frame, but the general trajectory of the bull market was unaffected: Figure 1: S&P 500 from January 1, 1995 – December 31, 2006 (click chart for larger version) Source: St. Louis Federal Reserve [+] Read More

Third Quarter International Equity Market Outlook - Cambiar Investors

October 31, 2013

International equity money manager Cambiar Investors' latest investment commentary discusses their outlook for the international equity markets and the performance of their International and Global equity portfolios. From the commentary: "As we enter the final quarter of 2013, it would not be a surprise if the year-to-date enthusiasm towards equities wanes in favor of a more defensive posture. The reasons for caution are plentiful: gridlock in Washington, taper timing by the Fed, a new Fed Chairperson, uncertainty in Syria, and above all – a stock market that is no longer that cheap. As the saying goes, the market climbs a wall of worry…but resolution on these fronts would certainly bolster investor confidence." Download Cambiar Investors' Full Commentary Here Get Free Research Reports on Cambiar Investors [+] Read More

'Wait and See' Issues Holding Back Global Growth - Calamos Investments

October 14, 2013

Money manager Calamos Investments' latest investment commentary focuses on their cautiously optimistic global outlook and why they believe the US equity market has more room to expand. "As we write this, markets are facing a number of issues that fall into the “wait-and-see” category - from the government shutdown and debt-ceiling negotiations in the U.S., to next steps for the euro zone and third-arrow reforms in Japan. These uncertainties are largely political in nature, and we expect them to foment considerable market volatility. However we believe that the global economy has healed considerably since the 2008 financial crisis, and the twin pillars of accommodative monetary policy and stimulative fiscal policy can allow global growth to continue in the 2% to 3% range." Download the Full Calamos Commentary Here Get Free Research Reports on Calamos Investments [+] Read More

3 Benefits to Consolidating Your Investment Accounts

October 8, 2013

There are several benefits to consolidating your investment accounts in one place. For some investors, however, this may not be possible for a variety of reasons. One option is to have a financial advisor build a comprehensive plan that includes all of your investment accounts. This can provide many of the benefits of consolidating your investment accounts. Benefit # 1: Help Ensure Your Portfolio is Properly Diversified By combining your investment accounts in one place, you’ll potentially be able to understand what your overall investments look like, and as a result, be better able to make decisions regarding your asset allocation, risk level and more. When you have investment accounts in multiple places - an IRA at Schwab, a Trust at Fidelity, a 529 plan at TD Ameritrade, for instance - you can easily lose track of your overall asset allocation. Many investors often have investment strategies in multiple accounts that overlap, resulting in an improperly diversified portfolio and inappropriate risk levels. [+] Read More

Assessing How a News Story Might Impact Your Portfolio

October 6, 2013

With so much news to consider on a daily basis, it’s important to filter out which news stories might impact the direction of the stock market and your investment portfolio. Some news stories seem like they should adversely affect the markets but they don’t, while others are significant enough to warrant a review of your portfolio allocation and financial plan. If a news story has you considering making changes to your portfolio, call your financial advisor first. He or she can act as a voice of reason to help determine whether making changes is necessary. [+] Read More

Talking With Your Financial Advisor About a Fixed Income Strategy

October 6, 2013

If you’ve been tracking your fixed income performance this year, you’re probably wondering what’s going on. Depending on your goals, a fixed income allocation should generate income, help preserve your principal, hopefully provide stability during more volatile times or provide a combination of all three. Recently, these benefits have been challenged by the exceptional volatility and trend in interest rates, which has resulted in less than desirable performance for many fixed income portfolios. Take this as an opportunity to have a financial advisor evaluate or re-evaluate your fixed income portfolio to help you ensure that it’s properly diversified and working for you and your goals. [+] Read More

"Here We Go Again" - Will the Debt Ceiling Debate Affect Your Portfolio?

September 30, 2013

On August 26, Treasury Secretary Jack Lew sent a letter to Congress warning them that the U.S. will likely reach the debt ceiling by mid-October. He noted that if Congress doesn’t raise it, the financial implications could be adverse for our economy and potentially the global financial system.1 The first thought for many investors is, “here we go again.” As frustrating as these political battles might be, over the past couple of years the debt ceiling debate in Congress hasn’t had much impact on the direction of the stock market, which has been trending higher. Will this time be different? What does the debt ceiling debate mean for your portfolio? A look at history might help us address these questions. The Debt Ceiling Debate Has Been Going On For Over 75 Years The debt ceiling debate is not a recent phenomenon, nor is it unique to any one political party. Since March 1962, Congress has changed the debt limit 77 times, and since the late 1950’s Congress has raised the limit every year, with the exception of fiscal year (FY) 1969 and between FY 1997 – FY 2001. More recent changes to the debt ceiling came through the Budget Control Act of 2011, under which the debt ceiling was raised on three separate occasions. The most recent change came in May of this year, when the debt limit was set at $16.669 trillion, where it stands today.2 [+] Read More

What Are the Differences Between Medigap and Medicare Advantage?

September 27, 2013

What is Medigap? Medigap is private insurance you can purchase to help cover some or most of your out-of-pocket expenses associated with Traditional Medicare. It doesn’t replace your Traditional Medicare, it just helps you pay for it. You’d still get all of the coverage associated with Plans A and B. What Does Medigap Cover? The out-of-pocket expenses Medigap helps you pay for: Part A hospital deductibles, Part B outpatient co-pays, out-of-country medical emergencies, and fees not covered by Parts A and B.1 Why Do People Purchase Medigap? People looking to reduce out-of-pocket healthcare costs are usually the ones to purchase Medigap. There are ten Medigap plan options, and all of them are standardized by law, so the benefits of each is the same regardless of which insurer sells it. The only difference between the ten plans is the cost (it can be expensive), so shopping around is crucial.2 [+] Read More

Maximize Social Security with “File and Suspend” Strategy

September 26, 2013

The “file and suspend” strategy can potentially boost your household income immediately, while also allowing for future increases to your social security income. The strategy works well for couples in which one spouse worked (or still works) full-time, and the other spouse didn’t work or only worked for a limited time with limited income. If your benefit is more than double your spouse’s, this strategy could effectively work as part of your comprehensive financial plan.1 How to Apply the File and Suspend Strategy To utilize the file and suspend strategy, you apply for retirement benefits at the full retirement age (age 66 if you were born within 1943-1954)2, allowing your spouse to collect their benefits based on your earnings record. Then, you immediately suspend your own benefits and delay claiming them until they are worth more at an older age. Your benefits will increase by an additional 8% for each year you delay collecting beyond your normal retirement age, up until you turn age 70. [+] Read More

What’s the Difference Between Traditional Medicare and Medicare Parts C and D?

September 23, 2013

In our previous post on Medicare Parts A and B, we outlined some of the basic features of Traditional Medicare, which provides hospital and medical coverage to those enrolled. While Traditional Medicare will cover many of your basic medical needs, some people choose to explore other types of healthcare plans because of various costs and different types of coverage available. In this piece, we’ll explore Medicare supplemental insurance plans as available through Medicare Advantage and Medicare Part D. Both are offered through private insurers, and most plans require premiums, co-payments and deductibles. Medicare Part C (Medicare Advantage): Costs and Benefits Medicare Part C is an alternative to Medicare Parts A and B, and it must by law provide coverage “equivalent” to Parts A and B.1 If you purchase a Medicare Part C plan it will replace your coverage through Medicare Parts A and B. With a Medicare Part C plan, you don't have to pay Medicare Part A and Part B deductibles and co-payments, because Medicare Part C plans have their own deductibles and co-pays. You would, however, still have to pay Part B premiums.2 [+] Read More

Brookmont Capital Named as the Top US Large-Cap Value Manager

September 20, 2013

"Brookmont Capital Management has been recognized by several reporting agencies as the top US Large-Cap Value Manager for its five-year performance through June 30, 2013. [+] Read More

Investing in Emerging Markets - What to Do - Cambiar Investors

September 19, 2013

Cambiar Investors comprehensive report on the Emerging Markets investing climate asks what should investors do with their emerging markets portfolio, and reviews the unique challenges of an atypical business cycle, investing in China, and what lies ahead for many emerging markets countries. [+] Read More

How Does Traditional Medicare Factor Into Your Healthcare Coverage in Retirement?

September 18, 2013

Traditional Medicare is another name for Medicare Parts A and B. Most people are automatically enrolled in Parts A and B and receive their benefit cards 3 months before their 65th birthday. You’ll be automatically enrolled if you’re already receiving Social Security retirement benefits when you turn 65.1 If you’re not automatically enrolled and want to apply, there is a seven month window to join: three months before your 65th birthday, the month of your 65th birthday, and three months after your 65th birthday. If you miss that window, there is “General Enrollment” every year between January 1 and March 31.1 Below we’ll break down the differences between Medicare Part A and Part B. Medicare Part A: Costs and Benefits Part A usually requires no premium payments, though there are some deductibles and coinsurances associated with coverage (more on these costs below). Part A covers hospitalization, or inpatient care. This includes hospital care, nursing facility care, nursing home care, hospice, and home health services.2 [+] Read More

Understanding Your Options for Healthcare Coverage in Retirement

September 17, 2013

The Basics of Medicare Parts A, B, C, D, and Medigap As you enter retirement or approach the age of 65, there are a lot of questions about what happens next: When should I start taking Social Security? How should I diversify my portfolio to ensure my long-term investment goals are met? Equally important is setting up your healthcare coverage. You’ll need to consider your healthcare needs, what coverage options are available to you, what the cost is going to be, what your budget allows, and so on. In our four-part series on Medicare, we’ll examine details about your healthcare options in retirement, to give you a foundation for making informed decisions as you build your comprehensive financial plan. [+] Read More

Same-Sex Marriage Treasury and IRS Guidance - JP Morgan

September 12, 2013

JP Morgan's recent report discusses how recent legislative changes can affect the taxes and retirement plans for same-sex married couples. [+] Read More

10-Year US Treasury Yield Crosses 3% for First Time Since July 2011: Time for Portfolio Changes?

September 10, 2013

WrapManager’s Weekly Summary of Market and Economic News The Bellwether US 10-Year Treasury Hit 3% on Thursday Interest rates continue to move higher as the economy recovers and as the Federal Reserve provides additional hints that they plan to “taper” their economic stimulus measures. Some people are concerned that rising interest rates could stifle the recovery of the housing market as well as general business activity.1 While that may be true to a degree, we also believe there are at least 4 Reasons Rising Interest Rates Aren't Necessarily a Bad Thing. In Spite of Rising Interest Rates, US Auto Sales Continue Booming In the month of August, new car sales rose 17% to 1.5 million, which is the highest level of sales since 2007. This is a good indication that the auto sector has moved past the recession and recovered in full. Analysts expect that close to 16 million cars and trucks will be sold in the US this year. Toyota, General Motors, Nissan, Honda, Chrysler, and Ford all posted double-digit gains for the month.2 [+] Read More

Coming Upon Final Act of Interest-Rate Saga - Eagle Asset Management

September 10, 2013

Eagle Asset Management's monthly commentary focuses on their predictions as to where interest rates will be and the affects it will have on the economy and markets. "Where will the 10-year Treasury be in three years? Will it be closer to 2 percent or 5 percent? I’m now wrestling with this question because the fiscal drag on the economy from the sequester will gradually fade over the coming months. The U.S. Federal Reserve’s tapering talk suggests it sees stronger growth ahead and there have been signs of economic stabilization in Europe and China. We could be close to moving on from the 2008 crisis, in which case interest rates should normalize. Or it could be another false dawn with growth disappointing and rates rolling over again." Download Eagle Asset Management's Full Commentary Here Get Free Research Reports on Eagle Asset Management [+] Read More

Did the S&P 500 Reach All-Time Highs? Is There a Cause for Concern?

September 5, 2013

Over the last several weeks, much attention has shifted to the S&P 500 index as it reached and eclipsed new highs. For some investors, this was a non-event - after all, it’s a normal occurrence historically within bull markets for the S&P 500 to reach new highs (click on the chart for a larger version): Stock Market Price Return Since 1900 Source: FactSet, J.P. Morgan Asset Management. Data shown in log scale to best illustrate long-term index patterns. P/E ratios shown at price peaks and troughs use trailing four quarters of reported earnings and are shown as a one year average. Past performance is not indicative of future returns. Chart is for illustrative purposes only. Data are as of 6/30/13. [+] Read More

Are There Tax Incentives Associated with Long-Term Care Insurance?

September 5, 2013

When developing a comprehensive financial plan, there are numerous factors to consider, such as when to start taking social security benefits. What about your spouse? How should I allocate my portfolio to ensure my long-term goals are met? What money managers should I hire? And the list goes on. As part of that plan, some people might consider purchasing long-term care insurance to protect their assets in the event they need extensive medical care later in life. Many don’t realize, however, that there could be tax incentives associated with long-term care insurance. The IRS outlines all of the itemized deductions available long-term care insurance premiums that are considered a medical expense1. In order for all or part of long-term care insurance premiums to be tax deductible, however, a few conditions must be met. [+] Read More

Navellier & Associates - "War Fever" Spooks Nervous Investors

September 4, 2013

Louis Navellier discusses the latest impact that the Syrian "war fever" is having on the US and other markets around the globe. "The S&P 500 fell 1.84% last week and 3.13% in August. The Dow fell 4.45% in August. On Friday, Blackrock reported thatAugust was its biggest month for ETF withdrawals in more than three years (since January 2010), with $16.1 billion inredemptions through last Thursday. The S&P 500 SPDR alone had $13 billion in outflows. These withdrawals will likely causethe strength and breadth of the market to deteriorate, but it could also increase demand for many higher-quality stocks." Download Navellier's Full Commentary Here Get Free Research Reports on Navellier & Associates [+] Read More

Churchill Management Group - "Sell on the Rumor, Buy on the News"

September 3, 2013

Churchill Management Group believes the odds of a stock market correction, defined by them as 10-20%, have increased. Their latest commentary explains their thinking, and addresses five news stories to expect this fall. "The above title is an old practical adage of Wall Street that describes how markets get rattled on the rumor of events to come and tend to settle down after the news has been revealed. As we go through the maturing phase of the bull market that began four-and-a-half years ago, it is a statement to keep in mind as the news coming in September is set to be expansive and emotional. On the docket are..." Download Churchill's Full Commentary Here Get Free Research Reports on Churchill Management [+] Read More

Is the Chinese Economy Stabilizing?

September 1, 2013

WrapManager’s Weekly Summary of Market and Economic News According to recent data released by the National Bureau of Statistics, the Chinese economy is stabilizing and should be able to meet growth targets on the year of 7.5%. The government has recently introduced policy measures of eliminating taxes on small businesses and increasing investment in urban infrastructure and railways to help give the slowing economy a boost.1 China’s Long-Term Economic Goals Over the long-term, China continues to indicate that they will tolerate lower growth rates as they move to reform the economy. Their goal is to rely less on exports and debt-finance construction for growth, and focus more on domestic demand while also reducing pollution and social inequality.1 Is the US Economy Slowing Down? Many analysts were optimistic there would be a pickup in economic activity in the second half of the year, but recent data point to a potential softening in the US economy. Spending, which accounts for approximately two-thirds of the US economy, was fairly weak in July, rising by a modest 0.1%. Inflation for the month was also tame, rising only 0.1% to 1.4%.2 [+] Read More

The Dangers of Short-Term Market Timing Strategies

August 31, 2013

As we established in our recent posts “Assessing the Probability of a Stock Market Correction” and “Are There Strategies to Handle Stock Market Corrections?,” market pullbacks are fairly normal occurrences within bull markets. We also pointed out some features that identify stock market corrections - they’re relatively short in duration, vary in size, and perhaps most importantly, they’re unpredictable when it comes to identifying when they’ll start and end. It’s the last point that makes short-term market timing strategies not only difficult to execute, but also potentially harmful to investors. Stock Market Corrections Are Unpredictable With stock market corrections, there are no clear warning signs for when investors should sell out of equities or when it’s time to reinvest. That creates two clear risks to short-term market timing strategies: An investor sells out of equities in an attempt to time the market correction correctly, but the stock market continues to rise. An investor might get it right and sell out of equities before a stock market correction, but then it becomes a question of when to reinvest. There is the risk that he or she misses out on the upside of the recovery. [+] Read More

Social Security Spousal Benefits: The Basics

August 30, 2013

In our previous post on Social Security retirement benefits, we looked at a few factors that might determine when someone should start receiving Social Security benefits. One of those factors centered on a spouse’s age and potential benefit, which we’ll examine a bit more closely in this piece. For the questions and scenarios below, we’ll assume the full retirement age is 66. You can determine what your full retirement age is using the Social Security Administration’s table here. What is a Social Security Spousal Benefit? A spousal benefit is equal to 50% of your spouse’s Social Security retirement benefit, as calculated at their full retirement age. If your social security retirement benefit based on your earnings record is greater than the spousal benefit, you will get paid the higher amount when filing for Social Security. [+] Read More

Lazard Asset Management - Time to Invest in Developing Markets?

August 25, 2013

Lazard's Developing Markets equity team explains why they are excited about their growth-at-a-reasonable-price philosophy in developing markets. "We think this phenomenon of paying a high premium for perceived stable growth is a reaction to the global financial crisis that has led many investors to anticipate another large shock to the global economy even as central banks have worked to reduce that risk. This bias could persist but should fade as any of the following begin to occur..." Download Lazard Asset Management's Full Commentary Here Get Free Research Reports on Lazard Asset Management [+] Read More

Are There Strategies to Handle Stock Market Corrections?

August 24, 2013

In our recent piece “Assessing the Probability of a Stock Market Correction,” we explained the nature of corrections and examined the probability of a stock market correction occurring this year. We concluded we would not be surprised if a stock market correction occurred sometime in the future. Is there something that investors could or should do to prepare for the possibility of a stock market correction? Is There a Way to Avoid the Downside of a Market Correction? Given that stock market corrections are normal in a healthy market but unpredictable and short in nature, it’s nearly impossible to time it correctly. However, one strategy to avoid locking-in the downside of a market correction would be to remain invested throughout the correction. Below is a chart of the S&P 500 similar to the one we used in our “Assessing the Probability of a Stock Market Correction” piece, which illustrates the performance of the S&P 5001 from December 31, 2010 – August 14, 2013 (Click on the chart for a larger version): [+] Read More

Roundtable with Eagle Asset Management's Senior Portfolio Managers

August 23, 2013

Eagle Asset Management's Senior Portfolio managers sit down and discuss their outlook on what they consider the main issues in the world today. "Eagle Asset Management’s equity and fixed-income portfolio managers regularly meet to discuss ideas, events in the financial markets and potential opportunities for investors. The global economy still has areas of concern, especially in Europe and China. Meanwhile, there are mixed data points on the domestic front. Our managers’ discussion included such topics as how and when the Federal Reserve will taper its quantitative-easing program; U.S. energy independence; what effects, if any, federal policy and politics have on markets; and – perhaps most interesting to readers – how they have positioned investment portfolios." Download Eagle Asset Management's Full Commentary Here Get Free Research Reports on Eagle Asset Management [+] Read More

Assessing the Probability of a Stock Market Correction

August 21, 2013

The run-up in stocks this year has been quite compelling so far. The S&P 500 is up +19.7% on the year as of August 51, and global stocks as measured by the MSCI World Index aren’t far behind at +14.34%.2 This strong performance has many investors asking: what is the probability of a stock market correction occurring sometime soon? Are there strategies to handle market corrections? Should I take some profits now as a short-term market timing strategy, so as to avoid any downside of a market correction? In a series of posts on stock market corrections, we’ll address these questions one at a time. What is the Probability of a Stock Market Correction Sometime Soon? Stock market corrections are normal occurrences in the markets. In fact, over the last 33 years the average intra-year decline for the S&P 500 is -14.7%.3 Using history as a guide offers some insight into a few examples of past stock market corrections (click on the chart for a larger version): [+] Read More

Eurozone Exits Longest Recession in 40 Years

August 18, 2013

WrapManager’s Weekly Summary of Market and Economic News Eurozone Exits Longest Recession in Over 40 Years> Initial reports have the Eurozone posting 0.3% growth in the second quarter, signaling the Eurozone may have exited its longest recession in over 40 years. France and Germany helped pull the Eurozone up with 0.7% and 0.5% GDP growth, respectively, however Spain, Italy, and the Netherlands still posted negative GDP numbers. In spite of potentially having exited its longest recession in 40 years, the Eurozone still carries a 12.1% unemployment rate as of June.1 That is almost double the current unemployment rate in the U.S., which as of July stood at 7.4%.2 Japanese Debt Tops 1 Quadrillion Yen Japan’s outstanding debt (including borrowings) rose to a record 1,008.6 trillion yen, representing the most debt held by any country in the world. The fact that Japanese debt tops 1 quadrillion yen also means it’s debt burden is larger than the economies of Germany, France, and the UK—combined. [+] Read More

2 Important Steps to Diversifying Your Portfolio

August 16, 2013

Investopedia defines diversification1 as “a risk management technique that mixes a wide variety of investments within a portfolio,” which “contends that a portfolio of different kinds of investments will, on average, yield higher returns and pose a lower risk than any individual investment found within the portfolio.” The goal of diversifying a portfolio is to “smooth out unsystematic risk events in a portfolio so that the positive performance of some investments will neutralize the negative performance of others. Therefore, the benefits of diversification will hold only if the securities in the portfolio are not perfectly correlated." Step 1: Diversifying Your Portfolio Across Asset Classes and Categories A glance at the chart below illustrates how this works. As you can see, different categories of assets may produce higher returns in some periods, but lackluster in others, and the best performing areas change hands regularly over time. (Click the chart for a larger version.) [+] Read More

Domestic vs International Stocks in Portfolio Diversification Strategy

August 13, 2013

US stocks have been outperforming international stocks for nearly all of the current bull market. From March 9, 2009 – August 5, 2013, the S&P 500 (SPY) has risen 124.34% compared to just 76.32% for the rest of the world (MSCI All Country World Index ex-United States: CWI). It follows that if you have a globally diversified portfolio, you may have noticed your US stocks outperforming your international holdings recently. Considering that Europe is still in the mire and China is showing signs of slowing, it’s possible this trend could continue. Would it be wise, then, to move some money away from your international equity strategy and rebalance towards a more US-based strategy? Before diving into that question, it’s important to consider how one should approach constructing an appropriate portfolio. Investing isn’t about putting all your money in the best performing asset class so as to generate the highest returns. This would likely result in a very concentrated and risky portfolio diversification strategy. Instead, since investors don’t know which sector, country, or category will outperform moving forward, it’s important to consider having exposure to various sectors and countries as part of a well-diversified portfolio. [+] Read More

Is the Eurozone Recession Ending? - The Wrap

August 13, 2013

WrapManager’s Weekly Summary of Market and Economic News Eurozone Recession Showing Signs of Ending In a sign the eurozone recession may finally be over, Germany posted robust 3.8% growth in factory orders from May this week, far outstripping estimates for 1.1% growth and marking the best growth in 8 months. Italy added good news into the mix as well, in reporting that their GDP fell by only 0.2% in the second quarter, versus a 0.4% expected contraction. They’re inching towards positive GDP growth, as their GDP in the first quarter was -0.6%. Economic activity is picking up.1 The UK Reporting Strong Numbers in Services and Retail The UK is also seeing a nice economic boost. The services sector expanded last month at its fastest pace in more than six and a half years, and retail sales also posted strong gains as total sales grew 3.6% in July, marking the best July growth since 2006.3 [+] Read More

4 Reasons Rising Interest Rates Aren’t Necessarily a Bad Thing

August 13, 2013

In our recent post on interest rates, we reviewed Federal Reserve policy and explained how future Fed actions may cause interest rates to rise. Some fear that with the Fed gradually taking their “foot off the gas” by reducing the current quantitative easing program, the economy could feel some negative effects. But the question we ask is: Could gradually rising interest rates actually be a good thing for the economy and your portfolio? Here are four reasons it might. Reason 1: Rising Interest Rates as a Vote of Confidence In Wealth Manager Tom Wilson’s recent piece titled “Preparing Your Portfolio for Rising Interest Rates,” he mentions that the Fed’s reductions or elimination of quantitative easing would be a sign of an improving economy. This could reflect itself in rising stock prices, which could be a benefit to portfolios. [+] Read More

Louis Navellier - Positive GDP Report Trumps "Mixed" Jobs Report

August 9, 2013

Will the Fed continue the quantitative easing program, and who will replace Ben Bernanke? Louis Navellier answers these questions and more. [+] Read More

Cambiar Investors - International Market Commentary Second Quarter 2013

August 9, 2013

Cambiar Investors' latest commentary reviews the international and emerging markets, along with the performance of their two international investment strategies. "Despite impressive annualized gains over the past three years, global equities have largely taken a backseat to their fixed income counterparts. Within equities, the U.S. has been the top-performing market, while austerity and slow growth have been headwinds for Europe, and Emerging Markets remain volatile. The Cambiar International Equity and Global Select portfolios continue to seek balance and broad diversification, while maintaining a degree of nimbleness to 'flex' the portfolio if a given sector/region becomes particularly attractive." Download Cambiar Investors' Full Commentary Here Get Free Research Reports on Cambiar Investors [+] Read More

Nuveen Asset Management - Equities Grind Higher

August 8, 2013

Should you overweight or underweight your portfolio to equities? Nuveen's Chief Equity Strategist Bob Doll answers with his thoughts. [+] Read More

Eagle Asset Management - Will Fed Accommodation Ebb?

August 8, 2013

Portfolio Manager Richard Skeppstrom explains why he's continuing to hold his ~60% allocation to equities moving forward. "June jobs, reported July 5, came in stronger than expected at 195,000 and previous months were revised higher. Treasury rates exploded up to 2.725 percent. Markets, both equity and bond, interpreted the numbers as a signal that the economy is indeed stronger and Fed accommodation will ebb." Download Eagle Asset Management's Full Commentary Here Get Free Research Reports on Eagle Asset Management [+] Read More

The Wrap - Week of August 2nd

August 2, 2013

WrapManager’s Weekly Summary of Top Economic and Market News United States The Bureau of Economic Analysis released initial second quarter GDP numbers Wednesday, coming in at +1.7%. Since real GDP increased +1.1% in the first quarter, this marked an overall acceleration in the growth rate. The uptick primarily reflected gains in nonresidential fixed investment, exports, a smaller decrease in federal government spending, and an upturn in state and local government spending[i]. A day before GDP numbers were released, the Federal Reserve issued a statement labeling US economic activity in the first half of the year as “modest.” They pointed to improving labor market conditions as well as stronger activity within the housing sector, but noted that fiscal policy (reduced government spending) is restraining growth. With inflation still in check and economic conditions as they are, the Fed has indicated they will continue with their current monetary stimulus programs[ii]. President Obama is floating a proposal to cut corporate taxes from 35% down to 28%, while giving manufacturers a preferred rate of 25%. His plan would also include a minimum tax on foreign earnings, as a method of working to avoid corporate tax evasions and curbing international tax havens. The proposed plan is likely to be met by resistance from both parties in Congress, as Democrats are reluctant to lower taxes and Republicans are wary of the new spending proposals that come with the plan. Republicans have also been fairly vocal that any grand deficit reduction deal would need to include structural changes to programs like Medicare and Social Security, which Obama’s proposal does not include[iii]. Europe Last week we reported that European PMI (manufacturing data) came in at 50.1, but those figures were revised higher this week to 50.3. Any reading above 50 signals expansionary activity. PMI rose for every country in the euro zone except for Spain, and the 50.3 reading marks a two year high[iv]. [+] Read More

Louis Navellier - Market Moves Sideways on Mixed Corporate Earnings

July 30, 2013

Navellier gives his thoughts on recent corporate earnings and the possible emergence of Europe out of its long recession. [+] Read More

Rising Interest Rates? How We Got Here

July 29, 2013

In response to the 2008-2009 financial crisis and global recession, the Federal Reserve (Fed) and other central banks across the world lowered interest rates and implemented asset purchase programs meant to drive down borrowing costs for banks and consumers. What is the Federal Reserve Trying to Accomplish? It works in two ways. First, by lowering short-term interest rates, the Fed and other central banks give traditional banks easier access to cheap capital, which policymakers hope will spur economic activity by increasing the amount of loans banks make to businesses and consumers. Second, the asset purchase programs, which are referred to here in the US1 as “quantitative easing,” has the Fed currently purchasing $85 billion per month of securities - divided between mortgage-backed securities and Treasury securities.i This serves two main purposes: [+] Read More

When Should I Start Taking Social Security?

July 29, 2013

Knowing when to take Social Security is dependent on a number of variables, all of which are unique to you and your financial plan. Ultimately, it is a financial choice you make, and it’s a very important one. At WrapManager, our Wealth Managers create a comprehensive investment plan for our clients, so that we intimately understand all of the variables that are important to meeting their family’s goals. Many people come to us wondering: should I start early and receive Social Security retirement benefits as soon as I’m eligible, or is it better to wait so you can receive a higher monthly benefit? Source: Social Security Administration Below, we’ve outlined a few guiding questions designed to help you think smarter about when to start taking your Social Security retirement benefits. We’d encourage you to discuss with your family and one of our Wealth Managers. [+] Read More

Nuveen Asset Management - Conflicting Crosscurrents Move Equities Sideways

July 29, 2013

Bob Doll expects choppiness in the equity market over the short term for several reasons. [+] Read More

The Wrap - Week of July 26th

July 26, 2013

WrapManager’s Weekly Summary of Top Economic and Market News United States US Bankruptcy Judge Steven Roberts ruled Wednesday that Detroit could continue bankruptcy proceedings, allowing city officials to move forward in restructuring some $18 billion of debt, which includes $5.7 billion in unfunded liabilities for healthcare and other retiree benefits and a $3.5 billion pension liability. This marks the largest municipal Chapter 9 filing in US historyi. Earnings season continues in full force, with notable technology giants Apple and Facebook reporting this week. Both companies exceeded expectations, with Apple reporting earnings of $7.47 per share on revenues of $35.3 billion, while analysts estimated it would make $7.32 per share on $35.02 billionii. Facebook widely exceeded earnings estimates due to better than expected revenue on mobile ads. The company reported earnings of 19 cents per share on revenues of $1.81 billion, which outstripped estimates of 14 cents per share on revenue of $1.62 billioniii. Of the 104 companies that have reported earnings as of July 19, 72% of them have exceeded expectations. So far, this is slightly better than last year’s average of 70%, and in line the four year average of 73%iv. Japan Prime Minister Shinzo Abe’s ruling coalition (known as the Liberal Democratic Party, LDP) scored a major victory Sunday in winning enough seats to secure a majority in the upper house. The LDP now has a majority in both chambers of parliament, giving the party greater control to potentially continue aggressive monetary policies that have characterized Japanese politics this yearv. [+] Read More

Navellier & Associates - Slower Growth Means Fed Keeps the Money Flowing

July 24, 2013

Louis Navellier believes Bernanke will continue its quantitative easing program in the face of slower economic growth. [+] Read More

Nuveen Asset Management - Earnings Acceleration Likely Needed for Upturn in Stocks

July 23, 2013

Chief Equity Strategist Bob Doll reviews his weekly top themes and the big picture for the U.S. stock market. [+] Read More

Navellier - "Bernanke Bounce" Lifted Market to New Highs

July 17, 2013

Louis Navellier looks at Ben Bernanke's comments and their subsequent affect on the markets. "The S&P rose 40 points (+2.96%) last week, reaching a new closing high above 1680. The biggest gain came Thursday, following a series of positive economic indicators and Ben Bernanke’s dramatic change of heart on U.S. monetary policy. This week, second-quarter earnings announcement season will begin in earnest. Currently, analyst expectations for second quarter sales and earnings are so downbeat that any positive surpri

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