Wealth Management Newsletter | All posts archived in 'August 2016' — Page


From monthly archives: August 2016

We are pleased to present below all posts archived in 'August 2016'. If you still can't find what you are looking for, try using the search box.

International Exposure – What is Appropriate?

So far this year, international stock returns have trailed returns for the U.S. stock market. Unless we have a drastic reversal in the last few months of the year, U.S. stocks will have outperformed international stocks for seven of the past nine years. However, for investors with a slightly longer memory, international stocks enjoyed a six –year uninterrupted streak of outperformance just prior to the financial crisis in 2008. So this begs the question, how much international exposure is appropriate in a globally diverse portfolio? Remember, asset allocation will be by far the most important driver of long-term returns. Most academic studies indicate that 90% or more of long-term returns are derived from the asset allocation, i.e. how much in stocks vs. bonds, what types of bonds and what types of stocks. For bonds, the key decisions are credit quality and maturity. For stocks, the key questions are U.S. vs. international, large cap vs. small cap, and growth vs. value factors. For our comments this mon ...

Managing Bond Risk

With interest rates near historical lows, investors might be concerned about the potential impact on their bond investments from rising interest rates in the future. Rising interest rates typically cause existing bonds to lose value. As you read the financial headlines and evaluate your current fixed income exposure, it may be helpful to consider these principles about fixed income investing: Academic research offers strong evidence that the bond market is efficient, and that bond prices and interest rates are not predictable over the short term. This uncertainty is reflected in the often-contradictory interest rate forecasts offered by economists, analysts, and other market watchers. Even when the experts share similar views on the direction of the economy and credit markets, reality often proves them wrong. Recent history is a good example, despite many experts predicting a jump in rates a few years ago and again as recently as late last year, the yield on a 10 year government bond is lower today than at ...

Philanthropy: Charitable Giving with Collectibles

A collection can be very special and unique to the individual. Passions can range from cars, wine, art, comic books and figurines. These works of “art” often evokes memories for the collector, or the family, and the legacy it leaves behind. Eventually, collectors need to plan for how they want to pass on their beloved collection. The first decision is whether the transfer will occur while the collector is alive or at passing. The next decision is if the collection will be gifted to a charitable organization or passed on to heirs. Each of these choices has its own consequences. For example, if a collector gifts a collectible to his/her children the positive impact is the asset is out the collector’s estate. However, the original basis carries over and no step-up in basis is received; the gift reduces the collector’s lifetime gift exemption. On the contrary if the collector waits and transfers the collectible to his/her children upon passing the positive impact is the basis step-up. The ...


These answers are informational only and are not intended to address all possible situations that might arise with respect to the question asked. You should check IRS Publication 590 for more information (keep in mind that the IRS does not stand behind any advice they give) and check with a qualified advisor before doing IRA transactions and especially before trying to correct something that may be wrong. Any tax advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding tax or penalties. Can I name a trust as the beneficiary of my IRA or Roth IRA? Yes, you can name a trust as the beneficiary of your IRA or Roth IRA. BUT, do not do this unless you understand all of the ramifications of having a trust instead of an individual inheriting the IRA. Always consult with an IRA expert advisor before taking this step. NEVER, NEVER, NEVER move your IRA assets into the trust or retitle your IRA into the name of the trust. Both of those actions are taxable events ...

New Money Market Rules – What you Need to Know

Money-market mutual funds used to be boring and simply a place to park your excess cash temporarily. But new rules passed by the Securities and Exchange Commission governing the $2.7 trillion industry take effect in October 2016. As a result, investors used to ignoring that part of their portfolio might suddenly have to pay attention instead and make some informed choices. The SEC regulations aim to prevent an investor exodus from money-market funds like the one that happened during the 2008 financial crisis, when the federal government had to step in with financial backing for the industry. One requirement under the new rules is that the shares of money-market funds that cater to institutional investors and invest in corporate or municipal debt will have a floating net asset value or NAV, like the shares of most other mutual funds. That’s a change from the stable $1-a-share value traditionally maintained by all money-market funds. The idea is that investors will be aware of changes in asset values a ...




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