Year-end Reflections and a Look Ahead

As 2013 comes to a close, it is a good time to reflect on the many things that have transpired.  For us, the year brought the start of a new firm and the opportunity to place new emphasis on our clients and the comprehensive nature of our work.  We are grateful to our clients and to the professionals who showed support during the year.  We look forward to providing many years of dedicated service and working together to navigate the numerous financial needs that will arise throughout the course of our relationship. Equity markets continued to show strength in 2013 and portfolios benefited as a result.  We remained diligent, yet cautious throughout the year.  Diligence came in the form of keeping fixed income and hybrid investments at targets.  Caution was exhibited by seeking quality, valued oriented equity investments and by keeping higher than normal levels of cash.  The result was moderate, yet steady growth in portfolios with reasonable downside protection when markets retreated.  Growth is more uncertain in 2014.  Interest rates remain low, but tapering by the Federal Reserve seems Read on! →

How much can you stand to lose?

One of my favorite columnists is Jason Zweig of the Wall Street Journal.  His Saturday column, “The Intelligent Investor” strikes me as a straight forward, common sense view on the markets and investing.  His recent piece on buying stocks at record highs was particularly interesting because of the way he addressed the potential for loss.  As 2013 comes to a close and markets bounce around historical highs, the time may be right to reflect on portfolios, how they are allocated and how much loss can be sustained if markets retreat. As investment managers and financial planners, risk is often discussed in terms of percentage loss.  I believe discussing loss in terms of a percentage falls short of trying to help clients understand risk and the potential for loss.  This shortcoming was frequently proven during the last financial crises when clients grew anxious over dollar losses that did not reconcile with the equivalent percentage loss they said they were willing to accept. When deciding on the right mix of cash, bonds, hybrids and equities (a diversified portfolio), Mr. Zweig rightly suggests Read on! →

Post-election Reflection

Interestingly, the electorate seemed to move to a more moderate posture with the election of Chris Christie in New Jersey and Andy McAuliffe in Virginia.  While the Tea Party has been prominent and in focus over the past several months the party was unable to elevate their favored candidates to the Governor’s mansion.  Investments are similar.  Companies, sectors and countries make headline news, garnering favor or getting harshly criticized for periods of time only to swing up and down, revert to the mean and have a more moderate impact on long term returns. Locally, Charlotte elected four democratic at-large candidates and a democratic mayor.  Democrats now hold a super majority and will influence the way Charlotte spends its tax dollars.  Regardless of state and national trends, Charlotte leaders will react to local influences.  They will debate, tax and spend as their constituents demand and our community will change accordingly.  If effective, they will balance their constituent wants with community needs. Like a political leader’s constituents, investment decisions are often influenced by personal wants.  Similarly, impulse, fear and greed (Tea Party Read on! →

Making Tax-Efficient Donations and Gifts

Building on our recent tax newsletter, below are some charitable giving suggestions that might help reduce taxes while providing some personal fulfillment.  It is well known that giving comes from the heart and is not typically financially motivated, but it doesn’t hurt to receive a little benefit when your tax liability is reduced.  Taxes and charitable giving are unique to the individual. Since these recommendations might not be appropriate for everyone, always check with a professional advisor before making any final decisions.   Donating Appreciated Stock Starting with the basics, you can typically donate appreciated stocks and mutual funds directly to a charity equipped to accept them.  If you want to make several gifts to multiple recipients consider opening a donor advised fund with either Charles Schwab or Fidelity Investments.  The donation to a donor advised fund is tax deductible in the year deposited to the account.  If you want to make several donations or you aren’t sure which charity you want to give to, the donor advised fund is ideal.  For more information on donor advised funds please visit Read on! →

College Savings Strategies

My colleague, Cheryl Sherrard, recently wrote a piece on what parents should consider before sending their children off to college for the first time.  A Health Care Power of Attorney (HCPOA) and Health Insurance Portability and Accountability Act (HIPAA) waiver are critical for a child that is 18 or older yet still dependent on their parent(s) for assistance.  If you are not yet at the point of sending your child off to college, but rather are at the stage of considering how you will fund higher education for your young children, there are some basics you should consider now, before time gets away from you. Some Basics[1]: Projected tuition and fees at Public In-State university is $108,100 (4 years, enrolling 2030) Projected tuition and fees at Private college is $362,800 (4 years, enrolling 2030) Average annual increase in cost is between 4% and 5% These costs are substantial.  If you prepare early, the impact of these costs on your annual budget can be reduced.  The key is starting early and saving consistently.  There are many ways to save but this Read on! →