Banks Vs. Credit Unions: Which Is Right For Your Wallet?
While branches of banks and credit unions look the same from the outside, there are some fundamental differences.
Maria Alcoke
About Maria Alcoke
Posts by Maria Alcoke:
The Importance Of Addressing Participant Complaints
Participants sometimes also complain if they are not offered mobile applications to access their accounts, says Joseph Conroy, a financial planner with Synergy Financial Group in Towson, Maryland. “Complaints about technology absolutely have merit,” he says. “Today’s participants want to enroll, access and rebalance their accounts from their smartphones. While they are willing to use paperwork and desktop computers to do those things for now—in a few years, they won’t”
13 Smart Money Moves To Make Before The End Of The Year
If you haven’t refinanced your older mortgage in the past few years, now is the time. “Interest rates are on their way up,” says Joseph Conroy, author of Decades & Decisions: Financial Planning at Any Age. “Shop your current mortgage rate around before the opportunity is gone.” Yes, the time and paperwork involved is a hassle, but your mortgage is a 15 or 30-year loan and a lower rate could save you thousands during that time period.
Changes to Required Minimum Distributions?
Big news for those facing the challenge of Required Minimum Distributions…
Last week President Trump signed an executive order asking the IRS to review its regulations concerning Required Minimum Distributions “RMD”. For those unfamiliar with RMDs, at age 70 ½ the government requires you to start taking taxable distributions from your IRA, 401(k) and other qualified accounts. This can create a significant tax problem for those who did a good job saving for retirement.
The amount taxed goes up every year. Any money left in the accounts after your death will continue to be taxed in a similar manner. The gift that keeps on giving.
It appears that the administration’s goal is to reduce the amount required to be taxed. On the face of it, this would reward savers. Those of you who were responsible enough to put money away in your retirement plans so that you could take care of yourself during retirement.
There are some arguments against reducing RMDs. It would disproportionately help the “rich”. It would reduce tax collections. It would increase the deficit.
We believe strongly in RMD management. There are a number of techniques we use to minimize or control RMDs.
Why is this important?
If the current President can issue an executive order to try and reduce RMDs, it stands to reason that a future President could issue an executive order to try and increase RMDs. Increasing RMDs would increase tax revenues, help reduce the deficit and tax the “rich”. The last rationalization “tax the rich” isn’t fair because there are many responsible savers who are just average Americans.
But they could get caught up in the fervor of the moment.
This is another reason why it is so important to determine if RMDs will cause you to pay more than your fair share of taxes.
At TFG Wealth Management we are committed to making every effort to stay on top of issues that will impact your retirement. Its not just about managing your investments but also about getting the most out of your retirement savings for you and your family.
Aging Bull, Raging Bull
In real estate there are three words to live by: …..location….location…..location.
When investing there are three words to live by: …..rebalance…..rebalance…..rebalance.
Last week marked the longest bull market in history as measured by the S&P 500 index. The U.S. economy remains quite strong. The market has risen over 320% since its low compared to the 1990s bull market that went up 417% before the tech bubble burst.
With the market going so well you might question, why re-balance? It’s very easy to understand re-balancing your investments when things aren’t going so well. But much harder to sell those winners, reduce your S & P 500 holdings and buy those out of favor assets when the market is doing well and the economy is so strong.
It’s important to remember that investment strategies are based on a number of interconnected factors or variables. The most important is of course, your goals. Are you looking for long term growth? Are you retired and just need to keep the income flowing? Are you just a few years away from retirement and the last thing you want to happen is see your retirement shrink because of a market downturn a month or six months before you want to retire?
Next, is your risk tolerance. As you know we measure risk in three ways. How much risk you want to take? How much risk can you tolerant? How much risk do you need to take?
Finally, what does your retirement plan look like? Do you have more than enough, just enough or are you short of what you need to retire?
The rational investor would take all these into consideration and then… re-balance.
But fear and greed come creeping into the picture.
Fear: will I lose it all?
Greed: will I miss out?
I have a secret to share…decisions based on fear and greed have never helped anyone achieve their long term goals.
Rebalancing on a regular basis is the key to realizing long term positive investment results and also protecting the gains you have already realized.
Your investment strategy was created based on your goals, your risk tolerance and your financial plan. So, unless your goals, risk tolerance or overall plan have changed why should your investment strategy change? But that is exactly what a long bull market does. It changes your asset allocation and changes your investment strategy.
So take charge of your future and re-balance.
Financial Planning At Any Age
Whether you are a recent graduate, new homeowner, or ready to retire, financial planning is essential. For this morning’s Maryland Business Report, Author Joseph Conroy, joins us to discuss financial planning for any age.
Fake News and Financial Markets
From the title of this article, you might think that I will be discussing how “Fake News” in the broader media impacts the markets. But there is another kind of fake news. If you don’t understand it, you will be in a world of trouble come the next correction or recession.
What could I possibly be talking about. Market index performance. Yes the Dow Jones, the S & P 500, the Nasdaq 100, the Russell 2000. I could go on and on.
When meeting with the families we help, the conversation will often turn to how did my investments compare to the markets. Let’s take the S & P 500 for example. A group of 500 stocks that is believed to represent a well diversified large company portfolio. It seems reasonable to compare the returns of the S & P 500 to your equity portfolio. But it isn’t.
Here is why. It’s called capitalization-weighting. Without getting too technical it means, the larger the company the more it counts. The reality is that Amazon, Microsoft, Apple, Netflix, Facebook and Alphabet (Google) represent almost all the investment returns for the S & P 500 YTD. So what about the other 494 stocks. Not so much.
While this is great when these tech/internet/entertainment companies are doing well, what will happen to the indexes when just these stocks hit a road bump, like new regulation or privacy concerns or cyber terrorism.
Portfolio returns are driven by the types of investments within the portfolio. If you are invested solely in the total market or the S & P 500, then your performance would likely be driven by a handful of stocks. This is simply the way market cap weighting works. This is why passive investing does well in up markets but no so good in down markets.
On the other hand, having a diversified portfolio and using active managers outside of the market cap-weighted indexes provides greater diversification.
While this may result in a lower upside, it also can have the impact of limiting the downside. This means lower volatility which is a key to having a successful, financial secure retirement.
The moral of this story is….beware of fake news. To truly understand your investment strategy, you need to dig deep into not just what the performance is for a particular index or portfolio but what are its drivers in good times and bad.
Can Bonds Still Save the Day?
Below is a synopsis of this investment report:
Our traditional understanding is that bond prices go up when stock prices go down. This has not been the case in 2018, however, as stocks sold off in the first quarter and bonds have also posted negative returns. The reversal of an established trend has led some to question whether bonds remain a good investment and, more importantly, whether they can still act as a hedge to stocks. The short answer is yes, but investors need to be nimble with bonds going forward and broaden their opportunity set.
For full access to the investment report titled “Can Bonds Still Save the Day?”, please contact us.
Global Monthly Focus – April 2018
Below is a synopsis of this investment report:
- U.S. markets rebounded in April after two turbulent months. Geopolitical headlines continued to play a significant role in unsettling investors, particularly the “trade war” between the U.S. and China. In the end, the stronger earnings momentum pushed stocks higher for the month.
- In fixed income markets, the 10-year U.S. Treasury yield peaked over 3% for the first time in more than four years, sending bond returns lower.
- Despite market volatility, economic readings continue to support a healthy expansion. The tailwind from tax cuts may dwarf any of the potentially harmful effects of tariffs. The impact of the fiscal stimulus has driven robust corporate earnings in the S&P 500 to date. For this reason, and given the general health of the U.S. economy, we think it’s too early to call an end to this economic cycle and the bull market.
For full access to the investment report titled “Global Monthly Focus – April 2018”, please contact us.
Why Is Everyone Talking About the 10-Year Treasury?
Below is a synopsis of this investment report:
- The new headline this week centered on the 10-year U.S. Treasury yield, which rose slightly above 3% intraday for the first time since January 2014. The 10-year U.S. Treasury is a yardstick used to gauge long-term growth and inflation expectations and thus serves as a key indicator of where the U.S. economy is heading.
- The markets, which have been lethargic, sold off as they digested the news on concerns that higher interest rates could start eating into corporate profits and potentially signal more inflation.
- There is little debate that the economic expansion is classified as “late-cycle,” but that does not mean it must come to an early end. With the passage of the Tax Cuts and Jobs Act late last year, growth could accelerate throughout 2018, suggesting the end is not upon us just yet.
For full access to the investment report titled “Why Is Everyone Talking About the 10-Year Treasury?”, please contact us.