wealth management

Transfer Your Values Alongside Your Wealth

jim Estate Planning, family wealth, family wealth management, Financial advisor, Protection Planning, wealth management, wealth planning strategies , , , , , ,
wealth and values

There’s this lingering myth of “old money families” where wealth is easily passed from generation to generation. But studies have shown wealth attrition to be more common, as bad investment decisions, mismanagement and dilution of assets between heirs eats into the family fortune.

Overcoming the challenges that plague wealth stewardship comes down to two core elements – strong communication with your next generation and putting a proper wealth transfer plan in place. We’re here to guide you.

The Family Roundtable

One of the most common barriers in wealth transfer is a lack of transparency between generations. In higher net worth families, often the older generations will shield the scope of wealth from other generations to prevent them from abusing their inheritance. But early communication with your adult children about family wealth is key.

Having us as an independent voice to shepherd the conversation can help you and your heirs talk about transfer of wealth on equal footing. It gives you a chance to discuss your financial strategies, your plan for specific family assets including the family business, and any philanthropic goals or values you would like the next generation to steward.

It also provides a forum for the next generation to discuss their own aspirations, to share any fears, and, most importantly, to feel like they play a role not just as an inheritor of the family wealth but also as an active player in the preservation of that wealth.

We can act as an independent voice for the family roundtable, someone who can guide the conversation and ensure all questions are asked and answered. We can also pinpoint challenges and help both you and your heirs come up with strategies to navigate those challenges.

Formalizing the plan

In addition to guiding the conversation, we can also play a critical role in structuring your wealth transfer plan.

We can walk you through the different vessels for protecting wealth in the transfer, advise you on the different structures for trusts, identify assets to include in your will, outline the pros and cons of transferring wealth during your lifetime versus after death, and help you balance personal preferences with tax efficient strategies.

Estate plans are far from static; the wealth transfer process is an evolving discussion, one that we can help you navigate as life events like marriages and remarriages, births of children and grandchildren, significant health issues and death, change your family and your needs.

Amidst the change, it’s good to have a constant – who better to play that role than your financial advisor?

Contact me to learn more about transferring wealth.

Click here if you would like to learn more about your options and if we can assist you with your wealth management, investment, and retirement planning.

This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.

How Quickly Will the Economy Recover

jim Economy, Financial advisor, Investing, investment strategy, Market Brief, Market Commentary, Market Outlook, Market Review, Retirement Planning, Stock Market, wealth management , , , , , , , ,
economic recovery

Now that the great short-squeeze has lost most of it’s air, it’s back to business as usual. The indexes shook off the weak job numbers and are looking ahead to the economy recovering and growing. Last week all indexes finished up.

Last Week

January jobs created less than 50,000 new jobs. On the positive side, unemployment fell from 6.7% to 6.3%. The number of Americans filing for unemployment also declined for the 3rd straight week. Most of the Nasdaq’s gains were attributed to good earnings reports, surpassing estimates. And the volatility index dropped back into the 20’s, calming the fears of an immediate 2021 correction. Readings from the ISM report were above 50, signaling expansion. This is good news when trying to grasp how quickly the economy will recover.

The Week Ahead

The economy is continuing to recover, both at home and abroad, as vaccination efforts spread. When a stumble comes, fiscal and monetary policy will undoubtedly offer an arm to stabilize or stand up. That remains supportive to equities, government bond yields, and credit markets. Roughly 59% of the S&P500 has reported earnings, and 81% have beaten EPS estimates. Per FactSet, the blended EPS growth rate is +1.7% y/y versus December 31’s estimate of -9.3%. For now, investors will continue economic implications of the race between widespread vaccination and virus mutation, the resumption of consumption, and the likelihood of higher prices or inflation across the economy.

Total after tax income was up 7.2% in 2020, the most in any year since 2000. Right now, there is plenty of demand for goods. Incomes and savings are up year-over-year. While production is not. It is supply that is hurting. The perfect recipe for inflation. A very real threat to the long-term health of the US economy. This we will keep an eye on. Year-to-date index performance; Dow up 1.77%, S&P up 3.48%, and Nasdaq up 7.51% through the close on Friday.

Have a safe week!

Click here if you would like to learn more about your options and if we can assist you with your wealth management, investment, and retirement planning.

This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.

Can a robot really help you financially?

jim Financial advisor, invest, Investing, Investing Strategy, investment manager, investment strategy, Retirement Planning, wealth management, wealth planning strategies , , , , ,
robo advisor

We’re hearing a lot about robo advisors these days. Are they right for you?

The financial services industry is no stranger to developing new products and innovations. Years ago, it was different types of stocks and bonds, then mutual funds were launched. More recently, exchange-traded funds (“ETFs”) that mimic indexes were launched. These days, robo advice is a hot topic. While having features that are certainly attractive to some investors, robo advisors aren’t right for everyone.

But first, the “what?”

What are robo advisors?

The term “robo advisor” is actually a bit misleading. Advisors generally guide their clients through the financial planning process to help these individuals achieve their life goals.

Robo advisors are automated portfolio managers. They take a limited amount of information about a client and create a portfolio of holdings. These holdings usually include a basket of ETFs. Robo advisors require little human involvement once their algorithm has been set.

Pros and cons

Robo advisors are programmed to automatically buy and sell holdings based on a desired risk-return profile. As there is little human involvement or management, they tend to be cheaper to invest in than actively managed portfolios. They also tend to be “set-it-and-forget-it” solutions that require very little effort by individual investors.

These portfolios rise and fall according to market and macroeconomic conditions, they typically don’t make adjustments to reflect the market. Conversely, as your advisor I’ve gained a deeper understanding of your financial picture, including your long-term needs and goals. Our work together means that your portfolio is suited specifically to you. Not just to a lot of people who may simply be your age and have a similar amount of savings.

Example of robots investing versus humans investing

During periods of rising markets, robo advisors will tend to perform quite nicely. As they reflect the performance of the wider markets in which they invest.

That said, markets don’t always go up. When markets are falling, portfolios run by robo advisors will tend to drop to the same degree as their corresponding markets. Meanwhile, active portfolio managers tend to rebalance or otherwise adjust their funds to reduce the downside impact of this market weakness. Possibly even taking advantage of it. By doing so, these portfolio managers are able to negate the losses that could result from market weakness. Which is something robo advisors can’t do.

Robo advisors are also not equipped to provide all of the other services that an advisor can provide. Including access to tax and estate planning, lawyers, accountants and other professionals who can help me ensure you have a complete financial plan that truly reflects your short- and long-term needs.

Please feel free to reach out to me to learn more about the benefits of a human vs. robo advisor.

Click here if you would like to learn more about your options and if we can assist you with your wealth management, investment, and retirement planning.

This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.

How to Tame Market Volatility through Diversification

jim diversification, family wealth management, Financial advisor, invest, Investing, Investing Strategy, investment manager, investment strategy, Mutual Funds, retirement, Retirement Planning, Stock Market, wealth management, wealth planning strategies , , , , , , , , ,
diversification

It’s that time of the year again. Whether it’s in person or virtually, the holidays are an opportunity for more conversations with loved ones. This year, let’s strive to put some positivity into our conversations. There is a lot to gripe about, but there’s more to look forward to.  And the more we talk, the better we plan, prepare, and progress. Discussing your financial strategies with loved ones can help reinforce them or pivot according to new circumstances. And I’m ready to hear you! Knowing what may have changed this year will help us become more successful in pursuing your financial goals.

One topic that is front of mind is how to diversify your portfolio. One way to help investors reach long-term financial goals is through an investment technique known as diversification. Diversification basically means spreading out your invested money across different investments types, industries, countries, etc. Diversification can smooth out volatility of your portfolio and potentially lead to stronger returns over the long term. Helping you take advantage of the benefits of diversification is a central part of my job as your advisor.

One guiding factor behind diversification is that not all investment categories perform well at the same time. As some are increasing in value, others may be decreasing. Market volatility is the movement of investment categories going up and down.

Maintaining a well-balanced portfolio

As your advisor, I help maximize returns and reduce the risks associated with market volatility. Essentially, your portfolio represents a collection of different investments that work in harmony to help you reach your goals. One way you can achieve portfolio diversification is to divide your investments among the major asset classes. Such classes include equities, fixed income and cash.

Asset classes – A range of risks and rewards

Each asset class comes with varying degrees of risk and return characteristics. Typically, each class performs differently in certain market environments. Here’s a quick summary of each.

  • Equities (e.g., stocks)
    Equities refer to buying stocks or shares of a business, making you a part owner. This means the investor is subject to stock appreciation when the company outperforms. But also subject to the risks of declining stock value if companies underperform.
  • Fixed income (e.g., bonds, Treasury bills)
    Fixed income investors lend capital in exchange for interest. Considered as creditors, bondholders often have a priority claim in case of company bankruptcy. This makes the investments less risky. Fixed income typically provides income at regular intervals.
  • Cash (e.g., money market funds, bank accounts)
    Cash investments provide low returns versus other asset classes, in the form of interest payments. These investments typically come with very low levels of risk.

Investment funds – One-stop diversification

I can also help achieve diversification through the use of investment funds; namely, mutual funds and exchange-traded funds (ETFs). These investment vehicles represent convenient and affordable ways to access a wide range of investments.

  • Mutual funds – These are made up of a pool of assets from many investors. Mutual funds are managed by a portfolio manager. The portfolio manager actively seeks to produce greater returns than a specific market benchmark, such as the S&P 500 Index. With the large scale of a mutual fund, you benefit from professional management and can get strong diversification by gaining access to investments that would normally be inaccessible or too expensive for most individuals.
  • ETFs – These are funds that track and seek to replicate the performance of select market indexes. ETFs represent a basket of securities based on the underlying index. This allows investors to gain broad diversification across entire markets, industries, regions or asset classes. ETFs are known to incur fewer administrative costs, therefore charging lower fees to investors.

Please feel free to contact me if you have questions on the terms discussed in this article, or on how your investment portfolio is diversified.

Click here if you would like to learn more about your options and if we can assist you with your wealth management, investment, and retirement planning.

This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.

How to Start Investing

jim invest, Investing, Investing Strategy, retirement, Retirement Planning, Stock Market, tax savings, wealth management , , , , , , , , , ,
How to start investing

So, you’ve landed your first “real” job! Now’s the perfect time to create your first investment plan and start investing.

First, let me congratulate you on getting through school and starting your first “real” job. You’ve worked hard to get here, and I’m sure there are many things you’ll want to spend your new paycheck on. An apartment of your own, some decent takeout (not from a student cafeteria), maybe a little traveling.

You should do those things, as long as they fit into your budget. You’ve earned a little breathing room. But now that you have some stability, you should also thinking about how to start investing for your future. Here are three ways to get the ball rolling.

1. Pay down debt

As a student, you may have accumulated a mix of debt, from student loans to credit cards. Create a debt-repayment plan that focuses on paying off your high-interest debt, like credit cards, first.

Student loans often carry lower interest rates, so these loans might not be your top priority. At the same time, many student loans require you to make a minimum monthly payment shortly after you graduate, and you only have so much time to repay the entire loan. You still need a loan-repayment plan to make sure you don’t default on these loans.

2. Build your emergency fund

Post-graduate life isn’t all sunshine and rainbows. Sometimes your air conditioner breaks down in the middle of a heat wave or your car dies on the way to a meeting. I suggest putting 10% of your paycheck into an emergency fund to cover unexpected expenses. The goal is to eventually have enough money in your emergency fund to cover three to six months’ worth of expenses, but it can take a while to get there.

Your emergency fund should be low risk and easy to access, like a regular savings account.

3. Think about retirement

This is the best time to take advantage of the power of compounding. If you start putting just $200 a month into a retirement savings account at age 25, and let it grow over the next 40 years at a 4% rate of return, you’ll have about $237,000 in that account when you turn 65.

Wait another 10 years to start investing the same amount at the same rate of return, and you’ll reach age 65 with about $140,000. That’s a big difference.

If your employer offers a 401(k), use it. With this tax-advantaged retirement account, you contribute pre-tax dollars directly from your paycheck. You employer will also match your contributions up to a certain percentage of your salary.

If you don’t have a 401(k), look into a traditional IRA (individual retirement account) or Roth IRA. With a traditional IRA, you’ll get a tax break on your contributions, while with a Roth IRA, you won’t pay federal taxes when you withdraw money in retirement. With both types of IRAs, you won’t pay taxes on any investment income you earn within the plan until you start making withdrawals.

Ready to start investing? Contact me today and we’ll work on creating your first investment plan.

This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.