WrapManager's Wealth Management Blog

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

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

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

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

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

“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

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

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

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