Wealth Management Blog | WrapManager (46)

Portfolio Strategy: 3 Must-Knows for the 2nd Half of 2014

Posted by Gabriel Burczyk | Founder & CEO

July 17, 2014

Preparing Your Portfolio 2nd Half 2014 As we enter the second half of the year, there are three main things you should be factoring-in to your portfolio strategy:

1) The Possibility of a Stock Market Correction

A significant amount of time has passed since the last sizable market pullback (10% or more), and history tells us one could be on the way.¹

2) You May Not Have Enough International Exposure

International stocks have not rebounded as quickly as US stocks during the recovery, and the case for international growth looks strong at the moment. Yet, many US investors remain under-allocated to international equities.¹

3) Adjusting Your Portfolio from a Risk-Managed Perspective

This is a constant with investing, but as we enter the 5th year of this bull market it becomes increasingly important. Consider tactical money manager strategies with the ability to go to cash in the event of a prolonged market downturn.¹

Preparing Your Portfolio for the 2nd Half of 2014: 3 Issues to Watch

July 15, 2014

The first half of the year was positive for stocks and most of the fixed income markets, and economies around the world showed signs of continued recovery and expansion – a good start to the year.1 Global Economy Performance and Outlook (Click chart for larger version) Source: J.P. Morgan Global Economic Research, J.P. Morgan Asset Management. Forecast and aggregate data come from J.P. Morgan Global Economic Research. Historical growth data collected from FactSet Economics. Guide to the Markets – U.S. Data are as of 6/30/14. As we look ahead to the back half of the year, there are three topics many investors are wondering about. We break those down below and assess what we think the market impact could be. 3 Factors that Could Affect the Investment Landscape Will Interest Rates Start to Rise? Interest rates are currently near historical lows, and actually fell slightly in the second quarter.1 However, Federal Reserve policy discussions indicate they could potentially tick higher over the course of the year. As always, it’s important to understand how rising interest rates would affect your fixed income portfolio. [+] Read More

Will the Taxman Cometh for Your Social Security Benefits?

July 10, 2014

As you look forward to retirement, you may be picturing the easy life. Maybe you plan for the beach, maybe you will pursue a new hobby, charity work or even a new, more fulfilling career. As you are preparing to enter retirement remember that you Social security benefits can potentially be taxed and plan ahead. If you think of the six-fingered vizier Count Rugen from the movie "Princess Bride" and his egregious tax collection every time the IRS comes to mind, just remember, the IRS does not need to be scary. You do not have to be crafty to get prepared for retirement. The key is to plan ahead! How Much of Your Social Security Benefits are Taxable? The short answer is the IRS will probably want their portion. How much can vary based on how much income and the type of income. The IRS offered Publication 915 to help resolve the answer to my question "Are my social security benefits taxable?"1 [+] Read More

Newfound Risk Managed Small-Cap Sectors: A Tactical Way to Invest

July 9, 2014

“Investors do not exist in a world of ‘100 year averages.’ Instead, they live in a world of 40 year investment horizons, where significant declines can “permanently impair retirement portfolios as investors do not necessarily have ‘more time’ to make up from large losses.” This is one of the core tenets that applies to many of money manager Newfound Research’s risk managed investment strategies. One such strategy, the Newfound Risk Managed Small Cap Sectors, is designed to protect and participate: “Participate in the strong growth profile of long-only, un-levered small-capitalization equity portfolio, while still protecting capital through rules that allow the portfolio to move to a 100% cash position in order to protect against large losses.” The intended benefits to you are two-fold: capture the returns of small-cap stocks over time, while having an active, tactical money manager strategy that can move to cash if it perceives increased downside risk. [+] Read More

Feel Better About Retirement: A Certified Financial Planner Can Help

July 8, 2014

When you look for a doctor to provide care for you and your family, what qualities do you look for? Most answers are probably the same: you want someone who has a good deal of experience, who is well-educated, and who is constantly devoted to learning more about their field of expertise. Having those qualities helps you trust the person providing you care. When it comes to hiring a financial advisor, we think the same qualities apply. Your financial advisor should be someone who is experienced, well-educated in financial planning, and devoted to their practice. Having these qualities can help increase confidence that your nest egg and your financial dreams are in good hands. [+] Read More

Understanding the Benefits and Risks of Long-Term Care Insurance

July 2, 2014

Research shows that at least 70 percent of people over 65 will need long-term care services and support at some point in their lifetime.1 Does that mean you should purchase long-term care insurance? Long-term care insurance can be a significant retirement expense, but it can also help protect your nest egg in the event you need additional health care. It’s an important financial decision for you which you should discuss with your financial advisor in addition to a long term care insurance expert who will help you decide on the plan itself. To help you get started, here is a general overview of some potential benefits and risks of long-term care insurance. [+] Read More

4 Common Portfolio Risks and How to Avoid Them

July 1, 2014

A key to investing well is finding balance between opportunities for growth and the potential risks that come with them. You want to generate returns needed to meet your long-term goals while limiting the potential portfolio risks associated with downside volatility and other adverse events.1 Practically every investor faces the following four risks to their portfolio. While each risk can be addressed in specific ways, start with good planning with your financial advisor, regular updates to your investment plan and being properly diversified. Then move on to the more specific methods below. Portfolio Declines Due to Market Volatility To paraphrase Boston money manager Newfound Research, LLC, ‘investors don’t live in a world of “100 year averages.” Instead, they live in a world of 40 year investment horizons, where significant declines can permanently impair retirement portfolios as investors do not necessarily have ‘more time’ to make up from large losses.’2 [+] Read More

How to Overcome 3 Common Retirement Planning Problems

June 30, 2014

Newfound Research, LLC, a Boston-based money manager specializing in tactical asset and risk management, published some insightful research focusing on issues that affect how investors plan for retirement. What they found is that retirees are facing somewhat of an uphill climb when it comes to successful retirement planning. People are living longer, have less guaranteed income, and are being met with an increasing cost of living. Common Retirement Planning Issues (Click image for larger version) Source: Newfound Research LLC. 1 Social Security Administration, as of 2013. 2 Employee Benefit Research Institute, as of 2011. 3 Federal Reserve Bank of St. Louis, as of 2013. 4 National Center for Education Statistics, 2013 dollars, as of 2012. 5 AARP Public Policy Institute, 2013 dollars, as of 2010. 6 United States Census Bureau, 2013 dollars, as of 2013. These issues serve to underscore the need for sound and thoughtful investment planning. [+] Read More

What Military Strategy and 401K Inservice Withdrawals Have In Common

June 26, 2014

You don't have to wait until you retire to take advantage of a 401K rollover and all the benefits that come with it. A 401K inservice withdrawal can be just what you need to advance your retirement strategy and create new investment options. In fact, it's not unlike a general gathering all of his troops together, examining the mission, and positioning everyone where they'll do the most good. Just as this wise general can be ready for whatever comes his way, a 401K inservice withdrawal can enhance your retirement income strategy while you're still working, thus preparing for a promising future. 401K Rollovers While You're Still Working Many 401K plans allow you to rollover a portion (or all) of your 401K into your IRA while you're working without incurring any of the penalties associated with early withdrawals. Normally, if you're under the age of 59 1/2, a 401K withdrawal could be subject to a 10% early withdrawal penalty and be treated as ordinary income, thus raising income tax concerns. These penalties could take quite a significant bite out of your retirement savings. [+] Read More

How High Income Earners Can Still Contribute to Roth IRAs

June 25, 2014

If you have not contributed to a Roth IRA recently because your income is too high and you’re not sure you’re allowed to, read this article. There’s a way you can make non-deductible contributions to a Traditional IRA (non-deductible IRA), then take that money and move it into a Roth IRA. With this method, you can take advantage of the tax-free growth and tax-free withdrawals that a Roth IRA provides.1 There are a few steps to this process, so consulting with your financial advisor and tax professional is a good idea. How to Convert Money into a Roth IRA Let’s say your investment portfolio consists of a 401(k) and a taxable brokerage account. You max out your 401(k) every year, and you’re looking for a way to get more tax-free growth out of your investments. You are also interested in a retirement income strategy that provides you tax-free income (Roth IRA),1 but you cannot contribute to one because you make more than $191,000 (married filing jointly) per year.2 [+] Read More