Friday, November 6, 2015

Are you affected by the Bipartisan Act of 2015?

President Obama recently signed the Bipartisan Budget Act of 2015 into law. This two-year budget deal is designed to close perceived loopholes in social security claiming strategies. It eliminates the ability to file for dependent spousal benefits on a retiree’s record when that retiree is not currently receiving benefits. The dependent spouse will now be limited to receiving the higher of his or her own or spousal benefit.

The good news is that those who have already filed for and immediately suspended benefits, while their spouse is receiving spousal benefits through a restricted application—can continue doing so!

But new social security claimants will definitely see a change in their options.

 1. If you and your spouse are less than six months away from reaching your full retirement age (FRA) for social security, there is still a window of opportunity for you to file for dependent spousal benefits.
 2. If you turn age 62 by year-end 2015, you may still be able to file a restricted application for spousal dependent benefits when you reach your FRA.

We continue to monitor these rule changes closely and are ready to discuss your social security planning strategy with you in light of this new legislation. If you have any questions or concerns about your family’s social security claiming plan, please feel free to call our office at 281.990.7100.

Tuesday, August 25, 2015

Nurturing an Independent College Student

In a recent appointment, I was talking with clients who are sending their daughter off to college for the first time. I was reminded that August is when many are going through this exciting, and sometimes scary transition. The majority of what my clients wanted to talk about wasn’t so much about how their portfolio was doing, but how they can help their daughter manage her own finances for the first time. As a parent having gone through this, I get it!

Here are a few things that came to mind which may help you or someone you know:
Decide who’s paying for what up front. Discuss with your student what you plan to cover (tuition, housing, meal, plans, and so on) and what expenses you expect your child to pay for. 

Make a budget. Work with your student to figure out how much money they’ll need per month, whether using their savings or from an allowance you’re providing. 

Don’t save them. It’s pretty easy to fall prey to sympathy for your student who is dealing with so much newness, but try not to just give in to the requests for more money. 

After they prove themselves. Although you shouldn’t save them when they’re struggling to stay inside a budget, there’s nothing wrong with rewarding success at handling their finances. Perhaps a nice dinner at their favorite restaurant or a little extra cash left behind on a visit.

Provide motivation to do well. If you are paying for your student to go to college, consider telling them you’ll pay for the spring semester in percentages based on how well they do in the fall.

It’s true that your child will face many challenges when leaving home for the first time. But, it’s much better for everyone if you are a little tough in the beginning. You would be amazed at how often the subject of dependent adult children comes up during client meetings! The universal plan is for our children to eventually learn to be financially independent adults, is it not?

Thursday, July 9, 2015

Patience is Key

Even if you lose money in the stock market, there is still the opportunity to benefit. There have been numerous examples of investors who put money into the stock market during periods when the market was flat, and they still came out ahead.

A good course of action is to put money into your long-term investments on a regular basis. Let’s look at one family that had setup their Roth IRAs before the 2007-8 market losses. When they lost money in their accounts, he decided to stop putting money in because he wasn’t sure it was still a good idea. She, on the other hand, kept contributing. The difference in their accounts 5 years later was shocking. You see, even though she didn’t like losing money in 2007-8, she kept investing each month and she bought more shares when the market was low. He, on the other hand, waited for the share prices to go back up before contributing again and, thus, bought his shares at a higher price than she did. Buy low and sell high is still the best idea. So, yes, even though we feel the losses twice as much as we feel gains, consistent long-term investing is a good approach for establishing the kind of retirement you would like.

The Portfolio Managment Approach Matters

When investment experts Peter Lynch and Bill Gross left the funds they managed, the funds seemed to change course.

Unfortunately, at any company or investment, when the bulk of the return is depending primarily on just one person, a lot can go wrong when that person is no longer associated with the entity.

A multiple-manager system can overcome this hurdle when it’s done right. This approach helps combine independence and teamwork, and works better to pursue investment opportunities. A team of managers that share research and resources, but are empowered to act on their own investment decisions, is a method we like to see! It’s like comparing a solid baseball team of 9 players with diverse skills to a team of one superstar player. No matter how great the one superstar is, he can’t cover the whole field as well as a solid team.

Here are some of the advantages of a well-functioning multiple-manager system:

·         Broad Diversification - Each of the fund managers invests in his or her highest conviction ideas. Because of this, the portfolios within the fund are able to contain a highly diverse group of securities.

·         Rigorous Risk Management - Superior long-term performance with less market fluctuations is the result that we’re looking for from the portfolio manager team. This is partially related to the higher level of diversity typically seen with this approach.  

·         Consistency of Objectives - The fund's principal investment group review investments to ensure consistency with fund objectives and overall guidelines.
When all of this is combined, it makes for a fund that is diverse, yet works together like a well-oiled machine.

Wednesday, May 6, 2015

Proven Advice to be a Successful Investor

When you are preparing to invest, one of the very first - and the most important - decisions that must be made is determining who to trust with your money. Once you have done so, you will be able to move forward much more easily with all of the other essential investment-related decisions.

That sounds simple enough but getting it done right is a different story. One important step that is easy to miss is evaluating the fundamentals.
When you evaluate investment ideas, strategies, and approaches for inclusion in your investment plan be purposeful.
Trust but verify that the fundamentals are actually put into practice for any investment you are considering. Some of the core values we look for include:
  • A defined, high-quality research process that is actually used, and favors long-term investors like you.
  • An even-handed or reasonable balance between cost and return. Be willing to pay a fair price for the type and level of returns that you expect or desire. Don’t be fooled by low cost investments with low returns or high return investments with high fees.
  • Adjustments to ensure your cost and return expectations match the right amount of risk for you, your family, and your goals.
  • A total commitment to honesty and integrity.
While these core values may not include in-depth mathematical formulas for choosing the proper investments based on numerical factors, they are actually more important in many ways. Trust and integrity are something that cannot be bought – it has to be earned.

So, before investing your hard-earned money, be sure to check out the
core values, management team, long-term history, results, fees and overall track record of where you plan to place your investment funds. Chances are that you will be much better able to sleep at night, knowing that your money is with a company that you trust.

Dare to Diversify So You Can Prosper

Throughout the years, successful investing has actually had less to do with the picking of individual stocks and more to do with the choosing of a well-diversified portfolio that consists of a nice mix of different types of assets. We've all likely heard the famous phrase, "Don't put all of your eggs in one basket." This is very good advice when it comes to investing.

There are numerous ways you can diversify your investment mix, depending on your tolerance to risk, your investment time horizon, and your overall financial goals.While the idea of putting together a well diversified portfolio of investments may seem to be a bit daunting, the good news is that it does not have to be difficult.In fact, by starting out with a plan, you will be able to get a good idea of the types of assets to include in your portfolio initially - as well as how and when you may need to adjust your diversification strategy over time.An actively managed portfolio can help to alleviate much of the work that must be done by an individual investor.
By allowing specialists to take over the task of replacing various investments at the appropriate times, you can see a difference in their overall portfolio return while still having time to play with your children or take those important vacations.