The Fiscal Cliff: Why Selling Now Is Not Always The Best Strategy
The daily fiscal cliff news coverage is causing irrational investor behavior regarding unrealized long-term capital gains (LTCG). Without congressional action the LTCG rate is set to increase from 15% in 2012 to 20% in 2013. In addition, high earners are subject to a 3.8% Medicare surtax applied to all capital gains. (income greater than $250,000 […]
Controlling Costs – A Financial Recipe for Success
I have seen people drive miles out of their way for the cheapest gas, shop at multiple grocery stores for the best prices, and even wake up at uncanny hours to receive the best deals on holiday presents! As consumers we are always looking for a good deal, and price is one of the largest […]
Global Equity Valuations
The global equity markets continue to experience disappointing returns. In discussions with clients, my advice is a reminder that the research shows that developing a strategic asset allocation plan and staying the course through rebalancing is the prudent course of action. The European sovereign debt crisis is in its third year and continues to create […]
Investor Behavior: Market Timing Pitfalls
Dalbar, an independent communications and research firm, has done countless studies trying to quantify the impact of investor behavior on real-life returns. Their studies focus on the difference between investors’ actual returns in stock funds to the average return of the funds themselves. Basically, they are comparing the return the investor gets to the return […]
What About Bonds?
Bonds will be a terrible investment over the next 10 years. That is the conventional wisdom in the investment community lately. “Bonds are the worst asset class for investors,” says Professor Burton Malkiel, the author of A Random Walk Down Wall Street, in an opinion piece published in late March in The Wall Street Journal. […]
The Tradeoff: Preserving Capital or Preserving Purchasing Power
Many aspects of life require careful consideration and balancing of the tradeoffs that arise from competing demands. For example, a common lifestyle tradeoff is working longer hours versus spending more time with your family. The competing demands within this decision are the income necessary to provide a suitable quality of life for your family versus the immeasurable […]
A Decade Lost?
The holiday season is a great time to see friends of old who are back in town and catch up with family you don’t get to see as often as you would like. While getting caught up on each other’s lives, and amidst the small talk, most people these days bring up their dissatisfaction with […]
Schwab Index Fund Changes
Many of our clients will be receiving a notice from Charles Schwab regarding a recent change in investment policy for two funds that we use in portfolios. The Schwab Small Cap Index Fund (SWSSX) and the Schwab International Index Fund (SWISX) are affected. Here is the communication from Schwab to advisors: We want to make […]
Five Reasons You Should Not Panic in the Face of Market Volatility
1. It is not really “different this time.” Vanguard, in a recent study entitled “Stock Market Volatility: Extraordinary or ‘Ordinary’?”, concludes that recent volatility appears extraordinary compared to the relative calm of the markets in 2010, but is in fact “ordinary” when compared to similar periods characterized by major global macro events – they cite […]
Market Analysis
Renewed fears of a double-dip recession, policy paralysis across the U.S. and Europe, and the looming threat of a financial crisis in the euro zone combined to create very volatile markets and a devastating quarter for equities. Equity Markets The third quarter of 2011 saw the value of small stocks and international stocks fall more […]