The Politics-Proof Portfolio

Home
  ›  
Posts from "" by tag:
  ›  
Page 4
You are here:

There are few things that we Americans get worked up about as much as presidential elections.

vote-stock-slideOne candidate, some of us feel, would be a disaster for the country, while the other would lead it in the right direction. That seems to hold true every four-year cycle, but this year emotions are pitched especially high. Spurring us along is the financial news media, which breathlessly advises us about how to invest for a Clinton presidency, or a Trump presidency.

brian1-002On October 20th, Brian O’Neil spoke on a panel discussion in front of roughly 75 attendees at the Grand Hyatt Denver.  Brian spoke with four other business planning, legal and finance professionals to discuss the next steps for business owners. The goal of the panel discussion was to provide relevant and actionable advice on how to handle the next stages of their company’s progression.

What are tactical adjustments? In their 1986 asset allocation research, Brinson, Beebower, & Hood defined tactical asset allocation as:

“…strategically altering the investment mix weights away from normal in an attempt to capture excess returns from short-term fluctuations in asset class prices (market timing);”

When it comes to tactical asset allocation, a growing body of evidence shows investors who make tactical moves in their portfolios do best when both technical analysis and fundamental analysis align.

Investors in the U.S. are keenly aware of how managing taxes can help to build wealth—as evidenced by the trillions of dollars that we’ve invested in IRAs, 401(k)’s and other tax-sheltered accounts.

What too many of us fail to consider, however, is the need to remain tax-conscious even after we’ve built our wealth. For retirees seeking to preserve and appreciate their wealth, tax-savvy decisions are especially important.

One of retirees’ key tools for tax management is known as retirement withdrawal sequencing. In plain English, this refers to the order in which you make withdrawals from various account types to fund your retirement.

Those who have saved successfully often have a combination of taxable, tax-deferred and tax-free accounts. When that’s the case, proper planning about which accounts to tap first can allow you to defer a substantial amount in taxes while maximizing the opportunity for the remaining accounts to appreciate.

callahan-event-09-20-16On September 20th, our Chief Investment Officer, Jim Callahan, spoke on a panel in front of roughly 100 attendees at the Denver Athletic Club. Along with investment executives from four other wealth management firms, Jim was invited to discuss the topic of “Advanced Asset Allocation”.

The role of tax strategies in trading and managing investment portfolios

Certain tax strategies can add a meaningful boost to portfolio performance because taxes are an explicit cost to any portfolio and, therefore, a detractor from performance. Although tax situations are unique to each individual, any strategy that limits or delays the tax bill and retains more after-tax return for investors will face little argument.

“Avoidance of taxes is not a criminal offense. Any attempt to reduce, avoid, minimize, or alleviate taxes by legitimate means is permissible. The distinction between evasion and avoidance is fine yet definite. One who avoids tax does not conceal or misrepresent. He shapes events to reduce or eliminate tax liability and upon the happening of the events, makes a complete disclosure. Evasion, on the other hand, involves deceit, subterfuge, camouflage, concealment, some attempt to color or obscure events, or making things seem other than what they are.”— Internal Revenue Manual Code 9.1.3.3.2.1 (05-15-2008) 26 USC §7201 – Avoidance Distinguished from Evasion

Assuming all investors pay taxes either now or later, the chart below illustrates the benefit of delaying taxes. We assume a portfolio of 60% stocks, 40% bonds that is rebalanced every year. The solid line depicts the growth of the 100% taxable portfolio, while the dotted line shows portfolio growth in a 100% tax-deferred portfolio. Of course, the taxman arrives eventually, so we show the hit (a worst-case all-at-once tax consequence) to the tax-deferred line when withdrawing at ordinary income tax rates.

Blue Chip StocksToo much of a good thing can be wonderful, at least, if actress Mae West was right. But when it comes to your investments, we’d argue too much of a good thing can be downright
dangerous.

Consider what’s going on among blue chip stocks in today’s low yield environment. Anyone seeking income from bonds knows that yields are at historic lows. As such, many investors have sought blue chips stocks and their healthy dividends as an equivalent to traditional bonds. We don’t believe this to be a terrible idea, but it definitely comes with its tradeoffs and we question whether those risks and rewards are getting the attention they deserve today.

Passive investing as the foundation for an optimal portfolio

To investors who have spent years accumulating wealth through active entrepreneurship or business management, the notion of being “passive” may have a negative connotation. But when designing a portfolio strategy, evidence suggests that passive investing produces superior results with lower expenses than one built around active trading.

In a passive investment strategy, an investor is not looking to beat the market. Rather, the goal is to gain exposure to the broader market – all the good and all the bad – at the lowest possible cost. (Source: Managing Investment Portfolios: A Dynamic Process)

The broader market is represented by indices, for example the Standard & Poor’s 500 Index for stocks and the Barclays Aggregate Bond Index for bonds. Investors do not buy into an index per se, but in funds that closely mimic the index.

financial-planner 08.19Hiring a financial advisor can be a smart and profitable decision: As we detailed in a recent blog article, advisors using industry best practices can help their clients earn a significant investment premium.

There’s a catch, though. Not all financial advisors do the right thing, consistently, for their clients. Surprisingly, the great majority of financial advisors are under no legal obligation to put their clients’ financial interests ahead of their own.

Gold Medal 08.15As we have watched the 2016 Olympics in Rio, it’s truly impressive to see the athletes from all over the world compete at such a high level and demonstrate their true dedication to their chosen sport.  The athletes and their families have spent years devoted to hard work, incredible amounts of focused energy to training, exhibit world class discipline and dedication in order to be the very best in the world.  Their ascension to the Olympics of course has not been linear, as each of the athlete’s had to overcome many obstacles and adversity in their paths to reach the pinnacle of their respective sport.  The Olympian athletes’ training efforts, focus, and discipline are primarily behind the scenes with many hours working with their coach and trainers, with never a promise to compete or let alone win an Olympic medal.  Their hard work and tireless effort’s provides them the best chance to execute their lifetime goals.


1 2 3 4 5 6 7 15
IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken Janiczek Welath Management -Janiczek”), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Janiczek. Please remember that if you are a Janiczek client, it remains your responsibility to advise Janiczek, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Janiczek is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Janiczek’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request. Please Note: Janiczek does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Janiczek’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

*Ranked/Named among Top, Best and Most Exclusive Advisors sources: Barron's March 2016, 2015, 2014; Advisory HQ March 2016; Financial Times June 2015; Five Star Professional November 2015, 2013, 2012,2011, 2010, 2009; Mutual Funds Magazine January 2001; NABCAP September 2010, 2011, 2013; Worth Magazine July 2002, January 2004, October 2004, October 2008; Wealth & Finance International, October 2014. Rankings and/or recognition by unaffiliated rating services and/or publications should not be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if Janiczek Wealth Management is engaged, or continues to be engaged, to provide investment advisory services, nor should it be construed as a current or past endorsement of Janiczek Wealth Management by any of its clients. Rankings published by magazines, and others, generally base their selections exclusively on information prepared and/or submitted by the recognized adviser.

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Janiczek Wealth Management), or any non-investment related content, made reference to directly or indirectly on this website will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this website serves as the receipt of, or as a substitute for, personalized investment advice from Janiczek Wealth Management To the extent that a viewer has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Janiczek Wealth Management is neither a law firm nor a certified public accounting firm and no portion of the website content should be construed as legal or accounting advice. If you are a Janiczek Wealth Management client, please remember to contact Janiczek Wealth Management, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Janiczek Wealth Management current written disclosure statement discussing our advisory services and fees is available upon request.

TM & Copyright 2017, Janiczek Wealth Management. All rights reserved.