Developing an Approach to Asset Management

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Our focus is not on moving your accounts – it’s on you.  You want sophisticated and attentive investment management to maximize your portfolios’ total returns in light of your risk tolerance.  Therefore, we construct each investment portfolio after an analysis of your risk tolerance, investment objectives and time horizon . . . and we can management it on various platforms.

As independent advisors, we have access to a full array of non-proprietary financial products and services as we work with you to help ensure your assets are strategically allocated, diversified and managed.  We seek to create investment strategies tailored to your needs that may include:

  • Cash and money market funds
  • Municipal, treasury and corporate bonds
  • Domestic and international stocks
  • Mutual funds and Exchange Traded Funds (ETFs)
  • Annuities
  • Alternative Investments including private placements and non-traded investments

Our goal is simple:  To help you preserve and protect your assets for you and your family.  Through our strategic approach to asset allocation and investment planning, we develop strategies that seek to help you:

  • Meet income needs over time
  • Manage risk in line with your goals and time horizon
  • Generate growth to outpace inflation

Give us a call and let us check your vitals . . .

Three Ways to Play Defense in Your Stock Portfolio

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Defensive investment strategies share a common goal — to help a portfolio better weather an economic downturn and/or bouts of market volatility. But there are some key differences, including the specific criteria by which particular stocks are selected. If you are nearing retirement or just have a more conservative risk tolerance, one of these defensive strategies may help you manage risk while maintaining a robust equity portfolio.

Tilt toward value

Growth and value are opposite investment styles that tend to perform differently under different market conditions. Value stocks are associated with companies that appear to be undervalued by the market or are in an out-of-favor industry. These stocks may be priced lower than might be expected in relation to their earnings, assets, or growth potential, but the broader market is expected to eventually recognize the company’s full potential.

Established companies are more likely than younger companies to be considered value stocks. These firms may be more conservative with spending and emphasize paying dividends over reinvesting profits. Unlike value stocks, growth stocks may be priced higher in relation to current earnings or assets, so investors are essentially paying a premium for growth potential. This is one reason why growth stocks are typically considered to carry higher risk than value stocks.

Seek dividends

Whereas stock prices are often unpredictable and may be influenced by factors that do not reflect a company’s fiscal strength (or weakness), dividend payments tend to be steadier and more directly reflect a company’s financial position. Comparing current dividend yields, and a company’s history of dividend increases, can be helpful in deciding whether to invest in a stock or stock fund.

The flip side is that dividend-paying stocks may not have as much growth potential as non-dividend payers, and there are times when dividend stocks may drag down, not boost, portfolio performance. For example, dividend stocks can be sensitive to interest rate changes. When rates rise, the higher yields of lower risk fixed-income investments may become more appealing, placing downward pressure on dividend stocks.

Temper volatility

All stocks are volatile to some degree, but some have been less volatile historically than others. Certain mutual funds and exchange-traded funds (ETFs) labeled “minimum volatility” or “low volatility” are constructed with an eye toward reducing risk during periods of market turbulence.

One commonly used measure of a stock or stock fund’s volatility is its beta, which is typically published with other information about an investment. The U.S. stock market as a whole is generally considered to have a beta of 1.0. In theory, an investment with a beta of 0.8 might experience only 80% of losses during a downswing — and thus would have less ground to regain when the market turns upward again.

The return and principal value of all investments fluctuate with changes in market conditions. Shares, when sold, may be worth more or less than their original cost. Investing in dividends is a long-term commitment. The amount of a company’s dividend can fluctuate with earnings, which are influenced by economic, market, and political events. Dividends are typically not guaranteed and could be changed or eliminated. Low-volatility funds vary widely in their objectives and strategies. There is no guarantee that they will maintain a more conservative level of risk, especially during extreme market conditions.

Mutual funds and exchange-traded funds are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.

Is It Time to Declare Your Financial Independence?

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No matter how much money you have or which life stage you’re in, becoming financially independent starts with a dream. Your dream might be to finally pay off the mountain of debt you’ve accumulated, or to stop relying on someone else for financial support. Or perhaps your dream is to retire early so you can spend more time with your family, travel the world, or open your own business. Financial independence, however you define it, is freedom from the financial obstacles that are keeping you from living life on your own terms.

Envision the future

If you were to become financially independent, what would change? Would you spend your time differently? Live in another place? What would you own? Would you work part-time? Ultimately, you want to define how you choose to live your life. It’s your dream, so there’s no wrong answer.

Work at it

Unless you’re already wealthy, you may have had moments when winning the lottery seemed like the only way to become financially secure. But your path to financial independence isn’t likely to start at your local convenience store’s lottery counter.

Though there are many ways to become financially independent, most of them require hard work. And retaining wealth isn’t necessarily easy, because wealth may not last if spending isn’t kept in check. As income rises, lifestyle inflation is a real concern. Becoming — and remaining — financially independent requires diligently balancing earning, spending, and saving.

Earn more, spend wisely, and save aggressively

Earn more. The bigger the gap between your income and expenses, the quicker it will be to become financially independent, no matter what your goal is. The more you can earn, the more you can potentially save. This might mean finding a job with a higher salary, working an extra job, or working part-time in retirement. And a job is just one source of income. If you’re resourceful and able to put in extra hours, you may also be able to generate regular income in other ways — for example, renting out a garage apartment or starting a side business.

Spend wisely. Look for opportunities to reduce your spending without affecting your quality of life. For the biggest impact, focus on reducing your largest expenses — for example, housing, food, and transportation. Practicing mindful spending can also help you free up more money to save. Before you buy something nonessential, think about how important it is to you and what value it brings to your life so that you don’t end up with a garage or attic filled with regrettable purchases.

Save aggressively. Set a wealth accumulation goal and then prioritize saving. Of course, if you have a substantial amount of debt, saving may be somewhat curtailed until that debt is paid off. Take simple steps such as choosing investments that match your goals and time frame, and paying yourself first by automatically investing as much as possible in a retirement savings plan. Time is an important ally in the quest for financial independence, so start saving as early as possible and build your nest egg over time. (Note that all investing involves risk, including the possible loss of principal, and there is no guarantee that any investment strategy will be successful.)

Keep going

Make adjustments. Life changes. Unexpected bills come up. Some years will be tougher financially than others. Expect to make some adjustments to your plan along the way, especially if you have a long-term time frame, but keep going.

Track your progress. Celebrate both small milestones and big victories. Seeing the progress you’re making will help you stay motivated as you pursue your dream of financial independence.

How Does Your Employer’s Retirement Plan Compare?

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Each year, the Plan Sponsor Council of America (PSCA) surveys employers to gauge trends in retirement plan features and participation. These vital results are used by employers and plan participants to benchmark their plans against overall averages. How does your plan compare to the most recent survey results, released at the end of 2018?(1)

Participation and savings rates

Plan participation (that is, the percentage of participants contributing to the plan) was on the rise, increasing from 77% in 2010 to 85% in 2017. Employees in the financial, insurance and real estate, manufacturing, and technology and telecommunications sectors were most likely to contribute (more than 85% of eligible employees), while those in the transportation, utility, and energy sectors (75.6%) and wholesale distribution and retail trade sectors (59.7%) were least likely.

The average amount participants contributed to their plans rose from 6.2% of salary in 2010 to 7.1% in 2017. Participants in the health-care sector contributed the most (8.7%), while those in durable goods manufacturing contributed the least (6.3%).

Roth option on the rise

Roth contributions are growing in popularity among 401(k) plans. Unlike traditional pre-tax contributions that are deducted from a paycheck before income taxes are assessed, Roth contributions are made in after-tax dollars. The primary benefit is that “qualified” withdrawals from a Roth account are tax-free. A withdrawal is qualified if the account has been held for at least five years and it has been made after the participant reaches age 59½, dies, or becomes disabled.

The percentage of plans allowing participants to make Roth contributions rose from 45.5% in 2010 to nearly 70% in 2017. Almost 20% of eligible employees made Roth contributions.

Company contributions

Nearly all employers surveyed contributed to their employees’ plans through matching contributions, non-matching contributions, or a combination of both. And it appears that employers have become more generous over time, as the average company contribution rose from 3.5% in 2010 to 5.1% in 2017. Moreover, many employers impose a vesting schedule on their contributions through which plan participants earn the right to keep the company contributions over time. In 2017, less than 40% of companies allowed their employees to become immediately vested in the company contributions.

Investment options

When it comes to your retirement plan, how many options would you prefer on your investment menu? Too few funds could limit the opportunity for an appropriate level of diversification, while too many funds might cause an overwhelming decision-making process without the vital guidance. So what’s the “right” number?

According to an article in InvestmentNews, an appropriate number of investment options (typically mutual funds) is 15 to 20.(2) And according to the PSCA, employers seem to be following this guideline, as the average number of funds offered among survey respondents was 20.

The most common types of funds offered were indexed domestic equity funds (84.6% of plans), followed by actively managed domestic equity funds (83.6%), actively managed domestic bond funds (78.9%), and actively managed international/global equity funds (77.9%). Target-date funds — those that offer a diversified mix of different types of investments based on a participant’s target retirement date — were offered in 70.6% of plans.

Overall, the two most popular types of funds, based on percentage of assets invested, were target-date funds and actively managed domestic equity funds.(3)  Information from Broadridge Investor Communications Solutions, Inc.

1PSCA, 61st Annual Survey
2 InvestmentNews, February 16, 2018
3The return and principal value of mutual funds fluctuate with market conditions. Shares, when sold, may be worth more or less than their original cost. A bond fund is a mutual fund that comprises mostly bonds and other debt instruments. The mix of bonds depends on each fund’s focus and stated objectives. Bond funds are subject to the same inflation, interest rate, and credit risks as their underlying bonds. As interest rates rise, bond prices typically fall, which can adversely affect a bond fund’s performance. Investing internationally carries additional risks such as differences in financial reporting, currency exchange risk, as well as economic and political risk unique to the specific country; this may result in greater share price volatility. The target date is the approximate date when an investor plans to withdraw money. The mix of investments in the target-date fund becomes more conservative as the date grows closer. The further away the date, the greater the risks the fund usually takes. The principal value is not guaranteed at any time, including on or after the target date. There is no guarantee that a target-date fund will meet its stated objectives. It is important to note that no two target-date funds with the same target date are alike. Typically, they won’t have the same asset allocation, investment holdings, turnover rate, or glide path.

NFL Brandon Copeland Investing For A Better Future

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We hear stories all the time about pro athletes finding a way to lose tens of millions, and even hundreds of millions, of dollars that they have made during their career. Therefore, it’s always interesting to hear about an athlete that understands how to manage his finances.

New York Jets linebacker Brandon Copeland is one such player and it is his knowledge of the real estate market that has helped set him up for life after football. Copeland was not a player who entered the NFL with high expectations or one of the huge contracts that comes with being a high round draft pick. While the 6-foot-3, 263 pounder certainly has the size to play as an outside linebacker/defensive end hybrid in the league, the perceived lack of competition that he faced while playing at Penn saw Copeland go undrafted in the 2013 NFL Draft.

After initially spending time on the practice squad of the Baltimore Ravens, Copeland landed a job with the Detroit Lions in 2015, before moving on to the Jets for the 2018 season. All that bouncing around is part of what made real estate investing so appealing to the Ivy Leaguer.

Copeland’s collegiate experience was one that seems to have set him up well to avoid the money pitfalls of most athletes. The Wharton School graduate spent a pair of summers while in school interning at an investment bank. He also spent his 2017 off-season working on Wall Street. All of those moves were made so that Copeland could get vital guidance about investing, more about real estate, and more about how to use money to make money.

It is real estate which is one of Copeland’s key focus areas when it comes to saving and investing. He opened a company in the real estate sector with his wife in 2018, a decision they came to together after spending time and energy flipping houses for profit. By expanding that hobby into a company, Copeland is able to take care of all aspects of house buying, selling, renovating, and flipping.

Despite his money smarts, it is actually some of Copeland’s relative failures that have pushed him to where he is today. A number of money mistakes in his early 20s, mistakes he share with a teammate with the same issues, have seen the linebacker go back to the classroom to teach a class called Life 101 to students. His class details how he lives on 10 to 15 percent of his NFL salary with the rest of his money dropping into long term investments like real estate.

While we may not all have the disposable capital of an NFL player, we can all learn something from Copeland and his journey. Invest smartly now, using long term strategies, to live better in the future.