News & Insights

The ABCs of Mutual Fund Share Classes

by Chris Jaccard, CFP®, CFA on 11/19/2014

You don’t need to read a prospectus to benefit from knowing the basics about mutual fund share classes. It will help you uncover your actual investing costs (especially when dealing with a broker), avoid unnecessary fees, and boost long-term performance. As you will see, even after you select a fund, it is crucial that you choose the most appropriate share class of that fund.

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posted in BlogInvestments

Are We Due For a Market Correction?

by Jim Freeman, CFP® on 6/27/2014

In a recent Wall Street Journal article Jason Zweig wrote, “As of this Friday (6/13/14) the S&P 500 has gone 980 days without a 10% decline the fifth-longest such stretch on record.”

His statement implies that a 10% correction may be right around the corner. I have no argument with that. But I would also add that a 10% correction is always right around the corner. In fact from 1900 to 2010 according to the Capital Research and Management Company 10% corrections have occurred on average once per year. And we all know how fast a year goes by.

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posted in BlogInvestments

Is it better to invest all at once in a lump sum, or little by little over time (by dollar cost averaging)?

by Chris Jaccard, CFP®, CFA on 4/29/2014

The Prevailing Research

The decision to invest all at once or little by little is one that researchers have addressed many times over the years. The results from a somewhat recent Vanguard research paper pretty much line up with others I have seen: Statistically, an investor is better off investing all at once.

About two-thirds of the time, the immediate Lump Sum Investor (LSI) beat the Dollar Cost Averaging Investor (DCA) who made installment investments over 12 months.

Outperformance Lump Sum vs Dollar Cost Averaging

Details Matter

Despite these results, the background and other factors need to be considered when choosing how quickly to invest a cash sum.

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posted in BlogInvestments

Should You Get Your Financial Advice from a Private Fiduciary or a Representative of a Publicly Traded Company?

by Jim Freeman, CFP® on 3/14/2014

John Bogle, the founder of Vanguard investments has dedicated his life to putting investors first and driving down the costs of mutual funds. In chapter 13 of his recent book, “Don’t Count On It!” he tells an interesting story of a 1958 court ruling that according to Bogle, “played a definitive role in setting the investment industry on a new course in which manager entrepreneurship in the search for personal profit would supersede manager stewardship in the search for prudent investment return for fund shareholders.”

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posted in BlogGeneralInvestments

Meeting the Retirement Income Challenge: Total Return

by Chris Jaccard, CFP®, CFA on 2/28/2014

Yields Have Fallen for Traditional Portfolios

It is well documented that portfolio income from bond interest and stock dividends (yield) has fallen for the last 30+ years. As shown below, even the yield from a 100% core bond portfolio has dropped below 4%. Clearly one old rule of thumb – moving to a highly bond focused portfolio as you age – will not supply the income and perhaps even the capital preservation that you need going forward.

Rates Have Fallen for Traditional Portfolios

Source: Vanguard

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posted in BlogInvestments

Step-Up in Basis Rule-Common Mistakes

by Ellen Li, MSBA, CFP® on 2/19/2014

What is a Step-up in Basis?

In general, when you sell an asset that has appreciated in value, you pay taxes on the gain. For example, if you own stocks, the “capital gain” is generally calculated as the difference between your purchase price and sale price. How much tax you have to pay for the capital gain depends on your tax brackets (see this chart on 2014 Capital Gain Tax Rates). However, there is a special rule for inherited property known as the step-up in basis rule. Here’s how it works: David inherits a house from his uncle who bought the house in 1982 for $70,000. The home was worth $800,000 at the time of his uncle’s death. If David decides to sell the house, his basis will be $800,000 so he will only be taxed on the difference between what he sold it for and his new stepped-up basis of $800,000.

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posted in BlogInvestmentsPersonal Finance

The stock market is at all time highs! Is now a good time to exercise your stock options?

by Jim Freeman, CFP® on 11/4/2013

If you do not already know the answer to this question, you are probably not managing your employee stock options effectively or prudently. Managing your options effectively and prudently means having an option exercising and/or hedging plan in place that is well thought out and most importantly integrated with all of your life time financial goals and objectives.

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posted in BlogInvestments

View on the Shutdown and Debt Ceiling

by Chris Jaccard, CFP®, CFA on 10/9/2013

As the Federal government shutdown moves into its second week, we wanted to offer a view on the situation. This is the first of two fiscal battles to be fought this month – with the “debt ceiling” battle coming to a head in about a week.

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posted in BlogInvestments

Buy Low and Sell High – Simple, but not Easy

by Jim Freeman, CFP® on 8/9/2013

To “buy low and sell high” is easier said than done as we all know. In fact, it is impossible to consistently time the markets year-in and year-out by being invested only when markets are rising and being out of markets only when they are falling.

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posted in BlogInvestments

Self-Discipline Matters More Than IQ

by Jim Freeman, CFP® on 6/14/2013

A research article by Angela Duckworth and Martin Seligman from the University of Pennsylvania showed that self discipline matters more than IQ in predicting academic performance. This does not surprise me. Hard work, discipline and true persistence are a hard combination to beat over the long-term.

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posted in BlogGeneralInvestments

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Posts are general in nature and do not constitute the rendering of legal, investment, accounting or other professional advice.