News & Insights

Embracing Retirement by Making the Right Housing Decisions

by Ellen Li, MSBA, CFP® on 9/22/2017

As a busy financial advisor and  mother, I like to balance myself with the practice of yoga. To me, yoga is more than just the practice of body movement, it’s  also an exercise of mental discipline.  Recently one of my favorite instructors used “embrace change” as our mantra and it really resonated  with me both  professionally and personally.

At Financial Alternatives, we recently helped two clients make new housing choices in their retirement years — one client remodeled their house and redesigned the living space on the first floor to make living there safer and more comfortable. The second client decided to move to an assisted living facility. In both cases, it was a transition, a new change that our clients embraced with courage and wisdom.  Stories such as these show the importance of making the right housing decisions  during your retirement years. These decisions could  have a tremendous effect on you  both financially and emotionally.

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posted in BlogGeneralPersonal Finance

5 Steps to Take After the Equifax Breach

by Chris Jaccard, CFP®, CFA on 9/14/2017

Background

Now that some of the dust has settled on one of the worst cyber security breaches in history, we think everyone should go through the 5 steps listed below.  Why everyone?  Because there is no way to be certain if you have been affected by the Equifax breach or not.  I entered false info to test Equifax’s verification site including a last name of “test” and a SSN of “123456” only to find that it positively identified me as a person impacted by the breach.  [9/16/17 Update: Equifax’s Chief Information Officer and Chief Security Officer are “retiring” and their internal investigation continues.]

Also, please make sure everyone in your family has taken these steps including your spouse, kids in college, domestic partner, and perhaps even minor children.

Step 1: Review Your Credit Report

Use the Annual Credit Report site to review your credit report from at least one of the three listed credit reporting agencies (“CRAs”).  By law, you are allowed one copy every 12 months, so we suggest you request a report from one of the three CRAs every 4 months.  Check for rogue activity or inaccuracies, and contact the CRAs to address the issue.

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posted in BlogGeneralPersonal Finance

Thank Vanguard for Lower Investment Costs. What Makes Them Different?

by Jim Freeman, CFP® on 9/5/2017

Most investors do not know this but The Vanguard Group is radically different from all other investment firms. What makes them different is that they are owned by the funds they manage – a unique arrangement that eliminates conflicting loyalties.

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posted in BlogGeneral

Thoughts on S&P’s decision to exclude non-voting stock from indexes

by Chris Jaccard, CFP®, CFA on 8/3/2017

This week the company that maintains the S&P 500 index announced that they will start excluding companies from their indexes that issue multiple classes of shares.  So newer issues of stock from companies like Snap Inc. (SNAP) – that do not have voting rights – will not be included in many popular indexes.  This follows similar statements from FTSE Russell and MSCI earlier in the year.

These announcements highlight a couple of key reminders for investors.  First, there is a significant human element even with indexes that claim to be strictly rule-based.  Second, although index providers and professionals agree that corporate governance matters, there is no consensus on how to encourage better practices while still maintaining indexes that represent public companies.

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posted in BlogInvestments

Market Review – Q2 2017

by Financial Alternatives on 7/13/2017

  • The broad US equity market posted positive returns for the quarter but underperformed both non-US developed and emerging markets.
  • In US dollar terms, developed markets outperformed the US equity market and had similar performance to emerging markets indices during the quarter.
  • The Bloomberg Commodity Index Total Return declined 3.00% during the second quarter.
  • Non-US real estate investment trusts outperformed US REITs.

posted in InvestingNewsletters

Investing Newsletter – Jul 2017

by Financial Alternatives on 7/13/2017

  • Investors continued to earn positive returns in the first half of the year.
  • Nobody knows when the next bear market will occur, but we know that stock markets have had their ups and downs and they always will.
  • Bear markets, which are corrections of 20% or more, cannot be distinguished beforehand from normal 5%-10% corrections which occur on a regular basis.
  • Trying to sell before a bear market usually causes investors to miss the next market up turn because most market drops turn out to be just normal 5%-10% corrections.
  • Accept that bear markets occur on a regular basis and avoid panic selling your stock positions during the downturn.
  • Maintain ample conservative investments in your overall portfolio.
  • Try to ignore the day to day financial news which is often sensationalized to keep your attention.

posted in InvestingNewsletters

Market Review – Q1 2017

by Financial Alternatives on 7/13/2017

  • Looking at broad market indices, emerging markets outperformed both US and non-US developed markets during the quarter.
  • Real estate investment trusts (REITs) lagged their equity market counterparts.
  • In US dollar terms, emerging markets indices outperformed both the US and developed markets outside the US.

posted in InvestingNewsletters

Planning Newsletter – Apr 2017

by Financial Alternatives on 7/13/2017

  • Giving evokes gratitude, improves our health and makes us happier.
  • Giving increases social connection, cooperation and can be contagious.
  • From a financial point of view, effective giving maximizes your possible tax deductions.
  • Personal Charitable Gift Funds make giving appreciated investments simple and easy.
  • Giving to charity from your IRA has significant tax benefits.
  • Giving appreciated stock can be a tax efficient way to give money to family members.
  • UTMA and 529 accounts offer tax advantaged ways to pay college expenses and provide gifts to children and young adults.

posted in NewslettersPlanning

New Medi-Cal Recovery Laws; another Reason Why Proper Estate Planning is Needed

by Ellen Li, MSBA, CFP® on 5/24/2017

Long –term care in nursing homes, assisted living facilities, and home care can be very expensive. If you don’t have substantial assets or a good long term care insurance policy, the cost of care may deplete your assets over time.

What happens then?

If you qualify for Medi-Cal, (California’s version of Medicaid), it will pay for the cost of care, subject to recovery (repayment) from the estate when the recipient dies. In the past, the aggressive recovery program  put an inordinate burden on the heirs and survivors who were sometimes  forced to sell the family home to pay the estate claim or forced to sign a “voluntary lien” which accrued at 7% annual interest.

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posted in BlogGeneralPersonal Finance

5 Tips on when to file your tax return (and when to expect the information you need)

by Chris Jaccard, CFP®, CFA on 2/28/2017

Depending on your sources of income and the types of investments you have, it may be a good idea to wait to submit your tax return until close to the April filing deadline.  Based on our experience, here are some thoughts on the timing of your preparation and when you can expect to get all the information you need.

1. Potentially File Early

If you have a relatively simple tax return and only have wage (W-2), contract work/rent (1099-MISC), or social security (SSA-1099) income, you should have everything you need to file your taxes by mid-February.  Basic 1099-INT or 1099-DIV forms should be available by early February.  Also note that the IRS does not require banks or investment custodians to send some 1099s if the amount to be reported is less than $10.00, so you don’t need to hold out for “de minimus” information like this.

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posted in BlogPersonal Finance

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Disclaimer

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