03Oct
Is There a Hidden Agenda with Robo-Advisors?
Investing
The market for working with robo-advisers is growing rapidly.

As with anything that increases in popularity, there is new research available about these seemingly “neutral” programs.

Before I share it, let’s define a robo-“advisor”.

Roboadvisors are a class of financial adviser that provide financial advice or portfolio management online with minimal human intervention.  They provide digital financial advice based on mathematical rules or algorithms. (Wikipedia)

In other words, this is nothing more than computer- based programs into which certain data is fed about the investor.  Then, the computer applies algorithms to the data and spits out an allocated investment program.

Here in lies the potential problem.

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22Sep
Investing Tips from Warren Buffett
Investing

Warren Buffett is arguably one of the best investors of all times.  Here are three investing tips from the “Oracle of Omaha”.

  1. “Never lose money.”

    While even the legendary Buffett has suffered stock market losses, one key to his success is that the losses are small and infrequent compared with his larger long-lasting positions.(Please do not take this direct quote literally.  There are no guarantees in investing and there is always the potential to lose money.)

  2. “Be an investor, not a speculator.”

    Speculators tend to bet on price without paying much attention to earnings or dividends.  Speculators tend to be short term technical traders.  On the other hand, investors tend to take the long view and expect to be paid continuously for owning an asset.  This could be in the form of interest or dividends.

  3. “Diversify, diversify, diversify.”

    This advice includes owning both U.S. and International positions, stocks and bonds, multiple sectors, and non-correlated asset classes.

While we understand that each client’s investment strategy and risk tolerances are unique, I hope that these general investing tips are both of interest and value to you.

I also look forward to sharing a conversation with you, to discuss these concepts further and explore how they could apply to your investment goals and objectives.

(Credit for some of this information goes to Steve Jurich, IQ Wealth Management September 2017.)


Barbara A. Culver

CFP®, ChFC®, CLU, AEP®
Resonate, Inc.
(513) 605-2500

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16Aug
How Resonate Provides Value
Economy
Richness of LifeIn case you have not read the first blog in this short series, I invite you to do so.

Since completing it, I have given thought to which of the many client stories I wanted to share with you.

The first story is that of a recent widow who was referred to us.  When I met with Alice, (not her real name, of course), I found her to be very clear and communicative in spite of the recent and sudden passing of her husband.

The stories she told me about her experiences in the financial services world both angered and saddened me.  Assumptions were made that, of course, she would not be able to “handle her own affairs nor make thoughtful decisions” primarily because she was a woman.  On several occasions, male advisors from different companies assured her that “they knew what was best” and even provided “solutions” without bothering to understand the client and her life.

In contrast, I discovered, that when given the opportunity, this woman was quite amazing in how quickly she was adjusting to new life and found her thought process to be remarkably clear.

This included her clarity of thought that the “solutions” provided probably benefited the advisor more than they would benefit her.  Upon discussion and review of the various recommendations, I supported her thinking.

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04Aug
Client Fees & Value
Economy
It seems that everywhere we turn today, the media is emphasizing advisory and product fees.

Common questions are:

“Are you paying too much?”

“Do you know what you are paying for?”

I consider this type question to be one-dimensional and shortsighted.  For example, if one wants to “stay on the numbers’ side”, then where is the question:

 “Are you receiving value for your fees?”

The interesting thing that happens when we insert the word “value” is that we add the possibility for an intangible answer in addition to the one-dimensional tangible answer.

Here are two recent examples of how we have added both tangible and intangible value for our clients:

Example One:

Clients recently came in for their conversation with us, which includes portfolio review. They brought a folder with them and asked: “Will you please look over these estimates for us to pre-pay our funerals?”

This led to a conference call with the clients and the director of the funeral home.  At the end of the conversation in which I asked many questions, the clients said, “Thank you so much.  We understand this now, and are very pleased with the decisions we have made.  Mostly, we feel wonderful that we have taken this burden off of our family.”

Tangible Results: the clients ended up saving $1100 from the original quote.

Resonate Time: 90 minutes

Resonate Fee for this work: $0 

 

Intangible Value Received by the Client: Relief; peace of mind.

Intangible Value Received by Resonate: Knowing we did the “right thing” for aging clients.

 

Another Example…

A client called recently and said: “I’m not sure if these new legal documents prepared by an attorney match our objectives discussed with you.”

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18Jul
IRS on Your Mind? – Here Is What NOT To Try!
Taxes

The subject of taxation is not normally a welcomed topic – here are some “fun” court cases provided by Kiplinger’s.

“A Little Peace and Quiet”

A busy tax preparer ran her business from her home.  During tax season, she felt so harassed from clients calling her at all hours of the day and night that she occasionally booked a room at a local hotel for some peace and quiet.  On her own return, she deducted the cost of this rest and relaxation as a business expense.  Unfortunately for her, the Tax Court ruled that the cost of her good night’s sleep was a nondeductible personal expense.

 

“Billing Mommy”

A wife was sent to jail for killing her husband.  Although she was named as the primary beneficiary of his 401(k) plan, state law barred her from receiving any of the funds because of her crime.  The account was paid to their son instead as the secondary beneficiary.  He claimed that his mother should be taxed on the payout as the intended beneficiary.  An Appeals Court gave him an A for effort but an F in taxation, ruling that he owes tax on the distribution.

 

“Wrecking a Rental Car”

An airline employee needed to get to New Orleans but was stranded by heavy fog.  He worked out a great deal with a rental car company where he paid nothing for a car that the company needed driven to New Orleans.  Unfortunately, he wrecked the auto in Mississippi and had to pay for the damages.  He tried to deduct the payment as a casualty loss, but the Tax Court denied his write-off because he wasn’t the owner of the vehicle.

Now here’s a little good news:

Kiplinger’s recently a report on “The LEAST Tax Friendly States in the U.S. for 2016”.

The good news is that Ohio, Kentucky, Florida, and Indiana are NOT on the list.

Here are the factors that were considered to create the list: income, property, gas and sales tax.

In order from the LEAST tax friendly, here are the top states. (Before reading further, it might be fun for you to see how many of them you could guess.)….  California, Hawaii, Connecticut, New York, New Jersey, Minnesota, Maine, Vermont, Illinois, and Rhode Island!

From our Blogs page, simply search for “tax” to find additional articles of interest.

Please note that, while we are not accountants and cannot provide tax advice, we do work cooperatively with very qualified accountants.  The information that we will share is available to the general public and should not be construed as giving income tax advice.

Barbara A. Culver
CFP®, ChFC®, CLU, AEP®
Resonate, Inc.
(513) 605-2500

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24May
What the Worldwide Aging Population Means for Women: Part 3
Health Care Costs

The first two parts of this blog provided the information supporting the fact that women face an unfair disadvantage in terms of planning for a successful retirement.

If you’ve not yet read parts one and two of this blog, please take a few moments to do so.

Here are the action steps that women can take to help prepare themselves for healthcare and retirement costs.

  1. Tell your story and expect to be heard and honored. You and your planning needs are unique.  You deserve the opportunity to “share your story as well as your hopes, fears and dreams”.

Regardless of your current life experience and financial knowledge, you deserve to be listened to without judgment.

You deserve to have all of your questions answered honestly and completely.

You deserve transparency around fees, commissions, and any other form of advisor compensation.

  1. Create a plan and follow it. Again, this is “your plan”.  It needs to be designed specifically for you to get you from “where you are to where you want to be”.
  1. Invest with appropriate risk level. Again, your investment portfolio needs to be designed specifically for you and what it is you want to accomplish.
  1. If you are of a pre-retirement age, be prepared to save aggressively to meet your goals.
  1. If you are already retired, then the allocation of your investment portfolio may be even more critical because you may no longer have the capacity to continue to save to reach your retirement goals.
  1. Be sure you understand how programs such as Social Security, Medicare, and employer-sponsored retirement plans can best be coordinated for maximum results.
  1. Consider products such as life insurance with long-term care riders, products that are designed to create guaranteed lifetime income in retirement, products that are designed to create income tax savings, and anything else that may be appropriate to help you reach financial peace of mind.
  1. Once your plan is in place, be sure to continue with annual conversations with your team of advisors.

As you can see, planning done well is complex and involves the integration of both programs, products and planning.

Do you remember the old Greyhound bus slogan, “Go Greyhound and Leave the Driving to Us”? 

It is suggested that the new slogan might be “Keep Texting and Leave the Driving to Us!”

Whether you find yourself familiar with the first slogan or relate more to the new slogan, we invite you to a conversation at Resonate.  Regardless of your age, our motto is to help you define and discover what Richness of Life means to you.  Then, it is our job to help create the pathway for you to experience this desired destination.

Barbara A. Culver
CFP®, ChFC®, CLU, AEP®
Resonate, Inc.
(513) 605-2500

 

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19May
What the Worldwide Aging Population Means for Women: Part 2
Health Care Costs

In the first part of this three-part blog, we talked about why the U.S. demographics of an aging society present more of a challenge for women than for men.

Here are some additional thoughts for your consideration:

In part one, we suggested that the fact that women still tend to outlive men by 3 to 5 years definitely contributes to the financial challenges that women face in retirement.

Here is a chart that supports that information:

The second reason that women face an uneven challenge is because we still experience a disadvantage in the work place.  In addition to the fact that women are still more likely than men to leave the workforce intermittently, we also know that women are more likely to hold lower- wage and part-time jobs, both of which are detrimental to funding future retirement.

So what can women do about this?  That will be the focus of part three in this series.

If you’ve already read enough, please contact us now.  Otherwise, please be sure to read part three.

Barbara A. Culver
CFP®, ChFC®, CLU, AEP®
Resonate, Inc.
(513) 605-2500

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11May
What the Worldwide Aging Population Means for Women: Part 1
Health Care Costs

In his annual letter to shareholders, BlackRock’s Larry Fink shares these thoughts on April 10, 2017.

“The graying of the population in developed countries is without precedent in human history.

While most developing countries outside of China can look forward to a demographic tailwind for many years, developed countries are rapidly aging.”

 

 

(1)

“According to estimates by the United Nations between 2015 and 2030, the number of people in the world aged 60 years or over is projected to grow by 56%, from 901 million to 1.4 billion.  The number of people aged 80 years or over, the “oldest old” persons, is growing even faster. Projections indicate that in 2050 the oldest old will number 434 million, having more than tripled in number since 2015, when there were 125 million people over age 80.”

If you happen to be female, the situation is even worse.  For decades to come, women’s life expectancy on average will continue to be 3 to 5 years longer than that for men.  This results in higher healthcare expenses in addition to coping with inflation for a longer period of time. (2)

If you are age 50+ and in relatively good health, please do not wait any longer to contact us!

We will work with you to determine what you need in the way of income and assets to help assure a successful retirement.  Then, we will work with you to create a plan to fulfill that goal.

Barbara A. Culver
CFP®, ChFC®, CLU, AEP®
Resonate, Inc.
(513) 605-2500

 

Source:
(1) World Bank
(2) “Missed Opportunities” by Sue Watt, Morningstar April/May 2017
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09May
Why Might I Want to Invest in Emerging Markets – 2 of 2
Economy

(Nothing I write is to be construed as a recommendation to buy or sell.  This blog is intended for informational use only.  I give full credit to Krishna Momani, Chief Investment Officer of the Oppenheimer Funds, for the information in this blog).

If you missed Part One of this blog, may I encourage you to read it before Part Two?

As you will see in the following chart, growth rates in many of the largest emerging market economies have stabilized and are now trending higher, commodity prices have bottomed, and currencies have steadied, bringing inflationary pressures under control.

Next, as you will see in the following chart, China is successfully transitioning from a manufacturing economy to a service-oriented economy.

The cyclical emerging market economic backdrop combined with still-relatively cheap valuations suggest that emerging market equities are poised to outperform the developed world over the next market cycle.

If you have questions or interest in learning more, I’d love to share a conversation with you!

Barbara A. Culver
CFP®, ChFC®, CLU, AEP®
Resonate, Inc.
(513) 605-2500

Source of charts: OppenheimerFunds, “The Case for Emerging Markets”, Krishna Memani, CIO
Disclosure:  These views represent the opinions of OppenheimerFunds, Inc. and are not intended as advice or to predict or depict the performance of any investment.  These views are as of the close of business on March 31, 2017, and are subject to change based on subsequent developments.  Equities are subject to market risk and volatility; they may gain or lose value.  Fixed-income investing entails credit and interest rate risks. Bonds are exposed to credit and interest rate risk.  When interest rates rise, bond prices generally fall, and a fund’s share prices can fall.  Investments in securities of growth companies may be especially volatile. Foreign investments may be volatile and involve additional expenses and special risks, including currency fluctuations, foreign taxes and geopolitical risks.  Emerging and developing markets may be especially volatile. Eurozone investments may be subject to volatility and liquidity issues.  The mention of specific countries, regions, or sectors does not constitute a recommendation by any particular fund or by OppenheimerFunds, Inc.
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01May
Why Might I Want to Invest in Emerging Markets – 1 of 2
Economy

While there is certainly not a “one-size fits all” answer to this question, I wanted to include some interesting information on emerging markets.

This is a two-part blog.  My goal in writing it is to blend some history of emerging markets with current trends, which I hope you find interesting.

(Please note that nothing in this blog is intended as a recommendation to buy or sell anything.  It is meant to be purely informational.)

Krishna Momani, the Chief Investment Officer of the Oppenheimer Funds, writes:

“In the first 13 years of this century, emerging market equities outperformed U.S. equities by over 7% per year.  That’s almost 200% of cumulative outperformance.”

“The following three years were not as kind to emerging market investors.  Emerging market assets suffered from a series of macro headwinds including weaker global growth, sharp declines in emerging market exports, a collapse in commodity prices, falling currencies, rising inflation, and capital flight as U.S. monetary policy conditions normalized.”

Emerging Markets Had Been Underperforming Since 2013

Prior to 2017, emerging market equities experienced a prolonged period of underperformance relative to developed market equities.  A confluence of factors weighed on emerging market performance including weaker global demand for exports, a slowdown in Chinese growth, the end of the multi-year commodity and credit-driven boom, and tighter U.S. monetary policy.

In particular, the onset of monetary normalization in the United States, beginning in earnest with the tapering of U.S. Federal Reserve (Fed) asset purchases in 2013 and continuing with the first Fed interest rate hike in December 2015, resulted in a massive flight of capital out of the emerging markets and into U.S. dollar-denominated assets.

The tide now appears to be turning.  The cyclical case for emerging market equities is supported by the following:

  1. Economic growth is improving (in some instances, such as in Russia and Brazil, off of
    recession lows) and exceeding expectations.
  1. Inflation has fallen rapidly. Real interest rates are now positive in emerging markets,
    suggesting that this time modest U.S. interest rate hikes will not result in significant capital
    In addition, policymakers are better positioned to support economic growth.
  1. Emerging market equities are trading at attractive valuations compared to developed
    market equities.
  1. The U.S. dollar is unlikely to be a headwind for U.S.-domiciled international investors.
    Many of the emerging market currencies are already trading at steep discounts.
  1. The likelihood that a series of Fed rate hikes will derail the nascent emerging markets economic recovery is small.

While “they may be down,” Momani encourages us to not count emerging markets as “out”.  I’ll discuss the reasons for this in Part Two.

If you would like to talk about anything in this blog, I’d love to share a conversation with you.

 

Barbara A. Culver
CFP®, ChFC®, CLU, AEP®
Resonate, Inc.
(513) 605-2500

 

 

Source of charts: OppenheimerFunds, “The Case for Emerging Markets”, Krishna Memani, CIO

Disclosure:  These views represent the opinions of OppenheimerFunds, Inc. and are not intended as investment advice or to predict or depict the performance of any investment.  These views are as of the close of business on March 31, 2017, and are subject to change based on subsequent developments.

Equities are subject to market risk and volatility; they may gain or lose value.  Fixed-income investing entails credit and interest rate risks.  Bonds are exposed to credit and interest rate risk.  When interest rates rise, bond prices generally fall, and a fund’s share prices can fall.  Investments in securities of growth companies may be especially volatile.  Foreign investments may be volatile and involve additional expenses and special risks, including currency fluctuations, foreign taxes and geopolitical risks.  Emerging and developing markets may be especially volatile.  Eurozone investments may be subject to volatility and liquidity issues.  The mention of specific countries, regions, or sectors does not constitute a recommendation by any particular fund or by OppenheimerFunds, Inc.

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