Month: July 2023

I remember on day one of a three-day winter climb in the White Mountains of New Hampshire my Whisper Lite stove, the only option for heating our freeze-dried food, malfunctioned. While I weighed the options of feeding the caloric crave with yet more frozen trail bars, or raw, freeze-dried dinners, a gracious and more prepared camper restored my defunctive apparatus with the required spare parts in minutes, before his meal was cooked, with a smile! Returning home, I immediately purchased a second stove and full repair kit, and repeatedly disassembled and reassembled it. Knowledge is useful in the adventures of life, and often critical, especially in the world of investing. Consider the consistent practices of many professionals as you strive to become a better investor yourself:

• Understand the underlying security options available to you. Common and preferred stocks, bonds, managed futures, REIT’s, MLP’s, and cash equivalents each possess distinct characteristics, risks and potential, and behavior patterns in specific market environments. Gain a basic knowledge of both the favorable and unfavorable conditions for each asset class.

• Understand the account types available to you. Direct mutual funds, brokerage accounts, company retirement plans, traditional and Roth IRA’s, and dividend reinvestment plans are common account types. Each has peculiar characteristics and varying qualifications and expenses. Discover the combination of these which best aligns with your financial plan and can offer the most comprehensive long-term tax benefits.

• Have a specific “BUY” strategy and stick to it. Building an investment portfolio requires investing, so get to it! Dollar-cost average long-term investment programs, especially in the early years. Never miss an employer-matched contribution. Follow strict parameters when making single purchases. Do not attempt to catch a falling knife by purchasing a cratering stock, avoid ‘doubling down’ on a losing position, and don’t feel rushed or pressured to buy. Courageously add to winning positions.

• Maintain an exit plan on all trades at the time of purchase, and honor it. Run with your winning trades, but dump losers with ruthless expediency! Maintain stop-loss orders on all non-forever holdings privately; avoid entering a stop-loss order as a pending trade with your broker. Know the conditions in which you will sell a given holding.

• Diversify your investment portfolio across various industries and asset classes. In the mountains it is said, “cotton kills”, but in the financial world it is said, “concentration can kill”!

• Favor capital-efficient, dividend-paying businesses in leading industries, and automatically reinvest all distributions. Limit speculations in both size and frequency. 

Seek to become a methodical wealth producer by consistently making wise investment decisions with tested investing techniques. Think about it, and blessings on your efforts!

Shaun

“Rule #1 is never lose money. Rule #2 is never forget rule #1.” ~Warren Buffet

“Give a portion to seven, and even to eight, for you know not what disaster may happen on earth.” ~Ecclesiastes 11:2

“Know well the condition of your flocks, and give attention to your herds.” ~Proverbs 27:23

The opinions voiced in this material are general, are not intended to provide specific recommendations, and do not necessarily reflect the views of LPL Financial.

All investing involves risk including the possible loss of principle. No strategy ensures success or protects against loss. Dividend payments are not guaranteed and may be reduced or eliminated at any time by the company.

Dollar cost averaging involves continuous investment in securities regardless of fluctuation in price levels of such securities. Investors should consider their ability to continue purchasing through fluctuating price levels. Such a plan does not insure a profit and does not protect against loss in declining markets. 

Asset allocation does not ensure a profit or protect against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

https://www.fivestarprofessional.com/spotlights/90982

Award based on 10 objective criteria associated with providing quality services to clients such as credentials, experience, and assets under management among other factors. Wealth managers do not pay a fee to be considered or placed on the final list of 2012/2022 Five Star Wealth Managers.

I’m no Master Gardener, but I do immensely enjoy time in my vegetable garden, and so appreciate the opportunity to grow my own healthy food. People see my garden and assume it requires an absurd amount of time to cultivate and maintain; the truth is it takes a small amount of time every day. Appropriating daily attention to a thing requires the understanding it is a process, not an event. Most gardeners do a big planting in the spring, enjoy a big harvest in the fall, and apart from the grocery store, otherwise might starve! How will you replace a sufficient portion of your earned income for a 25 year period in a high inflation environment without outliving your capital? Consider the following ‘best practices’ as you cultivate, and then receive from, your own retirement income plan:

• Healthy vegetables require nutrition, hydration, proper P/H, and sunshine. Your future retirement will likely require income-producing capital, and to build capital, you must invest. Many people strive to invest at least 10% (and even 20%) of their gross income for retirement, appropriate it primarily to the ownership of great businesses in tax-advantaged investment accounts, and fund it with hard work, career advancement, and frugality.

• Manage the risk level (and stock exposure) of each retirement asset based on two things: 1) your investment objective for that asset, and 2) time until drawdown begins.

• Advanced gardeners incorporate companion planting to reduce weeds, and to increase yields by more efficiently tapping into the base of nutrients. Consider developing a thoughtful withdrawal strategy from a companion of income sources that meets the annual need in a tax-efficient and wise investment manner without disrupting your estate plan. Employ the assistance you need to pull this off.  

• Understand the rules and taxability of your Social Security benefits, and how this income source fits into your plan. Make your Social Security election based on the highest probable lifetime net income benefit, considering all factors. 

• The ‘staples’ of my vegetable garden are asparagus, beans, potatoes, tomatoes, and green zucchini; everything else is experimental. Often a staple of successful retirement plans is an income source you can’t outlive. If Social Security is your only source of permanent income, consider the guaranteed income benefit of annuities for a select portion of your retirement capital. Scrutinize annuity expenses ruthlessly.

• Consider a Roth Conversion in low AGI tax years.1 Realize the period between partial retirement, and when Required Minimum Distributions (RMD’s) begin, are often the most beneficial years to “fill up” a lower tax bracket with an annual Roth Conversion. Never miss a high benefit Roth Conversion opportunity to neglect! Touch base with your CPA on this issue annually. The second beet planting must go in before August!     

Teach these things to your children when they are young. Enjoy the process. Think about it. Shaun

“Never depend on a single income. Make an investment to create a second source”. ~Warren Buffet

“Wealth gained hastily will dwindle, but whoever gathers little by little will increase it.”  ~Proverbs 13:11

1 Smart Asset, “8 Steps to Building a Successful Retirement Income Planning Strategy”, Javier Simon, July 11, 2023. https://smartasset.com/retirement/7-situations-when-you-need-a-financial-advisor-most

The opinions voiced in this material are general, are not intended to provide specific recommendations, and do not necessarily reflect the views of LPL Financial.

Investing in stocks offers no guarantees and involves various risks and the potential for loss of principle. Investors should consider the risks before investing in stocks.

Fixed and Variable annuities are suitable for long-term investing, such as retirement investing.  Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. Guarantees are based on the claims paying ability of the issuing company. Withdrawals made prior to age 59 ½ are subject to a 10% IRS penalty tax and surrender charges may apply.  Variable annuities are subject to market risk and may lose value.

Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

https://www.fivestarprofessional.com/spotlights/90982

Award based on 10 objective criteria associated with providing quality services to clients such as credentials, experience, and assets under management among other factors. Wealth managers do not pay a fee to be considered or placed on the final list of 2012/2022 Five Star Wealth Managers.

Some climbers think of mountaineering as a challenging event and an opportunity for accomplishment. Though these are aspects of climbing, defining the sport this way can lead to summit fever, which can kill you. Climbers who learn to embrace the process of mountaineering think of each climb as a unique and exciting adventure, from choosing a mountain wilderness to call home, to unpacking and penning a narrative of the expedition. Which perspective do you suppose offers a safer, more fulfilling, and more enduring experience? I have started to think about those to whom I will leave my cache of climbing gear when the time arrives. That gear will come with a history, stories and memories, and a renewed life and mission! Estate planning and mountaineering share these dynamics. Carefully working through the following estate planning list is akin to mapping a major mountain excursion:

• The wise mountaineer always knows exactly what, and where each item is in the pack. Store a well-protected digital and/or hard-copy spreadsheet of all physical, functional, collective and financial assets, and share it with your executor. Feel free to request an Estate Planning Checklist from my office.

• List your debts. Include monthly payment amount with method, payment date, loan duration, and contact information.

• Experienced climbers think in grams not ounces. Consolidate individual security positions with the same registration into a brokerage account. Name, and periodically update beneficiary designations for every ‘beneficiary-eligible’ asset. Store your most recent beneficiary list with vital documents.        

• Make a membership list. This will benefit organizational members, family and friends, and may cash in on otherwise forfeited life insurance coverage.

• Gather vital papers, like estate planning and personal identity documents, and deeds to vehicles and property, and safekeep them together with your executor’s knowledge and access. Take this opportunity to review the specific “present” funding of your estate plan with your attorney.

• Permit closure of your digital life with a list of websites, usernames, and passwords.  

• Every mountaineer needs a partner, and is only as good as that partner. Become a discerner of character and do business with those you trust, and with whom you communicate well. Instigate an ongoing dialogue between your tax preparer, esquire, and wealth manager. Have one agree to ‘moderate’ the process with exceptional note-keeping.¹ 

• Understand the legal authority your designated Powers of Attorney and Health Proxies will have over you in the case of your incapacity, and appoint such powers exclusively to those whom you trust with your welfare and life.

• Put in place the legal documents required to best protect and distribute your estate, in all matters perceived, and keep them current. Include a personal letter to convey your purposes and intentions in the bequest of your earthly belongings.¹   

Enjoy your estate planning journey, and may it bless your heirs as you intend. Think about it, Shaun.

“Know well the condition of your flocks, and give attention to your herds.” ~Proverbs 27:23

“A wise man leaves an inheritance to his children’s children.” ~Proverbs 13:22

1 TRW LAW, “25 Steps for Estate Planning”, 2023 The Law Offices of Travis R. Walker, P.A. https://www.traviswalkerlaw.com/25-steps-for-estate-planning/

  The opinions voiced in this material are general, are not intended to provide specific recommendations, and do not necessarily reflect the views of LPL Financial.

https://www.fivestarprofessional.com/spotlights/90982

Award based on 10 objective criteria associated with providing quality services to clients such as credentials, experience, and assets under management among other factors. Wealth managers do not pay a fee to be considered or placed on the final list of 2012/2022 Five Star Wealth Managers.