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Giving Clients a Fair Shake

Written by Brian Puckett, CFP®, CPA/PFS, Attorney at Law.

As we've previously written, there's a big difference between stockbrokers and true financial advisors. Brokers are salespeople: Because they're paid to sell you investments or insurance, they operate under a continual conflict of interest.

True financial advisors, on the other hand, only sell advice, not products. Unlike brokers, they are what's known as fiduciaries, meaning they must place clients' interests ahead of their own. Align Wealth Management is a fiduciary firm.

There's been a major development on this front. Early this month, the Department of Labor ruled that all advisors giving guidance to clients with 401(k)'s or IRAs must adhere to a more stringent "fiduciary" standard. This new rule, which goes fully into effect in 2018, is aimed squarely at brokers. For the first time, brokers will have to act more like true advisors.

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Maximize Your Returns by Minimizing Your Taxes

Written by Brian Puckett, CFP®, CPA/PFS, Attorney at Law.

Everyone loves earning money, including investment gains—but what's most important is how much you keep after taxes.

And as you know, taxes are becoming a higher hurdle. The top rate is now 39.6%, plus a 3.8% Medicare surtax on investments for high earners. And that doesn't include state taxes.

Minimizing taxes, then, is essential for those who want to build real wealth. That's especially true if we experience more moderate market returns over the next few years. Every dollar counts—and that's true whether you have a taxable investment account or a tax-deferred account. Eventually, Uncle Sam will want his cut.

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Your Portfolio’s Secret Weapon

Written by Brian Puckett, CFP®, CPA/PFS, Attorney at Law.

The stock market hasn't been a happy place so far in 2016. But for long-term investors, the real risk right now is losing sight of the big picture and making counter-productive short-term decisions.

So we'd like to provide some perspective on why a properly designed, long-term portfolio is still a good place to be. First, it's worth pointing out that the market correction that we've seen in the past couple of months isn't unusual. In fact, it's pretty routine: Historically, market declines of at least 10% have occurred once a year.

Temporary declines are the market's self-correcting mechanism, its way of "repricing" stocks, bonds and other investments that have become expensive relative to their fundamentals.

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Our 2016 Prediction: Market Predictions Will Err

Written by Brian Puckett, CFP®, CPA/PFS, Attorney at Law.

The beginning of a new year wouldn't be complete without a chorus of financial experts making predictions about the stock market.

But unless 2016 is very different from years past, the experts will be terribly wrong. The record shows that even the brightest minds on Wall Street get their predictions wrong most of the time.

Consider the research of Motley Fool columnist Morgan Housel. Housel studied forecasts that 22 of Wall Street's top strategists made for the Standard & Poor's 500 index from 2000 to 2014. He found that their predictions differed from the S&P's actual performance by an average of about 15 percentage points annually.

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Turning Investment Losses Into Gains

Written by Brian Puckett, CFP®, CPA/PFS, Attorney at Law.

Even in a bull market, certain investments within a diversified portfolio are likely to post losses. The good news, though, is that these losses can be put to good use through a process known as tax-loss harvesting.

In a nutshell, tax-loss harvesting enables you to offset the capital gains taxes that you've incurred on your successful investments. It's a service that we at Align Wealth Management provide automatically for our clients' taxable investment accounts.

Here's an illustration of how tax-loss harvesting works. Suppose Investment A has a realized gain of $1,000, while Investment B has a loss of $1,000. By selling Investment B, we realize a loss that will neutralize the $1,000 capital gain for tax purposes.