Print
PDF

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.

Print
PDF

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.

Print
PDF

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.

Print
PDF

Social Security Closing a Lucrative Loophole

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

If you're planning for retirement, you should be aware of Congress' recently enacted budget deal. Why? Because it eliminates a popular Social Security claiming strategy known as "file and suspend."

File and suspend is essentially a way for married couples to squeeze the maximum amount of benefit dollars from Social Security over their lifetimes. In some cases, file and suspend is projected to add hundreds of thousands of dollars to a couple's lifetime retirement income.

Before we go any further, it's important to clarify that couples who already have the file-and-suspend strategy in place will not be affected by the new legislation. In fact, there is still a six-month window for couples who meet certain age requirements to use file and suspend before the law's provisions take effect.

Print
PDF

Bringing the Evidence Home

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

Welcome to the final installment in our Evidence-Based Investment Insights: Bringing the Evidence Home. We hope you've enjoyed reading our series as much as we've enjoyed sharing it with you. Here are the key take-home messages from each installment:

  1. You, the Market and the Prices You Pay. Understanding group intelligence and its effect on efficient market pricing is a first step toward more consistently buying low and selling high in free capital markets.
  2. Ignoring the Siren Song of Daily Market Pricing. Rather than trying to react to ever-changing conditions and cutthroat competition, invest your life savings according to factors over which you can expect to have some control.
  3. Financial Gurus and Other Unicorns. Avoid paying costly, speculative "experts" to pinch-hit your market moves for you. The evidence indicates that their ability to consistently beat the market is rarer than rare.