Porter tells potential clients that he focuses on not guessing the market by buying index funds that buy broad swaths of the market; keeping costs as low as possible, such as fewer transaction costs and not paying analyst fees; and focusing on tax efficiency, by relocating assets from tax-inefficient types of investments to tax-advantaged accounts.
Eliminating all biases when investing is nearly impossible. Financial markets are a prime example of the way human biases can manifest at either end of a spectrum of emotions: This is the core of behavioral finance, where the study of economics and psychology intersect. People don’t always make rational decisions when it comes to money.
The reason a person receives a 401(k) refund check is most likely that the employer’s plan has failed one or both of these tests, which prevents the employee from contributing above a certain amount. And that occurs when eligible participants in the company’s 401(k) plan are not contributing enough of their income, and employers are
When pay day rolls around, be sure to take a close look at your pay stub. This could make the difference between owing the Internal Revenue Service in 2019 or snagging a refund. The IRS kicked off its “Check Your Paycheck” campaign on Monday, asking taxpayers to take a peek at their pay stubs and
Of course, this is what markets do — they have bubbles, corrections and crashes. But the recent tumult on Wall Street serves as a stark reminder of the role that Social Security plays as a stable source of income, insulated from the inevitable fluctuations in private investments — including the 401(k) plans that many Americans
It’s hard to envision a slowdown in global economic growth on the horizon unless we get into a trade war with China. That could happen, but the current betting on Wall Street is that cooler heads will prevail. With this good news at investors’ backs, it’s understandable to be a bull, but investors also need
With interest rates rising and volatility up in the markets, however, investors may be shifting away from pure indexing toward more active management of investment risk. “It’s about downside protection,” said Ryan Sullivan, a vice president of global ETF services at Brown Brothers Harriman. Sullivan helps fund companies to design and administer their products. “There
Some financial experts are not bullish on cryptocurrency as an investment. They wonder: Is it really the next big thing, or will it run its course? In fact, they urge clients not to waste their hard-earned money on bitcoin. And what about blockchain, the technology behind bitcoin? Right now a variety of companies are trying
Starting this year, under the Tax Cuts and Jobs Act, homeowners can only deduct the interest on the debt if the money from a HELOC went toward buying, building or substantially improving the home that secured the loan. Here’s the loophole: There’s no clear way for the Internal Revenue Service to ensure that this is
Little can strike more fear in the heart of taxpayers than the prospect of the Internal Revenue Service questioning their tax return. Yet, for most people, the chances of an audit are slim. Of the nearly 148 million individual tax returns filed in 2016, just 0.7 percent (about 1 million) were audited, according to the
The next step is for them to work with an advisor whose experience, business model, training and education allow clients to believe absolutely in their advisors’ objectivity and professionalism in managing their portfolios, he added. “There is no behavior that is irrational around investing when we understand [clients’] underlying thoughts and beliefs,” said Rick Kahler,
The new federal tax-reform law made some substantial changes to the U.S. tax code and obviously has a major impact on American taxpayers’ financial plans. We spoke with several members of the CNBC Digital Financial Advisor Council and had them weigh in on strategies they are recommending to their clients based on the new tax
Now that the Trump administration’s highly anticipated new tax legislation is airing out, some living in high-tax states such as California, New Jersey or New York are probably weighing the pros and cons of staying put or pulling up stakes and retiring to lower-tax states, like Florida or Texas. I am actually seeing plenty of
Preparing the next generation for leadership includes guidance on managing resources and wealth. This lesson is gender neutral despite the gender-specific reference made by King T’Chaka. In another poignant scene T’Challa’s mother, Queen Ramonda, also affirmed the parental and community influence in grooming T’Challa for his ascension to the throne. The state of affairs for
Gen X is the first generation to lose several retirement benefits the previous generations had taken for granted. It’s the first generation that can no longer rely on employer pensions for a secure retirement, and will be the first generation unable to rely on full Social Security benefits, which are on track to be depleted
You might find it bizarre that people are actually falling for the scam. Well, don’t be. Taxpayers are taking the bait and losing significant amounts of money, according to the Treasury Inspector General for Tax Administration. The Treasury Department reports that more than 10,000 victims have collectively paid in excess of $54 million as a
Americans have more than doubled their spending on so-called “drunk shopping”— or making purchases under the influence of alcohol — say researchers at personal finance comparison website Finder.com. According to the site’s 2018 survey, U.S. drinkers now spend an average $447.57 per person a year while blitzed, up from $206 a person last year, totaling
If you’re a financial advisor who is already serving as a fiduciary, you need to be using that to your competitive advantage when working with clients. “Most clients have no clue that right now the law doesn’t require advisors to put their clients’ best interests first, like a doctor, like a lawyer,” Josh Robbins, chief
What does the current market environment favor? One sector is financials, as measured by Financial Select Sector SPDR ETF (XLF) and iShares U.S. Regional Banks ETF (IAT), which are up by approximately 5 percent and 8 percent, respectively, this year. There are a few important lessons I’d like to share with investors about rising interest
John J. Miller Photogrpahy | Getty Images In Indianapolis, the nation’s 15th largest city, homeowners need only earn the median area income in order to afford the median priced home. Record-low inventory is causing home prices to rise across the U.S., so higher salaries are now required to afford monthly housing payments, according to SmartAsset.
However, for many people with hefty state and local tax bills, the new federal tax law gives municipal bonds some appeal. The new law caps the state and local tax deduction that can be claimed on federal returns at $10,000. For many households, that cap will outweigh any potential benefits from other changes in the
A period of very calm and quiet trading has lulled investors into a sense of complacency that, by some measures, has not been seen in years, according to some financial advisors. The recent sharp movements in markets have been a wake-up call for complacent investors, experts say. From February 2016-January 2018, volatility in the stock
PeopleImages | Getty Images Whether a variable annuity is a good option depends on all sorts of related financial considerations, including other sources of income in retirement and your individual situation and goals. It isn’t every day that an older client might consult experts to help him become impoverished as he prepares for long-term care.
It’s important to think about how you to deal with the bequest versus letting it just happen, according to Mendels, because moving too quickly can result in poor decisions, such as spending it all or taking advice that may be regretted later. It can be hard to say no, he warned, so plan on how
Amid the latest stock market volatility, a renewed interest in diversification and rising inflation are putting more focus on commodities. After being regarded as moribund in recent years, the category, led by precious metals, delivered positive returns in 2017 for the second straight year in a row, as measured by the broad Bloomberg Commodity Index.
The agency next issued a warning to taxpayers on Feb. 13 after reports of the incidents ”mushroomed” from a few hundred potential victims nationwide to thousands, said Terry Lemons, an agency spokesman. ”This one is really worrisome to us,” Mr. Lemons said. ”Scammers are getting a government deposit into your account.” In the past few
Bitcoin had its coming-out party in 2017. With all the excitement and opportunities around cryptcurrency, it might be easy to forget about crypto taxation. Almost every bitcoin or other “altcoin” transaction — mining, spending, trading, exchanging, air drops, etc. — will likely be a taxable event for U.S. tax purposes. Without a doubt, 2018 will
When people start investing money, one of the exercises they engage in is determining their own risk tolerance. Usually, this process is handled by filling out some sort of questionnaire, such as the one below, that has multiple-choice questions: If you had $10,000 to invest, would you: • Be willing to chance earning 30 percent
In the wake of the new law, Rick Kahler, CFP, owner of Kahler Financial Group, received some questions that stunned him. “I had two clients ask me if I would start charging commissions so they can deduct them pretax,” he said. “I am fee-only, and my fees are no longer deductible. Both of their accountants
The Tax Cuts and Jobs Act passed by Congress late last year represents the most significant changes to the tax code since 1986. The changes are biggest for corporate taxpayers. C corps will see their statutory tax rate decline from 35 percent to 21 percent, and pass-through corporate entities — partnerships, sole proprietorships and S