|
|
Greetings!
We hope you had a happy and prosperous New Year. Thank you for your continued business. If you know of anyone who could benefit from our services, please forward this newsletter to them.
|
|
|
5 Tips for Long-Term Investing as Markets Shudder
Be proactive and pay attention to taxes, costs and asset allocation
With shock waves roiling financial markets worldwide, investors are seeking new ways to protect their portfolios from the next upheaval.
But they may be ignoring the best weapons in their arsenal: straightforward strategies for managing money that, over time, boost returns.
"We're on this incredible volatility roller-coaster ride," said Andrew Lo, professor of finance at Massachusetts Institute of Technology and chief investment strategist at AlphaSimplex Group, a mutual-fund firm.
"For the next couple of years," he added, "my guess is we're going to have to spend more time thinking about managing losses than generating really attractive returns."
This week is a painful case in point. On Wednesday and Thursday combined, the Dow Jones Industrial Average fell 675 points or almost 6%, the largest two-day point drop since Nov. 20, 2008, and largest two-day percentage drop since Dec. 1, 2008.
Markets will go up again, Lo said, but there's "so much macro instability, you're going to get investors rushing to the left side of the moat together and then to the right side of the moat together. When you've got this coordinated herd mentality, you can get some wild swings in any investment."
Key strategies to eke out a profit include minimizing costs and getting as much diversification "as you're comfortable with," Lo said.
Plus, he noted, you need an investment plan that will keep you focused, so you don't panic "when markets start to dislocate, which they will."
Here are some building blocks for your portfolio's foundation:
1. Minimize taxes
High-tax-bracket investors lost an average of 2.4% of the value of their domestic equity mutual funds each year from 1981 through 2001, according to the Schwab Center for Financial Research. Read the study on Schwab's site.
To see the whole story on MarketWatch, click here. |
|
|
|
Investment Insight
1st Quarter 2012 |
|
ABOUT HORAN
HORAN offers a range of investment products and a comprehensive suite of services to enhance your financial security.
Our team of experts provides guidance, insight, and investment monitoring with complete objectivity.
By focusing on your needs first, success will follow.
Retirement planning is increasingly complex. A host of investment options, combined with fluctuating interest, inflation rates and other variables, make it difficult to determine how much you will need, where you should invest, and who to turn to for assistance. The complex tax and legislative environment surrounding retirement planning compounds the confusion.
We guide our individual and corporate clients through the confusion surrounding retirement planning.
For more information on the topics in this issue, contact a HORAN advisor at 513.745.0707 or visit our website www.horanassoc.com. |
|
|
Many Have Little to No Savings as Retirement Looms
After a vicious decade of no growth for the stock market, including two 401(k)-eating bear markets and persistently sky-high unemployment, more Americans are finding themselves in their 50s and 60s with practically no money saved for retirement.
"We were in our 30s, blinked, and now we're our parents' age," says Alan Tipps, a corporate jet pilot who typically earns more than $100,000 a year when he's working. But Tipps, 52, has been laid off three times during the past four years, and says that has forced him to burn through what was in his 401(k) just to "keep the lights on" in his home in Portales, N.M.
Investors of all ages have suffered. But for those close to retirement, it's been especially tough, because they're faced with taking distributions from investment portfolios that in some cases are a fraction of their peak value. Forced early retirements and the near extinction of pensions are making things worse, creating a generation of aging investors in which some have little or no plans for how they're going to pay for retirement.
It gets more ominous, given the other changes Americans are facing. Declining property values have drained home equity that many retirees might have counted on. Meanwhile, the number of people reaching retirement age is soaring as the Baby Boom generation ages.
Read the whole story at USA Today. |
|
How Retirees Can Cut Their Tax Bills
"Retirees usually have a bit more control over their tax situation than other taxpayers," says Steven Gershon, a director at the Kansas City, Kansas, office of the accounting and financial service firm, CBIZ MHM. "That's because they can decide how much they might need to withdraw from their retirement plans to keep their taxes low."
Delay, delay, delay
Most experts agree that delaying withdrawals from a 401(k) or traditional IRA until the age of 70½ years is best for taxpayers - letting these plans grow tax deferred.
Taxes on withdrawals from these plans are eventually taxed at ordinary income rates - but that can increase by more than 10 percent if withdrawals occur before age 59½.
This is where a Roth IRA can help, says Mike Scholz, tax director at Wegner CPA. Funds there can be withdrawn by age 59 when needed, tax free, if they've been open for at least five years.
"If a retiree doesn't have a current Roth IRA, it's worth it to see if a rollover from an existing IRA or employer plan to one makes sense," Scholz explains. "They have tax-free growth and tax-free distributions."
And having more than one type of IRA can help taxpayers when the required minimum distributions withdrawal, RMD, for these funds hits at age 70.
Read the full story at USA Today. |
| CORPORATE HEADQUARTERS 513.745.0707 | 800.544.8306 www.horanassoc.com |
Horan Securities, Inc., doing business since 1996.
Disclaimer
This eNewsletter is a digest of information published by a variety of web-based sources and is published as a service to our users. Horan Associates, Inc | Horan Securities, Inc. is not the author of the material unless specifically noted. We review each article to ensure that it is related to the interests of our subscribers. Horan Associates, Inc | Horan Securities, Inc. does not endorse the individual authors of these articles, although Horan Associates, Inc | Horan Securities, Inc. has reviewed these articles, for accuracy and completeness and your independent review for personal relevance should be undertaken. Reliance on this material should only be undertaken after an independent review of its accuracy, completeness, efficacy, and timeliness. All articles are copyrighted to their publishers. This publication is intended for general information only and not as legal advice. You should discuss specific details with your advisor.
Notice of Confidentiality
This email and any of its attachments may contain Horan Associates, Inc. | Horan Securities, Inc. proprietary information, which is privileged, confidential, or subject to copyright belonging to the Horan companies. This email is intended solely for the use of the individual or entity to which it is addressed. If you are not the intended recipient of this email, you are hereby notified that any dissemination, distribution, copying, or action taken in relation to the contents of and attachments to this email is strictly prohibited and may be unlawful. If you have received this email in error, please notify the sender immediately and permanently delete the original and any copy of this email and any printout. Thank you. |
|
|
|
|
|
