I hope everyone had a great Memorial Day weekend! Judy and I spent some time on the lake, and it sure was beautiful. It looks like summer is finally here to stay for awhile. GOOD NEWS! Kelly passed her Series 65 Uniform Investment Adviser Law Exam a few weeks ago! It's a tough one to pass, but I knew she would. She is definitely relieved to be done with it. What this means is that Kelly is now registered to give investment advice as an Investment Adviser Representative of JDS Wealth, as well as insurance planning advice through JDS Enterprizes. She's learning every day, and I'm really proud of her. On top of that excitement, we've been keeping quite busy at the office, and that's a good thing. For those of you that have not seen the new office upgrade and expansion that we completed a couple months ago - please stop by for a visit and we'll give you the nickel tour. Our radio show "The Safe Harbor Retirement Planning Show" is now on two days per week on WSIC AM 1400 - our original time of Saturday at 10:0am, and now Wednesday at 8:00am also. So listen in, or go to our website to listen to all of the uploaded shows. Our next workshops are June 17th & 19th at Epic Chophouse in Mooresville, starting at 6:00pm. We are covering "Today's Retirement Challenges", which is our most all-encompassing topic and hits on several points that can affect the success of your retirement. If you haven't been to this seminar before and would like to attend, just give us a call or shoot us an email and Kelly will save space for you. Enjoy this month's articles! Until next month,  James Stillman |
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Mutual Funds: Are they a thing of the past,
and are they right for you? - Part 3
Lake Norman Magazine, June 2014
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Last month was the second in a series of articles I've been doing about mutual funds. We left off exposing the fees that can be charged when dealing with mutual funds, and I hope nobody lost any sleep once we "pulled the curtain back". I'm not saying that all mutual funds charge ridiculous fees or that they are not a good tool for many folks, but they can be expensive.
Like any investment or savings strategy, there's good and bad, tradeoffs and compromise. There's no such thing as a perfect investment. Sorry folks, I don't mean to burst anyone's bubble, but facts are facts, and they can be sticky things. Education is key, and "applied knowledge" is powerful in my opinion. Now on to this month's points:
Mutual funds can be tax inefficient if held outside of an IRA
When someone buys a share of a publicly traded mutual fund, he or she is buying a share of an existing company that owns many individual investments, each with its own pre-existing tax liabilities. Whether or not that person ever sells those shares, he or she is responsible for a proportional share of the existing tax liabilities. The way mutual fund accounting works, a fund must pay out at least 90 percent of any investment income earned and 98 percent of any realized capital gains. The internal trading activity of the fund manager and fund inflows and outflows affect all shareholders, even though they may have personally performed no trading during the year.
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Fiduciary vs. Suitability
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If you care about you or your family's financial future, you should care. Doesn't sound like much of a big deal, but these two words, fiduciary and suitability, are critical to determining the type of care you receive from your "trusted" financial advisor. Unfortunately most of the public is not aware that a minority of advisors are held to a fiduciary standard while a majority are held to a much lower, suitability standard of care.
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Why Are Treasuries So Strong This Year?
GFPC Thought for the Week (299)
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Synopsis
*After the Fed began tapering its bond buying back in December, most investors believed that U.S. Treasury bonds would continue to face pressure going into 2014.
*To date, quite the opposite has happened as 10-year and 30-year Treasury bonds have delivered very robust returns driven by demand from pension funds, foreign investors, and banks.
*Although the short-term performance of Treasuries has been stellar, the Investment Committee continues to see the long-term risk-adjusted returns to be unattractive.
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The Three Types of Lies
GFPC Thought for the Week (300)
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Synopsis*Small-cap stocks are often viewed as a barometer for investors' risk appetites, and these equities have corrected sharply over the past two months.
*Of the prior thirty-five corrections since 2000, each was accompanied by a subsequent move in large-cap stocks. However, this most recent correction has failed to impact the S&P 500.
*The Investment Committee believes that large-cap stocks have not corrected because valuations in the S&P 500 are lower and economic data continues to be positive.
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All content is intended for informational purposes only. Any guarantees are for insured products only and are dependent on the claims paying abilities of the insurer. All investments carry some risk and you should be advised by your personal financial advidor before implementing any strategies discussed, as they are not suitable for everyone.
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