WrapManager's Wealth Management Blog

What does it take to be a top income earner in the United States? We found some data recently that breaks it down, telling us just how much you’d need to earn in order to give you a place at the top. Here are some of the numbers by age. In other words, you’d need to earn this much each year to be a top 1% earner in the US:1 Age 35: $291,000 Age 45: $458,000 Age 55: $453,000 Age 64: $473,000 Having a high income may seem like it’s an automatic for also having financial security, but it isn’t. High earners still need an investment plan. Making a lot of money also often means having high living expenses, which makes management all the more important. Case in point: multi-millionaires who find themselves bankrupt far too early in retirement – and sometimes even before they retire. We’re going to pick on professional athletes here, for two reasons: 1) they often qualify to be top 1% earners in their active years; and, 2) there are numerous instances where financial mismanagement led to bad outcomes. [+] Read More

In light of the increased security concerns caused by the Equifax data breach and the increased extent of the Yahoo data breach, we feel it is important to remind clients of ways that you can protect yourself from identity theft and other data theft. Below are four easy steps that you can take today to help protect your internet security. [+] Read More

JP Morgan Reviews Investing Opportunities & Rate Expectations JP Morgan’s Guide to the Markets for fourth quarter 2017 is now available. This comprehensive, 60+ page guide includes insightful charts illustrating: Corporate profits and financials Fixed income sector returns Local investing and global opportunities Federal funds rate expectations [+] Read More

The key word in the title of this article is “income.” Many retirees believe they may have a retirement plan (at least generally speaking), but when it comes to having a retirement income plan, the numbers don’t look so good. According to new research from LIMRA Secure Retirement Institute, “only 35% of retired clients and 38% of pre-retirees who work with an adviser have a formal written retirement income plan (emphasis ours).”1 Do you have one? Not having a formal, written retirement plan and retirement income plan may decrease the confidence many retirees feel about having enough money in retirement. Unfortunately, with decades of retirement education and growth in the advisor business, retirees are not getting much more confident about retirement security. According to the Employee Benefits Research Institute, in 1993, only 18% of workers felt “very confident” about being able to afford a comfortable retirement. Fast forward to 2016, and there are still only 18% of workers who feel “very confident.”2 When considering that the Dow Jones Industrial Average has risen more than 500% over the period from January 1993 to December 2016, one would think that retirement confidence would be higher. But something is clearly amiss. [+] Read More

Given our positive view on growth, we maintain a pro-risk tilt in our asset allocation. As the U.S. economy moves into late cycle, we are naturally more attuned to any dip in higher frequency data, but currently we see little risk of recession in the next 12 months. As a result, we remain overweight (OW) stock-bond and underweight (UW) duration—albeit with slightly lower conviction in light of the failure of inflation expectations to advance alongside other macro data. Correlation across regional indices remains low, favoring broad diversification across global equity markets. But at the margin our most favored regions remain the eurozone and Japan, ahead of the U.S. and emerging markets, with the UK our least preferred region. In bond markets we expect yields to grind higher over the fourth quarter and see U.S. Treasuries outperforming most other sovereign markets, in particular German Bunds, which look vulnerable given the robust level of eurozone growth. Elsewhere we remain neutral on credit, real estate and commodities, and UW cash. In a distinctly mature credit cycle, returns from credit will come from carry rather than capital appreciation; nevertheless, we expect credit to outperform government bonds even if it lags stocks. Overall, we take a pro-risk stance in our portfolios but are mindful that with the economic cycle maturing, liquidity and diversification are paramount. Read the entire market commentary here. [+] Read More

For some investors, hiring a wealth manager is a no-brainer. Whether it’s because finance and investing was not your chosen profession, or because you enjoy spending time doing other things, managing your financial life may feel like something best handled by a professional. Easy enough. For others, the decision to hire a wealth manager or financial advisor is not as clear-cut. There are “do-it-yourselfers” who prefer self-managing; people who keep all of their retirement assets at the bank or in the old company 401(k) plan; and even those who want to hire an advisor but simply don’t understand enough about the wealth management profession to know where to start (if that’s you, start here.) [+] Read More

After campaigning hard for the importance of tax reform, President Trump and his advisors released an early stage tax code change framework on Wednesday, September 27. From his podium in Indianapolis, IN, Trump explained that his framework would cut taxes for businesses and individuals and potentially deliver a “middle class miracle.”[1] As he put it, “…we will cut taxes for the everyday, hardworking Americans…”[2] While the House and Senate will still have significant work to do to in order to finalize the tax plan and craft new legislation, the initial review of Trump’s framework has some substantial changes to the current tax law, which could represent the largest tax reform change passed in 30 years.[3] [+] Read More

Tremendous growth in software functionality has only been enabled by tremendous growth in semiconductor performance... U.S. equity market returns over the last several years has been driven by the performance of a select group of large cap information technology and Internet stocks that have come to be known as the FAANGs, for Facebook, Amazon.com, Apple, Netflix and Google (now known as Alphabet). Our investment teams have shared concerns about the crowding effect that the outlier performance of this group has created. While these companies possess unique business models and maintain strong long-term growth potential, we believe more attractive current opportunities may be found in looking beyond the FAANGs to other areas of technology, such as semiconductors. Read an excerpt of the complete commentary below, or download the entire investment commentary as a PDF. [+] Read More

Just about every sports fan knows the joy of rooting for your favorite team when things are going well, when the wins pile up. But the opposite can also be true – in those years when your team is “rebuilding” (which is really a euphemism for losing all the time), it’s easy to jump ship and wait it out elsewhere. If you think sports fans are fickle or “fair weather,” investors arguably take it to an entirely new level. The research firm DALBAR tracked how often investors “switch teams,” or how often they move from mutual fund to mutual fund and/or strategy to strategy. They collected some fascinating data in the research process, and we’ll dig into their findings below. [+] Read More