WrapManager's Wealth Management Blog

Starting to save for retirement is an important first step toward achieving your goals. That said, retirement planning can seem overwhelming at times. The timeframe is long, and the future seems unclear. As you create a plan and develop your investment portfolio, however, you’ll see how having a solid plan can make you feel more confident about the future and ensure that you have attractive options available to you. Creating a plan is just the first step, however. After you have a plan in place there are still actions you should take on a regular basis to keep you on the right track, steadily pressing forward to your ultimate goal: a successful retirement. The following tips can help you to keep your retirement on track. [+] Read More

Let’s start with an example. Say you hire a money manager on January 1 of a New Year, and your objective is to give that manager one-year to prove his or her worth. After one year, the manager produces a +20% return for your investment portfolio. That’s fantastic, right? Not necessarily! What if that manager’s focus/approach was to manage a portfolio of global stocks, but the MSCI World (an index that tracks global stocks) was up +40% that year? In that case, his or her performance was not so great comparatively. That’s an example of how you can use ‘benchmarking’ as an investment tool—it gives you a metric to measure a manager’s performance on the basis for which you hired them. Looking at the performance of different asset classes can help make the point clearer. [+] Read More

J.P. Morgan's Chief Strategist, David Kelly, addresses the liklihood of a recession in the current, emotionally charged market enviroment. Read the full transcript of his commentary below. "Hello. This is David Kelly. I’m Chief Strategist here at J.P. Morgan Funds. In finance, almost as much as in politics, the most passionate and least reflective voices receive the most attention. A slump in Chinese stocks and the Chinese currency at the start of the year triggered a global stock market selloff. This, together with lower oil prices and some pretty weak numbers on global manufacturing, prompted many loud voices to say that the U.S. is either already in recession or is falling into one with near certainty. These dire predictions, in turn, have frightened many investors who remember the pain of seeing the stock market fall in half in the last two recessions. However, in this emotionally charged atmosphere, there are four key aspects of the current economic and financial environment that investors need to appreciate: [+] Read More

Quizmaster, Doug Hutchinson, has come up with another great quiz for us regarding how tax aversion can sometimes lead investors to make sub-optimal investment decisions. Good luck! Consider this scenario: Your friend Jeff owns a mutual fund worth $100,000 in his taxable account. Jeff has been considering selling the mutual fund and replacing it with a similar investment with lower fees (and, therefore better projected net of fees returns). However, Jeff is leaning toward not selling his mutual fund because his cost basis on the mutual fund is $75,000, so selling it would create a taxable gain of $25,000. [+] Read More

The recent market volatility has shifted focus away from the upcoming presidential election (a little), but there’s still not a day that passes without at least a few hours of campaign coverage. Take the build-up to November as you will, but we think we can all agree that until the actual results are in, it’s more rhetoric and political posturing than anything else. A topic du jour for political posturing is…you guessed it… the economy! Both parties try to persuade voters that their policies are better for the economy and the markets, so we decided to take a closer look at how the economy and stock market have performed under different kinds of leadership. As you review some of the findings below, please keep in mind we do not favor one party over the other—our primary goal is to help our clients reach their long-term goals, and how we view politics personally should not (and does not) play a role in the investment plans we create and manage. Also, the findings below should not set any kind of expectation for future returns depending on who wins. If anything, you should view the findings below as little more than ‘interesting cocktail party facts!’ So…Republicans or Democrats – Who’s Better for the Economy? Two Princeton economists performed some comprehensive research on the matter, in a paper titled “Presidents and the U.S. Economy: An Econometric Exploration.” For all of the interesting discoveries they make in the process, perhaps the biggest takeaway is that political party doesn’t seem to matter all that much The economy and stocks tend to perform better when a Democrat is in power, but Messrs. Blinder and Watson make it clear in their paper that gaining an edge in economic and stock market performance is more arbitrary than policy related: “It appears that the Democratic edge stems mainly from more benign oil shocks, superior [productivity] performance, and perhaps greater defense spending and faster growth abroad.” The analysis looked at a 64-year period starting with President Harry Truman and ending with President Barack Obama, which includes seven complete Democratic terms and nine Republican ones. Some findings: [+] Read More

Polen Capital Management's Focus Growth Portfolio was able to outperform the market again in 2015. Read their quarterly commentary to learn how leveraging Alphabet Inc.'s (formerly Google) weak 2014 share price helped them achieve that feat. [+] Read More

Whether you’re hoping to move closer to family, downsize your home, or live in a place you’ve always dreamed of, many people choose to relocate during retirement. In fact, relocating can be an effective part of your retirement lifestyle planning, especially if you consider the financial implications of your new chosen home state. As you make decisions about relocating, you can use each state’s tax rules to your advantage to potentially save thousands of dollars. Perhaps, more importantly, you can benefit even more if you can find a state with tax rules that align well with your personal retirement goals. If you’re leaving a large sum of cash to you children, you might consider choosing a state with very low estate taxes. [+] Read More

The benefits of investment diversification have long been known, heralded, and applied to portfolio management. And that’s not likely to change going forward either – it seems highly unlikely that sometime in the future we’ll look back on diversification as some kind of antiquated investment tool that no longer works effectively. That’s because asset prices have been volatile for as long as anyone can remember, and they move in all different directions at different times. While diversification and asset allocation do not ensure a profit or guarantee against loss, the theory of diversification that “everyone talks about” is if you own a portion of each asset class in your portfolio, you can attempt to neutralize the impact of individual price changes—smoothing out returns with lower volatility. [+] Read More

Discussions about retirement planning usually begin with a basic question: What’s the cost of a successful retirement? If everyone had the same expenses, the same family situation, and the same retirement goals and aspirations, there could be a one-size-fits-all answer to this question. But each person’s situation is unique. That said, there are certainly rules of thumb that can be extremely helpful when it comes to retirement planning. Using general guidelines—with a healthy helping of personalization—you can answer the very important question of how much you will need to have a successful retirement. Let’s first take a look at general guidelines, and then we’ll look at the ways each person needs to personalize retirement planning to fit their unique situations. Rules of Thumb Everyone can begin their retirement calculations from a few basic rules of thumb and then personalize from there. The following guidelines can help you get a rough, generalized estimate of what you’ll need for a successful retirement. [+] Read More