WrapManager's Wealth Management Blog

“Investors do not exist in a world of ‘100 year averages.’ Instead, they live in a world of 40 year investment horizons, where significant declines can “permanently impair retirement portfolios as investors do not necessarily have ‘more time’ to make up from large losses.” This is one of the core tenets that applies to many of money manager Newfound Research’s risk managed investment strategies. One such strategy, the Newfound Risk Managed Small Cap Sectors, is designed to protect and participate: “Participate in the strong growth profile of long-only, un-levered small-capitalization equity portfolio, while still protecting capital through rules that allow the portfolio to move to a 100% cash position in order to protect against large losses.” The intended benefits to you are two-fold: capture the returns of small-cap stocks over time, while having an active, tactical money manager strategy that can move to cash if it perceives increased downside risk. [+] Read More

When you look for a doctor to provide care for you and your family, what qualities do you look for? Most answers are probably the same: you want someone who has a good deal of experience, who is well-educated, and who is constantly devoted to learning more about their field of expertise. Having those qualities helps you trust the person providing you care. When it comes to hiring a financial advisor, we think the same qualities apply. Your financial advisor should be someone who is experienced, well-educated in financial planning, and devoted to their practice. Having these qualities can help increase confidence that your nest egg and your financial dreams are in good hands. [+] Read More

Research shows that at least 70 percent of people over 65 will need long-term care services and support at some point in their lifetime.1 Does that mean you should purchase long-term care insurance? Long-term care insurance can be a significant retirement expense, but it can also help protect your nest egg in the event you need additional health care. It’s an important financial decision for you which you should discuss with your financial advisor in addition to a long term care insurance expert who will help you decide on the plan itself. To help you get started, here is a general overview of some potential benefits and risks of long-term care insurance. [+] Read More

A key to investing well is finding balance between opportunities for growth and the potential risks that come with them. You want to generate returns needed to meet your long-term goals while limiting the potential portfolio risks associated with downside volatility and other adverse events.1 Practically every investor faces the following four risks to their portfolio. While each risk can be addressed in specific ways, start with good planning with your financial advisor, regular updates to your investment plan and being properly diversified. Then move on to the more specific methods below. Portfolio Declines Due to Market Volatility To paraphrase Boston money manager Newfound Research, LLC, ‘investors don’t live in a world of “100 year averages.” Instead, they live in a world of 40 year investment horizons, where significant declines can permanently impair retirement portfolios as investors do not necessarily have ‘more time’ to make up from large losses.’2 [+] Read More

Newfound Research, LLC, a Boston-based money manager specializing in tactical asset and risk management, published some insightful research focusing on issues that affect how investors plan for retirement. What they found is that retirees are facing somewhat of an uphill climb when it comes to successful retirement planning. People are living longer, have less guaranteed income, and are being met with an increasing cost of living. Common Retirement Planning Issues (Click image for larger version) Source: Newfound Research LLC. 1 Social Security Administration, as of 2013. 2 Employee Benefit Research Institute, as of 2011. 3 Federal Reserve Bank of St. Louis, as of 2013. 4 National Center for Education Statistics, 2013 dollars, as of 2012. 5 AARP Public Policy Institute, 2013 dollars, as of 2010. 6 United States Census Bureau, 2013 dollars, as of 2013. These issues serve to underscore the need for sound and thoughtful investment planning. [+] Read More

You don't have to wait until you retire to take advantage of a 401K rollover and all the benefits that come with it. A 401K inservice withdrawal can be just what you need to advance your retirement strategy and create new investment options. In fact, it's not unlike a general gathering all of his troops together, examining the mission, and positioning everyone where they'll do the most good. Just as this wise general can be ready for whatever comes his way, a 401K inservice withdrawal can enhance your retirement income strategy while you're still working, thus preparing for a promising future. 401K Rollovers While You're Still Working Many 401K plans allow you to rollover a portion (or all) of your 401K into your IRA while you're working without incurring any of the penalties associated with early withdrawals. Normally, if you're under the age of 59 1/2, a 401K withdrawal could be subject to a 10% early withdrawal penalty and be treated as ordinary income, thus raising income tax concerns. These penalties could take quite a significant bite out of your retirement savings. [+] Read More

If you have not contributed to a Roth IRA recently because your income is too high and you’re not sure you’re allowed to, read this article. There’s a way you can make non-deductible contributions to a Traditional IRA (non-deductible IRA), then take that money and move it into a Roth IRA. With this method, you can take advantage of the tax-free growth and tax-free withdrawals that a Roth IRA provides.1 There are a few steps to this process, so consulting with your financial advisor and tax professional is a good idea. How to Convert Money into a Roth IRA Let’s say your investment portfolio consists of a 401(k) and a taxable brokerage account. You max out your 401(k) every year, and you’re looking for a way to get more tax-free growth out of your investments. You are also interested in a retirement income strategy that provides you tax-free income (Roth IRA),1 but you cannot contribute to one because you make more than $191,000 (married filing jointly) per year.2 [+] Read More

There are two goals of the Churchill Management Group's Maximum Growth Strategy: achieve superior returns when it sees low-risk opportunities in the markets, and protect capital when risks in the stock market are deemed high. In an attempt to maximize returns, the portfolio managers will increase equity exposure and use leveraging techniques when they sense “top-down” low risk environments. In an attempt to protect capital, they may move all or a portion of equity exposure to short-term fixed income instruments or cash equivalents when risk in the stock market is deemed high. If you’re looking for a tactical money manager strategy to manage risk in your portfolio, the Churchill Maximum Growth Strategy is one option to consider. To quickly compare Churchill to other tactical money managers and to learn more about the approach, click here.1 [+] Read More

If you’re invested in target date funds, or your employer offers them as part of your 401(k) or another retirement plan, you may want to consider whether they are a good investment option for you. Target date funds are automated investment products that do not take into account your personal financial circumstances and needs, and they do not adapt to changing market conditions. As a result they may not be effective products for helping you reach your long-term retirement goals, and in some cases they could even add risk to your portfolio over time – hurting your retirement. Why Are Target Date Funds so Popular? The appeal of these funds is generally their “auto-pilot” feature – you pick a fund that matches your retirement date, and the fund will diversify your assets and gradually become more conservative as you near retirement.1 For this reason, some may perceive them as low risk investments, but there are issues with this view as you examine target date funds more closely. [+] Read More