WrapManager's Wealth Management Blog

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

According to an April 2014 Gallup poll, 59% of Americans are concerned their nest egg is not big enough to last them through retirement. A majority (53%) is concerned about not having enough to pay medical costs in the event of a serious illness or accident, and (48%) wonder about their ability to maintain the same standard of living throughout retirement. Thankfully good retirement income planning can help alleviate these concerns, and even help prevent them from happening in the first place. [+] Read More

The summer season gives families the chance to get together for quality time and fun, but it also presents you with an important opportunity – to have a constructive conversation with your family about your finances and estate plan. Fidelity Investments found that 86% of parents felt peace of mind after having conversation with their children, yet only one-third of parents and children agree about the right timing for these conversations.1 Having this talk helps in three ways: Preparation – inform your family how you want your estate handled and distributed Educational – your family members can learn about the details, their role in the plan and clear up any gray areas Comfort –peace of mind is important and knowing there’s a plan in place to help the transition go smoothly can help If you’ve been meaning to have this discussion but haven’t started it yet, make now the right time to do it. [+] Read More

Many investors today are faced with the same problem: how do you generate income in your portfolio when interest rates are so low? In the current market, finding asset classes that generate income at significant enough levels can be difficult: Traditional Income Generators (Click chart for larger version) Source: Newfound Research LLC. Short-Term U.S. Treasuries represented by SHY. Short-Term Corporates represented by CSJ. MBS represented by MBB. Intermediate Term U.S. Treasuries represented by IEF. Total U.S. Bond Market represented by AGG. Long-Term U.S. Treasuries represented by TLT. Intermediate Term Corporates represented by LQD. High Yield Corporates represented by HYG. Yields computed using smoothed trailing 252-day dividends. Starting date for graph is April 2008 because that is first date yields could be computed for all of the ETFs used in the analysis. Newfound Research LLC, a Boston-based tactical money manager focused on risk management, recognizes this problem and has created a distinct solution: The Newfound Risk Managed Income Strategy. The overarching goal of the investment strategy is simple: increase portfolio income in a prudent manner, by investing in traditional equity, fixed income and alternative-income vehicles in a risk-managed framework. In a fully bearish environment, the portfolio has the ability to move entirely to cash. [+] Read More

High net worth investors who open a trust account have two choices when it comes to choosing a trustee, generally speaking: assign a friend/family member/associate, or hire a corporate trustee to handle the trust management duties. If you’re looking for a corporate trustee service, consider The Advisory Trust Company of Delaware. 6 Benefits of Using Advisory Trust as Your Trust Administrator1 1) A Singular Focus on Trust Administration Services At Advisory Trust, they focus solely on administering the trust, meaning you can keep your financial advisor and the money manager strategies that make up your investment plan. Some corporate trustee services require you to give them discretion over investment decisions within the trust – meaning you would have to potentially fire your financial advisor and hand over control of your portfolio to the corporate trustee. [+] Read More

If you are the beneficiary of a Traditional, Simple, or SEP IRA and have just inherited the assets, you have a few reasonably simple options available to you. We’ve created a guide below to help you understand your choices. Inheriting an IRA means having a new set of financial decisions, and since your financial situation is unique it’s a good idea to ask for help. Your financial advisor should be able to guide you through these options so the transition goes smoothly and you can make a choice that’s right for you. Below we break it up into two sections: spouses who have inherited IRA assets, versus non-spouses. [+] Read More

The “per stirpes” IRA beneficiary designation is a useful tool for ensuring your assets are distributed equally amongst your lineal descendants (children, grandchildren) or those legally adopted. It helps makes sure that each of your children receives an equal share of your assets, and that their share remains in their family in the event they are not there to inherit your assets. How the “Per Stirpes” IRA Beneficiary Option Works Say you have a $2,000,000 IRA and four children, and you want each child to receive $500,000. One of your children has three children of his own. If you set up your beneficiaries as “to my descendants that survive me, per stirpes,” your kids would each receive their $500,000, and your three grandchildren would split the $500,000 in the event they inherit the assets. Each grandchild in this case would receive one-third of the $500,000 share, or roughly $166,667 each.1 What makes the “per stirpes” designation different from assigning each child as a 25% primary beneficiary is the fact that the assets ‘flow through’ to grandchildren in the event they inherit the assets in place of one of your children. In the above example, if you had assigned each child as a 25% primary beneficiary, the $500,000 share would have been split amongst your remaining children and would not have flowed through to your grandchildren.2 [+] Read More

If you generate retirement income from non-Social Security sources, like an investment portfolio or rental properties, your Social Security retirement benefits are probably taxable. It’s important to keep this in mind as you work through retirement income planning with your financial advisor, so you can anticipate what the taxes are and how you should adapt your investment plan to account for them. Here’s a basic example of how it works: Let’s say you’re a married couple filing jointly, and your combined Social Security retirement benefits for 2013 were $10,000. You also received $25,000 in income from a pension, and withdrew $15,000 from your investment portfolio. To determine if your benefits may be taxable, simply take one-half of your Social Security retirement income amount, in this case $5,000, and add it to all your other sources of income: $5,000 + $25,000 + $15,000 = $45,000. If your income total exceeds $25,000 (single) or $32,000 (married filing jointly), which in this example it does, then part of your Social Security income is taxable. You would most likely have to file a return for your Social Security Benefits received on Form 1040 or 1040A.1 [+] Read More