Financial Matters

Tips and news from the financial experts at Attentive Investment Managers.
Apr
02

In-Service Withdrawals

withdrawal

Many believe that their money is locked in when you are a participant in a 401(k) or profit sharing plan through an employer where you are a participating and current employee. However, certain qualifying events allow employees to access their vested balance to either withdraw and/or roll over money from those accounts and still continue to contribute.

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Mar
11

Pay Yourself First

woman-saving-money

Earlier this month, we discussed dollar-cost averaging as a strategy for investing which can offer you a higher average rate of return over the long-term and a seamless means of investing each month without too much pain for your wallet. Today, we will discuss the best way that you can achieve this strategy through the concept called “Pay Yourself First”.

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Mar
01

What is Dollar-Cost Averaging?

dollar-cost-averaging

Market moves can be choppy at times and downright terrifying. This is one reason many would-be investors never take the leap into investing their savings. We know that in order to make your dollars last, we must take on some risk in order to grow them. Then our rational minds try to determine that perfect moment to begin, which in itself is an impossible task - as we all know that trying to time the market is a fool’s errand. You can avoid the stress of getting together a lump-sum to invest and make saving possible without having to overthink it by utilizing the principle of dollar-cost averaging.

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Dec
04

’Tis the Season

busy-season

The period between Thanksgiving and the end-of-year holiday season would seem like a sleepy time for financial planners, but in fact it is anything but. You might be surprised at how much activity takes place on behalf of you and your investments in the final month of the year.

For instance? Even though this has been a good year in the markets, not all investments will have gained value. This is the last opportunity to harvest any losses we find in taxable accounts, by selling investments that have gone down and “booking” the loss. Then we can look for investments that have gained value, sell some of those to offset the losses, and thereby save capital gains taxes in the future. Up to $3,000 of ordinary income can be offset by investment losses as well.

This is also the time of year when mutual fund companies post, in advance, the amount of ordinary income and capital gain distributions they will make to their shareholders. Since the value of the shares drops by the amount that is distributed, this would seem like a non-event performance-wise. But in fact some mutual funds are poised to make 20% or even 30% distributions, and this cash is immediately taxable, unlike gains in the share values, which are only realized when you decide to sell. By selling funds before the distributions, and buying them back later, we can reduce your tax bill this year.

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Mar
21

Financial Planning is...

Financial Planning is...

Financial Planning is the comprehensive analysis and evaluation of an individual's current financial state and needs used in the development of a strategy to successfully meet your financial goals in the future. Professionals, like Mike, utilize their knowledge of client's future life goals, transfer plans (in life and death) and future expense needs to develop comprehensive Financial Plans.

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Apr
13

2016 First Quarter Report: The Bear That Wasn’t

2016 First Quarter Report: The Bear That Wasn’t
The first quarter of the new year has brought us small positive returns in many of the U.S. market indices, which means that investors survived—for now, at least—the worst start to a calendar year ever for the U.S. stock market. The easy call at the beginning of the year would have been to bail out when the markets were declining and sit out the widely-predicted start of a painful, protracted bear market. Some analysts were talking openly about another 2008-9 drop in share prices. But 10% market declines are simply a part of the market's normal turbulence, and anyone who spooks as soon as they see a month of bearish sentiment is likely to miss out on the subsequent gains. Since hitting their 2016 lows on February 11, both the S&P 500 index and the Nasdaq Composite have gained roughly 13% in value. That doesn't guarantee that there will be gains going forward, however. The Market Watch website reports that half of the S&P 500 sectors are reporting declin...
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Feb
12

Don’t Try to Catch a Falling Knife

Don’t Try to Catch a Falling Knife

There has been much discussion over the last month and half about Bear Markets, Sell-offs, the Global economy and a possible Recession. The vast majority of analysts believe we are not in a recession (neither the U.S., China, nor Europe) and that most economic indicators seem to point to the fact that overall the U.S. economy is strong. In fact, most analysts indicate that there is only a 20 -30% chance of a recession in the making for the U.S. In addition, trucking and retail industries are showing signs of stabilization indicating that things did not get worse in January. The factors that are seemingly the 'cause' of this downturn are angst surrounding global growth, politics, oil and Euro banking woes and each day one or another have been blamed for the sell-off during this downturn. However, none of them should be a catalyst for the down market indicating a true disconnect between reality and what investors in the market are thinking. It is important to note that when investors are buying in huge rallies it's traditionally thought the market has created a herd mentality however, when they are selling in bulk during downturns there is an assumption they are right.

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Jan
11

2015 Year End Report:

2015 Year End Report:
​In the past year, we experienced many things—a prelude to a Presidential election, a renewal of terrorist concerns,—but in the investment markets, we will look back and yawn. Despite some entertaining ups and downs, particularly in the third quarter of the year, the markets ended pretty much where they began, eking out small gains and losses pretty much across the board. The final three months of the year provided investors with gains that were tantalizingly close to wiping out the losses of the previous three quarters. What's going to happen in 2016? Of course, nobody knows with any degree of certainty. But many professional investors are approaching the new year with an unusual degree of caution. By most metrics, U. S. stocks are slightly pricier than their historical averages. That doesn't mean they can't get more so, but it seems unlikely that people will pay a lot more for a dollar of earnings in the coming year than they will today. Meanwhile, economic growth is moderate at best...
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Dec
30

How the Feds Rate Increase Impacts Bonds

How the Feds Rate Increase Impacts Bonds
Prior to a couple of weeks ago, the last time that the Fed raised interest rates was 2006 – now with a mending economy the Fed Committee has increased the federal funds rate to 0. 25%-0. 50%, up from a range of zero – 0. 25%. It is quite likely that the Fed will continue to slowly raise rates over the coming months which will bring a mix of good and bad trends for the investment markets. An important component for investors, with regard to interest rates is the effect rates have on bond holdings. As seen in the example below, there are two major risks to bonds. 1) Interest Rate Risk – As interest rates climb the value of existing bonds decreases. Also, the longer the maturity the bigger the decline will be. The technical term for maturity is "duration", which is defined as a measure of the sensitivity of the price of a fixed-income (bond) investment to a change in interest rates. 2) Credit Quality – Think of this like a FICO score with a 'AAA' bond rating being an 820 FICO, while a 'B'...
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