Average is not good enough … Our goal at Family Investment Center is excellence. We find excellent investment products and supervise an excellent service package. We maintain a library of excellent research materials and financial planning resources. We also demand top safety and security for our clients.
We won’t settle for average. We continually seek top managers or securities and meld them into superior custom portfolios. Each palette of investments is carefully tailored to personal or family goals. We enlist excellent managers, research, resources, and effort for our clients. Don’t settle for average. You deserve excellence.
Please search our blog posts for answers to common investment questions, and we look forward to sharing our knowledge and experience with you first-hand.
The State of the Target-Date Mutual Funds in an Investment Portfolio
The best investment portfolio goals are long-term in nature. However, as you get into the latter part of your career, it makes sense to start rethinking how your investments are diversified.
Changing your investment strategies by shifting assets to safer places as you get older could be a change you need to make. Does this mean all ofyour stock investments need to be shifted as you near retirement? Not necessarily. We know that there are risks related to investing in stocks, but there are also rewards. Generally, when one retires, there’s still a need for at least a portion of stocks, just to keep pace with inflation. So, for many, the changes to investment portfolios near retirement are only slight.
The Target-Date Fund
The advantage of target-date funds is that you can invest in a variety of stocks and bonds that will automatically become more conservative as you age. The closer you get to your retirement date, the more bonds and less stocks you’ll see in the portfolio.
For instance, you can choose a fund that currently invests 55 percent of your assets in stocks and 45 percent into bonds. The bonds will help to ensure that a good portion of your money is safe while the stock investments give your investment portfolio room to grow with the market. As you age, the fund manager will adjust the portfolio more conservatively.
Exchange-traded funds (ETFs) are similar to mutual funds in that each ETF owns shares of numerous stocks or bonds. ETFs give you the opportunity to customize how you make investments in equities and bonds in a way that are more suitable for your specific goals and your style of investing.
Another advantage is that ETFs offer lower expense ratios than typical mutual funds. And similar to individual stocks, they are actively bought and sold from open to close of the market.
While buying shares of individual stocks could be the best fit for you, that will definitely not be the case for everyone. Although many of the dividend-paying stocks have rallied for a number of years, that also means that many share prices are higher now. Ask your investment advisor about stocks that will give you a good mix of income, value and growth potential.
Build a Strategy With a Professional
Taking the DIY approach to your investment portfolio might feel gratifying, but this is too important an issue to treat it like a hobby. Consider asking an investment advisor for help assisting you in adjusting your investments as you get closer to retirement.
At Family Investment Center, we’ve worked with many clients in situations just like yours, and we have strategies that can provide you with confidence. Contact us today and let’s work toward your goals together.
How Taxes Can Affect Your Investment Portfolio
There is so much going on in Washington D.C. these days that it’s tough to keep up. However, given the recent movement regarding regulatory reform, it might be a good time to stop following the news surrounding the current administration and look at your investment portfolio to how it might be affected.
The Trump administration is eyeing a three percent or better GDP, which Treasury Secretary Steve Mnuchin said in May is achievable, but only if they make historic reforms to taxes and regulations. He also said he’s got a large group of people working on tax system reform while also making strides to undo the Dodd-Frank Act, which was put in place in 2010 in a response to the financial crisis that led to the Great Recession. It’s controversial and people are taking sides.
Mnuchin also said the administration is working to simplify personal taxes and make business taxes more competitive. The reforms Mnuchin talked about last month at a Senate Banking, Housing and Urban Affairs Committee hearing have some believing that if they are able to make these changes, corporate heavyweights could forge ahead with longer-term planning. Could this ease the uncertainty that causes a volatile stock market? The answer may be a resounding “yes” in the corporate world.
It’s also important to note that in 2015, Congress took the research and development tax credit, which had traditionally included sunsets that were frequently extended, and made it permanent. This means large companies, including those that are publicly traded, can more lay out their planning strategies and product development, which again, could lead to more stable performance on the stock market.
However, there might be a snag in the form of funding gaps for a few reasons. First, there is a move to rebuild infrastructure in the U.S. and keep the military the strongest in the world, which is expensive. At the same time, the aging population requires their entitlement programs, which means there will be a funding gap that must be dealt with. One possible solution is a border adjustment tax, which is being opposed by retailers who get a majority of their goods overseas or across borders.
All of this means that as an investor, you need to consider which companies will benefit from these changes, which will be hurt, and make sure your investment portfolio is set up to weather any storm. An investment advisor will tell you that fear and investing are two things that don’t mix well.
To really stay on top of these reforms, talk to your investment advisor about where your money is and if it should be adjusted to better reflect the positive changes that could result from taxation and reforms.
At Family Investment Center, we make it our duty to follow any change in public policy that impacts our clients’ investment portfolios. We welcome the chance to talk about these changes with our clients and offer strategies that will align with your goals and the current or impending reforms. Schedule an appointment with us today and let’s start planning your financial future.