We’re Not Pulling the Portfolio Ripcord… Yet

Pull the portfolio ripcord?

The second quarter started in somewhat choppy fashion as small cap and other high flying momentum stocks continued to face pressure as investors decided to shed stocks with swollen valuation multiples. The major averages fared better than their risky counterparts, and after a brief dip stocks began their ascent towards record breaking highs on the back on improving economic data, decent earnings growth, and continuing liquidity support from global central banks.

Meanwhile commodity markets appeared to work off some of their overbought readings from earlier in the year as they treaded mostly sideways during the quarter. Within fixed income, the bond market also fared well as investors continued to flock towards anything with a yield, foreign bond markets bubbled, and a number of technical factors came together to keep bond investors satisfied despite meager nominal yields.

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Time for a Portfolio Fire Drill

Time for a Financial Fire Drill

NOTE: There is a 100% probability that bull markets will be followed by bear markets. This article is not a forecast about imminent market behavior. For our latest views on markets, clients should read our market review. Financial fire drills are all about testing your emotional response to a bear market, which you should be doing all the time. (And it’s not a bad idea to check your emotional reaction to bull markets, as well.)

When I was a kid, my family lived in a two-story colonial in South Jersey. Once each year, to the great excitement of all concerned, my parents had my brother, sister, and me conduct a fire drill. We got to climb out of our bedroom window onto the roof of the garage, and then down from there.

Our house never suffered a serious fire, and we never had to make a rooftop escape, but my parents were still glad that we’d practiced what we had to do, just in case. It was a very good idea.

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A Helpful Change to Maryland’s Estate Tax Law?

Toy House

Governor Martin O’Malley recently signed a new law that will reduce the sting of estate taxes over the next several years for Maryland residents. So how does the Maryland tax compare with the federal version? As defined by the IRS, “The Estate Tax is a tax on your right to transfer property at your death.” The federal government imposes a tax on taxable estates in excess of $5.34 million (the individual federal exemption amount, which increases for inflation annually). Maryland currently imposes an estate tax on taxable estates in excess of $1 million (the state exemption amount).

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Five Affordable Retirement Locations for the Outdoor Lifestyle

Florida Beach

If you’re a lover of the outdoors and thinking about where you want to live in your retirement, you probably already have some candidates. But have you considered the financial ramifications of living in those areas? While financial implications should not necessarily be your primary focus, you should consider such things as taxes and cost of living when making your decision.

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Is the Market Heading for a Pause?

We're heading for a pause in the market

First quarter market performance was as whippy and volatile as the weather. Unusually cold temperatures in the U.S. not only froze much of the country’s population, but it also wreaked havoc on the quality of economic data, and kept markets on edge regarding how investors should be positioned. Geopolitical issues also rose from the ashes as various emerging markets had currency issues and Russia showed poor sportsmanship and invaded the Ukraine shortly after the conclusion of the Olympic Games.

By the end of the quarter, the markets showed mixed results, with U.S. stock and bond markets logging roughly equal returns, and international markets showing large variations depending on country and region. Commodities appeared to benefit the most from the weather and geopolitical environment, and they bounced to a very strong quarterly return.

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Secrets of a Successful Retirement Transition

Retirement Transition Secrets

For most Americans, retirement is one of life’s major turning points. We’re no longer required to take part in the work-a-day world, and can turn our attention and considerable experience to family, friends, service, and personal interests.

But it isn’t as easy as it sounds. Many people find retirement jarring, and have trouble adjusting to the new lifestyle. With that in mind, we’ve asked our retired clients for advice for those about to make the leap — what lessons they’ve learned, what they did well and what they wish they’d done differently. The responses are full of fantastic insights, important reminders, and creative ideas. Whether you’re facing retirement now or at some point in the future, you will find something of value here.

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Will There Be A Nasty Surprise In Your Tax Return?

A Surprise in Your Tax Bill?

Given the time of year, you may well be in the midst of gathering data for your 2013 tax return. As you embark on this project, you should be aware of a few new taxes you may have to pay. While I can’t cover everything, here are some of the bigger changes you might encounter.

(The changes outlined in this article were implemented in 2012 with the passage of the American Taxpayer Relief Tax Act (ATRA) of 2012, or with the Affordable Care Act).

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