How to Protect Your Tax Refund from Identity Theft

Jean and Carl are your everyday couple. They are looking forward to retirement in a few years and don’t have a very complex tax picture. Like many of us, they procrastinated on preparing their taxes but know they have to get them filed so they can get their refund. They have a cruise planned for the beginning of May and their tax refund will pay the balance owed for the trip, and give them spending money for souvenirs.

Beyond the Rubber Band Effect

One concept that is common in the investment world is the idea that assets will typically revert to the mean or mean reversion (the average). This may seem a bit contrarian since it essentially means that when an asset price returns in excess of its long term average return profile, over time it will likely reverse course and return to that long term average. Imagine a rubber band that gets stretched…. and then eventually snaps back to its normal size.

No-One Told Gold About the Currency Wars

One of the hot investment phrases streaming through the investment media lately is “currency wars.” This refers to the idea that governments around the globe are fostering weak currency policies in order to export their way to prosperity at a time when world aggregate demand is weak. Japan is the latest country to weaken its currency, as new leadership has recently diluted the value of the Yen materially in an attempt to jumpstart their way out of deflation. So with all these countries racing their currencies to the bottom, shouldn’t gold be the store of value that we can all depend on? One look at the chart below tells you that gold has not received the memo.

Why You Should Evaluate Portfolio Returns Over A Complete Market Cycle

How to determine the proper time horizon to evaluate portfolio performance is always a subject for an interesting conversation. In a recent client survey on investment issues, we asked our clients “What time horizon do you feel is the best time frame to evaluate portfolio returns?” The results varied: 16% said “Monthly,” 43% said “Quarterly,” 37% said “Annually,” and 4% said “Over a complete market cycle.” (As an investment professional, I would have selected the last option.)

Will This Industry Surprise in 2013?

Every now and then I scan various Exchange Traded Fund (ETF) options to find out what is working to determine if new trends are emerging. During this scanning process I recently came across a very interesting industry that looked quite promising to me. It has been wise for investment professionals to ignore this industry over the past six years, but this year could be different. Fair warning: Before I proceed, you need to leave your opinion at the door.

Should You Convert Your Traditional 401k to a Roth 401k?

One of the more interesting provisions in the recently passed American Taxpayer Relief Act (ATRA) is the ability to do a Roth conversion within a 401(k) plan. Before January 2nd, employees were mostly prevented from moving assets from the traditional, pre-tax portion of their 401(k) to a Roth component of the same 401(k) plan. While it was available to those employees who otherwise were eligible to take a distribution from the plan, that was rather limited. With the passage of ATRA, Congress has opened up the opportunity for anyone to move assets from the traditional, pre-tax portion of the 401(k) plan to the tax-free, Roth portion of their 401(k).

Can the Data Be Trusted?

Just two days ago the 4th quarter GDP came out as a negative number, which was much worse than expected. In fact, not one of 83 analysts had anticipated a negative number, meaning they were all too bullish on the 4th quarter growth number. But yesterday the Chicago Purchasing manager’s index, a growth barometer, was way above expectations for growth, and not one of 48 analyst estimates was in the ballpark, meaning they were all too bearish on growth.

Financial Planning for Generation X

We are adults in our 30s and 40s, born between 1965 and 1980 (Generation X). As children of the Baby Boomers, we benefited from our parents’ desire for us to go to college and further our education, even if they had not gone to college themselves. However, when the first Gen-Xers entered high school, America was in a recession, unemployment and inflation were high, and interest rates were in the double digits. By the time we started graduating from college, the stock market crashed and left us wondering if we had any financial future at all.