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.)

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).

Financial Planning for Baby Boomers

You were born between the years 1946 and 1964 — part of the explosion of births that resulted from World War II vets returning home and starting families. You’re often associated with the hippies of the 60’s and TV generation of the 70’s. You grew up with American Bandstand, Bewitched, Bonanza, Gilligan’s Island, and Lassie, and went to the big screen to see The Sound of Music and Gone With the Wind. You experienced the elation of our first steps on the moon, and the tragedy of the untimely deaths of John F. Kennedy, Robert Kennedy, and Dr. Martin Luther King.

Financial Planning for Generation Y

As a member of “Generation Y,” you are a young adult in your late teens, 20s, and early 30s, born between 1980 and 1994. Also called “Millennials” or “Echo Boomers,” you grew up amidst booms in the stock and real estate markets, only to see each of those “bubbles” burst. More educated than any prior generation, you attained those credentials during a time of skyrocketing educational expenses.

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.

The Cliff Averted: What the Fiscal Deal Means for You

The past week’s fiscal cliff deadline has been averted, at least for now. The last-minute compromise — the American Taxpayer Relief Act (ATRA) — extends the majority of tax cuts scheduled to expire at the end of 2012, in addition to retroactively reinstating some rules that had expired in 2011. However, the legislation also introduces a number of changes as well — including a new top tax bracket and an increase in the top long-term capital gains and qualified dividend rates. Some old rules that had lapsed have returned, such as the phaseout of itemized deductions and personal exemptions, and a new rule will allow 401(k) participants to complete intra-plan Roth conversions.

Planning for the Fiscal Cliff: Advice from the Wealth Managers

The 2012 election is over, and Americans find themselves in an unsure financial environment. The country is heading toward a “fiscal cliff” — a series of significant tax increases and automatic spending cuts that will be triggered at the end of the year. Congress and the President are negotiating a compromise solution to prevent that, but no one knows what it will involve, or if they’ll be successful at all.