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Articles on Wealth Management Topics

The Total Cost of ETF Ownership: Investment Considerations Beyond Expense Ratio

There's no doubt that lower fund management expenses and lower transaction fees are beneficial to investors - all other things being equal. But that's the rub. There are several other cost considerations in choosing which ETF to buy, and when to buy it, that can easily outweigh whether you pay or receive 50 cents per $1,000 invested per year, or whether you pay your broker nothing or $7 per trade.

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The CARES Act and Required Minimum Distributions

As mentioned in the most recent issue of "Seasonal Musings" - the quarterly e-newsletter distributed by Five Seasons Financial Planning - the passing of the SECURE Act late last year permanently changed the financial planning landscape, and in particular, many of the rules on required distributions from IRA's and retirement plan accounts. The Coronavirus Aid, Relief and Economic Security (CARES) Act, passed just a few months later, contains a number of measures related to the taking of RMD's in this calendar year alone.

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How Equity-Indexed Annuities (EIA's) Actually Work: A Case Study

Buyers often seem unaware of the shortcomings of annuities until well after their purchase. Equity-indexed annuities are no exception to this statement. While the downside protection they offer is not at issue here (but is subject to the claims-paying ability of the insurance company involved), the upside potential of these products is often vastly exaggerated (or misunderstood) by salespeople motivated by nothing more than the prospect of sales commissions averaging about 6% of the amount invested.

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Check Up on a Financial Advisor by Checking BrokerCheck

"Advisor Background Checks a Must, Warn Regulators." "SEC Urges Consumers to Run Background Checks on Advisors." These were recent headlines in Financial Advisor magazine and the by-product of a campaign by the SEC and by other regulators of financial advisors to raise public awareness of the BrokerCheck tool. The Financial Industry Regulatory Authority (FINRA) manages the BrokerCheck website, and this online database allows consumers to investigate their current or prospective advisors, and the firms that employ them.

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Financial Advice from Utah's Credit Unions May Not be What it Seems

Credit unions are a big part of the financial services landscape here in Utah, much more so than in other states. I use a credit union for both my personal and Five Seasons Financial Planning bank accounts, something I never even considered when living in the Northeast. And many clients also use them for banking and loans. But apparently the investment services and financial advice being offered by credit unions here in Utah are not necessarily what they seem.

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Financial Markets Update for Wealth Management Clients 3

“You make most of your money in a bear market, you just don’t realize it at the time.” This statement must seem like a paradox when your portfolio balance is declining at an alarming rate on a weekly basis. But "money is indeed made" in a variety of ways during financial market upheavals like this one. And doing so doesn't require any particular market-timing skills or short-selling prowess, but it does require a disciplined and consistent approach to portfolio management, a focus on the longer term, and a certain amount of courage and conviction.

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Financial Markets Update for Wealth Management Clients 2

At the risk of overdoing it with client communications, I'm feeling that developments in the financial markets in the past week warrant another outreach to all of you, and in particular to those of you who weren't Five Seasons clients during the October 2007 - March 2009 bear market. In the interest of brevity, this missive will take the form of a list of talking points that have occurred to me, or that have cropped up in one-on-one correspondence with clients, this week. Here's hoping the following will calm nerves, provide perspective, satisfy curiosity, or simply help you to pass time while "social distancing":

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Financial Markets Update for Wealth Management Clients 1

Despite the confidence exuded by the talking heads on financial news networks like CNBC and Bloomberg TV, it's always a tenuous business to try to assign big stock market moves (down or up) to one specific root cause. And frankly it's not a particularly productive exercise to try to do so, other than for the benefit of TV ratings. That being said, in my humble opinion, while the coronavirus was certainly the catalyst for, and is still an ongoing contributing factor to, this stock market correction or bear market, there are several other factors at work:

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The Relationship Between Economic Growth and Stock Market Returns

The most widely-followed U.S. stock market indices now all sit at or near record highs. One of the factors often given credit for our stock market's resilient performance is the recent strength in economic indicators. But should a strong economy lead us to believe that the outlook for future stock market returns is rosy? The indisputable answer is, surprisingly, "No".

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