457(b) plans are retirement plans for government workers and for highly-compensated employees of non-profit organizations. As such, 457's are offered by some of Utah's largest employers, including Intermountain Healthcare and the University of Utah. These plans are analogous to 401(k)'s and 403(b)'s, but they differ in one critical way.
The "Fee-Only" business model of delivering financial advisory services has garnered a lot of positive press in recent years. In response to this groundswell of accolades for "Fee- Only" financial advice, commission-based advisors and their employers have devised a number of ways to protect their turf. Most of these are meant to confuse the consumer.
One of the investment universes that Five Seasons Financial Planning monitors in an ongoing search for value to exploit for the benefit of client portfolios is that of closed-end mutual funds. At this time of year, when tax-loss selling is prevalent, there are often compelling values to be found, and this year is no different. Since you may be somewhat less familiar with the concept of closed-end mutual funds than with other types of mutual funds, here's a quick primer:
Getting good grades can dramatically reduce total college expenses in a number of ways. Beyond bribing your kids and grandchildren in return for academic performance, here are some other tips and tools to keep college expenses under control:
With the bond universe ranging from " ... obscenely overpriced to somewhere on the expensive side of fair value", and with most major U.S. stock indices within shouting distance of all-time highs, the current market environment is presenting a quandary not just to financial advisors but to investors as well. The investing public with cash on the sidelines seem torn between the fear of missing out on a further rally in stocks and the fear of committing capital at valuations that have often presaged middling returns, if not nasty bear markets. Consequently, a question clients have been posing recently is: Is it better to commit new money to the markets as fast as possible, or is it better to dollar-cost average our way into the markets over time?
As different asset classes, and different investments within those asset classes, generate disparate returns through time, you will find that your portfolio asset allocation will stray from its target. "Portfolio rebalancing" is the process of correcting this, of bringing your investment portfolio back into alignment with your target asset allocation.
With summer in full swing, I've been reflecting on what I learned from one of my experiences from a summer past - being hired to serve as an expert witness in a case against another "financial advisor". This was a new and somewhat revelatory experience for me. But what I really took away from this experience was:
Are we whistling past the graveyard? Regardless of opinion, these relatively quiet days in the markets seem opportune for preparing for the inevitable next bout of market turbulence, no matter its cause or timing. So how do you maintain your investing composure when all around seem to be losing theirs?
If recent conversations with clients are any indication, a primary worry out there is how to plan for, or guard against, the "inevitability" of higher interest rates, a.k.a. falling bond prices. Most of these discussions arise from genuine concerns about the future performance of fixed-income investments given this backdrop. Some arise from a touch of performance-chasing, i.e. "Stocks have done so well in the last few years, so why not allocate more of our portfolio to them at the expense of our bond allocation, which has been languishing?".
Luckily, even the worst annuities don't have to be "roach motels" - there is often a way out of them without having to sacrifice an arm and a leg. The best escape route depends on a variety of factors, i.e. the annuity's surrender charge schedule, whether or not it's held in a tax-qualified account, the fine print of the annuity contract, the client's financial situation, etc. A provision of the Patient Protection and Affordable Care Act (PPACA) offers another possible way out.