Five Pine Wealth Management https://www.fivepinewealth.com fee-based advisors and fiduciaries Tue, 03 Dec 2019 18:29:24 +0000 en-US hourly 1 https://wordpress.org/?v=5.4.1 https://i0.wp.com/www.fivepinewealth.com/wp-content/uploads/2020/04/cropped-fivepine_favicon-1.jpg?fit=32%2C32&ssl=1 Five Pine Wealth Management https://www.fivepinewealth.com 32 32 168414219 Can You Put Your IRA into a Trust? https://www.fivepinewealth.com/2019/12/03/can-you-put-your-ira-into-a-trust/ Tue, 03 Dec 2019 18:20:36 +0000 https://www.fivepinewealth.com/?p=1498 Can your IRA be put directly into a trust? In short, no. Individual retirement accounts (IRAs) cannot be put directly into a trust. What you can do, however, is name a trust as the beneficiary of your IRA.

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Can your IRA be put directly into a trust? In short, no. Individual retirement accounts (IRAs) cannot be put directly into a trust. What you can do, however, is name a trust as the beneficiary of your IRA. The trust would inherit the IRA upon your passing, and your beneficiaries would then have access to the funds, according to the terms of the trust.1

Can you control what happens to your IRA assets after your death? Yes. Whoever was named the beneficiary will inherit the IRA. But you also can name a trust as the IRA beneficiary. In other words, your chosen heir is a trust. When you have a trust in place, you control not only to whom your assets will be disbursed, but also how those assets will be paid out.2

Using a trust involves a complex set of tax rules and regulations. Before moving forward with a trust, consider working with a professional who is familiar with the rules and regulations.

The trust can dictate the how, what, and when of income distribution. A trust will allow you to specify an amount your heir may receive. Or, you could include language that requires your heir to take monthly or annual distributions. You can even stipulate what the money should be spent on and how it should be spent.2

Why would I use a Trust instead of a Will? There are a couple reasons. The biggest is that a will always passes through probate. That means a court oversees the administration of your will and ensures that the bequeathed assets are correctly distributed. One thing to keep in mind, though, is that this may lead to an expensive, slower process. A living trust, on the other hand, can help certain assets avoid probate. This may save your estate and heirs both time and money. Finally, for those who would like to keep their arrangements discreet, a trust can remain private whereas a will is a matter of public record.2

That sounds complicated. If decisions about your IRA are complicated, it may be best to review your choices with a trusted financial professional who can explain the pros and cons of naming a beneficiary to your account.3

Disclosures & Citations

Securities and advisory services offered through Centaurus Financial, Inc. Member FINRA & SIPC, Registered Broker Dealer and a Registered Investment Advisor. Centaurus Financial Inc. and Five Pine Wealth Management are not affiliated. This is not an offer to sell securities, which may be done only after proper delivery of a prospectus and client suitability has been reviewed and determined. Information relating to securities is intended for use by individuals residing in (OR, OH, ID, CA, WA, MT, UT, NY). Centaurus Financial Inc. does not provide tax or legal advice. A portion of this material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. Citations. 1 -irs.gov/retirement-plans/plan-participant-employee/retirement-topics-beneficiary [10/17/19] 2-elderlawanswers.com/understanding-the-differences-between-a-will-and-a-trust-7888#:~:targetText=Both%20are%20useful%20estate%20planning,soon%20as%20you%20create%20it. [9/19/19] 3 -bankrate.com/investing/what-is-a-trust/ [6/4/19] Content goes here

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Ways to Repair Your Credit Score https://www.fivepinewealth.com/2019/11/26/ways-to-repair-your-credit-score/ Tue, 26 Nov 2019 16:54:33 +0000 https://www.fivepinewealth.com/?p=1494 Steps to get your credit rating back toward 720.  We all know the value of a good credit score. We all try to maintain one. Sometimes, though, life throws us a financial curveball and that score declines. What steps can we take to repair it? Reduce your credit utilization ratio. Your credit utilization ratio (CUR) […]

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Steps to get your credit rating back toward 720.

 We all know the value of a good credit score. We all try to maintain one. Sometimes, though, life throws us a financial curveball and that score declines. What steps can we take to repair it?

Reduce your credit utilization ratio. Your credit utilization ratio (CUR) is the percentage of a credit card’s debt limit you have used up. Simply stated, if you have a credit card with a limit of $1,500 and you have $1,300 borrowed on it right now, the CUR for that card is 87%. Carrying lower balances on your credit cards tilts the CUR in your favor and promotes a better credit score.1

Review your credit reports for errors. You probably know that you are entitled to receive one free credit report per year from each of the three major U.S. credit reporting agencies – Equifax, Experian, and TransUnion. You might as well request a report from all three at once. As the federal government’s Consumer Financial Protection Bureau notes, you can do this at annualcreditreport.com. About 20% of credit reports contain mistakes. Upon review, some borrowers spot credit card fraud; some notice botched account details or identity errors. At its website, the CFPB offers sample letters and instructions you can use to dispute errors.2

Behavior makes a difference. Credit card issuers, lenders, and credit agencies believe that payment history paints a reliable picture of future borrower behavior. Whether you pay off your balance in full, whether you routinely max out your account each month, the age of your account – these are also factors affecting that portrait.3

Think about getting another credit card or two. Your CUR is calculated across all your credit card accounts, in respect to your total monthly borrowing limit. So, if you have a $1,200 balance on a card with a $1,500 monthly limit and you open two more credit card accounts with $1,500 monthly limits, you will markedly lower your CUR in the process. There are potential downsides to this move – your credit card accounts will have lower average longevity, and the issuer of the new card will, of course, look at your credit history.1

Think twice about closing out credit cards you rarely use. When you realize that your CUR takes all the credit cards you have into account, you see why this may end up being a bad move. If you have $5,500 in consumer debt among five credit cards that all have the same debt limit, and you close out three of them, accounting for $1,300 of that revolving debt, you now have $4,200 among three credit cards. In terms of CUR, you are now using a third of your available credit card balance whereas you once used a fifth.4

Beyond that, 15% of your credit score is based on the length of your credit history – how long your accounts have been open and the pattern of use and payments per account. This represents another downside to closing out older, little-used credit cards.3

Alternative credit scoring systems have also emerged. If your credit history has taken a big hit or is spotty, they may end up helping you out. TransUnion’s CreditVision Link, the LexisNexis Risk View Score, and the FICO XD2 and UltraFICO scores compiled by Fair Isaac Co. (FICO) are examples. They introduced new scoring criteria for borrowers who may be creditworthy, but lack sufficient credit history to build a traditional credit score or need to rebuild their scores. Cell phone payments, cable TV payments, property records, and other types of data are used by these systems in order to set a credit score.5

Disclosures & Citations

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. Citations. 1 – nerdwallet.com/blog/finance/credit-utilization-improving-winning/ [10/29/19] 2 – consumerfinance.gov/about-us/blog/common-errors-credit-report-and-how-get-them-fixed/ [2/5/19] 3 – cnbc.com/select/what-is-a-credit-score-and-how-to-check-yours-for-free [10/23/19] 4 – fool.com/the-ascent/credit-cards/articles/dont-close-that-credit-card-without-asking-yourself-these-6-questions/ [10/5/19] 5 – creditcardinsider.com/blog/check-free-fico-score-every-other-free-credit-score/ [9/17/19] Securities and advisory services offered through Centaurus Financial, Inc. Member FINRA & SIPC, Registered Broker Dealer and a Registered Investment Advisor. Centaurus Financial Inc. and Five Pine Wealth Management are not affiliated. This is not an offer to sell securities, which may be done only after proper delivery of a prospectus and client suitability has been reviewed and determined. Information relating to securities is intended for use by individuals residing in (OR, OH, ID, CA, WA, MT, UT, NY). Centaurus Financial Inc. does not provide tax or legal advice.

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Traditional vs. Roth IRAs https://www.fivepinewealth.com/2019/11/22/traditional-vs-roth-iras/ Fri, 22 Nov 2019 22:39:35 +0000 https://www.fivepinewealth.com/?p=1482 Perhaps both traditional and Roth IRAs can play a part in your retirement plans. IRAs can be an important tool in your retirement savings belt, and whichever you choose to open could have a significant impact on how those accounts might grow. IRAs, or Individual Retirement Accounts, are investment vehicles used to help save money […]

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Perhaps both traditional and Roth IRAs can play a part in your retirement plans.

IRAs can be an important tool in your retirement savings belt, and whichever you choose to open could have a significant impact on how those accounts might grow.

IRAs, or Individual Retirement Accounts, are investment vehicles used to help save money for retirement. There are two different types of IRAs: traditional and Roth. Traditional IRAs, created in 1974, are owned by roughly 35.1 million U.S. households. And Roth IRAs, created as part of the Taxpayer Relief Act in 1997, are owned by nearly 24.9 million households.1

Both kinds of IRAs share many similarities, and yet, each is quite different. Let’s take a closer look.

Up to certain limits, traditional IRAs allow individuals to make tax-deductible contributions into the retirement account. Distributions from traditional IRAs are taxed as ordinary income, and if taken before age 59½, may be subject to a 10% federal income tax penalty. For individuals covered by a retirement plan at work, the deduction for a traditional IRA in 2019 has been phased out for incomes between $103,000 and $123,000 for married couples filing jointly and between $64,000 and $74,000 for single filers.2,3

Also, within certain limits, individuals can make contributions to a Roth IRA with after-tax dollars. To qualify for a tax-free and penalty-free withdrawal of earnings, Roth IRA distributions must meet a five-year holding requirement and occur after age 59½. Like a traditional IRA, contributions to a Roth IRA are limited based on income. For 2019, contributions to a Roth IRA are phased out between $193,000 and $203,000 for married couples filing jointly and between $122,000 and $137,000 for single filers.2,3

In addition to contribution and distribution rules, there are limits on how much can be contributed to either IRA. In fact, these limits apply to any combination of IRAs; that is, workers cannot put more than $6,000 per year into their Roth and traditional IRAs combined. So, if a worker contributed $3,500 in a given year into a traditional IRA, contributions to a Roth IRA would be limited to $2,500 in that same year.4

Individuals who reach age 50 or older by the end of the tax year can qualify for annual “catch-up” contributions of up to $1,000. So, for these IRA owners, the 2019 IRA contribution limit is $7,000.4

If you meet the income requirements, both traditional and Roth IRAs can play a part in your retirement plans. And once you’ve figured out which will work better for you, only one task remains: opening an account.

Disclosures & Citations

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. Securities and advisory services offered through Centaurus Financial, Inc. Member FINRA & SIPC, Registered Broker Dealer and a Registered Investment Advisor. Centaurus Financial Inc. and Five Pine Wealth Management are not affiliated. This is not an offer to sell securities, which may be done only after proper delivery of a prospectus and client suitability has been reviewed and determined. Information relating to securities is intended for use by individuals residing in (OR, OH, ID, CA, WA, MT, UT, NY). Centaurus Financial Inc. does not provide tax or legal advice. Citations. 1 – https://www.ici.org/pdf/per23-10.pdf [12/17] 2 – https://www.marketwatch.com/story/gearing-up-for-retirement-make-sure-you-understand-your-tax-obligations-2018-06-14 [6/14/18] 3 – https://money.usnews.com/money/retirement/articles/new-401-k-and-ira-limits [11/12/18] 4 – https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits [11/2/18] Content goes here

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What Are You Getting for the Fees You Are Paying? https://www.fivepinewealth.com/2019/11/19/what-are-you-getting-for-the-fees-you-are-paying/ Tue, 19 Nov 2019 18:19:50 +0000 https://www.fivepinewealth.com/?p=1470 As you invest, are you receiving the service and resources you deserve? How much do you pay for wealth management? About $1,000 a month? More than that? If your account is $1 million or larger, that may be the case. Typically, wealth management firms provide their services for an annual fee approximating 1% of the […]

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As you invest, are you receiving the service and resources you deserve?

How much do you pay for wealth management? About $1,000 a month? More than that? If your account is $1 million or larger, that may be the case.

Typically, wealth management firms provide their services for an annual fee approximating 1% of the assets in an investor’s account. Through the years, this 1% yearly fee has become something of an industry standard.1

What are you getting for that 1% fee? You should be getting more than just basic investment advice.

A financial professional with a fee-based business should be able to provide you with insight into retirement planning, tax and estate planning, risk management, and college planning. He or she should provide more than just a second opinion on your investment choices.

If you feel you deserve more service and resources from a wealth manager than what you now receive, consider hiring a CERTIFIED FINANCIAL PLANNER™ professional. A CFP® professional possesses the education, experience, and perspective to offer a truly holistic overview of your financial situation and the possible paths toward your financial goals. The phrase “comprehensive financial planning” truly sums it up.

When a financial professional gives you truly comprehensive guidance, that 1% fee may be worth every penny. A 1% annual advisory fee is a tiny price to pay if the insight gained keeps you from making an error that could cost you much more. (It should be mentioned that some CFP® professionals are willing to negotiate their fees. Some determine their annual advisory fees based on a sliding scale.)

A CFP® professional who provides financial planning services must also abide by a fiduciary standard. What does that mean? It means that when that person offers financial advice, he or she must act solely in a client’s best interest.2

When it comes to wealth management, you should avoid buying on price. This could prove to be a major error.

Some investors think even a 1% annual fee is too much to pay, probably because they have been receiving so little in return for it. They decide to manage their wealth themselves, or they opt for a “robo-advisor” (an automated, algorithm-based online wealth management service, with little or no human touch included). Both of these alternatives have drawbacks.

Do-it-yourself wealth management can potentially undermine your wealth-building effort. Think about the responsibility and time and acumen it demands. Do you have the knowledge and education that a CFP® professional does? Do you think you can regularly outperform the benchmarks, or for that matter Wall Street money managers?

Many people think they can, and they may in the short term, but at considerable risk. Do-it-yourself wealth management tends to open the door to a day trading mentality, in which investors chronically buy high and sell low and underperform the markets. The do-it-yourselfers also tend to “chase the return” to their detriment. Tax and risk management may get short shrift. A great return may not look all that great after taxes.

In life, business, and wealth management, there really is no substitute for personal interaction. That lesson is being learned by investors who rely on robo-advisors.

A robo-advisor deploys computer algorithms to make investment and asset allocation decisions for you. It does not know you. It has no understanding of what you and your family want out of life, or what you want from retirement. It will not sit down with you to create a retirement plan or a risk management strategy. It does not have to uphold a fiduciary standard that places your best interest first.

Yes, it may charge you a lower annual fee than a real live wealth manager, but that discount may be offset, because it may direct your assets into investments that come with relatively high management fees and charges of their own. A robo-advisor is ultimately making decisions on behalf of your investor profile, not you; that decision-making comes with a degree of genericism.

In paying that 1% fee for wealth management, make sure you get what you deserve. You should receive comprehensive financial planning for that expense. A CERTIFIED FINANCIAL PLANNER™ professional can provide that to you.

Citations & Disclosures

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. Securities and advisory services offered through Centaurus Financial, Inc. Member FINRA & SIPC, Registered Broker Dealer and a Registered Investment Advisor. Centaurus Financial Inc. and Five Pine Wealth Management are not affiliated. This is not an offer to sell securities, which may be done only after proper delivery of a prospectus and client suitability has been reviewed and determined. Information relating to securities is intended for use by individuals residing in (OR, OH, ID, CA, WA, MT, UT, NY). Centaurus Financial Inc. does not provide tax or legal advice. Citations. 1 – advisoryhq.com/articles/financial-advisor-fees-wealth-managers-planners-and-fee-only-advisors/ [4/17/16] 2 – cfp.net/public-policy/public-policy-issues/fiduciary-standard [4/19/16]

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Ten Years, Tremendous Gains https://www.fivepinewealth.com/2019/11/15/ten-years-tremendous-gains/ Fri, 15 Nov 2019 20:52:15 +0000 https://www.fivepinewealth.com/?p=1458 A look at where stocks were in 2009 and how they have performed since. Where were you on March 9, 2009? Do you remember the headwinds hitting Wall Street then? When the closing bell rang at the New York Stock Exchange that Monday afternoon, it marked the end of another down day for equities. Just […]

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A look at where stocks were in 2009 and how they have performed since.

Where were you on March 9, 2009? Do you remember the headwinds hitting Wall Street then? When the closing bell rang at the New York Stock Exchange that Monday afternoon, it marked the end of another down day for equities. Just hours earlier, the Wall Street Journal had asked: “How Low Can Stocks Go?”(1)

The Standard & Poor’s 500 stock index answered that question by sinking to 676.53, even with mergers and acquisitions making headlines. The index was under 700 for the first time since 1996. The Dow Jones Industrial Average tumbled to a closing low of 6,547.05.2

To quote Dickens, “It was the best of times, it was the worst of times.” It was the bottom of the bear market – and it was also the best time, in a generation, to buy stocks.(2)

The next day, a rally began. Buoyed by news of one major bank announcing a return to profitability and another stating it would refrain from further government bailouts, the Dow rose 597 points for the week ending on March 16, 2009. On March 26, the Dow settled at 7,924.56, more than 20% above its March 9 settlement. The bull market was back.(3)

This bull market would make all kinds of history. In fact, it would become the longest bull market in history – at least by one measure.

While the last 10-plus years have seen some big ups and downs for the benchmark S&P 500, the index has never closed more than 20% below a recent peak in that span, meaning the current bull market is more than 10 years old.

Ten years later (at the close on Friday, March 8, 2019), the S&P 500 had risen 305.5% from that low. The Dow had gained 288.7%.

How about the Nasdaq Composite? 483.94%. (As you look at these impressive numbers, remember that past performance may not be indicative of future results.)(4),(5)

Those gains did not come without turbulence, and stocks in no way turned into a “sure thing.” The risk inherent in the market is still substantial along with the potential for loss. The lesson this long bull market has taught is simply that the bad times in the stock market are worth enduring. Good times may replace those bad times more swiftly than anyone can anticipate.

Disclosures & Citations

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. Citations. 1 – forbes.com/2010/03/06/march-bear-market-low-personal-finance-march-2009.html [3/6/10] 2 – thestreet.com/investing/stocks/bull-market-10th-anniversary-14891697 [3/10/19] 3 – tinyurl.com/yyhbtfw8 [4/2/19] 4 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=03%2F09%2F2009&x=0&y=0 [4/2/19] 5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F08%2F19&x=0&y=0 [4/2/19] Securities and advisory services offered through Centaurus Financial, Inc. Member FINRA & SIPC, Registered Broker Dealer and a Registered Investment Advisor. Centaurus Financial Inc. and Five Pine Wealth Management are not affiliated. This is not an offer to sell securities, which may be done only after proper delivery of a prospectus and client suitability has been reviewed and determined. Information relating to securities is intended for use by individuals residing in (OR, OH, ID, CA, WA, MT, UT, NY). Centaurus Financial Inc. does not provide tax or legal advice.

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Updates and Changes to Retirement Account Contributions in 2020 https://www.fivepinewealth.com/2019/11/13/updates-and-changes-to-retirement-account-contributions-in-2020/ Wed, 13 Nov 2019 23:49:22 +0000 https://www.fivepinewealth.com/?p=1456 As we finish up the 2019 calendar year and head into 2020, it’s important for you to remember that you can still contribute funds into your retirement accounts to grow money tax-deferred in a Traditional IRA or 401(k), or tax-free within a Roth IRA or Roth 401(k). In 2019 you can contribute up to $6,000 […]

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As we finish up the 2019 calendar year and head into 2020, it’s important for you to remember that you can still contribute funds into your retirement accounts to grow money tax-deferred in a Traditional IRA or 401(k), or tax-free within a Roth IRA or Roth 401(k).

  • In 2019 you can contribute up to $6,000 into your IRA or Roth IRA. If over the age of 50, you can contribute up to $7,000 for the year.
  • In 2019 you can contribute up to $19,000 in your employer plan (often a 401(k), 403(b), or 457 plan). If over the age of 50, you can contribute an additional $6,000 for a total of $25,000. It is important to remember this total applies only to what you are contributing and does not include what your employer is contributing or matching.
  • In 2020 the contribution maximum for IRA or Roth IRA accounts will stay the same at $6,000 maximum, or up to $7,000 if over the age of 50.
  • In 2020 the contribution maximum for an employer plan will increase from $19,000 to $19,500, or if over the age of 50, you will be able to contribute an additional $6,500 for a total of $26,000.

Remember, you can contribute to your IRA for the 2019 tax year through April 15, 2020, or when you file your taxes.

The IRS has also increased the phaseout of adjustable gross income taxpayers can earn to take advantage of tax-deductible IRA contributions or tax-free Roth IRA contributions. Reach out to us if you would like to learn more about the specifics of these limits.[1]

Disclosures & Citations

[1] All information in this article was found on the journalofaccountancy.com website and IRS.com website Securities and advisory services offered through Centaurus Financial, Inc. Member FINRA & SIPC, Registered Broker Dealer and a Registered Investment Advisor. Centaurus Financial Inc. and Five Pine Wealth Management are not affiliated. This is not an offer to sell securities, which may be done only after proper delivery of a prospectus and client suitability has been reviewed and determined. Information relating to securities is intended for use by individuals residing in (OR, OH, ID, CA, WA, MT, UT, NY). Centaurus Financial Inc. does not provide tax or legal advice.

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Yes, Young Growing Families Can Save & Invest https://www.fivepinewealth.com/2019/11/11/young-families-can-save-and-invest/ Mon, 11 Nov 2019 23:16:31 +0000 https://www.fivepinewealth.com/?p=1388 It may seem like a tall order, but it can be accomplished. Put yourself steps ahead of your peers. If you have a young, growing family, no doubt your to-do list is pretty long on any given day. Beyond today, you are probably working on another kind of to-do list for the long term. Where […]

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It may seem like a tall order, but it can be accomplished.

Put yourself steps ahead of your peers. If you have a young, growing family, no doubt your to-do list is pretty long on any given day. Beyond today, you are probably working on another kind of to-do list for the long term. Where does “saving and investing” rank on that list?

For some families, it never quite ranks high enough – and it never becomes the priority it should become. Assorted financial pressures, sudden shifts in household needs, bad luck – they can all move “saving and investing” down the list. Even so, young families have strategized to build wealth in the face of such stresses. You can follow their example.

First step: put it into numbers. How much money will you need to save by 65 to promote enough retirement income and to live comfortably? Are you on pace to build a retirement nest egg that large? How much risk do you feel comfortable tolerating as you invest?

A financial professional can help you arrive at answers to these questions and others. They can help you define long-range retirement savings goals and project the amount of savings and income you may need to sustain your lifestyle as retirees. At that point, “the future” will seem more tangible, and your wealth-building effort, even more purposeful.

Second step: start today & never stop. If you have already started, congratulations! In getting an early start, you have taken advantage of a young investor’s greatest financial asset: time.

If you haven’t started saving and investing, you can do so now. It doesn’t take a huge lump sum to begin. Even if you defer $100 worth of salary into a retirement account per month, you are putting a foot forward. See if you can allocate much more. If you begin when you are young and keep at it, you may witness the awesome power of compounding as you build your retirement savings and net worth through the years.

Of course, this may not be enough, and you may find that you need to devote more than $100 per month to your effort. If you strategize and escalate your savings over time, you may very well generate enough money for a very comfortable retirement.

Merely socking away money may not be enough, either. There are a wide variety of choices you can make – perhaps alongside a trusted financial professional – that may help position you and your household for a comfortable future, provided you keep good financial habits along the way.

How do you find the balance? This is worth addressing – how do you balance saving and investing with attending to your family’s immediate financial needs?

Bottom line, you should consider finding money to save and invest for your family’s near-term and long-term goals. Are you spending a lot of money on goods and services you want rather than need? Cut back on that kind of spending. Is credit card debt siphoning away dollars you should assign to saving and investing? Fix that financial leak and avoid paying with plastic whenever you can.

Vow to keep “paying yourself first” – maintain the consistency of your saving and investing effort. What is more important: saving for your child’s college education or buying those season tickets? Who comes first in your life: your family or your luxuries? You know the answer.

It has been done; it should be done. There are people who came to this country with little more than the clothes on their backs who have found prosperity. It all starts with belief – the belief that you can do it. Complement that belief with a strategy and regular saving and investing, and you may find yourself much better off much sooner than you think.

Disclosures

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. Dollar-cost averaging does not protect against a loss in a declining market or guarantee a profit in rising market. Dollar-cost averaging is the process of investing a fixed amount of money in an investment vehicle at regular intervals, usually monthly, for an extended period of time regardless of price. Investors should evaluate their financial ability to continue making purchases through periods of declining and rising prices. The return and principal value of stock prices will fluctuate as market conditions change. Shares, when sold, may be worth more or less than their original cost. Securities and advisory services offered through Centaurus Financial, Inc. Member FINRA & SIPC, Registered Broker Dealer and a Registered Investment Advisor. Centaurus Financial Inc. and Five Pine Wealth Management are not affiliated. This is not an offer to sell securities, which may be done only after proper delivery of a prospectus and client suitability has been reviewed and determined. Information relating to securities is intended for use by individuals residing in (OR, OH, ID, CA, WA, MT, UT, NY). Centaurus Financial Inc. does not provide tax or legal advice.

The post Yes, Young Growing Families Can Save & Invest appeared first on Five Pine Wealth Management.

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Diversification, Patience, and Consistency https://www.fivepinewealth.com/2019/11/07/diversification/ Thu, 07 Nov 2019 18:43:14 +0000 https://www.fivepinewealth.com/?p=1285 Regardless of how the markets may perform, consider making the following, part of your investment philosophy:   Diversification. The saying “don’t put all your eggs in one basket” has real value when it comes to investing. In a bear or bull market, certain asset classes may perform better than others. If your assets are mostly […]

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Regardless of how the markets may perform, consider making the following, part of your investment philosophy:

 

Diversification

Diversification. The saying “don’t put all your eggs in one basket” has real value when it comes to investing. In a bear or bull market, certain asset classes may perform better than others. If your assets are mostly held in one kind of investment (say, mostly in mutual funds or mostly in CDs or money market accounts), you could be hit hard by stock market losses, or alternately, lose out on potential gains that other kinds of investments may be experiencing. There is an opportunity cost as well as risk.1

Asset allocation strategies are used in portfolio management. A financial professional can ask you about your goals, tolerance for risk, and assign percentages of your assets to different classes of investments. This diversification is designed to suit your preferred investment style and your objectives.

Patience. Impatient investors obsess on the day-to-day doings of the stock market. Have you ever heard of “stock picking” or “market timing”? How about “day trading”? These are all attempts to exploit short-term fluctuations in value. These investing methods might seem fun and exciting if you like to micromanage, but they could add stress and anxiety to your life, and they may be a poor alternative to a long-range investment strategy built around your life goals.

Consistency. Most people invest a little at a time, within their budget, and with regularity. They invest $50 or $100 or more per month in their 401(k) and similar investments through payroll deduction or automatic withdrawal. They are investing on “autopilot” to help themselves build wealth for retirement and for long-range goals. Investing regularly (and earlier in life) helps you to take advantage of the power of compounding as well.

If you don’t have a long-range investment strategy, don’t hesitate to reach out to us!

Disclosures

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. Securities and advisory services offered through Centaurus Financial, Inc. Member FINRA & SIPC, Registered Broker Dealer and a Registered Investment Advisor. Centaurus Financial Inc. and Five Pine Wealth Management are not affiliated. This is not an offer to sell securities, which may be done only after proper delivery of a prospectus and client suitability has been reviewed and determined. Information relating to securities is intended for use by individuals residing in (OR, OH, ID, CA, WA, MT, UT, NY). Centaurus Financial Inc. does not provide tax or legal advice.

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Why Having a Financial Professional Matters https://www.fivepinewealth.com/2019/11/05/why-having-a-financial-professional-matters/ Tue, 05 Nov 2019 17:59:13 +0000 https://www.fivepinewealth.com/?p=1281 What kind of role can a financial professional play for an investor? The answer: a very important one. While the value of such a relationship is hard to quantify, the intangible benefits may be significant and long-lasting. There are certain investors who turn to a financial professional with one goal in mind: the “alpha” objective […]

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What kind of role can a financial professional play for an investor? The answer: a very important one. While the value of such a relationship is hard to quantify, the intangible benefits may be significant and long-lasting.

There are certain investors who turn to a financial professional with one goal in mind: the “alpha” objective of beating the market, quarter after quarter. Even Wall Street money managers fail at that task – and they fail routinely.

At some point, these investors realize that their financial professional has no control over what happens in the market. They come to understand the real value of the relationship, which is about strategy, coaching, and understanding.

A good financial professional can help an investor interpret today’s financial climate, determine objectives, and assess progress toward those goals. Alone, an investor may be challenged to do any of this effectively. Moreover, an un-coached investor may make self-defeating decisions. Today’s steady stream of instant information can prompt emotional behavior and blunders.

No investor is infallible. Investors can feel that way during a great market year, when every decision seems to work out well. Overconfidence can set in, and the reality that the market has occasional bad years can be forgotten.

This is when irrational exuberance creeps in. A sudden Wall Street shock may lead an investor to sell low today, buy high tomorrow, and attempt to time the market.

Market timing may be a factor in the following divergence: according to investment research firm DALBAR, U.S. stocks gained 10% a year on average from 1988-2018, yet the average equity investor’s portfolio returned just 4.1% annually in that period.1

A good financial professional helps an investor commit to staying on track. Through subtle or overt coaching, the investor learns to take short-term ups and downs in stride and focus on the long term. A strategy is put in place, based on a defined investment policy and target asset allocations with an eye on major financial goals. The client’s best interest is paramount.

As the investor-professional relationship unfolds, the investor begins to notice the intangible ways the professional provides value. Insight and knowledge inform investment selection and portfolio construction. The professional explains the subtleties of investment classes and how potential risk often relates to potential reward.

Perhaps most importantly, the professional helps the client get past the “noise” and “buzz” of the financial markets to see what is really important to his or her financial life.

The investor gains a new level of understanding, a context for all the investing and saving. The effort to build wealth and retire well is not merely focused on “success,” but also on significance.

This is the value a financial professional brings to the table. You cannot quantify it in dollar terms, but you can certainly appreciate it over time.

Citations.
1 – cnbc.com/2019/07/31/youre-making-big-financial-mistakes-and-its-your-brains-fault.html [7/31/2019]

Disclosures

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. Securities and advisory services offered through Centaurus Financial, Inc. Member FINRA & SIPC, Registered Broker Dealer and a Registered Investment Advisor. Centaurus Financial Inc. and Five Pine Wealth Management are not affiliated. This is not an offer to sell securities, which may be done only after proper delivery of a prospectus and client suitability has been reviewed and determined. Information relating to securities is intended for use by individuals residing in (OR, OH, ID, CA, WA, MT, UT, NY). Centaurus Financial Inc. does not provide tax or legal advice.

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Your Diversified Portfolio vs. the S&P 500 https://www.fivepinewealth.com/2019/10/31/your-diversified-portfolio-vs-the-sp-500/ Thu, 31 Oct 2019 17:54:56 +0000 https://www.fivepinewealth.com/?p=1260 “Why is my portfolio performing differently from the market?” This question may be on your mind. It is a question that investors sometimes ask after stocks shatter records or return exceptionally well in a quarter. The short answer is that even when Wall Street rallies, international markets and intermediate and long-term bonds may under-perform and […]

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“Why is my portfolio performing differently from the market?”

This question may be on your mind. It is a question that investors sometimes ask after stocks shatter records or return exceptionally well in a quarter.

The short answer is that even when Wall Street rallies, international markets and intermediate and long-term bonds may under-perform and exert a drag on overall portfolio performance. A little elaboration will help explain things further.

A diversified portfolio necessarily includes a range of asset classes. This will always be the case, and while investors may wish for an all-equities portfolio when stocks are surging, a 100% stock allocation is obviously fraught with risk.

Because the stock market has advanced so much over the past decade, some investors now have larger positions in equities than they originally planned, and that may leave them exposed to an uncomfortable degree of market risk. A portfolio held evenly in equities and fixed income ten years ago may now have a clear majority of its assets in equities, with the performance of stock markets influencing its return to a greater degree. (1)

Yes, stock markets – not just here, but abroad. U.S. investors have more global exposure than they once did. International holdings represented about 5% of the typical investor’s portfolio back in the 1990s. Today, they account for around 15%. If overseas markets struggle, the impact on portfolio performance may be noticeable. (2)

In addition, a sudden change in sector performance can have an impact. At one point in 2018, tech stocks accounted for 25% of the weight of the S&P 500. While the recent restructuring of S&P sectors lowered that by a few percentage points, portfolios can still be greatly affected when tech shares slide, as investors witnessed in late 2018.(3)

The state of the fixed-income market can also potentially impact portfolio performance. Bond prices commonly fall when interest rates rise, which presents a short-term concern for an investor. If a bond is held to maturity, though, the investor will receive the promised principal and interest (assuming no default on the part of the issuer). Moreover, a rising interest rate environment may help the fixed-income segment of the portfolio’s long-term performance. New bonds issued in a rising interest rate environment have the potential to generate more yield than the older bonds of similar duration that they replace.(4)

This year, U.S. stocks have done well. A portfolio 100% invested in the U.S. stock market in 2019 would have a year-to-date return approximating that of the S&P 500. But who invests entirely in stocks, let alone without any exposure to international and emerging markets?(5)

Just as an illustration, assume that there actually is a hypothetical investor this year who is 100% invested in equities, as follows: 50% domestic, 35% developed foreign markets, and 15% emerging markets.

In this illustration, the S&P 500 will serve as the model for the U.S. market, MSCI’s EAFE index will stand in for developed foreign markets, and MSCI’s Emerging Markets index will represent the emerging markets. Through the end of July, the S&P was +18.89% year-to-date, the EAFE +10.31% YTD, and the Emerging Markets just +7.38% YTD. As foreign and domestic stocks have equal weight in this hypothetical portfolio, it is easy to see that its overall YTD gain would have been less than 18.9% as of the July 31 closing bell.(6),(7)

Your portfolio is not the market – and vice versa. Your investments may return less than the S&P 500 (or another benchmark) in a particular year due to various factors, including the behavior of the investment markets. Those markets are ever-changing. In some years, you may get a double-digit return. In other years, your return may be much smaller.

When your portfolio is diversified across asset classes, the highs may not be so high – but the lows may not be so low, either. If things turn volatile, diversification may help insulate you from some of the ups and downs that come with investing.

Citations.
1 – money.com/money/5481891/this-is-how-much-money-you-should-have-in-stocks-at-every-age/ [12/18/18]
2 – forbes.com/sites/simonmoore/2018/08/05/how-most-investors-get-their-international-stock-exposure-wrong/ [8/5/18]
3 – cnbc.com/2018/04/20/tech-dominates-the-sp-500-but-thats-not-always-a-bad-omen.html [4/20/18]
4 – fidelity.com/viewpoints/investing-ideas/fed-rate-hike-worries [4/23/19]
5 – investopedia.com/ask/answers/12/beating-the-market.asp [6/25/19]
6 – us.spindices.com/indices/equity/sp-500 [7/31/19]
7 – msci.com/end-of-day-data-search [7/31/19]

Disclosures

Securities and advisory services offered through Centaurus Financial, Inc. Member FINRA & SIPC, Registered Broker Dealer and a Registered Investment Advisor. Centaurus Financial Inc. and Five Pine Wealth Management are not affiliated. This is not an offer to sell securities, which may be done only after proper delivery of a prospectus and client suitability has been reviewed and determined. Information relating to securities is intended for use by individuals residing in (OR, OH, ID, CA, WA, MT, UT, NY). Centaurus Financial Inc. does not provide tax or legal advice. A portion of this material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.

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