Money Matter$

Now that we are three months into the new year, we can talk about some of the economics happening around the world—and some ways we’re positioning client portfolios to make the best of the situations. There are currently three key economic themes that I am keeping in mind: Rising interest rates in the United States Quantitative easing and currency devaluation (currency wars) in both Asia and Europe U.S. stocks are richly valued due to relatively strong economic growth and quantitative easing over the past six years Let’s tackle them one at a time

In our financial planning process with clients, we perform an insurance needs analysis. We don’t sell insurance, so it’s not as though we’re funneling you to the sale of an insurance “solution”. But part of our fiduciary duty to you is ensuring that you’re adequately protected against financial risks. One of the topics we cover is long-term care insurance:

I’ve had more than one conversation over the past few months with people wondering if the stock market is creating another bubble just waiting to pop. There are many reasons to believe it. We’ve gone nearly three years without a 10% correction. The Shiller P/E ratio has only been this high in 1929, 1999, and 2007, on the eves of major market crashes. The Dow and S&P 500 just hit major milestone levels of 17,000 and 2,000, respectively. The S&P 500 has averaged returns of more than 22% over the past three years. How can we not be in a bubble?

A common question we are asked from those finally reaching retirement is which payout option do I choose? The options usually include lump sum payout, lifetime income or term certain. A lump sum payout is fairly easy to understand … you are paid a lump sum and sent out the door. But now what do you do with it? If you don’t move it to an IRA, be prepared for a huge tax consequence. If you move it to an IRA, how will you invest it?

Beginning with this newsletter, we offer you a glimpse into our SFM Model Portfolios. This is not a list of stocks, but instead a screened and factored list of our favorite funds—made up mostly of ETFs. A healthy majority of these funds trade commission-free at TD Ameritrade, thereby lowering costs for our clients.

It is with this blog post that we announce an optional (you must opt in or it doesn’t change for you) change to our fee structure for 2014 and beyond. Instead of simply telling you we’re reducing your advisory fees, you must take action—as there is a small catch. (more on that later)