Category Archives: Investment Planning

Dealing with Market Volatility – A Long-Term Perspective Helps Manage Short-Term Actions

A 60-second read by Anthony Benante: If staying up-to-date on market events is a part of your regular routine, that is fine, but remember that volatility is a constant factor when it comes to investing. It’s best to have a plan established before you invest, so that you know what to do when markets make unexpected short-term moves.  For the assets you are investing for the long-term, the day-to-day fluctuations you experience now may not seem as significant over time. However, there are actions you want to take. 

At Baron Financial Group, we review our investment choices versus peer investments, to determine if any individual investment choices need to be changed.  Also, we review client portfolios versus their specific long-term strategy and rebalance them if needed.  These actions are part of working towards our main objective, which is to help our clients achieve their financial goals.  Volatile markets are incorporated in our financial plans for clients and we keep clients informed about their chances for achieving those goals in different market environments.  This helps give our clients a clear perspective of where they stand and what it will take to achieve their long-term financial goals, even after incorporating recent market moves.

As always, if you have any further questions, don’t hesitate to contact the Baron Financial Group team.

 

Should politics affect your decision to include international investments in your portfolio?

A 45-second read by Anthony Benante:  For your specific portfolio, you need to evaluate your ability and willingness to take risk to help determine your personal profile. Without knowing about your entire financial situation, we would not make a specific recommendation for any asset. Typically, including globally-diversified assets in your investment strategy offers statistical benefits. We encourage you to think about the long-term nature of investing and validate your investment strategy with a comprehensive financial plan.  The plan should show outcomes based on different market environments and cycles.

Given the expectation that you could live into your 90s, it would probably not be best to look at your portfolio through a political lens.  In the short-term, breaking news is constantly occurring and it would be difficult to react correctly to each new development as it relates to your investments.  Over the long-term, there is the possibility for change in political parties and history suggests that the political party in charge in the United States has little impact on long-term market performance.  The decision to include international investments should not be directed by current political situations, but rather based on which investment strategy can help you achieve long-term success.

Reach out to our Baron team if you have any questions…

An Overview of myRA

A 45-second read by Victoria Cannillo: You have most likely heard of a Roth IRA or a Traditional IRA, but what about myRA? myRA was introduced in 2014 as an option for people who don’t have access to an employer-sponsored retirement savings plan or other retirement savings options. According to the myRA website, you can contribute up to $5,500/year into the account ($6,500/year for those older than 50). Once the account reaches an account balance of $15,000, or when the account is 30 years old, the savings will be transferred or rolled-over into a private-sector Roth IRA.

For 2016, the maximum income allowable to participate in the program was $132,000 for single-tax filers and $193,000 for couples filing together. Read more specifics about the program, here.

Some pros and cons of myRA to consider:

Pros:

  • No cost to open an account and no fees
  • Flexible contribution amounts (a traditional IRA has a $1,000 minimum)
  • Investments are backed by the United States Treasury
  • Tax benefits are similar to a Roth IRA, such as earning interest tax-free

Cons:

  • There is only one investment option – a treasury bond (accounts are invested solely in Government Savings Bonds)
  • Once the account balance reaches $15,000, it stops accumulating interest, so your maximum for savings is limited
  • Doesn’t seem to offer many long-term options at this time

Reach out to your Baron team if you want help in understanding what kind of IRA would be best for you.

Baron Financial Group Attends CFA Institute Conference

Anthony Benante, CFA and Nicholas Scheibner, CFP® of Baron Financial Group recently attended the 70th CFA Institute Annual (four-day) Conference in Philadelphia, to keep updated on financial industry topics and trends. The CFA (Chartered Financial Analyst) Institute’s mission is to lead the investment profession globally by promoting the highest standards of ethics, education, and professional excellence for the ultimate benefit of society.

According to the CFA Institute, it’s imperative that investment professionals remain current in this changing and complex climate to best serve their clients’ interests.

Read more about the CFA Institute at cfainstitue.org.

To learn more about Baron Financial’s investment management service, visit our services pages on our website.

Class of 2017: It Isn’t Too Early to Start Thinking about Your Retirement

A 60-second read by the Baron Team:  Congratulations 2017 college graduates! Throw that mortarboard as high in the air as you can and before it circles back down to earth, start thinking about saving for your retirement. You are most likely going to be responsible for setting yourself up for a successful retirement, so your best bet is to invest early and often.

Invest in yourself first. Most people think investing is the key to wealth, but while certainly important, you have to have some money first to invest. So as soon as you begin your first job out of school, start saving as much as you can for retirement.

Continue reading Class of 2017: It Isn’t Too Early to Start Thinking about Your Retirement

Not all CDs are the same…

A 90-second read by Anthony Benante: When investing in a Certificate of Deposit (CD), you may have more options than you think.  You can purchase a CD at a local bank or you can purchase CDs in your investment accounts (such as a taxable account, IRA or Roth IRA, etc.).  These are typically known as Brokered CDs.  Even though the CDs you get from the bank and the CDs in your investment accounts are called Certificates of Deposit, you should know that there are differences.  In either case, we would recommend that the CDs you invest in are fully covered by FDIC insurance.  If you would like to learn more about FDIC insurance coverage, feel free to ask us or you can go online to www.fdic.gov.

Purchasing CDs from your local bank: If you were to purchase a CD from a local bank that is FDIC insured, you would receive interest and would get your principal investment at maturity. If you receive regular statements, the value of your CD would most likely never change because it is not tradeable.  If for some reason you wanted access to your funds prior to maturity, you would most likely be subject to a penalty, such as 90 days’ worth of interest (but this should be verified individually). Other factors to consider are that local banks can offer “teaser rates” (rates higher than the market) for CDs to attract deposits, but those rates may not be available after your CD matures.  Unless you want to consistently move your money from institution to institution, using time and effort, you will be subject to the rates being offered only by your bank.

Continue reading Not all CDs are the same…

5 Financial Actions to Consider at Year-End

A 90-second read by Anthony Benante:  What 5 things should you be thinking about at the end of the year when it comes to your finances?

1. Review your personal budget and commit to a savings plan for 2017

a. On January 1, write down the balance in your checking account. Do this on the first of the month for the next three months. After you incorporate your income for the period, as well as take note of any cash withdrawals from other accounts, you can get a general sense of what your monthly spending is.

b. We work directly with our clients at Baron to help understand how their budget and all of their financial assets work together.  If you would like a budget sheet (either electronic or hard-copy), let us know. 

2. Review your long-term investment strategy

a. Is the long-term strategy in place for you still right for your specific circumstance? Are you going to be making any large purchases coming up in the New Year? Are you thinking about revisiting your risk tolerance – becoming more aggressive or conservative?

b. At Baron, we use a customized approach to design client portfolios.  We not only consider potential return, but also risk, as well as how the investments complement each other.  Having a long-term investment strategy is critical for investing success and provides a guide for when markets act unexpectedly or make a major directional move.

Continue reading 5 Financial Actions to Consider at Year-End

Are Appreciated Investments a Part of Your Philanthropic Strategy?

A 45-second read by the Baron Team: Did you know that your appreciated investments could be among the best items to give to your favorite charity to get maximum tax benefits? Donating an appreciated investment instead of cash can qualify you for two tax breaks; you will get a charitable deduction for the current value of the investment and you will avoid having to pay capital gains taxes on the increased value of the investments.

So the next time you plan on donating cash or checks to an organization, you may want to consider some other options:

1) Does the charity of your choice have the resources or capabilities to accept gifts of appreciated investments directly?

 2) For Federal Income Taxes, if you are older than 70 ½, consider a qualified charitable distribution (QCD).

A QCD “is generally a nontaxable distribution made directly by the trustee of your IRA (other than a SEP or SIMPLE IRA) to an organization eligible to receive tax deductible contributions” (IRS pub. 590b). For more information on QCD’s, refer to page 13 of IRS Publication 590b.

Any further questions regarding charitable donations, feel free to contact the Baron Financial Group team.

Where is the Best Place to Put My Emergency Funds? How Much is Enough?

A 60-second read by Anthony Benante:  You want to put your emergency funds in an account where the funds are easily accessible and not exposed to risk.  Examples include traditional bank accounts that carry FDIC insurance (savings, checking, etc.).  The current FDIC insurance limit is $250,000 (as of October 2016), so you should structure your accounts appropriately to ensure your emergency funds are protected.  You don’t want your emergency funds exposed to volatility, because it is possible you may need access to the funds when markets are experiencing volatility. If you put emergency funds in a risk asset (an investment that can change in value, such as a stock), it could wind-up causing you two financial problems, as opposed to having one financial solution.

How much you put in your emergency fund really depends on your specific situation, the stability of your job, your monthly budget and the consideration of all financial resources available. Typically, you want to put 6 to12 months of your salary away. If you are in a risky job or the majority of your income is from commissions or bonuses, the emergency fund may need to be more. Please contact us at Baron if you would like help in determining an appropriate amount for an emergency fund that would be best for your specific circumstance.

Medicare & Retirement Planning Webinar

Baron Financial Group’s Investment Committee provides an educational webinar on financial planning and investment management.  Medicare Consultant and guest presenter Mary Jean Cullen (MedicareAssist, LLC) discusses how Medicare works.  It is important to keep in mind that annual enrollment is open now through December 7th.

This presentation was first held at the September 13, 2016 Wine & Wealth event for our clients.

The webinar includes the following topics:

  • Beware of Market Doomsayers (0:00 -7:28) – Victor Cannillo
  • Asset Allocation and Diversification (7:30-15:53)   – Anthony Benante
  • Customized Financial Planning  (15:56-19:12) –  Nicholas Scheibner
  • What Role Does Life Expectancy Play in Retirement Planning? (19:13-23:15) – James Shagawat
  • Choosing A Medicare Plan: Learn What You Need To Know Prior and During Your Medicare Years    (23:30-51:44)  – Mary Jeanne Cullen

If you have any further questions, don’t hesitate to contact the Baron Financial Group team.