Tax Loss Harvesting Part I - Take the Easy Money

Thursday, 25 April 2019
Robert E. Dockendorff, JD, LL.M

Tax Loss Harvesting Part I - Take the Easy Money
Everyone should do it, but few do.

At the end of every year, take a look at your portfolio and sell whatever is "down" to capture a tax loss. If you still like the investment, buy it back after thirty days. If not, buy something else. 

This annual exercise can create huge value over several years of investing. 

Stop Avoiding Decisions on Equity Compensation: Part I - The Basics

Monday, 25 February 2019
Robert E. Dockendorff, JD, LL.M

Stop Avoiding Decisions on Equity Compensation: Part I - The Basics
Make Hard Decisions Now For Better Results Later

Equity compensation is a broad category of various ownership grants given to employees, founders and investors throughout a company’s lifecycle. If managed properly, equity compensation can provide an economic windfall that turbo charges a wealth plan. 

Tax Deferral on Capital Gains: The Qualified Opportunity Zone Investment

Monday, 11 February 2019
Robert E. Dockendorff, JD, LL.M

Tax Deferral on Capital Gains: The Qualified Opportunity Zone Investment
Invest Money Now, Pay Taxes Later

A little discussed provision of the Tax Cuts and Jobs Act of 2017 allows for investors to invest taxable capital gains directly into an “Opportunity Fund” and defer paying taxes. There is a 10% and 15% basis increase after holding the Opportunity Fund for five and seven years, respectively. Any gains on Opportunity Fund investments are tax free if there is a holding period of ten years or longer.  

How to Avoid Bad Financial Decisions

Monday, 28 January 2019
Robert E. Dockendorff, JD, LL.M

How to Avoid Bad Financial Decisions
Less Bias, Better Judgment

Using good judgment to make smart decisions is paramount to successful results, and financial decisions are no exception. It is well documented that investor behavior, defined as the mental processes and emotions that cause investors to buy or sell, is the decisive factor in long term results, rather than knowledge, skill or luck. We might classify these behavioral missteps as the lack of good judgment in financial decision making. 

My Company Was Acquired - Now What?

Monday, 14 January 2019
Robert E. Dockendorff, JD, LL.M

My Company Was Acquired - Now What?
Navigating a Potential Windfall

While folks may not have a full grasp on their employment picture over the short term, as consolidation means many things to many different people, one area of worthwhile focus is the effect of ownership change on personal finance and retirement planning. 

How does this acquisition affect your current retirement plan? Major transitions are a great time to take another look at everything and see how you can solidify your finances, despite short-term uncertainty. 

Obligatory Investment Outlook (2019)

Monday, 07 January 2019
Robert E. Dockendorff, JD, LL.M

Obligatory Investment Outlook (2019)
Just a Quick Note on Annual Investment Outlooks…

Each year, seemingly thousands of financial institutions, professional investors and everyday financial advisors provide a forward-looking outlook for the coming year. These outlook papers serve as forward-looking predictions for the market and economy. Ostensibly, investors leverage these insights to position their portfolios for success.

There is no shortage of intellectual geniuses in the investment community. For decades, the brightest, most ambitious go-getters from all over the globe have flooded into asset management firms in search of their investment fortune. I won’t pretend to be half as smart as these folks. I’m not a CFA, nor do I play one on TV.

Effective Financial Planning for Young Professionals

Tuesday, 18 December 2018
Robert E. Dockendorff, JD, LL.M

 Effective Financial Planning for Young Professionals
There are two stages of retirement planning - accumulation and distribution.

There are two stages of retirement planning - accumulation and distribution. Accumulators are those still working (and who we’ll discuss here). Distributors are those that are no longer working and live off their assets and passive income streams (to be discussed later).

Here’s a graphic showing the lifecycle of a good financial plan from working years (accumulation phase) to retirement years (distribution phase). 

 

One Fund for Equities. A Viable Approach?

Friday, 07 December 2018
Robert E. Dockendorff, JD, LL.M

One Fund for Equities. A Viable Approach?
A few months back I listened to very popular podcast for financial advisors

The guest was an advisor that experienced great success at a young age as a traditional Wall Street broker but had since moved into the fiduciary world (the better world of wealth management). After decades of advising thousands of clients, he made a comment that greatly resonated with me regarding investment choices.  

He said that with less than $500k in equity exposure, folks should just buy Vanguard’s Total World Stock ETF for equity exposure.  

From the podcast transcript:

And with these younger people, I’m always like, “Hey listen, just go to Vanguard, buy this thing, the VT, for the next $250,000. And when you get there, call me.” Now, little do they know I’ll just keep saying, “Well, do that again until you get to half a million then call me.”

This advisor only works with clients with greater than $500k to invest, so this recommendation was within that context (ie. don’t call me until you have $500k). But hearing this from an industry veteran that has made a lifelong living of being the “investment guy” for many wealthy clients was intriguing.

HSAs Part II: Funding Hacks, Resources and Smart Healthcare Decisions

Tuesday, 20 November 2018

HSAs Part II: Funding Hacks, Resources and Smart Healthcare Decisions

I’ve already explained the economic and tax advantages of HSAs.

Now, let’s talk about how to optimize HSA funding with an IRA rollover to provide a “cushion”, some resources for where to spend your HSA funds on everyday “health expenses”, and how to be a smarter healthcare consumer.

Funding – IRA to HSA Rollover

Married couples can contribute up to $6,900 annually to HSAs. Generally, open enrollment season is in October or November, but benefit changes technically don’t go into place until January first of the following calendar year. You have to wait until your HDHP plan goes into effect to contribute to your HSA.  

Human Advisors Are Irreplaceable (For Now)

Tuesday, 30 October 2018

Human Advisors Are Irreplaceable (For Now)

Competent investment management is a commodity service—and this is no secret.

For the past decade, institutional and retail investors alike have chosen low-cost passive index funds over higher cost actively managed strategies because active managers can’t consistently beat the index, but still, charge high fees for trying. Here are the numbers for active managers vs. the index from a Wall Street Journal article:

Why You Should Consider the HDHP/HSA During this Benefits Season

Tuesday, 16 October 2018

Why You Should Consider the HDHP/HSA During this Benefits Season

Nobody likes paying high premiums for family health insurance coverage. If premiums seem very high, it’s because they are.

In fact, the cost of family healthcare premiums has increased 55% in the last ten years. What was once a negligible payroll deduction is now a major household expense that could very likely exceed expenses like real estate taxes, car payments or mortgage interest.

But ask yourself—why continue to pay such high premiums if you don’t require significant ongoing health services? Total premiums could be $10,000 per year, but the gross amount of medical care may only be $3,000 - $4,000.

How Can Confidence Kill Investment Returns?

Tuesday, 25 September 2018

How Can Confidence Kill Investment Returns?

"Too much information can serve to artificially inflate our confidence so that we increase our bets without any greater ability to predict the outcome of future events."

Adam Robinson is a macro global advisor to some of the largest hedge funds and ultra-high-net-worth family offices. As a child, he was a chess prodigy tutored by the legendary Bobby Fisher. As a young adult, he created the now ubiquitous Princeton Review SAT prep course—which he later sold for a handsome reward. Based on my admittedly limited knowledge of Robinson, his “magic” lies in developing mental models for key decisions to maximize performance and efficiency. He’s like a chess master for life.

In a recent interview, the interviewers asked Adam what types of “bad advice” he often hears related to his profession of global finance and investing. Adam responded with an interesting story that has profound value for all types of investors.

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