Articles by Glenn Wessel, CFA®, CPA, CFP®
Put Market Volatility in Perspective
Thomas Fuller, who was stolen from Africa to serve as a slave in this country, once observed that "every garden has its weeds. " While his assessment of life as a slave might be considered unbelievably gracious, a little generosity of spirit can go a long way toward taking the edge off events that are otherwise trying.
Return-of-Premium Guarantees
Recently, I wrote about the explosion of financial options and guarantees that has given rise to unprecedented consumer choice. From teaser rates, to put options, to interest rate floors, to insurance policy riders, financial "engineering" is everywhere.
Beware the Wash Sale
In an effort to reduce income taxes, taxpayers can be pretty creative. Generally, this creative energy is trained on deferring income and gains, or accelerating losses and deductions. With respect to accelerating losses, one strategy favored by those who hold taxable portfolios of publicly-traded securities is to engage in so-called tax-loss harvesting.
Index Investing Gets Smarter
It is regularly noted by the popular press that in any given year, various stock, bond, and commodity indexes tend to outperform amateur and professional investors alike.
Life Insurance - Some Rules of Thumb
A number of misconceptions surround the purchase and ownership of life insurance. Here, I’ll address the virtues of the so-called "life insurance needs analysis" along with some life insurance rules of thumb. While a discussion of death can be an emotional topic, it is worth remembering that the purchase of life insurance is ultimately a financial decision.
Market Timing - A Source of Negative Returns
In describing the capital markets and the endless ways in which an investor might approach the process of trying to make a few bucks, the cliché of "buying low and selling high" often surfaces. Paradoxically, implementing this most simple notion has vexed investors for as long as there have been investors. Switch gears for a moment.
Hedge Funds...A Mislabeled Industry
Oxymoronic terms such as "taped live," "alone together," "plastic glass," "agree to disagree," "head butt," "pretty ugly," and "hedge fund" circulate regularly because they create a chuckle. Wait a minute. You haven’t seen "hedge fund" on that list before? Well then, let’s go ahead and add it.
Sham Credentials
One Chinese proverb suggests that talent counts for thirty percent and appearance counts for seventy. It seems that the financial services industry has taken heed. As competition intensifies, advisors are sporting an increasingly long list of impressive-sounding credentials that are, dare I whisper, less than rigorous.
The Myth of Permanent Insurance
A number of dubious marketing claims swirl around cash value life insurance (CVLI) which includes most any type of life insurance that doubles as an investment. One particularly specious claim is that CVLI is somehow permanent in nature versus term insurance which is temporary. This claim is insidious on a couple of counts.
Own Bonds? Understand Duration
Novice investors typically perceive risk in fairly nebulous terms such as the possibility of losing money. However, professional investors tend to evaluate risk in terms of a variety of specific risk elements.
Municipal Bond Funds - Not Always Tax-Free
Having some idea that municipal bonds are generally exempt from federal taxation, investors often mistakenly surmise that municipal bond funds and tax-exempt bond funds are one in the same. They’re not, and for investors who may be subject to the Alternative Minimum Tax, failing to distinguish between the two could be a costly mistake.
The ABCs of Mutual Fund Fees
If you own any mutual funds you may have noticed that some funds have an innocuous letter such as an A, B, or C appended to the end of their name while certain other funds sport names that are free of such suffixes. If you purchase fund shares directly from the fund itself rather than through a salesperson, you neatly sidestep any commissions that might otherwise apply.
Retiring? Time for a Little New Math
If you think back to your days in high school math class, you may recall having studied the associative property of multiplication. Because that memory may be lurking somewhere between your first kiss and your learner’s permit, your mental hard-drive may have difficulty retrieving it.
Cash Value Life Insurance Policy Loans Not Such a Good Deal
A number of dubious marketing claims swirl around cash value life insurance (CVLI) which includes most any type of life insurance that has an investment component.
Is Your Advisor Double-Dipping?
Once upon a time the commission rates charged to investors for securities trades were fixed by regulation. On May 1st of 1975, however, commission rates were deregulated and the competitive juices within the brokerage industry began to flow.
Rolling Over Employer Stock to an IRA Could be a Mistake
As decades of work come to an end and the transition into retirement begins, retirees must generally grapple with the issue of what to do with the funds they’ve accumulated in their companies’ retirement plans. Often, the decision is made to roll such funds over into an IRA. After all, an IRA does preserve their tax-deferred nature.
Cash Value Life Insurance - The Myth of Buying Young
A number of dubious marketing efforts swirl around cash value life insurance (CVLI) which includes most any type of life insurance that doubles as an investment.
Life Insurance on Children?
Although I have already discussed a number of the fallacies associated with any type of life insurance product that doubles as an investment (so-called cash value life insurance), the issue of whether it makes financial sense to carry life insurance on children applies to term life insurance just as much as it does to cash value life insurance.
Annuity IRAs...A Bad Deal
Philosopher George Berkeley famously suggested that, "Truth is the cry of all, but the game of the few. " I suspect he was on to something or he wouldn’t have had a college and a town named after him. I think of this timeless quote whenever I see an annuity contract lurking within an Individual Retirement Account (IRA).
