At Apprise Wealth Management, we want to help people make better decisions about money. We also read constantly and like sharing some of the commentaries we enjoyed reading the most each week.
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Here are this week’s articles as well as a brief description of each:
1. Don’t Make These 5 Investing Mistakes That General Electric Investors Made. Investing is hard. Shares of well-known, blue-chip companies can deliver disappointing returns. If you invested in General Electric (GE) 15 years ago and still hold your shares, you have lost more than 40% of your capital through October 2018’s end. In contrast, the S&P 500 rose more than 250% over the same period. This article highlights five investing mistakes made by GE investors as well as five lessons that can be learned. For investors, it is important to remain humble. Investing involves finding the proper balance between confidence and humility. Knowing your limits can also provide long-term benefits.
2. Four Important Tips to Help Clients Teach Their Kids About Money. To a large extent, money is often a taboo subject. As parents, we often fail to properly educate our children about finances. This is particularly unfortunate as our education system typically fails to provide our children with a strong financial education. One of the reasons for naming this firm Apprise Wealth Management relates to the meaning of the word apprise – to inform or tell someone. Our goal is to help others to better understand their finances. While this article is directed toward financial advisors, you can choose to implement its recommendations on your own.
3. Selfish Writing. Why does one write? Should we write even if we are not publishing material for others to read? Whether writing for The Motley Fool, blogging for the RIA that I worked for previously or for Apprise, writing investment research reports, or journaling for myself, I find the process of putting my thoughts down on paper valuable. Explaining things to others can enhance your personal understanding of a subject. As discussed in this post:
“Many of the good writers you enjoy probably aren’t much smarter than you. They’ve just forced themselves through the process of transferring vague feelings into words and the clarity that generates. The takeaway for voracious readers is that you can discover new perspectives and new context by writing yourself.”
Try writing things down. You may be shocked by how much you can learn from the process, even if you are the only one that reads your thoughts.
4. America Probably Has Enough Parking Spaces for Multiple Black Fridays. I was shocked when I read this stat: The U.S. has as many as two billion parking spaces for about 250 million cars. (That multiple – 8:1 – is higher than I would have guessed.) This means the parking area per car in our country is larger than the area of housing per person. Our growing preference for shopping online instead of at the local mall has made the number of excess parking spots much more noticeable. It can also contribute to the disparity in the costs borne by online versus brick-and-mortar storefronts. Adding parking spaces comes at a cost. Those costs are ultimately passed onto customers.
5. Take Advantage of Tax Diversification. Asset location (generally, which asset type(s) should be held in which account type(s)) is an often-overlooked part of a diversified investment approach. However, to fully benefit from asset location, you need to own accounts in three categories:
· Tax-Deferred (e.g., traditional IRA, 401(k))
· Taxable (e.g., standard brokerage account
· Tax-Free (e.g., Roth IRA)
If eligible, I would add Health Savings Accounts (HSAs), to the mix as a fourth category.
If you only focus on traditional tax-deferred accounts, when you start tapping into these accounts at retirement, your tax bills could be larger than you expected. If your accounts are not tax diversified, there may also be opportunities to convert accounts from tax-deferred to tax-free.
We hope you find the above posts of interest. If you would like to talk to us about financial topics such as your investments, creating a financial plan, tax diversification of accounts, or saving for your retirement please fill out our contact form, and we will be in touch. We can schedule a call, a virtual meeting via Zoom, or a meeting at Apprise Wealth Management’s office in Northern Baltimore County.
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Phil Weiss founded Apprise Wealth Management. He started his financial services career in 1987 working as a tax professional for Deloitte & Touche. For the past 25+ years, he has worked extensively in the areas of financial planning and investment management. Phil is both a CFA charterholder and a CPA.
Located just north of Baltimore, Apprise works with clients face-to-face locally and can also work virtually regardless of location.
