The Story Behind the ‘Taxman’

As the Beatles rose to fame in the 1960’s, their earnings subjected them to the United Kingdom’s top tax bracket which included a whopping 95% supertax.

 

George Harrison, was noted as the Beatle who paid the most attention to the bands financial situation and wrote the ‘Taxman’ in response to the high levels of progressive tax.

 

In a 1980 interview, John Lennon recalled how the song began, “I remember the day he [Harrison] called to ask for help on ‘Taxman’, one of his first songs. I threw in a few one-liners to help the song along, because that’s what he asked for.”

 

Paul McCartney later explained: “George wrote that and I played guitar on it. He wrote it in anger at finding out what the taxman did. He had never known before then what he’ll do with your money.”

 

“We were all [upset] with the tax situation,” remembers Ringo. “We went into one mad scheme where we paid a guy to go and live in the Bahamas and hold our money for us so it would be tax-free. And in the end we had to bring all they money back, pay the taxes on it and pay this guy. So we might as well have just left it where it was.”

 

In 1966, the “Taxman” would become the opening track of the bands popular album, “Revolver” and was the only opening track written by George Harrison on a Beatles album.

 

‘Taxman’ is played by radio stations throughout the country on April 15th each year as an anthem to tax day, and now you know how it all began!

 

Would you like to have a complimentary tax review? Just send us a copy of your 1040 tax forms and we will show you strategies designed to lower your tax payments and increase your income.

 

Disclaimer: This newsletter is a publication dedicated to the education of individual investors for informational service only. The information provided herein is not to be construed as an offer to buy, sell or hold a stock of any kind. All economic and performance data is historical and not indicative of future results.

 

Advisory Services Network, LLC does not provide tax advice. The tax information contained herein is general and is not exhaustive by nature. Federal and state laws are complex and constantly changing. You should always consult your own legal or tax professional for information concerning your individual situation.

 

Advisory services offered through Enhance Wealth, a member of Advisory Services Network, LLC, 6600 Peachtree Dunwoody Road, Embassy Row 600, Suite 575, Atlanta, GA 30328. 770-352-0449 Insurance products and services offered through Enhanced Capital, LLC. Advisory Services Network, LLC and Enhanced Capital, LLC are not affiliated.

Is This the Writing on the Wall?

Question: What do famed investors Warren Buffett, Carl Icahn, George Soros, Jack Bogle, Bill Gross, Jim Rogers, and David Tepper have in common?

 

Answer(s):

 

1. They are ALL billionaires

 

2. They ALL predicted a previous market crash in 2001 and/or 2008

 

3. They ALL believe the next market crash could be around the corner

 

Bill Gross is one of the most successful bond investors of our time and famed manager of PIMCO’s $270 Billion Total Return Fund. In a recent interview he said the U.S. stock market is at it’s highest risk since the 2008 crisis.

 

Warren Buffett is infamous for closing his first fund down in 1969 and returning investors money because he was “unable to find opportunity”. This occurred in 1969 prior to one of the worst decades in the markets as the Dow Jones returned a total 4.8% from 1970-1979. Today he is once again sitting in all cash (except this time it is over $100 Billion!) because he has “no where to go”.

 

Carl Icahn is a business magnate and 5th wealthiest hedge fund manager and was quoted recently with other investing tycoons explaining why the indexes are overvalued at this time and market conditions are extremely risky.

 

Jack Bogle, founder of the Vanguard Group also believes the indexes are currently overvalued and the stock market will return only 4% over the next decade.

 

Jim Rogers gained popularity running the Quantum fund which returned 4,200% in 10 years versus’s the S&P 500 gain of just 47%. He ultimately retired at the age of 37 but continued providing investment advice on a public scale. Prior to the financial collapse in 2008 he advised investors to “short” bank stocks (“shorting” is an investing method designed to make money as the underlying holding declines). He has stated in many interviews over the last few months that the market is ready “to collapse” and “going to be the biggest in my lifetime”.

 

Could This Be Writing On The Wall Of What Is To Come?

 

There is no way to know until the next decline occurs. But why wait?

 

You Have a Choice.

 

1. Continue doing what you have always done and get what you have always got during previous market crashes or …

 

2. Raise your standards of what you should expect from your investment plan to protect during declines and grow during up trends.

 

Imagine having peace of mind knowing your portfolio will work for you by adapting as markets change rather than being controlled by them.

An investment approach designed to guard against loss when the markets weaken while increasing growth potential during times of expansion.

 

Our clients utilize this updated investment approach and have experienced firsthand the enhanced results and benefits this program provides beyond traditional investing methods.

 

Please contact us to learn more.

 

Disclaimer: This newsletter is a publication dedicated to the education of individual investors for informational service only. The information provided herein is not to be construed as an offer to buy, sell or hold a stock of any kind. All economic and performance data is historical and not indicative of future results.

 

There are many factors that affect investment performance including, but not limited to, general economic and market conditions including market volatility. There can be no assurance that these factors will affect future investment performance in the same manner as historical performance. All investments involve risk of loss. There can be no assurance that a portfolio will achieve its investment objective.

 

Advisory services offered through Enhance Wealth, a member of Advisory Services Network, LLC, 6600 Peachtree Dunwoody Road, Embassy Row 600, Suite 575, Atlanta, GA 30328. 770-352-0449 Insurance products and services offered through Enhanced Capital, LLC. Advisory Services Network, LLC and Enhanced Capital, LLC are not affiliated.

 

The New Reality

ESPN aired a documentary recently about Coach John Calipari’s rise to fame appropriately titled, “One and Not Done”. The show focused primarily on his approach to recruiting elite players who call the University of Kentucky home for one year before moving on to the NBA.

 

It was an interesting expose spotlighting how Calipari’s unique method has been polarizing for many in the sport while having a wide affect on basketball at the college level.

 

There were many who opposed Calipari’s pioneering strategy stating it did not coincide with the way things have always been and that coaches should focus on more traditional ways to win games. Others who were in favor cited the new excitement it has brought to the game and the realities of it’s effectiveness.

 

However, there was one statement given by a former coach that summed things up best when he said, “The fact is that the strategy works, and you can continue living in what used to be or realize the new reality of what is.”

 

The program concluded by saying many of the coaches who had previously been against Calipari’s approach have now succumbed to it to stay competitive among the crowd.

 

This is a great example of what has been taking place in the investment world for years.

 

What used to be and what is now are vastly different. Because of these changes, many believe Buy and Hold and Asset Allocation no longer have a competitive advantage compared to new strategies designed for the New Economy.

 

Just because you are doing what you have always done does not mean this is still relevant or the best approach moving forward. Your financial future depends on being able to adapt to changing economies using updated strategies designed to grow during the good times and protect during the bad.

 

If you are ready to update your approach and align to the New Reality, contact us to learn more.

 

Disclaimer: This newsletter is a publication dedicated to the education of individual investors for informational service only. The information provided herein is not to be construed as an offer to buy, sell or hold a stock of any kind. All economic and performance data is historical and not indicative of future results.

 

There are many factors that affect investment performance including, but not limited to, general economic and market conditions including market volatility. There can be no assurance that these factors will affect future investment performance in the same manner as historical performance. All investments involve risk of loss. There can be no assurance that a portfolio will achieve its investment objective.

 

Advisory services offered through Enhance Wealth, a member of Advisory Services Network, LLC, 6600 Peachtree Dunwoody Road, Embassy Row 600, Suite 575, Atlanta, GA 30328. 770-352-0449 Insurance products and services offered through Enhanced Capital, LLC. Advisory Services Network, LLC and Enhanced Capital, LLC are not affiliated.

The Tipping Point

I am obsessed with end caps and infomercials.

 

Normal everyday items which offer just a little something more than the usual that have been enhanced in some way.

 

In fact, this why I named our firm “Enhance Wealth” as I’ve always been on the lookout for the “end cap” of investing strategies.

 

Malcolm Gladwell authored a national best seller entitled “The Tipping Point: How Little Things Can Make a Big Difference” explaining how a persons success or a company’s edge can result from just one small factor that makes a major impact over time.

 

But often these small differences are not noticeable until after it is too late to implement.

 

We are a nation looking for instant results.

 

Our determination if something works or not is often based on it’s short term results. If it displays a big difference quickly we feel good about it and will continue until it stops providing better results. If it doesn’t show obvious benefits immediately we often abandon it.

 

Ask the person trying to lose weight who constantly switches from one diet to another claiming each one doesn’t work.

 

Or the injured person who quits physical therapy too soon because they don’t make full recovery in the time they desire.

 

The reality is the smallest of factors that can go unnoticed are often the ones with the most influential impact on the end result, both good or bad.

 

A friend of mine is an airline pilot and recently told me that if he missed his flight plan by just one degree on take-off he would ultimately miss his final destination by hundreds of miles.

 

The smallest factors can make the biggest difference.

 

When it comes to finances there are 2 WAYS to put more money in your pocket:

 

1. Make More
2. Spend Less

 

This applies to all areas whether building a business, planning a budget, or investing for your future.

 

Let’s look at an example of this with our friend Bob.

 

Bob is investing $500,000 for his future.

 

Right now he’s in a plan that’s producing an after-expense growth rate of 4% per year. He estimates that based on this, his lump sum will become $1,621,699 in 30 years assuming no additional contributions.

 

But what if he was able to increase his return by just 1% a year while reducing his expenses another 1% for a net return of 6% annually.

 

This may not seem like much of a difference now but after the same 30 year period his money would grow to $2,871,746.

 

That is an extra $1,250,047 difference over the same time period for Bob to use for himself or pass down to his loved ones.

 

If you are looking for a “Tipping Point” to enhance your investment strategy and provide the potential for a dramatic impact to your future success feel free to give us a ring.

 

We would be happy to show you an new option, and help you … Stop the Insanity!

 

Disclaimer: This newsletter is a publication dedicated to the education of individual investors for informational service only. The information provided herein is not to be construed as an offer to buy, sell or hold a stock of any kind. All economic and performance data is historical and not indicative of future results.

 

There are many factors that affect investment performance including, but not limited to, general economic and market conditions including market volatility. There can be no assurance that these factors will affect future investment performance in the same manner as historical performance. All investments involve risk of loss. There can be no assurance that a portfolio will achieve its investment objective.

 

Advisory services offered through Enhance Wealth, a member of Advisory Services Network, LLC, 6600 Peachtree Dunwoody Road, Embassy Row 600, Suite 575, Atlanta, GA 30328. 770-352-0449 Insurance products and services offered through Enhanced Capital, LLC. Advisory Services Network, LLC and Enhanced Capital, LLC are not affiliated.

 

The opinions expressed herein are solely those of the author and do not reflect the opinions of Advisory Services Network, LLC or any of its other advisory representatives.

An Alternate Approach

Over 60 years ago, a University of Chicago student was searching for a potential research topic for his upcoming dissertation when one of his friends suggested he study the stock market as a possible subject.

 

This advice led Harry Markowitz to win a Nobel prize for his creation of Model Portfolio Theory (MPT), known to most as Asset Allocation.

 

The theory of Asset Allocation was designed to mitigate risk by distributing a portfolio over a specific mix of asset classes held over long periods of time. The expected returns, risk, volatility of this mix were estimated using historical (previous) long-term data of each asset class.

 

Over time, the continued viability of this method has been tested and it’s reliance on long-term averages has shown to hide the true risk and volatility potential over shorter periods of time.

 

There is also debate concerning the continued relevance of the original factors Asset Allocation was originally built upon.

 

Many analysts have conceded to the need for an updated approach using new factors that have come along since original methods were first introduced.

 

In 1997, a research institute was founded to investigate the ongoing potential of traditional methods and identify a potential alternative to manage a portfolio in a more suitable manner using updated factors influential in the New Economy.

 

After much research, an alternative method known as Adaptive Asset Allocation was introduced.

 

This strategy was able to enhance probabilities of portfolio success in the current times through an updated approach which included:

 

1) Using a Dynamic (Adapt and Change) management style rather than the traditional Static (Buy-and-Hold) approach. This update provided the ability to take advantage of economic changes and adapt to fluctuations of volatility.

 

2) Monthly Re-allocation instead of an asset mix designed to be held 5-10 years at a time to increase growth potential during upward swings while enhancing the probability of preservation through short-term sell-offs.

 

3) Using short-term Momentum factors to determine expected return potential rather than historical long-term trends to increase exposure in areas showing current strength while reducing holdings displaying signs of weakness.

 

4) Managing risk through short-term volatility measures rather than a static mix of diversified holdings from historical long-term statistics. This method focuses on short-term volatility with the ability to reduce risk (loss) during short to mid-term cycles rather than relying on a buy-and-hold approach using long-term averages.

 

Adaptive Allocation has shown to outperform traditional methods (1), with less risk by adapting one’s portfolio ongoing to take advantage of short and mid-term market movements properly.

 

To put it simpler, this updated approach focuses on maximizing the chance of being right while minimizing the cost of being wrong.

 

We utilize this approach to guide our client’s portfolios through an ever-changing economy and believe in it’s superior potential to improve probabilities in both long and short term markets over traditional, out-dated methods.

 

As always, we encourage you to decide for yourself. Research this topic and determine whether or not it might be an appropriate fit for you and your family.

 

If you would like to learn more, feel free to contact us with any questions.

 

(1) http://www.gestaltu.com/2012/05/adaptive-asset-allocation-a-true-revolution-in-portfolio-management.html/

 

Disclaimer: This newsletter is a publication dedicated to the education of individual investors. This newsletter is an information service only. The information provided herein is not to be construed as an offer to buy, sell or hold a stock of any kind. All economic and performance data is historical and not indicative of future results.

 

Current performance may be lower or higher than what is shown. There are many factors that affect investment performance including, but not limited to, general economic and market conditions including market volatility. There can be no assurance that these factors will affect future investment performance in the same manner as historical performance. All investments and investment strategies involve a risk of loss.

 

Advisory services offered through Enhance Wealth, a member of Advisory Services Network, LLC, 6600 Peachtree Dunwoody Road, Embassy Row 600, Suite 575, Atlanta, GA 30328. 770-352-0449 Insurance products and services offered through Enhanced Capital, LLC. Advisory Services Network, LLC and Enhanced Capital, LLC are not affiliated.

 

The opinions expressed herein are solely those of the author and do not reflect the opinions of Advisory Services Network, LLC or any of its other advisory representatives.

Rise Of The Robots

The 1980’s was known as the “Yuppie” decade and saw Ronald Reagan take office, Steven Spielberg build fame with movies like “E.T.” and “Raiders of the Lost Ark”, and a musical revolution take place through the introduction of the first music television station known as MTV.

 

This decade also brought us the most influential invention in our lifetime …
the computer.

 

The computer age kicked off in the late 80’s and immediately began reshaping industries by revolutionizing the speed at which information could be disseminated.

 

Stock traders suddenly had the ability to access data on a level they never thought possible and in the early 1990’s, the SEC ruled in favor to create electronic stock exchanges laying the groundwork for a new type of trading known as “High Frequency Trading” or “HFT “. HFT became popular very quickly allowing firms to trade over a thousand times faster than traditional human-to-human stock trading. In just a few short years, HFT accounted for over 10% of the entire stock market’s daily trading volume. (1)

 

What is HFT?

 

High-Frequency Trading is an automated trading process which executes buy and sell orders automatically from computer generated outcomes known as algorithms. This approach allows large financial firms, banks, and hedge funds to trade millions of shares every day using transactions completed in less than a second. (2)

 

How Does it Work?

 

The algorithms used by these computers do not attempt to solve what might be the next great stock, which way the market is heading, or what companies have the biggest profits. Instead, these computers are programmed to trade both sides of the market and capture the difference of a stock’s current buy and sell price, also known as the “bid-ask spread”. HFT firms use this recipe to make a small profit per trade on millions of transactions every day.

 

Why has HFT Become So Popular?

 

High Frequency Trading has grown in popularity for one reason, it works! Virtu Financial, one of the largest HFT firms in the world, is known for reporting only one losing day over a 6 year period. They made money 1,237 days out of 1,238. (The one losing day was due to a large dividend payment they made.) (3)

 

So What is the Problem?

 

Author Michael Lewis, is known for his provocative investigative type books such as “The Big Short” which became a blockbuster movie in 2015 and uncovered the back story how a few investors were able to profit from the real estate collapse of 2008 at the expense of others.

 

His latest book, “Flash Boys” focuses on High-Frequency Trading with evidence of market rigging through HFT “front running” trades. (Front running is the practice of stepping in front of orders placed or about to be placed by others to gain a price advantage using information not yet obtained by others) (4)

 

A day after the book was released, the Federal Bureau of Investigation (FBI) announced investigation into several HFT Firms and exchanges. In May of 2015, the SEC announced a $4.5 million fine on three market exchanges for improper HFT practices.

 

Lewis estimates the impact of HFT trading costs to traditional investors is between $5 billion and $15 billion per year. (5)

 

On average, 80% of the daily trading volume comes from High-Frequency Trading resulting in a major impact to the stock market’s normal price movements. (6) Traditional mutual fund managers have protested the disadvantage High Frequency Trading brings to retail investors by hurting the performance of mutual funds through market imbalances.

 

However, as traditional managers and investors have fought hard to keep High Frequency Trading at bay, regulators have not only let this segment continue, but to flourish. April 2015, marked the first IPO (Initial Public Offering) of an HFT Firm allowing anyone to buy stock as an investor in this growing trend. This announcement forced a crossroads on the fund managers who had protested this practice for years.

 

Mutual Fund Managers suddenly had to choose between:

 

1) Investing in the very same HFT companies they had been fighting against to increase their return potential for investors which leads to higher inflows into their funds or:

 

2) Stick to their mutual fund morals by refusing to participate or help perpetuate the problem, thereby accepting under performance which would ultimately lose business.

 

How does this Affect You?

 

High speed trading, electronic networks, and computer algorithms are here to stay. No one debates this phenomenon has changed markets as we know it in a major way.

 

Research has shown a HFT has created both advantages and disadvantages for every day investors like you and me including: (7)

 

Advantages:

 

1) Increased liquidity
2) Reduced transaction charges by exchanges

 

Disadvantages:

 

1) Increased volatility
2) Extreme price swings
3) Market Influence
4) Increased price action to news and events
5) Imbalance of supply and demand

 

What Should You Do Going Forward?

 

We are not suggesting to run out and invest your life savings in a High Frequency Trading platform (not that you could anyway), but just be aware of the impact this phenomenon is having on markets and investing.

 

At this Point You have 2 Choices:

 

1) Continue investing as you always have or …
2) Look into something NEW

 

If you would like to learn information concerning a non-traditional investment method that embraces volatility and adapts as markets change feel free to contact us at 859.231.6622 or ann@enhancewealth.com to schedule a complimentary CPR – Comprehensive Planning Review to assess your current situation and introduce new options so you can determine if you are already doing everything you can or if there might be a better way to consider.

 

(1) https://en.wikipedia.org/wiki/High-frequency_trading
(2) http://www.investopedia.com/ask/answers/09/high-frequency-trading.asp
(3) https://www.bloomberg.com/view/articles/2014-03-20/why-do-high-frequency-traders-never-lose-money
(4) http://www.investopedia.com/terms/f/frontrunning.asp
(5) https://en.wikipedia.org/wiki/Flash_Boys
(6) https://fas.org/sgp/crs/misc/R44443.pdf
(7) https://www.capgemini.com/resource-file-access/resource/pdf/High_Frequency_Trading__Evolution_and_the_Future.pdf

 

Disclaimer: This newsletter is a publication dedicated to the education of individual investors. This newsletter is an information service only. The information provided herein is not to be construed as an offer to buy, sell or hold a stock of any kind. All economic and performance data is historical and not indicative of future results.

 

Current performance may be lower or higher than what is shown. There are many factors that affect investment performance including, but not limited to, general economic and market conditions including market volatility. There can be no assurance that these factors will affect future investment performance in the same manner as historical performance. All investments and investment strategies involve a risk of loss.

 

Advisory services offered through Enhance Wealth, a member of Advisory Services Network, LLC, 660 Peachtree Dunwoody Road, Embassy Row 600, Suite 575, Atlanta, GA 30328. 770-352-0449 Insurance products and services offered through Enhanced Capital, LLC. Advisory Services Network, LLC and Enhanced Capital, LLC are not affiliated.

 

The opinions expressed herein are solely those of the author and do not reflect the opinions of Advisory Services Network, LLC or any of its other advisory representatives.

You made gains in 2017 | How to keep them in 2018

2017 was quite a year!

 

Our 45th president was sworn into office

 

The Federal Reserve raised interest rates – 3 times

 

Hurricanes ravaged Texas, Florida, Puerto Rico and the Caribbean

 

The first major tax reform in over 30 years went into affect.

 

Las Vegas witnessed the deadliest mass shooting in US history

 

North Korea tested a hydrogen bomb and missiles capable of reaching the U.S.

 

NFL players protested, solar eclipse mania swept the country, terrorist attacks, suicide bombers, wildfires, earthquakes, and much more.

 

2017 was quite a year in the stock market too.

 

The Dow Jones rocketed 25% breaking 25,000 for the first time

 

The S&P 500 had it’s best year since 2013 increasing 19%.

 

The performance 2017 posted is not unusual. What is unusual was the market’s steady increase  without even one meaningful pullback , which is rare.

 

In fact, this is now the longest number of days the S&P 500 index has gone without a 5% dip … ever.

 

2018: What to Do Now

 

With 2017 behind us, investor’s emotions are moving from the excitement seeing their account values increase to fear of being able to KEEP these profits.

 

Buy-and-hold investors first experienced the fallacies of traditional investing after watching their life savings sliced in half during the market meltdowns of 2001-2002. It then took the markets 7 years to finally return to previous peaks set in July of 2000.

 

But investors had little time to celebrate as prices plummeted once again with little warning during the financial crisis of 2008.

 

When the dust settled and markets bottomed in February 2009, investors were in shocked to see index values return to levels set 13 years prior in September, 1996. Through all of the ups and downs, markets were right back to where they started.

 

Click on the chart below to see an expanded image

Source: Yahoo! Finance S&P 500 ^GSPC

 

I recently met with an investor who expressed his current fears of reliving past events as he described his experience during the 2008 decline:

 

“IT HAPPENED SO FAST I DIDN’T HAVE TIME TO REACT. I WAS NUMB AND BEFORE I KNEW IT, LOST HALF OF MY LIFE SAVINGS FOR THE SECOND TIME. I CANNOT AFFORD LOSSES LIKE THAT AGAIN.”

After meeting with hundreds of families over the past 20 years I’ve learned majority of individuals make investment decisions based on how they FEEL.

 

When things are good, they see no reason to make a move before something happens.

 

But when market’s inevitably decline, they will do just about anything to ease the pain after the event has already occurred.

 

How to Prepare

 

“A rising tide lifts all boats” is a popular saying which in market terms means as the market moves up, most all investments do as well, and vice versa.Right now everyone is focused on how much their investments made last year, but the true value is by being able to protect these profits when the tides turn.

 

The stock market has changed. The factors affecting markets today did not exist when traditional methods were introduced.

 

Based on new factors and fallacies in traditional methods, many investors have adopted an updated approach designed to use the market to their advantage rather than fearing what the market may do next.

Strategies built for the new economy are designed to:

1. Align with market conditions as they change

2. Focus on growth during times of strength

3. Protect and defend in times of weakness

 

How they differ from Traditional methods:

1. Instead of Buy-and-Hold they rely on Buy-and-Adjust

2. Instead of Asset Allocation they utilize Adaptive Allocation

3. Instead of Diversification they increase holdings showing strength and eliminate those displaying weakness.

 

We live in a state of “updating” just trying to keep up as our world changes. We update our cars, our computers, phones, and homes to help improve the quality of our lives.

 

But yet, the majority of investors have NEVER updated their portfolio approach.

 

At this point you have a decision to make:

1. Do what you’ve always done, and get what you have always got or

2. Choose another path

 

#AdaptiveInvesting

 

Disclaimer: This newsletter is a publication dedicated to the education of individual investors for informational service only. The information provided herein is not to be construed as an offer to buy, sell or hold a stock of any kind. All economic and performance data is historical and not indicative of future results.

 

There are many factors that affect investment performance including, but not limited to, general economic and market conditions including market volatility. There can be no assurance that these factors will affect future investment performance in the same manner as historical performance. All investments involve risk of loss. There can be no assurance that a portfolio will achieve its investment objective.

 

Advisory services offered through Enhance Wealth, a member of Advisory Services Network, LLC, 6600 Peachtree Dunwoody Road, Embassy Row 600, Suite 575, Atlanta, GA 30328. 770-352-0449 Insurance products and services offered through Enhanced Capital, LLC. Advisory Services Network, LLC and Enhanced Capital, LLC are not affiliated.