Issue 35.10

The two words signify a far-reaching kind of financial care.

There’s financial planning, and then there’s wealth management. Think of wealth management as a step up from garden-variety financial planning. One office (rather than one person) provides a range of services for a client: personal financial planning and investment management, tax reduction and estate planning strategies, and occasionally in-house legal resources. Business continuation planning, tax preparation and even budgeting and bill paying are sometimes added to the menu.

The difference is really big-picture. Financial planning usually means creating a strategy for accumulating wealth for retirement and personal goals. Investment management focuses on managing financial assets with a performance level in mind. Wealth management, in comparison, considers the total net worth of a family, a couple or an individual. It weighs financial decisions in light of an investment portfolio and additional components of the financial picture such as real estate, insurance, a business, charitable gifting and more.

Yet it is also about paying attention to detail. Every successful professional or business owner reaches a point of delegation – there comes a point at which you can’t do it all yourself. Indeed, it can be hazardous to try and keep track of every detail without help. The same goes for your finances – your taxes, your investments, your various accounts.

Good wealth management helps you stay on top of things. A skilled wealth management firm pays attention to many of the financial details in your life for you. You can free up your mind. You feel confident because the wealth management firm has an ongoing relationship with you, with regular reviews and communication. 

Wealth management unites advisors from different disciplines as a team. The team looks at your goals, needs and priorities to determine the right, individualized strategy for guiding your invested assets and enhancing your net worth.

When is it time for wealth management? If you have too many financial concerns, issues or priorities to address by yourself, then it is certainly time for this kind of financial care. And even if your financial life is less complex, significant wealth calls for a vigilant, ongoing management approach.

Scott S. Lovell is the founder of Lovell Hathaway, Your Retirement SpecialistSM , and is a registered representative offering securities and advisory services through Geneos Wealth Management, Inc. Member FINRA and SIPC.  For additional information, Scott can be reached at (435) 656-2518.

Securities and advisory services offered through Geneos Wealth Management, Inc. Member FINRA/SIPC

This material was prepared by Peter Montoya Inc., and does not necessarily represent the views of the presenting Representative or the Representative’s Broker/Dealer. This information should not be construed as investment advice. Neither the named Representative nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information.. www.petermontoya.com, www.montoyaregistry.com, www.marketinglibrary.net

Issue 31.10

What it is, why people opt for it.

Ever hear of critical illness insurance? This isn’t standard-issue disability insurance, but a cousin of sorts. With people living longer, it is a risk management option entering more people’s lives.

The notable wrinkle about this type of insurance is that the insurer issues you a lump sum while you are alive.

Insurance for a prolonged health crisis:

You buy critical illness insurance to help you out in case you are diagnosed with, suffer from, or experience a serious, potentially life-threatening health concern. Now, what does an insurer define as “serious” or “life-threatening”? That varies.

Events or illnesses that often qualify include organ transplants, open-heart surgeries, deafness or blindness, Alzheimer’s disease, HIV or AIDS diagnoses that are not sexually linked, heart attacks, paralysis or the loss of limbs, serious cancers and other maladies. Many non-fatal, but trying conditions also fall within the category.

The idea is that you will use the payout to get through the crisis financially – the treatment, the surgery, the costs incurred. The cash premium is either paid directly to you, or to someone that you designate.

A lump sum to use as you see fit. While critical illness insurance pays out a lump sum to the ill, insured party, there are usually no strings attached to the money. It usually does not have to be used for medical payments. The money is tax-free, and you can use it to pay hospital bills, living expenses, and business expenses … whatever costs you need or want to pay in a time of crisis.

Things to remember:

Critical illness insurance policies only pay out if you come down with one of the stipulated illnesses. This is why many people do not purchase them. However, with lifespans extending, many people recognize that more years may give them more chances to encounter a serious but survivable illness.

If you would like to know more about critical illness insurance and whether it may be appropriate for you or a loved one, then be sure to talk with a qualified insurance or financial professional today.

Scott S. Lovell is the founder of Lovell Hathaway, Your Retirement SpecialistSM , and is a registered representative offering securities and advisory services through Geneos Wealth Management, Inc.  Member FINRA and SIPC.  For additional information, Scott can be reached at (435) 656-2518.

These are the views of Peter Montoya, Inc., not the named Representative nor Broker/Dealer, and should not be construed as investment advice. Neither the named Representative nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your Financial Advisor for further information. www.montoyaregistry.com www.petermontoya.com

Issue 27.10

If passed, H.R. 3524 would spare some heirs from estate taxes:

An interesting bill on the back burner of Congress:

Last summer, Reps. Mike Thompson (D-CA) and John Salazar (D-CO) co-sponsored H.R 3524, The Family Farm Preservation and Conservation Estate Tax Act. H.R 3524 would exempt farms and ranches from estate taxes provided the land keeps being used for farming or ranching or has a conservation easement.1

The bill was referred to the House Committee on Ways and Means last summer, and as equilibrium returns to Congress, perhaps its momentum will resume.2

A way to address a huge problem:

Usually, farm families have to sell part or all of their acreage just to pay estate taxes. This has been a factor in the decline of the family-owned farm or ranch in America. It has also hurt rural economies, impacted food production, and affected stewardship of rural lands.

A return to pre-EGGTRA estate tax levels in 2011 would definitely make the problem worse. Even if Congress follows the President’s preference and estate taxes return to 2009 levels in 2011, you have a tax condition that offers no incentive for a family to keep ranching or farming.

A union of interesting allies:

The Environmental Defense Fund (a conservation lobby) and the Public Lands Council (a ranching and farming lobby) are united in support of H.R. 3524. The California Cattlemen’s Council and the Land Trust Alliance are also on board with the bill, as well as two dozen more farming organizations.3

Help keep the momentum going:

As Congress put aside just about everything else (including the estate tax) to focus on health care reform, this was one of many important pieces of potential legislation that was set aside for the time being. Contact your local Senator or Representative to show them your interest in the bill today.

Scott S. Lovell is the founder of Lovell Hathaway, Your Retirement SpecialistSM , and is a registered representative offering securities and advisory services through Geneos Wealth Management, Inc.  Member FINRA and SIPC.  For additional information, Scott can be reached at (435) 656-2518.

Securities and advisory services offered through Geneos Wealth Management, Inc. Member FINRA/SIPC

This article was written by Peter Montoya Inc., not the named Representative or Broker/Dealer, and should not be construed as investment advice. Neither the named Representative nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information.

www.montoyaregistry.com www.petermontoya.com

Citations.

1 edf.org/pressrelease.cfm?contentID=10353 [8/20/09]

2 thomas.loc.gov/cgi-bin/bdquery/z?d111:h.r.03524: [8/20/09]

3 cfbf.org/agalert/AgAlertStory.cfm?ID=1375&ck=70FEB62B69F16E0238F741FAB228FEC2 [9/2/09]

Issue 23.10

Now is a good time to examine what’s in your portfolio.

The stock market is unsettled … and perhaps its fluctuations are unsettling you. It’s a stressful time for the economy and Wall Street, and you may be concerned about your portfolio given what’s going on with oil prices, the real estate market, and rising unemployment figures. It may be a good time to review how your assets are invested.

Is your portfolio balanced? A balanced portfolio may help you ride out stock market turbulence. Stocks and mutual funds aren’t the only asset allocation choices you have, and you won’t be alone this winter if you decide to examine other investment options.

Fixed annuities and Treasuries become attractive to investors when the market turns volatile. Bonds tend to maintain their strength when stocks perform poorly; fixed annuities are simply contracts with insurance firms, not correlated to stock market performance (though certain types of annuities may enable you to take advantage of stock market gains while maintaining your principal). Fixed-income mutual funds, dividend income funds and bond funds also have their adherents.

Last but not least, you have cash, though cash holdings haven’t traditionally performed anywhere near the level of the stock markets.

Are you retired, or retiring? If you are, this is all the more reason to review and possibly even revise your portfolio. Frequently, people approach or enter retirement with portfolios that haven’t been reviewed in years. The asset allocation that seemed wise ten years ago may seem foolhardy today.

Often, people in their fifties and sixties feel they need to accumulate more money for retirement, and that feeling leads them to accept more risk in their portfolio than they should. In the absence of a salary, however, you’ll likely want consistent income and growth, and therein lies the appeal of a balanced investment approach designed to manage risk while encouraging an adequate return.

Why not take a look into your portfolio? Ask your financial advisor to assist you. You may find that you have a mix of investments that matches your risk tolerance. Or, your portfolio may need minor or major adjustments. The right balance may help you insulate your assets to a greater degree against financial ups and downs.

Scott S. Lovell is the founder of Lovell Hathaway, Your Retirement SpecialistSM , and is a registered representative offering securities and advisory services through Geneos Wealth Management, Inc.  Member FINRA and SIPC.  For additional information, Scott can be reached at (435) 656-2518.

These are the views of Peter Montoya, Inc., not the named Representative or Broker/Dealer, and should not be construed as investment advice. Neither the named Representative nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your Financial Advisor for further information.

Issue 15.10

It’s easy to be victimized. What can you do to protect yourself?

Identity theft can be as primitive as “ghosting” – taking a dead person’s name and making a fake Social Security card with a scanner, a color copier, and light-blue marbled paper from an art supply store. Or it can involve sophisticated cybercrime forums such as CardersMarket – 6,000 members strong with a server based in Iran, outside the grasp of U.S. authorities. But there are ways you can defend yourself. Here are a few …

Don’t trash it, shred it. Shred anything financial aside from your tax records: credit card statements, bank statements, old checks, deposit slips, you name it. A cagy thief can borrow thousands of dollars or order checks in your name with such data. If you really must keep these periodic records, hide them in the most unvisited place possible.

Hide your Social Security card. The only time you need to show it to anyone is when you start a new job. Otherwise, there’s no need to carry it around.

Don’t sign the backs of your credit or debit cards. Don’t put your autograph below the magnetic strip. Instead, write “See I.D.” Clerks will ask to see the identification of the card user, a step that might discourage (or alert onlookers to) a thief.

Don’t buy things through obscure websites or payment services. If you’ve never heard of the company or the payment method, don’t take the risk – or at the very least, Google to see if there have been any identity theft problems linked to them.

Don’t talk business on cordless phones (or cell phones). Have you ever picked up a cordless phone and heard portions of your neighbor’s conversation? It’s common, because cordless phones (and cell phones) use very low frequencies. Use a landline. Carry altered copies of driver’s licenses and ID cards. Make copies of them to carry in your wallet or purse, with the last few digits blacked out. A thief can only guess at the missing digits.

Ask for an annual credit report from Equifax, TRW and Experian. These are the three American credit reporting agencies. Get an annual report from each of them; this will tell you if someone else has opened an account in your name.

Scott S. Lovell is the founder of Lovell Hathaway, Your Retirement Specialist^SM , and is a registered representative offering securities and advisory services through Geneos Wealth Management, Inc.  Member FINRA and SIPC.  For additional information, Scott can be reached at (435) 656-2518.

These are the views of Peter Montoya, Inc., not the named Representative or Broker/Dealer, and should not be construed as investment advice. Neither the named Representative or Broker/Dealer give tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your Financial Advisor for further information.

Issue 11.10

Meet diversification, patience, and consistency.

Any investor would do well to call on three friends during the course of his or her financial life: diversification, patience and consistency.  Regardless of how the markets perform, they should be a part of your investment philosophy.

Diversification.  The saying “don’t put all your eggs in one basket” has real value when it comes to investing.  In a bear market, certain asset classes may perform better than others.  Ditto for a bull market.  If your assets are mostly held in one kind of investment (say, mostly in mutual funds, or mostly in CDs or money market accounts), you could be hit hard by stock market losses, or alternately lose out on potential gains that other kinds of investments may be experiencing.  So there is an opportunity cost as well as risk.

This is why asset allocation strategies are used in portfolio management.  A financial advisor can ask you about your goals and tolerance for risk and assign percentages of your assets to different classes of investments.  This diversification is designed to suit your preferred investment style and your objectives.

Patience.  Impatient investors obsess on the day-to-day doings of the stock market.  Have you ever heard of “stock picking” or “market timing”?  How about “day trading”?  These are all attempts to exploit short-term fluctuations in value.  These investing methods might seem fun and exciting if you like to micromanage, but they will add stress and anxiety to your life, and they are a poor alternative to a long-range investment strategy built around your life goals.

Consistency.  Most people invest a little at a time, within their budget, and with regularity.  They invest $50 or $100 or more per month in their 401(k) and similar investments through payroll deduction or automatic withdrawal.  In essence, they are investing on “autopilot” to help themselves build wealth for retirement and for long-range goals.  Investing regularly (and earlier in life) helps you to take advantage of the power of compounding as well.

Are diversification, patience and consistency part of your investing approach?  Make sure they are.  If you don’t have a long-range investment strategy, talk to a qualified financial advisor today.

Scott S. Lovell is the founder of Lovell Hathaway, Your Retirement Specialist^SM , and is a registered representative offering securities and advisory services through Geneos Wealth Management, Inc.  Member FINRA and SIPC.  For additional information, Scott can be reached at (435) 656-2518

These views are those of the author and should not be construed as investment advice. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please consult your Financial Advisor for further information.  Diversification does not ensure a profit or protect against loss in a declining market.

Issue 8.10

How’s your pension plan doing?  Many people know they have a pension plan, but they’re not quite sure how it works, how stable it is, or exactly how their money is invested.  The details are often hazy.

Pension plans are also called “defined benefit” plans because they provide a predetermined, continuous income for retirement.  This fixed payout is generally determined by factors such as your exit salary and your seniority or longevity at work.  Government pension plans commonly require employer contributions, though union and private pension plans may not.

If you do not have a pension plan:

It may be worthwhile to find out if your employer offers one.  Ask for the details, and be sure to find out at what point you become eligible.  It’s typical for an employee to gain eligibility after three to five years.

If you have a pension plan:

It’s important to keep tabs on it and make sure you understand it.  For example – do you know if your plan is stable?  Increasingly, employers are terminating pension plans and either directing pension assets into annuities or issuing lump-sum payouts to workers.

If you were in a pension plan that was terminated, or if you had a pension plan with a former employer that has since gone out of business, contact the Pension Benefit Guaranty Corporation (www.pbgc.gov).  This is an agency of the federal government created to protect pension plan assets.

If you are more than five years away from retirement it may seem too soon to bother tracking down pension plan details, but it’s never too soon to start.

It’s important to get all the information you can about your plan, and once you have that information, you need to keep up with it.

After all, your retirement may depend on it.

Scott S. Lovell is the founder of Lovell Hathaway, Your Retirement Specialist^SM , and is a registered representative offering securities and advisory services through Geneos Wealth Management, Inc.  Member FINRA and SIPC.  For additional information, Scott can be reached at (435) 656-2518.

This article was written by Peter Montoya, Inc., not the named Representative or Broker/Dealer, and should not be construed as investment advice. Neither the named Representative nor Broker/Dealer give tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your Financial Advisor for further information.

Issue 6.10

A little phrase that may mean a big difference.  When you read about investing and other financial topics, you occasionally see the phrase “tax efficiency” or a reference to a “tax-sensitive” way of investing.  What does that really mean?

The after-tax return vs. the pre-tax return.  Everyone wants their investment portfolio to perform well.  But it is your after-tax return that really matters.  If your portfolio earns you double-digit returns, those returns really aren’t so great if you end up losing 20% or 30% of them to taxes.  In periods when the return on your investments is low, tax efficiency takes on even greater importance.

Tax-sensitive tactics.  Some methods have emerged that are designed to improve after-tax returns.  Money managers commonly consider these strategies when determining whether assets in an investor’s account should be bought or sold.

Holding onto assets.  One possible method for realizing greater tax efficiency is simply to minimize buying and selling to reduce capital gains taxes.  The idea is to pursue long-term gains, instead of seeking short-term gains through a series of steady transactions.

Tax-loss harvesting.  This means selling certain securities at a loss to counterbalance capital gains.  In this scenario, the capital losses you incur are applied against your capital gains to lower your personal tax liability.  Basically, you’re making lemonade out of the lemons in your portfolio.

Assigning investments selectively to tax-deferred and taxable accounts.  Here’s a rather basic tactic intended to work over the long run: tax-efficient investments are placed in taxable accounts, and less tax-efficient investments are held in tax-advantaged accounts.  Of course, if you have 100% of your investment money in tax-deferred accounts such as 401(k)s or IRAs, then this isn’t a consideration.

How tax-efficient is your portfolio?  It’s an excellent question, one you should consider.  But this brief article shouldn’t be interpreted as tax or investment advice.  If you’d like to find out more about tax-sensitive ways to invest, be sure to talk with a qualified financial advisor who can help you explore your options today.  What you learn could be eye-opening.

Scott S. Lovell is the founder of Lovell Hathaway, Your Retirement Specialist^SM , and is a registered representative offering securities and advisory services through Geneos Wealth Management, Inc.  Member FINRA and SIPC.  For additional information, Scott can be reached at (435) 656-2518.

This article was written by Peter Montoya, Inc., not the named Representative or Broker/Dealer, and should not be construed as investment advice. Neither the named Representative nor Broker/Dealer gives tax or legal advice.  All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.  Please consult your Financial Advisor for further information.

Issue 4.10

Everyone has an estate.  Rich or poor, it doesn’t matter.  When you die, you leave behind an estate.  For some, this can mean property, cash money, assets and more.  For others it could be as simple as the $10 bill in their wallet and the clothes on their back.  Either way, what you leave behind when you die is considered to be your “estate”.

Why plan?  Well, even if you’re just leaving behind the $10 bill in your wallet, who will inherit it?  Do you have a spouse?  Children?  Is it theirs?  Should it go to just one of them, or be split between them?  This (quite simply) is what estate planning is all about.  

Who needs estate planning?  While it is absolutely possible to die without planning your estate, I wouldn’t say it is advisable.  If you die without an estate plan, your family could face major legal issues and (possibly) bitter disputes.  So in my opinion, everyone should do some form of estate planning.  Your estate plan could include wills and trusts, life insurance, disability insurance, a living will, a pre- or post-nuptial agreement, long-term care insurance, power of attorney and more.

Why not just a will?  Basically, a will tells the world what you’d like to have happen, but other items (like properly prepared and funded trusts) can provide the tools to make things happen, and help your heirs to avoid probate.

So, what is “advanced” estate planning?  Advanced estate planning is generally something those with a very high net worth should consider.  For example, if you are single and your net worth exceeds $1.5 million dollars, or if you are married and (as a couple) your net worth exceeds $3.5 million dollars, you should consider advanced estate planning.  The main purpose of advanced estate planning is to reduce taxes.  The use of unified credit, gifting strategies, trusts and more can help your heirs receive the highest benefits possible under federal and state laws.

Where do you begin?  Whether you need basic or advanced estate planning, I would advise you to speak with qualified professionals.  A Financial Advisor can refer you to a good estate planning attorney and a qualified tax professional, and lead a team effort to assist you in drafting your legal documents.  

Scott S. Lovell is the founder of Lovell Hathaway, Your Retirement Specialist^SM , and is a registered representative offering securities and advisory services through Geneos Wealth Management, Inc.  Member FINRA and SIPC.  For additional information, Scott can be reached at (435) 656-2518.

These views are those of the author and should not be construed as investment advice. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please consult your Financial Advisor for further information.

Issue 2.10

What it is, why people opt for it.

Ever hear of critical illness insurance?  This isn’t standard-issue disability insurance, but a cousin of sorts.  With people living longer, it is a risk management option entering more people’s lives.

The notable wrinkle about this type of insurance is that the insurer issues you a lump sum while you are alive.

Insurance for a prolonged health crisis.  You buy critical illness insurance to help you out in case you are diagnosed with, suffer from, or experience a serious, potentially life-threatening health concern.  Now, what does an insurer define as “serious” or “life-threatening”?  That varies.

Events or illnesses that often qualify include organ transplants, open-heart surgeries, deafness or blindness, Alzheimer’s disease, HIV or AIDS diagnoses that are not sexually linked, heart attacks, paralysis or the loss of limbs, serious cancers and other maladies.  Many non-fatal, but trying conditions also fall within the category.

The idea is that you will use the payout to get through the crisis financially – the treatment, the surgery, the costs incurred.  The cash premium is either paid directly to you, or to someone that you designate.

A lump sum to use as you see fit.  While critical illness insurance pays out a lump sum to the ill, insured party, there are usually no strings attached to the money.  It usually does not have to be used for medical payments.  The money is tax-free, and you can use it to pay hospital bills, living expenses, business expenses … whatever costs you need or want to pay in a time of crisis.

Things to remember.  Critical illness insurance policies only pay out if you come down with one of the stipulated illnesses.  This is why many people do not purchase them.  However, with lifespans extending, many people recognize that more years may give them more chances to encounter a serious but survivable illness.

If you would like to know more about critical illness insurance and whether it may be appropriate for you or a loved one, then be sure to talk with a qualified insurance or financial professional today.

Scott S. Lovell is the founder of Lovell Hathaway, Your Retirement Specialist^SM , and is a registered representative offering securities and advisory services through Geneos Wealth Management, Inc.  Member FINRA and SIPC.  For additional information, Scott can be reached at (435) 656-2518.

These are the views of Peter Montoya, Inc., not the named Representative nor Broker/Dealer, and should not be construed as investment advice. Neither the named Representative nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your Financial Advisor for further information.