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Portfolio Solutions Blog

A common financial goal is to help pay for a child’s college tuition. Many families find 529 plans as a smart and tax-efficient way to finance future higher education expenses. These college savings plans were created by Congress under Section 529 of the Internal Revenue Service, from which they got their name.

Almost all states and the District of Columbia sponsor 529 plans that feature their own investment options and benefits. In most plans, you can contribute to a 529 plan in any state. However, since 529 plans vary, as do each individual’s circumstances, you should do your...

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The end of December through early January in the financial industry is forecasting season – the time of year when market “experts” tell the media how they believe markets will perform over the next 12 months.

Unfortunately, most of what is said is more hype than substance. In fact, the majority of market forecasters are proven wrong.

CXO Advisory Group, a market research firm, studied 6,582 forecasts made by 68 experts about the U.S. stock market from 2005 through 2012. It found that the aggregate accuracy of...

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 “The investor’s chief problem – and even his worst enemy – is likely to be himself.” – Benjamin Graham, The Intelligent Investor

Finding a sensible investment strategy isn’t that difficult, but executing it over the long term is. You may expect the randomness of market returns to likely be the biggest challenge to successful investing, but it’s not. It’s you.

You are a living, breathing investment risk comprised of innate behavioral biases. It’s okay,...

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Here is a market prediction for 2015: investing will be a zero-sum game. Okay, that isn’t much of a prediction because the concept of markets as zero-sum is not new and it applies at all times. Still, understanding this concept can help you make better investment decisions in the new year and beyond.

Essentially, investing is a zero-sum game in that a particular market is made up of the holdings of all investors in that market. Therefore, if one investor outperforms, then another investor must underperform. You can think of it like a poker tournament – for a player to win a hand,...

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At times, things that people believe provide safety and stability can actually do more harm than good. For example, training wheels may help you balance on a bicycle, but on a long-distance trek they can slow your pace and increase the risk of injury.

When investing, cash can have a similar effect on your portfolio. While cash seems like the safest investment, in the long run it can drag down your portfolio and hurt your ability to reach your financial goals. Here’s why:

1. Low returns

As generally low-risk investments, cash investments are expected...

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We have a confession: When creating this blog, we considered timing the market. We tried to determine in advance the ideal time to post it. If we waited too long, we risked publishing after a correction; if we published too early, it could get lost in the noise from market gains.

October and December of last year seemed like opportune times to publish as markets became volatile. But, markets dipped quickly and rallied just as fast to record-breaking highs.

Attempting to publish a blog based on market conditions, like all...

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Some of your investment accounts and assets are more tax-friendly than others. For example, interest earned from bonds is taxed as ordinary income while gains from stocks are taxed at a lower capital gains rate. An investor may use a tax strategy known as asset location in an attempt to manage different tax rules and reduce the overall tax burden in his or her portfolio.

Basically, asset location means placing lower-taxed assets in taxable accounts and higher-taxed assets in tax-advantage retirement accounts. Investment Specialist Jennifer Flaherty demonstrates how it all works in...

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