The Roth IRA Tool Chest Series: The Roth "Emergency Bin"

The Roth IRA is most often viewed as a retirement tool. That makes sense, since “IRA” stands for Individual Retirement Account. Just because it is called a retirement account, however, doesn’t mean it can’t be used in other ways. In fact, there are features built into the Roth IRA that make it perfect for many other uses. This article is the first of a series that will discuss many efficient, creative and often overlooked ideas related to the Roth IRA.

Brokers as Fiduciaries?

On April 6, 2016, the U.S. Department of Labor issued new rules requiring brokers to act in the best interestsof their clients – when advising on retirement accounts. As a Portfolio Solutions® client, you can rest assured that we act in your best interests AT ALL TIMES, whether related to your retirement accounts, taxable accounts or any other financial guidance we help you with. This is because Portfolio Solutions® has always operated as a Registered Investment Advisor, regulated by the U.S.

Market Update - January 2016

Once again, investment markets are acting like investment markets. We understand that the day-to-day numbers and sensationalized media coverage may be disconcerting, but we want to reassure you that this short-term volatility is a natural and healthy part of the market cycle.

Active versus Passive Investing

There are two roads an investor can follow when managing an investment portfolio: active management and passive management. Active management is when investors use stock picking and market timing techniques to try to outperform specific benchmarks. In contrast, passive management refers to a strategy where investors buy index funds that attempt to replicate the return of a specific benchmark.

Three Simple Index Fund Portfolios

I’m often asked to recommend a simple index fund portfolio for people who are just getting started with passive investing and want to learn the basics. There are several good portfolios you can build to suit your needs using a few funds that require little maintenance. Balanced index funds are also a good option for people who don’t want to do any maintenance.

Total Bond Index Funds are Not the Total Bond Market

If you are interested in index funds, it is likely that you own shares in a U.S. total bond market fund or ETF. There are roughly $160 billion invested in total bond market funds and ETFs, most of which follow the Barclays Capital U.S. Aggregate Bond Market index or a derivative of it. This index is widely considered to be “the benchmark” for the U.S. investment grade bond managers. Truth be told, it’s not the best representation.  It’s less — and it’s more.

Save and Grow Rich

What’s the fastest way for younger people to grow their wealth? The answer is to make saving a habit. A solid savings plan that puts away 10 percent of income or more is the most reliable method for growing wealth at an early age. Learning to invest well is also important, but it’s not nearly as important as sticking to a regimented savings plan.

Beyond The Fiduciary Standard

Congress is wrestling with the idea of creating a uniform fiduciary standard for all investment advisors. This would either force stockbrokers (registered reps of brokerage firms) to adhere to the same fiduciary standard that fee-only advisors must follow, or lower the standard for fee-only advisors and raise it somewhat for brokers so there is a meeting in the middle. Will any change fix the problems in the advisor industry? I have doubts.

To Tilt or Not to Tilt

I tilt. Do you tilt? It’s OK to tilt. Many people tilt. I’m not talking about posture or politics – I’m talking about portfolio design.

A portfolio “tilt” is industry slang for an investment strategy that overweighs a particular investment style. An example would be tilting to small-cap stocks or value stocks that have historically delivered higher returns than the stock market. Overweighing to a style is always done with the expectation of achieving a higher return or higher risk-adjusted return than the market.

70 is the New 65

Late baby boomers and the generations that follow are slowly beginning to realize and accept that 70 is the new 65. Retirement on The Golden Pond at age 65 is fast becoming a luxury that few will be able to afford. Most workers haven’t saved enough, and government programs cannot be counted on for a bailout. The solution is to work to age 70, at least part time, and delay taking Social Security benefits.


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