Archive for 'February 2015'

    Putting Your Clients' Tax Refunds to Work for Them

    February 26, 2015 1:50 PM by Brian Dobbis

    The IRS allows taxpayers to deposit their refunds directly into IRA accounts. 


    With tax season in full swing, a number of taxpayers will be receiving federal tax refunds. This represents a tremendous opportunity for them to save for their retirement in a fairly painless way, by having their refunds automatically deposited into an IRA. Individuals may be able to contribute up to $5,500 ($6,500 if age 50 or older at the end of 2014) to a traditional, Roth, or SEP IRA (but not a SIMPLE IRA). 

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    Growth River No. 6: The North American Energy Revival Led by Shale and Solar

    February 25, 2015 11:30 AM by F. Thomas O'Halloran

    The boom in shale gas and oil has ushered in much lower oil and gas prices, which should be supportive of economic growth. Meanwhile, renewable energy sources, led by solar energy, are making progress. 

    Who expected the current low oil and gas prices as recently as one year ago, and how did they come about? 

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    Growth River No. 5: Emerging Nations and Their Mushrooming Middle Classes

    February 24, 2015 12:30 PM by F. Thomas O'Halloran

    While Russia and Brazil are struggling and China’s growth is slowing, a number of other emerging markets have overcome significant structural issues to spread prosperity. 

    The superior growth rates of emerging nations, relative to the developed world, are giving rise to an expanding middle class in these nations. This is lifting millions of people out of poverty.


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    Roth Alert: Is it Time to Convert?

    February 19, 2015 5:35 PM by Brian Dobbis

    Not everyone can contribute directly to a Roth IRA, but almost anyone can convert to a Roth and receive the tax advantages of this powerful savings tool. 


    Tax-free income is perhaps the best-known potential benefit of owning a Roth IRA. Although not all taxpayers are eligible to make Roth contributions, virtually everyone can convert traditional IRAs to Roths. 

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    Growth River No. 4: American Manufacturing's Renaissance

    February 18, 2015 6:00 PM by F. Thomas O'Halloran

    American manufacturers are benefiting from an improved comparative advantage versus other nations, larger markets, and most importantly, from a technology-driven productivity boom.

    America’s industrial base has certainly taken its lumps over the years. But three trends have converged to create a renaissance for American manufacturers. These include an improved economic comparative advantage for U.S. companies (driven by more favorably currency and relative wage differentials, and the shale energy revolution), new emerging nation markets which have created much larger sources of demand for their products, and a technology-driven surge in productivity. The third of these is quickly overtaking the first two as the most powerful influence. 

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    Growth River No. 3: The Dynamic U.S. Consumer Society

    February 17, 2015 6:15 PM by F. Thomas O'Halloran

    Shoppers of the world, rejoice!  Amidst constant innovation in product development, distribution, and social media, consumers are savoring a plethora of choices. 

    In Civilization—The West and the Rest, historian Niall Ferguson explains the historical uniqueness of the United States’ consumer society—so all-pervasive today that it is easy to assume this has always been the case. Yet, in a larger historical context, it is one of the critical factors that propelled the West ahead of the rest of other nations.

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    Risk Management: The Unexpected Benefits

    February 12, 2015 5:15 PM by Alec Crawford

    Careful portfolio monitoring can help add alpha, reduce style drift, and limit accidental factor bets.

    In the popular mind, risk management is all about disaster prevention. If the market hits an air pocket, risk management provides the parachute.

    And that certainly is important. By looking at portfolio metrics and running hundreds of scenario analyses, a good risk management team can provide portfolio managers with a reasonable depiction of the downside risk they face for a particular shock, whether it’s a surge in the value of the dollar, a plunge in oil prices, or any number of other outlier events. But risk management can also reveal less obvious dangers, help a portfolio avoid style drift, and even eliminate portfolio inefficiencies.

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    In-Service Distributions May Fuel Rollover Market

    February 12, 2015 4:00 PM by Brian Dobbis

    Most employers permit workers to take distributions from their plans for the purpose of rolling them over to IRAs. This presents a potentially significant opportunity for advisors who want to build their IRA business.


    Assets in 401(k) retirement plans currently represent $4.5 trillion of the $6.6 trillion in assets invested in defined-contribution plans.1 Moreover, private-sector defined-benefit plans have an additional $3.2 trillion invested.2 This, coupled with more Americans living later into their golden years, creates extraordinary “money in motion” rollover opportunities.

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    Growth River No. 2: Modern Medicine and the Genomics Revolution

    February 6, 2015 10:55 AM by F. Thomas O'Halloran

    Nothing illustrates the allure of transformative innovation like genomics—the study of genes and their function. This is the basis for new medical advances. 

    Modern medicine achieved dramatic breakthroughs in the nineteenth and twentieth centuries, many of these on the battlefields of war and in the  dank colonies of the British Empire. The digital boom is leveraging this progress through the twenty-first century genomics revolution. The genomics revolution has made major strides in the diagnosis and treatment of diseases. These have led historian Niall Ferguson to characterize modern medicine as Western Civilization’s killer app.

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    New IRA Rollover Rule is a Game Changer

    February 5, 2015 5:15 PM by Brian Dobbis

    Be careful not to step out of bounds.


    The new year ushered in a new rule for IRA rollovers that effectively restricts account owners’ access to their IRA funds. It behooves advisors and their clients to know enough about the rule to avoid committing an unintentional foul, which could result in painful penalties.

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    Growth River No. 1: The Digital Boom

    February 5, 2015 1:40 PM by F. Thomas O'Halloran

    The Digital Boom is transforming the way we work, shop, play, travel, learn, and consume content. The pace of change is  likely to increase.

    America’s first two Industrial Revolutions were driven by harnessing the energy of fossil fuels. The third revolution leverages technology. As fossil fuels generated enormous human-equivalent energy, technology enables mankind to relentlessly conquer the distance, spatial, and time constraints of human existence (see Chart 1). Digital technology also continues to automate more of what we do on a regular basis.

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    Growth Rivers Driven By Transformative Innovation

    February 3, 2015 11:30 AM by F. Thomas O'Halloran

    While aggregate economic growth faces stiff headwinds, transformative innovation is remarkably vibrant. 

    Worried about growth in a slow growth environment? There is reason to be—the developed world today faces severe financial and social headwinds. Debt has built up to a stifling level and the developed world is aging. Aggregate growth will likely be subdued as long as these conditions persist. Although government measures such as fiscal and monetary policy can provide near-term help, sustainable growth can only be enabled by what renowned economist Joseph Schumpeter called creative destruction—the “perennial gale” of capitalism. This is the process by which capitalism internally generates growth—new markets, products, and services replace the existing ones. Fortunately, there is evidence that such winds of change are flourishing in the form of relentless innovation, which continues to create new industries and transform those currently in place.

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