Archive for 'June 2015'

    Will Mobile Payments Revolutionize How We Pay?

    June 29, 2015 4:35 PM by Subrata Ghose

    With the current pace of technology, some experts believe digital payment options will only expand and improve as next-generation cybersecurity advances. 

    Next time you hear the advertising slogan, “What’s in your wallet?”, consider how you feel about digital wallets—for example, using a smartphone to buy something at a store. 

    Read More »

    Small-Cap World Tour: The REIT Time for Spain?

    June 26, 2015 9:55 AM by Harold E. Sharon

    With quantitative easing driving recovery in Europe, some Spanish real estate investment opportunities feature the potential for attractive yields and capital appreciation.

    (Third of a three-part series.)

    After investing aggressively in German real estate companies, Lord Abbett’s international small cap equity team has found similar opportunities in Spain, one of the cheaper rental markets for commercial space in Europe.

    Read More »

    How to Account for Aftertax 401(k) Contributions in a Rollover IRA

    June 25, 2015 2:35 PM by Brian Dobbis

    IRS Notice 2014-54 answered a question investors and advisors had been asking for years.


    In September 2014, the IRS issued guidance, IRS Notice 2014-54, on a matter that had baffled advisors and clients alike: how to allocate aftertax qualified-plan assets to rollovers. The main question was: Can aftertax (nondeductible) money in a 401(k) be rolled over (converted) to a Roth IRA tax-free?

    Yes, says the IRS.

    Read More »

    Corporate Bonds: Behind the Boom in Non-Dollar Issuance

    June 23, 2015 10:15 AM by Andrew H. O'Brien, CFA

    U.S. companies are attracting new investors and locking in low borrowing costs outside the United States.

    If there were any doubts remaining as to the globalization of finance, recent news of Apple’s first Japanese yen-denominated bond issue should have converted doubters into believers. But for those who may not have been paying close attention, this neither was the first Apple bond issue denominated in non-U.S. dollars nor is Apple the first U.S. company to issue bonds in other than its home currency. 

    Read More »

    Small-Cap World Tour: A Yen for Japan

    June 19, 2015 12:20 PM by Harold E. Sharon

    Why Japan is attracting more foreign investors in small caps

    (Second of a three-part series.)

    The Lord Abbett International Opportunities Fund looks at a variety of companies in small cap. They may be best of breed, with a long track record, quality management, and strong niches they dominate. They may be younger companies with true growth potential in relatively new industries, or they may simply be overlooked companies, whose intrinsic value may have been underestimated by the market.

    Read More »

    A Single Form That Can Make a Big Difference

    June 18, 2015 4:40 PM by Brian Dobbis

    IRS Form 8606 may be the single most important document for owners of IRAs that contain aftertax dollars, and it could save them from being taxed twice on their retirement savings.


    In my estimation, IRS Form 8606, Nondeductible IRAs should be required reading for all financial advisors and their clients. Why? Because it is the most important—and frequently overlooked—document governing the taxation of traditional IRAs. Ignorance of this form and its purpose could result in individuals overpaying taxes on their retirement savings. 

    Read More »

    Bonds: Is More Transparency Better?

    June 17, 2015 12:45 PM by Andrew H. O'Brien, CFA

    The regulatory push for transparency will soon reach nearly every corner of the U.S. bond market. But does the benefit outweigh the costs? 

    TRACE is an acronym well known in the bond markets. It stands for Trade Reporting and Compliance Engine, and it was launched in 2002 by the National Association of Securities Dealers (NASD) to increase the transparency of the corporate bond market. (In 2007 NASD was renamed the Financial Industry Regulatory Authority or FINRA, as it is known today.)

    Read More »

    Small-Cap World Tour: Passage to India

    June 16, 2015 4:50 PM by Harold E. Sharon

    Why certain small caps in India appear more attractive than in China

    (First of a three-part series.)

    Imagine a politically dysfunctional country that imports 80% of the oil it consumes. If world oil prices hit $100 or more, double-digit inflation is likely to ensue. Factor in a new pro-market government, widespread reforms and lower commodity prices, including oil, and that country is likely to attract considerable amounts of international investment.

    Read More »

    Making Early Retirement Withdrawals without Penalty

    June 12, 2015 9:42 AM by Brian Dobbis

    There are several ways individuals can avoid early-withdrawal penalties if they take distributions from their IRAs before reaching 59½. A so-called 72(t) payment plan is one way.


    Do you have clients who want or need to get access to their retirement funds before age 59½? Taking an IRA distribution prior to that age generally subjects the account owner to both income taxes and a 10% early-withdrawal penalty, unless an exception applies. In a previous blog—“Taking Retirement Withdrawals before 59½ without Penalty”—we offered a broad overview of the statutory exceptions to the early-distribution penalty.

    Read More »

    Is Inflation Ready for Its Own "Liftoff"?

    June 9, 2015 4:05 PM by Timothy Paulson

    Greater-than-expected increases in certain price measures have roiled bond markets in the U.S. and elsewhere.

    Inflation is starting to make waves again in fixed-income markets. But this time, the action started outside the United States. A report released by the German Federal Statistical Office on June 1 said that the country’s overall consumer price index is expected to rise to a year-over-year rate of 0.7% in May.  

    Read More »

    Real Questions from Real Advisors

    June 4, 2015 1:10 PM by Brian Dobbis

    The intricacies of IRAs provide fertile ground for questions from financial advisors who want to maximize the opportunities presented by these ubiquitous retirement savings tools.


    IRAs always are a popular topic among advisors, because they are a frequent subject of discussion with their clients. I could devote blogs to many aspects of IRAs, which remain one of the most accessible ways for people to save for their golden years.

    Read More »