Glossary – Asset Management
and Retirement Planning Terms
Concentrated Positions
A single holding that makes up more than 5% to 10% of your portfolio can create risk because if that stock (or the respective sector that stock is in) experiences a significant decline, your portfolio may suffer much greater volatility than if you held a diversified asset mix. A disproportionately large single stock holding can…
Cost-Effectiveness
This involves costs associated with being a shareholder of a mutual fund, exchange-traded fund (“ETF”), closed end fund, or other investment that is managed by a third-party. For example, mutual fund costs can include: management fees, sales loads, and redemption fees. As an independent fee-only fiduciary financial advisor, we have a tremendous advantage in helping…
Custodial Accounts
There are two types of custodial accounts that are most commonly referred to as the Uniform Transfers to Minors Act (UTMA) and the Uniform Gifts to Minors Act (UGMA). These accounts can allow parents and/or grandparents to start investing for a child today. A UTMA or UGMA account is similar to a brokerage or taxable…
Detailed Reporting
We prioritize efficiency and convenience for our clients. Our goal is to streamline and simplify your financial life and investment accounts. We have software and tools to consolidate reporting to provide an easily accessible overview of your financial performance and status. Clients receive direct custodian reporting containing a description of all transactions and all account…
Disability Insurance
This can be critical for some people depending on circumstances. Earnings are the biggest asset (depending on stage of career). Disability insurance replaces part of your income, usually around 60% up to a specified amount, when an illness or injury is ongoing or permanent. All disability is not created equally. Now is a good time…
Distribution Strategies
Once you reach retirement, it is important that you manage your retirement withdrawals from various accounts as tax-efficiently as possible. Taxes will likely be one of your biggest expenses in retirement. It is important that you stay on top of your income and potential tax liability each year. Your investment returns may be significantly different…
Diversification
The goal of diversification is to improve the probability of success for your investments, regardless of economic and market conditions. Choosing the right mix of investments and then periodically rebalancing and monitoring your choices can make a big difference in your outcome. We believe that you should have a diversified mix of stocks, bonds, and…
Donor-Advised Funds (DAF)
Generally, a donor advised fund is a separately identified fund or account that is maintained and operated by a section 501(c)(3) organization, which is called a sponsoring organization. Each account is composed of contributions made by individual donors. Once the donor makes the contribution, the organization has legal control over it. However, the donor, or…