This coming Wednesday:  “Hump Day” or “Wacky Wednesday”?

The U.S. Department of Labor has an opportunity to make an historic ruling that will benefit everyone saving for retirement. The final version of the highly anticipated “Fiduciary Rule” is to be announced on Wednesday, April 6.

Why is this important? The fiduciary standard that Registered Investment Advisers (like Carnegie) live by will be forced upon any adviser providing investment guidance to retirement plan accounts. In other words, advisers that are currently permitted to recommend only products that earn them the most commissions will finally be forced to come clean.

Since 1907, "Be Prepared” has been the motto for millions of Boy and Girl Scouts around  the world. The expression represents the constant readiness and willingness in both mind and body to do the right thing at the right moment. You don’t have to be a scout to understand the motto applies to all of us. Here are five components of a strong financial plan:

As the calendar turns, we look towards the New Year with optimism on what can be accomplished over the next twelve months.  Not in terms of performance, as 2015 reminded us, much of that is out of our control.  We can construct solid portfolios, but the market will deliver what it will.  What is in your control is the action you take this year that you didn’t take last year to improve yourself.  This is often called your New Year’s resolutions, typically a list hastily compiled and often dismissed by Martin Luther King Day.  This year we’d like to suggest making one resolution in 2016 that will improve either your life or the life of someone else you love.

Congress once again waited until the final hours to provide tax clarity by passing the Protecting Americans from Tax Hikes Act of 2015 (PATH). The Act does considerably more than the typical tax extenders legislation seen in prior years. It makes permanent over 20 key tax provisions. Here are some of the more popular provisions. 

For Individuals:

Charitable Distributions from IRAs

The Act permanently extends the provision for individuals age 70 1/2and older to be allowed to make tax-free distributions from individual retirement accounts (IRAs) to a qualified charitable organization. The treatment continues to be capped at a maximum of $100,000 per taxpayer each year. Therefore, amounts in excess of $100,000 must be included in income, but may be taken as an itemized charitable deduction, subject to the usual adjusted gross income (AGI) annual caps for contributions.

Points to note about the IRA charitable rollover:

• Married individuals filing a joint return may jointly exclude up$200,000.
• You can use an inherited IRA to donate but you have to be at least 70 ½
• The charity receiving donated IRA funds may not be a donor advised fund, supporting organization, or most private foundations.

IRA assets are particularly favorable when donating to charity, rather than leaving to heirs, because

Have you had the talk yet?  No, not “that talk”.  To mix a metaphor, the birds and the bees are already out of the barn at this point!  No, this talk is about your financial plan. With the holidays approaching, you may want to consider using this time to enter this conversation. Below are some practical tips you can use to get the conversation started.

1. Don’t Make It Awkward

Appropriate communication of your financial picture is very much a part of a successful financial plan.  After all, it is likely that family members will be the recipients of your estate someday.  They may even be called upon to help manage your finances should the need arise.  It can be a little intimidating for someone thrust into that position without any prior knowledge. Remember to keep calm and have patience.  After all this involves money, family, and the future.  All the makings of a soap opera!  If it helps, have an outline or topic list prepared.

Thanksgiving is a time when families traditionally get together and celebrate the holiday.  While spending time with family often involves eating/drinking, and watching football (and the occasional nap if you’re lucky), it also may be a great time to discuss family finances at some point over the extended weekend together.  After all, how many times can you rave about those sweet potatoes? 

The markets moved dramatically up and down in the third quarter, ending down.  The volatility and decline seems out of sync with the U.S. economy which has continued to show growth, albeit without much in the way of animal spirits.  The U.S. has a historically low unemployment rate, exhibits decent growth in consumer spending and shows improved housing prices and low inflation.  

But, investors do not like uncertainty.  A combination of factors and fears of the unknown appear to be at play.  It is noted that the most dangerous times for financial markets is when “stories” become broken.  A whole crop of stories broke down in the third quarter from “Invincible China” to “Energy Demand Always Growing Faster than Supplies.”   This in turn has resulted in multiple levels of uncertainty:

When we think about investing in equities here at Carnegie, we think of the companies we invest in as businesses. If I polled 5 random people off the street and asked them to list 5 good companies, depending upon their age, sex and race, I would probably hear names like Apple, Facebook, Google, Tesla and Netflix. While these companies have performed admirably in the last few years, we never lose sight of our pursuit in finding great businesses with sustainable business models or what Warren Buffet likes to call a “moat”. What if I told you that one of the best sectors to invest in over time is a collection of boring, slow growing businesses? 

A recent survey indicated that the average person’s digital estate included assets valued at over $65,000. Actor Bruce Willis has been reported as being in litigation with Apple over his ability to leave his daughters his 60,000+ selection iTunes Library.  (Apple’s policy has been that the music is licensed to you rather than owned by you so that after your death the library is extinguished).  While this is extreme, your digital assets typically can include:

The recent market sell-off has garnered quite a bit of attention, and we wanted to reach out to let you know our thoughts. We know this kind of market activity is unsettling. This current slide in equity prices feels particularly unpleasant, since the market has been mostly placid this year and has been on a steady advance the last six years.

            For the last four years, whenever a news report emanates from Greece, it has been suggested as an excuse for the stock market advancing or declining.  This quixotic response has caused undo nervousness as the latest Greek drama unfolds here in the middle of 2015.  It is certainly possible they will agree to kick the debt problem further down the road or slip into default by not paying their debts, either way the impact to your portfolio will likely be negligible.