Insights – Alpha Fiduciary

The End of Liquidity and it's Effects on Your Portfolio

Mon, 06 Jun 2022 22:24:45 GMT

Don't Assume This Cycle Is Like the Last Cycle

I am writing this piece realizing that while many will miss it, ignore it, it or simply not grasp its relevance – this is arguably the single most important concept relative to growing and protecting your wealth, and should be the basis of evaluating the strategies you employ to manage your wealth going forward.

Joe Zidle - Chief Investment Strategist of Blackstone Group authored the material I am presenting

Global central banks are about to make the most important shift in policy since the early 90’s, this policy change is relevant to understanding the volatility across portfolio asset classes in the last 12 months: The end of a liquidity cycle is the beginning of a coordinated global tightening cycle.

While it is daunting to think that the days of easy money and the “everything rally” are over, this ending marks the start of a new environment that will come with its own opportunities. The new environment will feature dispersion across asset classes, portfolio performance, companies, and sectors. It will require a different approach than the traditional 60/40 portfolio of stocks and bonds. More broadly, it will require creativity, high conviction investing and a renewed look for uncorrelated assets or tactical strategies designed to adjust risk exposure while navigating future market volatility. If ultra-low interest rates and balance sheet expansion benefited beta strategies, monetary tightening will require more active, selective investing, i.e., alpha, to deliver outperformance.

Don't Assume This Cycle Is Like the Last CycleChina a differentiating factor for inflation this time Moving forward, will rates fall back into the post-recession pattern we’ve seen since 1980, or will they revert to the earlier trend? History says it’s close to a 50/50 proposition, but I think there is reason to believe that the 10-year Treasury yield after the next recession will be higher than it is today.

A primary reason for this view is that the underlying inflationary conditions in the US and global economy seem to be more persistent, due in large part to China’s demographics. China is widely credited with driving down prices as its economy grew from low-income to middle income. That leap forward occurred as China benefited from favorable demographics. But a negative replacement ratio and a falling prime age working population fundamentally change China’s role on the manufacturing stage. When China had a labor surplus, it drove costs down. But with its current labor deficit, China’s role as the preeminent low-cost, global manufacturer is being reevaluated.

Figure 1 highlights China’s demographic challenge.

In my view, increased costs in the supply chain, elevated commodity prices that I think could be long-lasting, and widespread labor shortages argue for interest rates to settle at levels structurally higher than the levels of the prior cycle.

Liquidity = Beta

That prior cycle was defined by unprecedented monetary stimulus. As Figures 2 and 3 show, from the end of the Global Financial Crisis in 2009 until now, the combined balance sheets of the Fed, European Central Bank and the Bank of Japan grew from approximately $5.3 trillion to over $23.7 trillion. That persistent central bank accommodation pushed interest rates to a 5,000-year low. Liquidity on that scale provided a massive boost to beta factors.

Figure 2: Central Bank Balance Sheet Assets: federal Reserve, ECB, and BOJ

USD in trillions

Figure 3: History of Global Short and Long-Term Interest Rates

2009–2021: Beta’s stars aligned Record-high profit margins and multiple expansion, fueled by low interest rates, combined to produce the biggest bull market in history. Corporate profit margins increased from 4.3% in the first quarter of 2009 to an all-time high of 13.3% in the fourth quarter of 2021 (see Figure 4). ⁱ The amount of money investors in the S&P 500 paid for each dollar of earnings nearly doubled from 12.1x earnings in February 2009 to a multiple of 23x earnings in January 2022. ⁱⁱ Performance followed: the S&P 500 returned over 17% on an annualized basis from February 2009 through January 2022; the Russell 2000 averaged 15% and the Nasdaq an impressive 21%. ⁱⁱⁱ Each index handily beat its historic average returns.

Figure 4: S&P 500 Net Profit Margins

Investors in fixed income enjoyed similarly high returns as a result of these beta factors. The Bloomberg US aggregate bond index benefited from a 40-year bond bull market since inflation last reared its ugly head in the early 1980s. And in the last cycle, liquidity muted corporate bankruptcy risk. Credit spreads narrowed as financial conditions eased. Corporate bond spreads on the safest investment grade bonds peaked at nearly 14% in 1984, before declining steadily over the following decades to a record low 2.0% in July 2020. A traditional portfolio consisting of 60% stocks and 40% bonds returned 10.7% per annum from 2010 through the end of 2021. ^iv

Tightening = Alpha

Low interest rates and balance sheet expansion created a seemingly unending positive feedback loop for market beta. Good news was good for returns. Bad news was even better. And the worst news of all—a global pandemic—proved the best environment of all for market returns as each recession begot lower rates and easier monetary policy. Now that central banks around the world are on track to hike rates more than 250 times this year while shrinking their balance sheets, those same beta exposures won’t similarly outperform.

Different conditions call for a different mindset

Return assumptions across all asset classes should be dialed back from those of the last cycle. I think a reasonable forward 10-year CAGR assumption for US equity returns is something in the 5% range—around 8% nominal earnings growth. And instead of multiple expansion, we should discount returns for a compression from today’s above-average levels. Interest rates that settle higher than the last couple cycles mean investors in traditional fixed income will be clipping coupons, not enjoying the outsized returns from the secular bond bull market of the past 40 years.

To achieve outperformance, higher conviction investing, and more active management will be needed to make up for returns from beta alone.

Investing in This New Cycle

Investing in good neighborhoods, those companies, and sectors with secular growth tailwinds, will be more important than ever. Free cash flow generation, and a runway to increase it, will be critical as inflation remains a concern for longer. Relying on market beta alone will likely be inadequate to meet many investors’ return expectations. Active management and operational expertise are more likely to drive outperformance than financial engineering alone, and I think investors will benefit from paying a premium for these qualities.

In a fixed income book, this environment will be one in which credit risk is re-introduced as an important consideration. In an era of seemingly unlimited liquidity, the number of non-earning companies skyrocketed, even as credit risk remained historically low. In the face of increased credit risk, senior secured debt and investments that are higher in the capital structure could be well positioned to weather a potential storm. While default rates are still generally expected to be below the historical average in the coming years, I would say that interest rate and credit risk are more evenly balanced than in the past several years. The risk is more skewed to the downside than the upside for both risk factors.

As financial conditions continue to tighten, traditional fixed income may remain positively correlated to stocks. As Figure 5 highlights, the correlation between bonds and stocks is highly variable, depending on the macroeconomic environment. In the late 1970s and the 1980s, they had a strong positive correlation, and since then the relationship has been highly cyclical. Rising interest rates and persistent inflation should prompt investors to reconsider what a “core” portfolio should be.

Figure 5: Stock / Bond Correlation

(Rolling 5 year average

Lastly, I remain of the view that duration risk across all asset classes will be a critical factor in determining performance.

What it means for markets: a new beginning for alpha

The markets were awash in liquidity over the past decade, and the rising tide lifted virtually all financial assets. Now, as the liquidity recedes, we will see which investors were simply riding the wave of beta without any value-add of their own. Divesting from beta-reliant strategies and pivoting towards alpha generation may prove to be a defining driver of outperformance in this cycle.

The cost of money in the financial system literally directly affects or strongly influences every aspect of the capital markets, asset classes, and importantly correlation between asset classes.

Please do not misconstrue my message as a warning that the financial markets are about to crash, quite the contrary for now, we see significant opportunities available today and some which are still developing which were caused by the policy shifts discussed above. That said portfolio strategy for most investors will need to reflect new realities regarding correlation between stocks, bonds, and other asset classes, you should investigate this and understand why a strategy change may be beneficial and how to best execute this.

Time is of the essence here, we see significant opportunities now and dislocations coming next year to both the stock and bond asset classes, preparing for these events now may be one of the most important steps you take in protecting and growing your wealth.

If desired, I am happy to discuss your portfolio and offer my thoughts or a second opinion on your current portfolio strategy.

Be well,

Art Doglione

Inflation and Central Bank Policy Are Top of Mind for Investors

Mon, 23 Aug 2021 21:57:49 GMT

Q3 2021, Inflation and Central Bank Policy Are Top of Mind for Investors

The surge in inflation in 2021 has fueled an intense inflation debate with central banks taking a more benign view that the current rise in inflation is “transitory,” while markets are nervous that the rise in inflation could herald a new phase of higher inflation after decades of low inflation and deflation fears. Major developed central banks, including the US Federal Reserve and European Central Bank, expect that much of the sharp rise in inflation will turn out to be transitory. Several Fed officials commented that the chief sources of rising prices are driven by temporary shortages of key supplies and labor tied to the reopening of the economy.

Our view on inflation is that unless labor costs rise across the board, the free markets will resolve supply/demand imbalances, rising prices will cause demand destruction until prices normalize, that said food and energy prices are likely to remain elevated for some time due to recent policy decisions. As shown below, asset class performance in both equities and REITS has historically been quite good in the 3-4% inflation environment we foresee, gradually rising but controlled inflation is a byproduct of a growing economy and supportive of rising earnings and equity prices.

The above table shows 2021 asset classes have performed consistent with historical norms given a 3-4% inflationary environment, in other words the free markets have accurately priced in the current environment, but you may be wondering – where do we go from here?

Let’s Consider Global Central Bank Policy

Developed market central banks remain on hold as they consider rising inflation to be a “transitory” phenomenon. The Fed expects to keep rates at zero until 2023 but has been signaling that it is time to “start thinking” about tapering quantitative easing purchases. For now, the Fed is likely to keep the pace of its purchases at the current level but may begin reducing the pace of its purchases by early next year. Meanwhile the ECB has committed to increasing purchases in Q3 2021 relative to earlier in the year, while likely preparing the ground for a very gradual tapering of purchases in the fourth quarter.

The Bank of Canada has already announced it will begin QE tapering. There is also the possibility that the Bank of England will let its QE purchases expire in the second half of 2021. Among emerging markets, there is a split between those central banks that have begun down a normalization path as the recovery gains strength and financial stability concerns (i.e., concerns about excess risk taking) move to the fore, and other central banks still grappling with virus-related downside risks. In China, one of the first major economies to exit the pandemic recession, policymakers are already tightening credit and housing policies.

The Bank of Korea took its first steps toward normalization at its latest meeting, with a more hawkish tone in its statement and press conference. By contrast, in the wake of a large second infection wave in India, the Reserve Bank of India could continue to add to its accommodative measures with additional bond purchases and by relaxing regulatory controls and enhancing liquidity measures.

As noted above, most advanced economies have increased fiscal stimulus to deal with the pandemic and confinement measures. Conditional on continued economic recovery and successful virus management, a large part of the extraordinary support is expected to be withdrawn over time. This would result in a tightening of the fiscal stance across countries as measured by a change in the government primary balance. Changes in the overall fiscal stance should be calibrated to overall economic conditions. Too abrupt a removal of fiscal stimulus could threaten the recovery. Too profligate a stance for too long, meanwhile, would further fuel inflation pressure. The infrastructure spending bill currently being negotiated would provide another dose of fiscal stimulus in the US, however, the size, scope, and odds of the bill becoming law are still very much uncertain.

Growth vs. Value

Value Is Still Cheap and Coming Off More Than a Decade of Underperformance: If we are correct, and the cycle has, indeed, turned, it’s likely early days in the outperformance of Value. As shown in Figure 2, style cycles tend to move in multi-year waves. The latest Growth cycle was particularly long at 14 years! As a point of reference, the last Value cycle lasted eight years (2000-2007), however, the most explosive period of outperformance was during the first two years. With Value outperformance beginning last September, we are just nine months into a Value phase.

Meanwhile, Value continues to look cheap relative to Growth on a relative PE basis. Growth stocks typically sell at higher earnings multiples, but the current difference in PE multiples is still more than a standard deviation above its historic average (Figure 3). That is, the PE for Growth is currently 30.2 versus 18.6 for Value, more than an 11-point gap compared to a long-term average of about 5.5.

While growth and value stocks have been battling one another in terms of performance, we had favored growth for several years, though we reduced growth exposure in Q2 2021 to add value exposure, which we believe is poised to outperform as the economic reopening matures.

We’d like to leave you with the understanding that while inflation and central bank policy are significant factors in setting the stage for equity performance going forward, history has shown that the factors underlying policy shifts win the day in the long run.

The markets may continue to experience some near-term volatility thru summer as policy shifts are front and center in investors minds, but given growth in corporate earnings is strong, consumers are spending, and Fed policy shifts are intended toward neutral not hawkish, we see plenty of opportunity for investors.

Be Well.

Alpha Fiduciary is an SEC registered investment advisory firm. The information contained herein should not be construed as personalized investment advice and should not be considered as a solicitation to buy or sell any security or investment advisory services. All investments include a risk of loss. Past performance is no guarantee of future results, and there is no guarantee that future investments will be profitable. For more information please contact Alpha Fiduciary or refer to the Investment Adviser Public Disclosure website ( www.adviserinfo.sec.gov ) to review our Form ADV Brochure.

Economic Cycles and Your Investment Strategy

Fri, 04 Jun 2021 18:39:20 GMT

The Market's Expectation for average inflation

Investors understand that Fed policy decisions affect the markets, and while the Fed has come a long way in clearly communicating its intentions since the Greenspan era, the calendar is perpetually full of scheduled data releases, each viewed as another piece of the puzzle the market is trying to correctly predict in real time.

Inflation is arguably the hottest topic of discussion now, and rightly so, after all it affects the Fed’s interest rate policy decisions, which in turn directly or indirectly affects nearly every other aspect of the capital markets.

For the average investor, these are often nervous times because they are weighing the need for income or growth against risks such as rising interest rates, market volatility, and the potential that their current portfolio of investments will perform poorly with the turn of the next data point released if that data point shows a hotter level of inflation or worsening supply chain imbalances.

Even the argument that inflation is here and rising on a long-term basis vs. were seeing inflation but it’s likely caused by the gradual economic reopening vs pent up consumer demand for such large ticket purchases as autos, homes, appliances. Etc., thus as pent-up demand is satisfied the inflationary environment will subside.

The market gauges expected inflation largely by the 5-year Breakeven Inflation Rate (Shown Above)

While the 5-year BIR clearly shows the market’s expectation for average inflation over the next five years is at its highest level since 2008, periodic excessive market volatility attributed to the inflation issue will likely remain until enough pieces are added to the puzzle for the market to accept that we are likely to experience 2.5-3.0% inflation for some time, rather than runaway inflation triggering the Fed to make aggressive policy moves and choking off future economic growth, that said, it is entirely possible that the puzzle develops to reveal more persistent inflation than is our current view, which would certainly cause us to pivot away from certain portfolio investments such as growth stocks in favor of inflation helped assets such as REITS, and value stocks.

Keep in mind that the Fed’s two primary tools are asset purchases and short-term interest rates. Given the April jobs miss, we can assume that on short-term rates we’re going to see lower for longer and the Fed will hold off on rate hikes near-term, but it doesn’t necessarily mean they’re going to refrain from tapering or slowing asset purchases. Tapering has implications for Treasury bonds, housing, the mortgage markets, and is still likely to begin by late third or early fourth quarter 2021. Right now, the bond market is pricing in a first rate hike for December 2022, but the jobs report makes it much more likely the Fed holds off on rate hikes. The Fed’s language continues to suggest to us that sometime in 2023 is more likely.

The problem is that the Fed has an almost perfect history over roughly 40 years of holding off on rate hikes while the market has long priced them in, only to play catch up and over tightening even after the bond market screams stop! The risks to over tightening are obvious - choking off economic growth concurrent with high interest rates – a difficult situation for investors.

Given economic cycles have been established and repeated for a very long time it would seem that any investment program worthy of your consideration should either have a mechanism for recognizing economic cycle pattern behavior and adjust accordingly as cycles develop, or be run by professionals who will make the appropriate adjustments to keep portfolios “tuned” to the environment, the idea here is called tactical management and its goal is to make hay while the sun shines, while posturing the portfolio more defensively at such times that the system’s signals deem appropriate.

Alpha Fiduciary uses software to help it recognize pattern behavior across markets that may be indicative of cycle turns or inflection points in the financial markets, indicating tactical portfolio changes to help us stay opportunistically postured in our client portfolios at times that our systems deem this exposure to be best, while always watching for changes in markets that may require some tactical reduction or redirection of risk exposure to protect portfolio capital when its deemed best to do so. In short, our process is designed to help keep portfolios both durable and resilient.

As experienced portfolio managers who have managed wealth thru many economic cycles and corresponding financial market turmoil, we believe durability and resilience are the two most important qualities a portfolio management process should impart.

If you believe your wealth management process lacks durability and resilience or find yourself concerned about your portfolio when thinking about the economy and its future direction, we’d be happy to review your current portfolio to provide a second opinion to help you fully understand if your portfolio is designed to likely meet your needs today and over the long run .

We can be reached at 480-505-4033 , or you can email info@alphafiduciary.com , you may also schedule a conversation with us at www.alphafiduciary.com and click the schedule an appointment link.

Alpha Fiduciary is a SEC registered investment advisory firm. This blog is provided for informational purposes only and should not be construed as personalized investment advice and should not be considered as a solicitation to buy or sell any security or investment advisory service. Please refer to the Investment Adviser Public Disclosure website(www.adviserinfo.sec.gov) to review our Form ADV Brochure for more information.

2021 Investment Update

Tue, 16 Feb 2021 01:40:19 GMT

2021 INVESTMENT UPDATE

Raise your hand if you predicted 2020 would see a global pandemic, massive unemployment caused by the first ever government mandated economic shut down in history, a highly contested election, and a stock market recovery from the lows that was amongst the strongest in U.S. history, all in the same year? Ok, put your hand down, there is always one in a crowd! While the calendar has turned all the pages of 2020, there are many differing opinions as to the current health of the U.S. economy and financial markets, have they come too far too soon, what effects will government stimulus and economic dislocations have on the financial markets in 2021 and beyond?

Widespread uncertainty in 2020 failed to dampen the outlook and recovery of equities in Q2 and Q3 2020, record low interest rates were certainly the fuel and spark the markets needed, however the markets took a pause in early Q4 as election chaos gave investors pause, until positive vaccine news once again provided the spark in November 2020. Stocks across the board have risen to new heights, awakening even value stocks from their multiyear slumber. However, following such an impressive rise some on Wall Street believe the rally has come too far too soon, prompting calls of a “bubble” in both stocks and bonds.

While it is our opinion that we are not currently experiencing a bubble in equities, we will grant that the most striking characteristic of economic bubbles, the very thing that fuels their existence is our blindness to them! Perhaps we should first define what a bubble is, one definition of a bubble is that an assets price rises rapidly to the point of being disconnected from any reasonable measure of its inherent value. This is typically caused by emotional inertia driving future expectations higher causing an implausible gap between price and value, some might say Bitcoin! Just an observation largely based perhaps on an inability to make a case for its value given many still can’t even determine if it’s a currency or a commodity! If it’s a currency there is not, and cannot ever be enough in supply to serve this role, if it’s to be viewed as a commodity similarly to gold or silver, I’ve yet to find anything that requires Bitcoin in its manufacture. It may very well continue its explosive price ascent, but attempts to determine “what it’s worth” have been difficult, if not futile.

One asset class where we believe weakness will continue is bonds; with rates at record lows and significantly elevated federal spending to support the economy as well as fund party pledges, we are aware the Fed’s desire is to keep short term rates at low levels, this does not preclude the free markets from pulling the intermediate and long end of the yield curve higher. This realization may seem unsettling to some investors, however, if the economy does start to show better growth in the second half of 2021 as we expect it will, we will likely see rates rise and bond prices fall. Alpha Fiduciary has focused on bond allocations largely supported by real assets or special circumstances which we believe are preferable to own, relative to traditional fixed rate bonds, in rising rate environments.

Finally, earning season will likely provide support for stocks as we begin to see the world return to a more normal operating environment, it would not surprise us to see at least a temporary surge in economic growth before settling in to a more gradual and sustainable GDP growth in the 2.5% range as pent-up demand is satisfied in 2021.

While we don’t think most longer-term investors should underweight stocks in this environment, we favor a core/tactical approach to equities as we believe this presents an attractive upside capture while posed to potentially reduce downside exposure should factors signal to reduce equity exposure in the event it’s warranted.

There are many different approaches to the tactical management of equities, designed and employed with the goal to gain exposure to asset classes when they are rising, and to reduce exposure to those asset classes to limit or reduce downside capture.

If you would like to discover if Alpha Fiduciary’s wealth management approach can benefit you, please visit Alphafiduciary.com, or call us at 480-505-4033.

Alpha Fiduciary is a SEC registered investment advisory firm. This blog is provided for informational purposes only and should not be construed as personalized investment advice and should not be considered as a solicitation to buy or sell any security or investment advisory service. Please refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov) to review our Form ADV Brochure for more information.

Pro Tips We see Opportunities We’ve Not Seen in Many Years

Wed, 12 Aug 2020 20:14:00 GMT

Are you a glass half full or glass half empty person? That’s a trick question because truthfully unless you are actively searching, and surveilling a given situation you will likely only see what’s on the surface and easily seen by … Continue reading

The post Pro Tips We see Opportunities We’ve Not Seen in Many Years appeared first on Alpha Fiduciary .

Pro Tip – How To Deal With High State Income Tax Rates

Fri, 19 Jun 2020 18:44:00 GMT

With the 2018 tax overhaul well behind us, many people who reside in high tax states such as California, Hawaii, New York, etc. are no longer able to fully deduct their high state taxes on their federal tax return. … Continue reading

The post Pro Tip – How To Deal With High State Income Tax Rates appeared first on Alpha Fiduciary .

Negative Interest Rates and Your Portfolio

Mon, 18 May 2020 18:06:00 GMT

In the US, we haven’t yet had to experience a significant period of negative nominal interest rates. But given economic fears and the extreme stimulus measures currently underway in Washington, negative rates on US government bonds could soon become a … Continue reading

The post Negative Interest Rates and Your Portfolio appeared first on Alpha Fiduciary .

Financial Planning Strategies for Today’s Environment

Wed, 06 May 2020 19:36:00 GMT

If you’re looking for a silver lining in the current market downturn, there are several. We have already written about some timely investment ideas and will continue to present what we think is compelling. But did you realize there may … Continue reading

The post Financial Planning Strategies for Today’s Environment appeared first on Alpha Fiduciary .

Positioning your Portfolio for Recovery after the Downturn

Mon, 30 Mar 2020 17:32:00 GMT

It’s easy to forget how high markets had been flying just two quarters ago and how optimistic the mood felt. But thanks to a tiny bug too small to see even with a standard microscope, the world has been turned on its head. Continue reading

The post Positioning your Portfolio for Recovery after the Downturn appeared first on Alpha Fiduciary .

Is My Financial Advisor Really a Fiduciary?

Wed, 18 Mar 2020 17:42:00 GMT

Not all financial professionals must put your interests first When you consult a financial professional about your personal situation, it might be easy to assume that you will receive unbiased financial advice based on your best interests. However, this might … Continue reading

The post Is My Financial Advisor Really a Fiduciary? appeared first on Alpha Fiduciary .

How to Respond When Friends or Family Members Want to Borrow Money

Tue, 03 Mar 2020 16:24:00 GMT

You’re successful, and your friends and family know it. You never seem worried about money. You have a great job, and you can afford all the basics with ease. Congratulations, you are now a target. As much as you might … Continue reading

The post How to Respond When Friends or Family Members Want to Borrow Money appeared first on Alpha Fiduciary .

Qualities to Look for in a Trust Company

Tue, 18 Feb 2020 17:21:00 GMT

Tips for What to Look for in a Trust Company Establishing a trust is an important way to build your legacy and preserve generational wealth. There are multiple ways to set up and fund a trust account, such as through … Continue reading

The post Qualities to Look for in a Trust Company appeared first on Alpha Fiduciary .

Main Street Philanthropy: How the Small Guy Can Give Smart

Tue, 04 Feb 2020 16:59:00 GMT

Americans like to give. According to the Giving USA 2018 report, Americans gave over $410 billion dollars to charities in 2017, and 70% of that was from individuals. You read that right: it was people like you and me, not … Continue reading

The post Main Street Philanthropy: How the Small Guy Can Give Smart appeared first on Alpha Fiduciary .

What is a Trust Protector Provision, and How Can it Improve Your Trust?

Thu, 23 Jan 2020 18:09:00 GMT

You’ve set up your trust, funded it, and handed the keys to a trustee (or, eventually, to a successor trustee). What happens if the trustee fails you through incompetence or malfeasance? Do you or your ultimate beneficiaries have any recourse … Continue reading

The post What is a Trust Protector Provision, and How Can it Improve Your Trust? appeared first on Alpha Fiduciary .

Powers of Attorney: A Critical Part of Your Estate Plan

Thu, 09 Jan 2020 17:40:00 GMT

It is a fact of life that we can’t be everywhere at once. And it is also a sad fact that as we get older, we often lose our capacity to do things for ourselves. Thus, during your lifetime you … Continue reading

The post Powers of Attorney: A Critical Part of Your Estate Plan appeared first on Alpha Fiduciary .

Fantastic Estate Transfer Failures and How to Avoid Them

Tue, 10 Dec 2019 17:07:00 GMT

What Can We Learn From Famous Estate Transfer Failures? We’ve all heard the names of some of the wealthiest families that built their fortunes from modest beginnings; however, did you realize that few have maintained the same purchasing power … Continue reading

The post Fantastic Estate Transfer Failures and How to Avoid Them appeared first on Alpha Fiduciary .

Why You Might Want an Intentionally Defective Grantor Trust

Mon, 18 Nov 2019 17:45:00 GMT

How an Intentionally Defective Grantor Trust Can Benefit You Usually when we hear the word “defective,” we think about an umbrella that doesn’t open, a dangerous children’s toy, or perhaps our last car. And these are generally never defective by … Continue reading

The post Why You Might Want an Intentionally Defective Grantor Trust appeared first on Alpha Fiduciary .

Directed Trust versus Delegated Trust: Which one is for You?

Wed, 06 Nov 2019 16:16:00 GMT

Now that you’ve decided to establish a trust to preserve your family’s legacy, there are many important decisions to make. For example, will you manage the trust assets yourselves or hire an investment advisor? Will you serve as trustee or … Continue reading

The post Directed Trust versus Delegated Trust: Which one is for You? appeared first on Alpha Fiduciary .

2019 Smart Year-End Financial Moves

Thu, 24 Oct 2019 15:19:00 GMT

If you’re searching for smart year-end financial moves to make, the following items may help you save money on this year’s taxes or get on track for a better 2020. The below are not in any order of importance, and … Continue reading

The post 2019 Smart Year-End Financial Moves appeared first on Alpha Fiduciary .

Trust Incentives and Restrictions: Making Sense for Heirs

Tue, 15 Oct 2019 16:06:00 GMT

Trust Incentives and Restrictions: What Makes Sense for Your Heirs? If you think about it, trust distributions are like taxes. But whereas taxes seek to guide your economic choices toward government goals by instituting greater or lesser penalties, trust distributions … Continue reading

The post Trust Incentives and Restrictions: Making Sense for Heirs appeared first on Alpha Fiduciary .

How to Avoid Probate Delays and Costs by Making Smart Moves Now

Wed, 25 Sep 2019 15:05:00 GMT

Probate can be expensive and tedious. Properly titling assets and taking advantage of beneficiary designations help you avoid probate. Living trusts address more complicated situations. Most people are familiar with the concept of probate and likely recall having been told … Continue reading

The post How to Avoid Probate Delays and Costs by Making Smart Moves Now appeared first on Alpha Fiduciary .

Choosing a Trustee is More Than Just Finding Someone You Can Trust

Tue, 21 May 2019 14:59:00 GMT

You’ve worked hard to create your family trust. You hired a good attorney, funded the trust with your most important assets, and even carefully structured an investment portfolio to consider current and future beneficiaries’ needs. But now who is going … Continue reading

The post Choosing a Trustee is More Than Just Finding Someone You Can Trust appeared first on Alpha Fiduciary .

How You Can Avoid State Tax by Changing to a South Dakota Trust

Thu, 09 May 2019 18:55:00 GMT

People unfamiliar with trusts may mistakenly assume that trusts confer tax savings over what they would pay if they simply held assets in their own names. While this is almost certainly not the case—in fact, federal tax rates usually increase … Continue reading

The post How You Can Avoid State Tax by Changing to a South Dakota Trust appeared first on Alpha Fiduciary .

Prudent Strategies for Successful Generational Wealth Transfer

Thu, 18 Apr 2019 15:00:00 GMT

People often daydream about how inheriting a large sum of money could solve their most pressing problems. Less often do they think about how such wealth can complicate their lives and negatively impact future generations. But wealthy families the world … Continue reading

The post Prudent Strategies for Successful Generational Wealth Transfer appeared first on Alpha Fiduciary .

If You Have Assets, You Need An Estate Plan

Fri, 12 Apr 2019 15:25:00 GMT

You don’t have to be wealthy by today’s standards to risk creating chaos for others when you pass on. The fact is that after you are gone, you can’t tell anyone what you intended to give to children, grandchildren, friends, … Continue reading

The post If You Have Assets, You Need An Estate Plan appeared first on Alpha Fiduciary .

Pro Tips We see Opportunities We’ve Not Seen in Many Years

Wed, 10 Apr 2019 12:28:16 GMT

Pro Tips We see Opportunities We’ve Not Seen in Many Years

Opportunity rarely sits on the surface and even if it does most people don’t recognize it at the time.

-Arthur Doglione

At Alpha Fiduciary we currently see an opportunity to buy an entire category of high yielding assets at discounts to their intrinsic value not seen since 2008, opportunities are abundant in this space and now is the time to allocate capital while others are fearful.

Exceptionally low valuations in this category are providing a rare opportunity to derive an attractive current income, while at the same time positioning yourself for the potential recovery in these assets.

The category I am speaking about is publicly traded REITS, they are priced near 10-year lows and in our opinion offer exceptional value as compared to other stock and bond assets at this time. Savvy REIT investors made extremely attractive returns in the recovery after the 2008-2009 crisis which was largely a real estate crisis whereby many REITS had little access to capital and often had to dilute investors as they raised the capital they needed to survive.

The portfolio of publicly traded REITS we have built and manage is filled with companies whom own portfolios of well-maintained and viable real estate assets and are internally managed so that we know management is aligned with shareholders. Lastly, the current crisis while certainly severe in terms of its affects across the economy, is not a real estate crisis.

If you are looking for an attractive level of income, the opportunity to potentially grow capital assets substantially while we handle the day to day monitoring and management of allocating across the portfolio toward the achievement of its objectives, talk to us today.

This portfolio can be managed as a standalone with a minimum $250,000 allocation, or it can be a part of a portfolio that may hold other assets we manage for you. Either way, we would be pleased to engage in a discovery call with you to determine if this opportunity is a good fit for you.

We are experienced investment Fiduciaries with your best interest first, we believe we can be a very beneficial addition or change to your wealth management program. Don’t delay, there is no telling how long this opportunity will present itself.

Click here to schedule a discovery call where we can discuss your current wealth management plan and this opportunity.

What’s Under the Hood of My 401(k)?

Fri, 16 Jun 2017 21:46:00 GMT

Not all 401(k)s are created equal. Much like understanding the basic components of the parts under the hood of your car, you should generally be aware of the basic parts of your 401(k) plan to ensure that you know its … Continue reading

The post What’s Under the Hood of My 401(k)? appeared first on Alpha Fiduciary .

Core-Satellite Investing: The Best of Both Worlds?

Wed, 07 Jun 2017 14:04:00 GMT

One of the biggest debates among financial professionals, investment advisors, and investors is whether you should invest in only “passive” index funds or use so-called “active” strategies to get the best returns for your portfolio. If you’re wondering which approach … Continue reading

The post Core-Satellite Investing: The Best of Both Worlds? appeared first on Alpha Fiduciary .

Why It Pays to Use a 529

Thu, 18 May 2017 16:10:00 GMT

If you are the proud parent or grandparent of a newborn baby, one of your most important goals is probably to help prepare for college expenses. But what is the best way to do this? While you may have considered … Continue reading

The post Why It Pays to Use a 529 appeared first on Alpha Fiduciary .

To Be or Not to Be…A College Grad?

Thu, 04 May 2017 16:48:00 GMT

When you consider that Americans owe more than $1 trillion in student loan debt and that the average class of 2016 graduating student held over $37,000 of debt, it begs the question, “Does going to college make financial sense for … Continue reading

The post To Be or Not to Be…A College Grad? appeared first on Alpha Fiduciary .

What is Your Legacy?

Thu, 06 Apr 2017 21:40:00 GMT

When people start planning their estates, they often think about who gets the IRA, the car, the house, etc., and how much to leave to specific individuals. But almost immediately, another thought arises: How will an inheritance affect the recipient(s)? … Continue reading

The post What is Your Legacy? appeared first on Alpha Fiduciary .

“Survey says!”

Thu, 23 Mar 2017 21:36:00 GMT

How Surveys Could Help You Transfer Wealth Successfully If you’ve watched daytime TV at all over the past few decades, you’ve likely ended up watching at least one episode of Family Feud. In this popular game show, two families are … Continue reading

The post “Survey says!” appeared first on Alpha Fiduciary .

So You’re a Trustee. Now what?

Thu, 23 Feb 2017 19:35:00 GMT

It can be a great honor to be named trustee of your family’s or another person’s trust. You may also have named yourself trustee for a trust you funded for the benefit of your heirs because you want to maintain … Continue reading

The post So You’re a Trustee. Now what? appeared first on Alpha Fiduciary .