Confronting the tax drag
Tom Metzold, Jim Evans, Lew Piantedosi, Peter Crowley; August 2014
The 2014 tax season brought home the unwelcome reality of higher taxes, particularly for high-income earners who bore the brunt of the tax increases. While people immediately saw the impact on their income, the effects higher taxes can have on investment returns is not as well recognized. People may know about using retirement plans, such as IRAs and 401(k)s, to manage the taxes on their investment returns, but they are often not familiar with a variety of other approaches that could help reduce their tax burden.
Finding value in a challenging bond market
Payson Swaffield, July 2014
As investors have embraced risk in recent years, they have bid up the prices of non-Treasury debt to the extent that no sector is particularly cheap relative to its history. Regardless, we think the income markets offer considerable opportunity and that a deft hand may still pick out great value.
What inning is the bull market in?
Edward J. Perkin, July 2014
Since the low of the bear market in March 2009, U.S. equities have been on a 5-year bull run. Investors naturally wonder how much longer this can last. To use a baseball metaphor commonly applied to the markets, they wonder what inning we are in. The answer depends on what “game” one is watching.
Solving the Income Puzzle
Christopher Remington, Michael Cirami, Kathleen Gaffney, and Scott Page; July 2014
With interest rates at near historic lows, investors are starved for income. Government bonds and high-grade corporates have generally been the core of investors’ income portfolios, but yields on these bonds are minimal. Delivering a potential double whammy for investors, the prospect of rising interest rates could bring principal losses because the prices of bonds in these core sectors are highly sensitive to changes in interest rates. Diversifying into nontraditional income sectors may provide investors with greater income and lessen their exposure to interest-rate risk.
Are you managing volatility?...or is it managing you?
Research shows investors’ personal returns fall short of the equity markets’ actual returns because investors too often make the mistake of buying high and selling low. But there are several strategies investors and their advisors can draw on to take a more disciplined approach to investing.