Jun
10

Floating Rate Bonds: The Pros and Cons

By Matthew DiQuollo

One way to diversify your fixed-income portfolio is through the purchase of floating rate bonds. Floating rate bonds are available through securities brokers and may be purchased individually or as part of a mutual fund or exchange traded fund (ETF). Whereas coupon bonds pay a fixed rate of interest, a floating rate bond has a variable rate that resets at certain intervals. For example, the rates can be reset every 3, 6, or 12 months or daily, weekly, monthly or quarterly. The rates are usually based on a standard like LIBOR (the London Interbank Offered Rate) or the Federal funds rate, plus a modest spread, .50%, for example. Entities including local and foreign governments and corporations are typical issuers of floating rate bonds. Read More→

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Categories : Financial Planning, Investment Management
Apr
08

Master Limited Partnerships: A Primer

By Matthew DiQuollo

Master Limited Partnerships or MLPs, as they are known, are a popular investment vehicle that has been around since the early 1980s. They began as a way for corporations to access capital from smaller investors by making them “limited partners” in a business. MLPs are tradable like a stock, which makes them a liquid investment and, importantly, investors enjoy a key tax benefit: the returns are not subject to corporate income tax.

Back in the day, any corporate entity could issue an MLP, so in 1987 the government restricted which businesses could do so. In order to be deemed an MLP, 90 percent of the partnership’s income must be derived from various “natural resource” activities, such as oil and gas exploration, production, and transportation; real estate; and commodities. Read More→

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Categories : Insights, Investment Management, Tax Strategies
Nov
15

Are Exchange Traded Funds Right for your Portfolio?

By Matthew DiQuollo

ETFs More Popular than Ever

Exchange Traded Funds (ETFs) were introduced in the U.S. in 1993 and since then have steadily grown in popularity.  In fact, ETFs have enjoyed a record $1.3 trillion in net asset inflows through the third quarter of 2012, according to the ETF Industry Association.  Are these investments suitable for your portfolio?  Here’s a review of some ETF basics. Read More→

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Categories : Financial Planning, Investment Management, Portfolio Protection
Nov
08

Plan Now In Advance of Key Changes in Tax Rates, Capital Gains and Dividends

By David M. Hill

Rates scheduled to rise with the expiration of the Bush-era tax cuts

The expiration of the Bush tax cuts will indeed happen on December 31.  But will they be extended?  Many believe they will not.  What this means is that effective January 1, 2013, taxpayers who are now taxed at a maximum of 33 percent, will be taxed at 36%, and taxpayers now taxed at a maximum of 35% will be taxed at 39.6%.  Additionally, long-term capital gains will be taxed at 20% and dividends and short-term capital gains will be taxed as ordinary income.

Our usual advice to defer gains until next year is out the window for the most part, considering these developments.   What you may want to consider right now, in light of the fact that these new rates will in all likelihood go into effect, is to take some gains this year before the tax rates are due to rise. Read More→

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Categories : Charitable Giving, Estate Planning, Financial Planning, Investment Management, Tax Strategies
Jul
16

All About Arbitrage

By Noreen Johnston

You may have come across the term “arbitrage,” a somewhat exotic-sounding investment strategy, in the newspapers or perhaps from popular Hollywood movies about Wall Street and the financial markets.  Traditionally employed by hedge funds, arbitrage is an investment technique that has been used for decades.  Its objective?   To realize a gain by simultaneously buying and selling two related investments, thereby capturing the return spread as their prices move closer together.    Read More→

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Categories : Financial Planning, Investment Management
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