CGTC Blog

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A blog about keeping you up-to-date with the latest Financial Planning and Wealth Management news.

Coronavirus and the Market Impact

Coronavirus and the Market Impact
It was just two weeks ago the markets were looking at all time highs and consensus was building about an economic recovery continuing based on higher earnings forecasts.  We don’t often experience black swan events but the coronavirus outbreak, by definition, could be possibly considered the black swan event of 2020.  It is early in the outbreak, but markets are seemingly reacting as if some level of economic downturn or recession is on the horizon.  We won’t know for sure what the toll will be on the economy or financial markets until later this year.  We can draw from several historical virus pandemics to get an idea of what happened to economic activity, but every situation and recovery is different.  Here are our quick thoughts on what has transpired so far and what our team at Coral Gables Trust is doing about it.   Government Action   It didn’t take long...
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The most successful investor sometimes needs expert advice.

The most successful investor sometimes needs expert advice.
We’ve all heard of the “millionaire next door,” the investor who quietly amasses a fortune by living within his or her means, buying the right securities, and faithfully staying the course through various stock- and bond-market cycles. Perhaps we even know a few such people.   This sort of person typically eschews the services of a financial planner, reasoning that his or her own strategy has worked so far, and that the financial planner’s fee is an unnecessary expense. But financial planning by an objective professional — one who has no proprietary products to sell —is an investment that will pay for itself many times over, just like a good security.   An adviser will take many things into account when advising a client, including the time horizon (age of the family), its short- and long-term financial goals, and the timing and nature both of cash inflows and outflows.   The...
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Building stronger client/advisor relationships on a personal level.

Building stronger client/advisor relationships on a personal level.
Within the financial services industry, opinion is mixed on whether wealth management professionals should give clients advice on personal matters, on issues that do not relate to the client’s economic picture. Some practitioners give this practice a wide berth, reasoning that giving personal counsel could lead to trouble or damage the advisor-client relationship, especially if the client disagrees with the advice or the recommendation works out badly. But here’s another way of looking at it: judiciously handled, extending guidance to a client on non-financial matters can strengthen the relationship and provide benefits for both client and financial professional. You have to proceed carefully, of course, and the recommendations you give must be at arm’s length, and solid advice. Some advisors just talk, talk, talk, and go through the numbers with the client. But if you instead listen, you can learn so much more. Listen with empathy and be an active listener....
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Fee-free, passive funds are attractive, but it’s about more than beating an index.

Fee-free, passive funds are attractive, but it’s about more than beating an index.
Last summer, Fidelity Investments became the first financial company to offer no-fee index mutual funds, and quickly attracted about $1 billion into two portfolios. This has several implications for wealth management companies, and for investors.   The funds the company is offering — one each focusing on U.S. and international stocks — are passive funds; they are built to mirror a market index. Active strategies, on the other hand, comprise stocks chosen by an advisor and their team of analysts.   Passive funds are a lot cheaper than active funds, and over the past five years, they’ve had a stronger growth rate, partially because the fees are lower. They are the go-to product for millennials who have just begun investing. The thinking goes: ‘When the market is as strong as it is, why would I pay someone more to choose stocks for me?’ This product is starting to creep into the...
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Retired? Rewards vs. risks should still guide your investment decisions.

Retired? Rewards vs. risks should still guide your investment decisions.
Advice on amassing sufficient assets and investing them well to build a healthy retirement is easy to find. Books, online resources, lectures, magazine articles, a talk with your financial advisor — even blogs like this — can be invaluable tools for the investor just starting out and those who want to proactively manage their financial futures.   But what about that day, six months after your 70th birthday, when you’re facing the prospect of taking annual required minimum distributions from your IRA or 401(k)? The Internal Revenue Service demands that you withdraw a percentage of your tax-sheltered funds — the amount will vary depending on myriad factors including the type of plan you have, your life expectancy, and the age of your spouse, and other considerations — and pay taxes on those withdrawals.   Guidance at that juncture is somewhat harder to find, but here are some factors we at Coral...
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The importance of financial planning update one.

The importance of financial planning update one.
It seems as if the importance of personal finance management has always been a cultural touchstone. “If you fail to plan, you are planning to fail!” Ben Franklin declared in America’s colonial days. In 19th century England, Charles Dickens has Mr. Micawber recite his own recipe: “Annual income 20 pounds, annual expenditure 19 [pounds] 19 [shillings] and 6 [pence], result: happiness. Annual income 20 pounds, annual expenditure 20 pounds ought and 6, result: misery.” Ideally, individuals and families should set realistic, achievable goals and then prioritize those goals according to their values. Ideally, this should all evolve in a logical, painless and orderly way. Yet the prospect of taking one’s financial affairs in hand can be daunting. According to the National Association of Personal Financial Advisors, in 2012, 56 percent of U.S. households lacked a budget, 40 percent of adults had no savings other than retirement funds, and 50 percent of...
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Consumers should prefer traditional wealth managers to robo-advisors. Here’s why.

Consumers should prefer traditional wealth managers to robo-advisors. Here’s why.
Today, online transactions are so prevalent that it’s hard to imagine a financial life without them. How would we buy an airline ticket, transfer money between accounts, book a vacation, pay bills, or keep track of expenses without internet connectivity?   But there’s one area in which consumers seem to prefer a human encounter to computer clicks. The acceptance of robo-advisors — online software that allows clients to manage investments — once ballyhooed as the next major trend, has been slow to catch fire. Some observers say that only one-half of 1 percent of assets under management are enrolled in such arrangements, and that the number will only increase to 2 percent by 2022. We at Coral Gables Trust Company know there are many good reasons for that.   Let’s be clear: there are situations in which robo-advisors , or plug-and-play programs, can be very useful. For the young investor just...
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Yes! Florida continues to be a robust State for jobs.

Yes! Florida continues to be a robust State for jobs.
This week we've invited Mason Williams, our Chief Investment Officer, at Coral Gables Trust Company to give us a quick insight and share his predictions on the latest local and national job report numbers for South Florida. Yes! Florida continues to be a robust State for jobs. I was recently asked at a conference would South Florida continue to show job growth in Q4 of 2018 and into 2019? Yes! I responded. Because of its strong and steady annual job growth rate of 2.4% compared to the national rate of 1.9% over the past year, and because of the state unemployment rate of 3.8% matching the national average of 3.8%. Yes! Florida is and will continue to be job strong.  When we look at the South Florida/Miami-Dade metro area key indicators, the unemployment rate of 3.9% is also in-line with the state and national average.  And further north, the Broward metro region...
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