White Papers & Articles

2014 Economic and Investment Outlook

2013 will be remembered as the year of U.S. Equities. With returns topping 32% year-to-date, there was no better asset class. Non-U.S. developed markets (Europe and Japan) were also top performers, putting up a combined 23.3% for the year-to-date period. After that, however, the returns dropped off for other asset classes. In fact, relative to historic performance, high-yield bonds, real estate, U.S. investment grade bonds, emerging markets equities, emerging markets bonds and commodities all disappointed. Looking back, we will categorize 2013 as the year when the U.S.

2013 Year-End Tax and Estate Planning Tips

It’s December 2013 and therefore a good time of year to make sure you are set with your 2013 tax and estate planning goals. This bulletin will provide some helpful tax tips, give you food for thought for year-end planning, and possibly spark some conversations between you and your advisors.

Why We Diversify

Risk is frequently defined as the possibility of suffering harm or loss. That definition seems straightforward enough—avoid taking any risks and you will be spared any losses. Yet the investment world presents a conundrum. The safest approaches (such as holding only cash or short-term bonds) will often be insufficient to meet financial goals and objectives, yet investing solely in the riskiest assets (such as stocks) can be hazardous. Some measured amount of risk must be taken, and a broader approach to the subject as it relates to investing is worth exploring.

The Affluent Marketplace Intensifies—Challenges and Opportunities Ahead

The investment advisory arena continues to be as dynamic as ever. Traditional providers of advice and services to the high net worth investor (HNW—$500,000 to $10 million investable assets) are experiencing unprecedented challenges. For more information about Catapult by Convergent™ Intiative, click here.

 

The Risks of Fixed Income Investing

Remember when the words ‘bond’ and ‘fixed income’ meant ‘safe’ money?

For at least the past 30 years, since Treasury bond yields peaked at nearly 16%, the bond market has enjoyed a raging bull market, averaging a 10.5% return annually. Additionally, these market returns have come with the benefit of a very high level of security.

Achieving Tax Benefits through the Inter Vivos QTIP Trust

With the passage of the American Taxpayer Relief Act of 2012 (“ATRA 2012”), the $5 million of gift, estate, and generation-skipping tax exemptions for each individual are now permanent (and adjusted annually for inflation). However, family dynamics such as second marriages may still present a roadblock for effective planning. This paper addresses a planning technique designed to allow a taxpayer to take advantage of a married couple’s exemptions while allowing the donor spouse to maintain some control over the ultimate disposition of wealth.

The Case for Gold

Gold can serve a variety of functions within a portfolio and in this paper we discuss what we believe are its five key roles and why one should have an allocation to gold today. Our belief that gold should be in portfolios is based on not only these five roles, but also on existing political and economic factors. In this paper, we will discuss what we believe are the five key roles of gold as well as the essential factors that can be used to determine when gold should be included in a portfolio.

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The Investor's Dilemma

Individuals usually hire investment professionals to help them do two things: (1) preserve their current wealth and (2) grow their wealth over time. The key is building a portfolio that will allow investors to tolerate severe market downturns and stick with their long-term investment plans. In this paper we will discuss the four main tenets we follow in an effort to balance these mutual objectives: asset class diversification, active portfolio oversight and management, systemic hedges, and manager selection.

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Self-Settled Spendthrift Trust

A “spendthrift trust” is a trust which prohibits a beneficiary and his or her creditors from reaching trust assets contrary to the trust terms. A self-settled spendthrift trust (or more commonly called a self-settled trust) is a spendthrift trust which includes the “Settlor” of the trust as a beneficiary of the trust.

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Our Investment Approach & the Year Ahead

Reminiscing on 2011 evokes thoughts of the sport of boxing, and not simply because its roots lie in Greece. While some may view the sport as violent and barbaric, boxing is often referred to as the "sweet science," an engaging display of tactics and skilled craft. When looking at it this way, boxing is a great analogy for investing and can also be used to help explain Convergent's investment approach.

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