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YP Access Program aligns young investors with personalized wealth management solutions.

In my opinion, financial firms limit themselves, and their clients, to investment account roll overs or commission-oriented investment products — a far cry from high-potential wealth management solutions. Some commission products are a version of one-off sales transactions that are not always aligned with the client’s best interests. Many firms have established prohibitive minimum account sizes just to be considered a candidate, but we believe looking solely at the account balance is only one piece to the ideal client puzzle. By the time a prospective client has acquired the assets to attract a credible firm, there are hundreds of other firms out there equally interested, making it difficult to distinguish between the good, the bad and the awful.   Midwest Wealth Management’s YP Access Program is designed to bridge the gap between the beginning of high-trajectory professional work life and the time investors have conventionally been aligned with a financial professional. This program offers younger investors personalized planning advice, asset allocation, risk assessment and industry insight that high-end professionals, entrepreneurs, and foundations have leveraged for years. By aligning with Midwest Wealth Management early in their career, young investors gain a much better understanding of their working relationship with an investment advisor long before discussions of investing retirement nest eggs happen.   There’s also an educational component to the program specifically designed for our clients, wherever they are on their investment trajectory. Because not everyone comes to our firm with at the same level of financial literacy, our program is designed to help educate clients along the way, and build a generation of sophisticated investors. It’s packaged through an established consulting agreement with contract expectations of 3 years, and priced to fit well within any budgetary concerns for investors as they begin their professional career, build their business or climb their respective corporate ladder. For more information on the Young Professional Access Program, email support@midwest-wealth.com.   As a private investment group specializing in wealth management, Midwest Wealth Management, Inc. offers a proprietary trading platform, alternative investment offerings and dedicated advisory support for a select audience. For more information, please visit www.midwest-wealth.com indianapolis alternative investments  
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INDIANA WEALTH MANAGEMENT … SERIOUSLY? SERIOUSLY.

Indiana wealth management? Not all successful wealth management firms are located on Wall Street. And the ones that are there may offer quality investment products — usually chosen by advisors who don’t know you. Or that don’t care to.   Located in the heart of Indianapolis, Midwest Wealth Management is a private investment group specializing in an alternative route to wealth creation designed for the sophisticated and independent-minded investor. It’s a place where your voice carries the most weight in helping you achieve your vision of a well-invested future. And it’s accomplished through a proprietary trading platform, alternative investment offerings, and dedicated advisory support for a select audience. It’s the heart of the Midwest with the brains of a seasoned Wall Street advisor. To learn more, visit us at www.midwest-wealth.com   As a private investment group specializing in wealth management, Midwest Wealth Management, Inc. offers a proprietary trading platform, alternative investment offerings and dedicated advisory support for a select audience. For more information, please visit www.midwest-wealth.com.   Indiana Wealth Management
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THE COSTS OF OWNING A MUTUAL FUND

Advertisements by financial firms and the opinions expressed by pundits in the financial press are raising concerns about the fees you pay when investing. The conversation should not stop at how much you are paying your advisor or a fees to discount brokerage firm.  As a sophisticated investor, you know there are many important factors that should be considered when selecting any investment. That said, I will be focusing on the real costs of owning mutual funds, costs that that may not be readily apparent. These costs can be significant and could seriously impact your results.   Mutual funds can be purchased by paying a commission to your broker or by paying an ongoing fee to your advisor. The amount of commission you pay is based upon the total value of the purchase within the same fund family. There are different breakpoints for paying a reduced commission and no load mutual funds which you may purchase without a commission, however additional deferred sales charges may apply. A fee-based financial advisor does not charge a commission, but you will pay an annual fee that can typically range between .5% and 2%. There are firms that specialize in managing portfolios of mutual funds as sub advisors and these sub advisors typically charge between .5% and 1%. If your advisor hires a sub advisor to actually manage your mutual fund portfolio, the overall combined fee could be 1% to 3% per year.   Once you have a portfolio of mutual funds, you need to understand the cost of continuing to own them.  Most people are aware of mutual fund operating expenses, which include management fees, marketing costs and distribution costs. According to MorningStar, the average mutual fund charges 1.25% for operating expenses. What is not included in that number is the transaction costs that occur within a mutual fund.  According to a study by Roger Edelen, a finance professor at the University of California, Davis, the average fund has trading costs of 1.44% per year. Mutual fund companies have objected to separately reporting transaction costs due to the complexity and financial burden of calculating these costs. Since the costs are not reported, it makes comparison of transaction costs impossible when comparing funds.     Income taxes can also add to the unexpected costs of owning mutual funds. Over the last 18 months the stock market has had significant gains and for the owners of mutual funds held outside of retirement accounts the sale of appreciated stocks by the fund manager can create taxable income. If the manager sells previously appreciated stock, you can be taxed on the gain even though you did not own the mutual fund during the period that the stock appreciated. For Hamilton County, Indiana residents the maximum tax rate on capital gains is 28.2% and the maximum tax rate on short-term capital gains is 47.8%. You or your advisor can usually find out the amount of embedded gains by contacting the mutual fund company. It can be a very unpleasant surprise to have to pay income tax when the value of your mutual funds may not have changed since the date of your purchase.     Mutual funds do have a definite place for investors. They can allow investors with smaller amounts of capital to gain proper diversification and exposure to professional management. They have also been greatly utilized by investors who do not want or have the skillset to pick individual securities in their portfolio. Every investor deserves to have full transparency that allows them to make the best informed decisions for their future and goals. The fee structure associated with cost of owning investments and receiving professional advice should be no different.     Investments involve risk including possible risk of principal invested.  There is no guarantee that a diversified portfolio will enhance overall returns or outperform a no-diversified portfolio.  Diversification does not ensure against market risk. Neither Commonwealth nor Midwest Wealth Management offer tax or legal advice.  Securities and advisory services offered through Commonwealth Financial Network, Member FINRA/SIPC, a Registered Investment Adviser. Indiana Wealth Management
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Saudi Arabia desperate? Indianapolis Wealth Advisor explains reaction to lower oil prices.

Much of the discussion (and reaction) of lower oil prices has rested on the shoulders of OPEC’s continued oil production and more importantly, the leader, Saudi Arabia.  We believe their move to continue at current production levels was a move to outlast the production of the America’s shale producers and drive them out of business.   So far the move hasn’t turned out how Saudi Arabia anticipated, as shale producers are continuing their drilling. Now there’s a black hole in the oil kingdom’s budget due to slumping oil prices and a sharp rise in military spending. That's forcing the government to raid its reserves, and possibly borrow from foreign investors, analysts say. Saudi Arabia has already burned through almost $62 billion of its foreign currency reserves this year, and borrowed $4 billion from local banks in July -- its first bond issue since 2007.1   This idea of borrowing money and dipping into currency reserve to fund government programs – the kind of projects that are normally taken care of by oil production – flew under the radar earlier in the summer. However, with the borrowing strongly continuing at a heavy pace, Saudi Arabia is starting to make the front page due to its unfavorable position and weakened market share.   This deep and constant borrowing is starting to get more market insiders worried. Saudi Arabia is experiencing costly credit downgrades and massive budget deficits- not to mention calling the IMF to predict their cash shortage within 5 years. An International Monetary Fund official told The Wall Street Journal that Saudi Arabia and fellow Middle Eastern oil exporters face a combined $1 trillion budget shortfall over the next five years if crude oil prices remain near present levels and economic reforms aren’t introduced soon.2   Yet it is hard to blame the fault on anyone beside Saudi Arabia itself. Again, as they ty to outlast U.S. shale producers, they underestimated the U.S. producers to stay in the game. Then when you take into account that oil prices are at almost half the price levels of a year ago, it is going to be hard for Saudi Arabia and other OPEC members to dig their way out of this the fiscal hole.   If you would like to learn more how these situations effect your portfolio, alternative strategies or have investment questions in general, we invite you to visit Midwest Wealth Management at www.midwestweatlh.com, or call us at 317-288-4989.  
  1. OPEC leader Saudi Arabia is having to borrow money. CNN Money. 2015
  2. Watts, William. Will fiscal pain of low oil prices force Saudi Arabia’s hand? MarketWatch. 10, Nov. 2015.
Indiana Wealth Management
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Medical Professionals-The Extinction of a Decade of Doctors

For the past 20 years, I have had the pleasure of managing money for some of the brightest medical professionals across the country. Every day has provided me a great learning experience with no shortage of entertainment. Having been able to sit in the front seat with my clients and see technology transform once unimaginable advancements into real life applications has been an unbelievable experience.   Over the past 36 months, the theme has dramatically shifted and even the most enthusiastic specialists have all been asking “How soon can I get out?” This was naturally disconcerting for me and I wanted to really understand how each of their practices was being effected by the recent legislative change.   • The switch to Electronic Health Records (EHRs) has not been as easy as anticipated, with patient interaction time decreasing as overall total hours worked increased.   • The reimbursement systems with Medicare/Medicaid and government regulations added additional stress while inhibiting their ability to practice medicine as they had previously known.   • The coding shift from ICD-9 to ICD-10 increased the number of diagnosis codes five-fold from 13,000 to 68,000. This coding shift now requires additional staffing, training and software upgrades that cost an estimated $100,000 per office. In addition to the increase in overhead, the increased confusion has offices expecting significant delays in payments received.   The result of these changes has not only effected the medical professionals I work with, but a Deloitte survey of over 20,000 U.S. physicians suggests 62% of physicians are likely to retire earlier than planned in the next 1-3 years.   With the anticipated exit of physicians from the field, the amount of newly-minted medical school graduates is not close to covering the difference. It is estimated that by 2024 we will have an annual shortage of 46,000 to 90,000 doctors.   Currently: • One in three doctors is over 50 years old. • One in four is over 60 years old.   Even current physicians do not believe future generations are going to be able to fill this gap. 81% of surgical specialists believe the best and brightest will pursue a career in something other than medicine. Whether this is because of the decreased income, the amount of debt incurred or just the amount of schooling to begin practicing is yet to be determined. As one specialized physician stated “It’s hard to explain to your five-year-old son, without making him petrified to start kindergarten, that you’re actually in thirty-fifth grade.”   The problem is not easily solved by increasing the number of skilled nurse practitioners, as they have also been retiring at an equally early rate. With this accelerated early retirement happening, it leaves smaller staff to provide the same support, increasing burnout and ultimately resulting in earlier retirements than the predecessors.   The next five years will ultimately determine what the future of medicine practice looks like. There is an extreme amount of pressure on the hospitals to provide creative solutions to help smooth this transition. Even if legislation was more favorable, technology improvements and financial incentives have to increase to retain older doctors. In an environment with reimbursements being cut, this could be a very difficult task. If they are unable to solve this problem, medical care of the future will be vastly different than the current structure of today.   Sources: Deloitte 2013 Survey of U.S. Physicians: Physician perspectives about health care reform and the future of the medical profession Medical Economics: ICD-10 Documentation USC Annenberg, Center for Health Journalism: Whether retiring or fleeing, doctors are leaving health care, R. Jan GurleyMarch 2014.
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Indiana wealth advisors weigh in: don’t panic with increase in interest rates.

You won’t hear it from the mouth of this Indiana wealth advisor, but some investors think the world coming to an end with the Federal Reserve ready to raise interest rates in mid-December. To many, the reality of this rate hike has caused panic in the stock market for those selling and buying.   Hopefully, these investors will take a step back and look at the big picture from a historical perspective. In past cycles, the economy emerges from recession as the Fed cuts rates, and grows with lower inflation. At some point, the Fed reacts to improved growth or climbing inflation and begins to increase rates and the cycle continues. That’s why it’s not surprising to have rate hikes, because of past precedent. Once this is taken into account, the most important step is to analyze the historical data of markets to see how they have reacted during these previous cycles of rising rates.   While some investors are ready to write stock prices off when the rates rise, a debilitating decline from rate hikes has not been the case from a historical perspective. Consider the past six rate hike cycles going back to the early 1980s. Using time periods of 250 trading days (roughly equivalent to one year), it was discovered that while pockets of weakness surrounded rate hikes, equities generally weathered the storm. In most cases, equities performed well prior to Fed rate increases, then struggled or declined slightly after the onset of rate hikes, only to recover and outperform in the two years following the first rate increase1. Investors need to remember that there are typically a multitude of events that lead to a market or individual security to increase/decrease in value: monetary policy is not the sole contributor.   The key takeaway is that rising rates should not dramatically shift your goals. While investing in certain sectors can be an effective tool for managing volatility and downside risk, there is a greater risk of over allocating your portfolio to sectors that stand to benefit from the "group think" mindset. These actions can dilute perceived upside potential and cause more damage than your strategy can handle.   For more strategies about investing and financial planning, you can visit our website at www.midwest-wealth.com. While you’re there, you can get more alternative investment information by downloading our free eBook entitled: The Alternative Investor, a guide book for alternative investments by Greg Shields, founder and CEO of Midwest Wealth Management, Inc., an Indianapolis-based wealth management firm.   As a private investment group specializing in wealth management, Midwest Wealth Management, Inc. offers a proprietary trading platform, alternative investment offerings and dedicated advisory support for a select audience. For more information, please visit www.midwest-wealth.com.  
  1. Doll, Robert C. What Stocks Really Do When the Fed Hikes Rates. Barron’s. 4, June. 2015 
  2. How a sector strategy can help you manage risk as markets shift. Fidelity. 17, July 2015.
  Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Past performance is no guarantee of future results.  
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Digital Holiday Gifts May Need Estate Planning

In estate planning, we traditionally have counseled our clients on how to protect and safeguard their assets. When we say assets, most people think of hard assets, such as real estate, retirement accounts, life insurance, investments, bank accounts, jewelry, collectibles, etc. With the cloud and internet playing a big role in our everyday lives, there is another form of asset that you need to consider when planning.   I had the opportunity to sit down with Steve Robinson, a founding partner at Robinson Wolenty & Yong, LLP to discuss some major changes and best practices for estate planning in a digital age. A practicing lawyer for 35 years, Steve concentrates his practice in estate planning, probate, business planning and real estate matters.   What are digital assets?   They are best understood in three different categories: social media, entertainment and financial accounts.   Social Media: Emails, Text, Twitter, Facebook, Snapchat, Instagram, etc. Entertainment: Amazon, Ebay, Netflix, Hulu, iTunes, Pandora, Spotify. Financial: Credit cards, mortgage/rent payments, car, utilities, cable.   Why are they important?   These different digital assets are all accessed through online accounts. In order to access your accounts you have to use a unique username and password combination, “soft assets.” I am not saying anything that’s ground breaking or new but I hope you can see where this is heading.   Let’s paint a scenario- You do not receive paper statements from your investment account, everything is sent electronically to your computer which is password protected. You pass away and no one knows about this account nor the password. How does your family find out about the hard asset? They could hire a forensic computer specialist to determine the password, but this can be expensive and time-consuming.   Some of us maintain a record of our password(s), but how many of us actually share where it could be located by someone you trust? In addition, most social media companies will not allow access to customer files without knowledge of the password, which means obtaining a court order to access the account. Many people have family pictures and personal information on these outlets that would cause unnecessary hardships on their family if they couldn’t be easily accessed.   How do you plan for Soft Assets?   We currently use a digital asset estate information form that assists our clients in categorizing and maintaining their soft asset information. This is basically a soft asset inventory, which would include usernames, security questions and passwords. It helps sort one’s email accounts, domain names, banking, investments, tax information, insurance, credit cards, social and digital media accounts. There are several software programs you can purchase to manage your passwords such as:   • Robo-Form • Last Pass • 1Password   However, you still need a password to access your phone and the password manager. All of your estate planning documents should be located in one place, a fireproof safe or lock box work well. These documents should include updated wills, trusts, powers of attorney, and medical powers of attorney. The person responsible for handling your estate administration should know where this information is stored.   Midwest Wealth Management, Inc. does not provide legal/tax/estate planning advice. You should consult a legal or tax professional regarding your individual situation.
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