It may come as a surprise, but not all successful finance and wealth management firms are located in New York's Financial District. Those Wall Street firms may offer quality investment products however, it is likely they are chosen by advisors who don’t know you. They may not even have the heart to get to know you, your story or your vision for the future.
Further east in the Midwest, sits a firm that has abolished the high fees, pretentious attitudes and cookie-cutter investment advice. We have chosen to support busy, successful people who want and need personalized guidance.
Based in Indianapolis, Midwest Wealth Management is a private investment group. We have a specialized 5-stage process called THE WEALTH GUIDE™. It starts with listening to you and finding out where you want to go. The process provides the advice, resources, and active investment management to help you get there.
If you think you don’t have enough to need a financial plan or an advisor, you might be surprised. We work best with successful professionals who know something is keeping them from saving enough and who feel they aren’t maximizing what they’ve already saved. We want to hear your story, and help you create and achieve your vision of a well-invested future. To learn more, visit us at www.midwest-wealth.com
As a private investment group specializing in finance and wealth management, Midwest Wealth Management, Inc. offers a proprietary trading platform and dedicated advisory support for a select audience. For more information, please visit www.midwest-wealth.com.
In down market years, the thing worse than losing money is to lose money and have to pay taxes for capital gains that you didn’t personally realize. This is one of the issues investors are finding with their mutual fund holdings.
A mutual fund has to be taken as a whole package, so there can be repercussions if some better performing stocks in that fund are sold to take a profit. This would be considered a taxable event, so even if the mutual fund as a whole suffered a loss, the investor (you) would have to pay on that taxable gain even if you total losses were much higher than any profit you made from the trade. That’s because the profits and losses are always passed back to the owner of the fund.
Here’s a good example: Late last year, the $8.7 billion Columbia Acorn fund (LACAX) had posted a year-to-date return that was essentially nil, yet ended up paying out anywhere from 28% to 31% of its assets in December. An investor who put $10,000 in the fund early last year will have gained nothing but could owe taxes on roughly $3,000 in gains.1
We caution investors who do go this route to do their research. They should be able to find the amount of capital gains built into any one fund at a point and time and be cautious about making any moves before year-end distributions. That’s because distributions are based on when the fund bought the stocks and its cost basis. Shareholders divide the distribution equally, regardless of when they got in. In this case, you would just be buying a tax bill as the gains distributed reduce the share price.
Hiring an advisor to help manage this type of common investor pitfalls is where clients begin to realize the value of the advisor-client relationship. The do-it-yourself investor or robo-advisor might decide to sell a stock that is performing well because they want to move into one that offers more profit. It sounds like a good idea because money was made on the trade — until you step back and see that overall you would be losing money on the general fund and still have to pay taxes on the trade.
That’s why it’s important to have a wealth advisor who listens to you about and provides the advice, resources, and active investment management to help you see the big picture. To learn more about how you can avoid paying unnecessary capital gains with the right investment strategy, visit Midwest Wealth Management at www.midwest-wealth.com, or call us at 317-288-4989.
1.Max,Sarah. Mutual Fund Distributions: The Profit and the Peril. BARRON’S.