Our Market Commentary-Global Developments

U.S. Interest Rates: Bond & Currency Moves The Federal Reserve has started to surprise many observers by the number of potential interest rate hikes in 2017. The initial thought of two rate hikes may turn out to be three or four. The decision to raise rates pushed short-term bonds lower. The yield of the two-year U.S. Treasury rose to the highest level in 7 years. Rising U.S. rates can cause disturbances for markets and other countries’ currencies moves all over the globe.


  • China’s Yuan tumbled to lowest level against the dollar in more than 8 years
  • U.S. dollar is moving closer to 1:1 parity with the Euro, its highest level in nearly 15 years.


Bitcoin on the Move The most popular crypto currency, Bitcoin, has risen to record highs above $1,250. The currency has increased an impressive 76% since the U.S. Presidential election and is now worth more than an ounce of gold.


Volatility (VIX) Touches Multi-Year Low Dropping 20% over 2016, the VIX, a measure of market volatility, hit levels only previously seen in early 2007 and in summer of 2014.  
  • Indicates a lot of complacency in the market and that investors perceive minimal risk in equities.
  • This can lead to a lot more upside pressure, as retail investors are owning historically low percentage of stocks.
  • Could leave stocks susceptible to large and quick corrections on any news of a negative event.
  About Midwest Wealth Management, Inc. Midwest Wealth Management, Inc. was formed by Greg Shields, a 30-year financial services veteran committed to offering sophisticated investors an alternative when looking for a more strategic path for long-term investing. As a private investment group, 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. Securities and Advisory Services offered through Commonwealth Financial Network®. Member FINRA/SIPC a Registered Investment Adviser.
//

3 things to consider to minimize risk and build a wealth accumulation strategy.

Risk management is an important element of a well-balanced portfolio and once of the most considered areas when building a wealth accumulation strategy. An advisor’s role is to identify the potential for market loss and then take the appropriate action to minimize the possibility of loss based on the client’s risk tolerance level. Because in the end, the overall wealth accumulation strategy must align your investment portfolio with your overall financial goals. When developing these goals, it’s important to remember a few key points:


The Safeguarding of assets. Sec.gov states that the safeguarding of assets “provides reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the financial statements." Internal controls are key, as well as ensuring compliance with applicable laws and following regulations. These elements are essential for a knowledgeable advisor who is bound by a fiduciary responsibility to build his or her clients’ wealth while minimizing unforeseen risks. The understanding of your limits. For investors, securing downside protection for the long term is becoming a very desirable alternative. Knowing your tolerance limits to market volatility sets the strategy when weighing out the risk to return ratio, as well as providing the ability to manage or reduce risks that cannot be diversified away. This can be especially true for alternative investments, which is one of many reasons why many investors turn Midwest Wealth Management. Our experience dealing with complex types of investments like alternatives can help educated clients and help them decide whether it’s right for them. The ability to minimize losses. A proactive risk management strategy can also help minimize losses by balancing investments with other assets. This is achieved by diminishing a portfolio’s volatility and increasing its durability with such things as alternative investments, which can have a non-correlated performance relative to stocks and bonds.


As a private Indianapolis investment group specializing in wealth management, Midwest Wealth Management features investments that may offer significant tax advantages over a standard allocation built with stocks and bonds, and a well-balanced approach between risk and return. For more information, visit us at www.midwest-wealth.com.


About Midwest Wealth Management, Inc. Midwest Wealth Management, Inc. was formed by Greg Shields, a 30-year financial services veteran committed to offering sophisticated investors an alternative when looking for a more strategic path for long-term investing. As a private investment group, 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.


Appendix C. Safeguarding of Assets. SEC.gov. https://www.sec.gov/rules/pcaob/34-49544-appendixc.pdf


Investing in alternative investments may not be suitable for all investors and involves special risks, such as risk associated with leveraging the investment, adverse market forces, regulatory changes, and illiquidity. There is no assurance that the investment objective will be attained. All investments are subject to risk, including the loss of principal. Talk to a financial advisor before making any investing decisions.
//

Manage Risk in Carmel, Indiana

If you’re a business owner in Carmel, Indiana, you have already accepted that the financial decisions of companies always come with some degree of risk. It’s the same in the investment world, where understanding risk should be part of a sound financial education. Wealth managers in Carmel and everywhere should be taking many types of risk into account for their clients. The uncertain future value of stocks, credit risks, and operational risks all fall into this category.


A proper risk management strategy executes an articulated and structured approach to identifying, assessing and managing risk. Frequent updates and review of the assessment based on new developments or actions taken should also be implemented into the overall risk management strategy. Be sure that your risk assessment is systematic, recorded and regularly reviewed. It should identify and manage major risks, i.e., those which are most likely to occur that would have a severe impact on operational performance, achievement and objectives.


Talk to your advisor about a sound risk management strategy for your business. You can also visit us at www.midwest-wealth.com . Because when it comes to wealth creation, safeguarding against financial risk is an important conversation best reserved for your wealth manager.


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.

//

529 college savings plan misconception’s every grandparent needs to know.

Grandparents are often the first to help new children prepare for the high cost of college tuition by opening some sort of savings vehicle in their name. A popular choice as of late has been tax-advantaged state-run 529 plans. These savings plans, legally known as “qualified tuition plans,” are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal Revenue Code.   When utilizing these plans, what many grandparents may not understand is that if your grandchildren live in Indiana and you are in Florida, you do not have to use an Indiana’s 529 plan. Out of state, in-state or private colleges do not play a factor in starting a 529 or choosing a state’s plan. You are more than welcome to use any state’s 529 plan. In fact, 34 states currently offer residents a full or partial tax deduction or credit for plan contributions. The contributor can make their decisions based on tax credits, fees, asset allocation or historical performance, and these decisions are usually determined with the advice of the contributor’s financial advisor.   And a 529 plan offers many other benefits any grandparent can appreciate: For one, they can be assured the money they are giving their grandchildren will be used for its intended purpose. Savings in a 529 account must be spent on qualified education expenses such as tuition, books and some room and board to avoid incurring income taxes and a 10% penalty on the earnings portion of the withdrawal.   It also does not matter if one recipient has multiple accounts set up because the tax advantages will be the same. Earnings in 529 plans are not subject to federal tax, and in most cases, state tax, so they will grow tax-free as long as you use withdrawals for eligible college expenses, such as those listed above. If one grandchild does not use up all the funds you have provided, you can change the beneficiary to another grandchild without any tax implications.   These 529 plans are a great way for a grandparent to help out their grandchildren (and their own children) manage the high costs associated with college. To learn more about these and more college savings opportunities, visit us at midwest-wealth.com or call us at 317-288-4989. The fees, expenses, and features of 529 plans can vary from state to state. 529 plans involve investment risk, including the possible loss of funds. There is no guarantee that a college-funding goal will be met. In order to be federally tax-free, earnings must be used to pay for qualified higher education expenses. The earnings portion of a nonqualified withdrawal will be subject to ordinary income tax at the recipient’s marginal rate and subject to a 10-percent penalty. By investing in a plan outside your state of residence, you may lose any state tax benefits. 529 plans are subject to enrollment, maintenance, and administration/management fees and expenses.     An introduction to 529 plans. U.S. Securities and Exchange Commission. http://www.sec.gov/investor/pubs/intro529.htm   Flynn, Kathryn. Eight Reasons why Grandparents love 529 plans.savingforcollege.com. 16, July.2015 http://www.savingforcollege.com/articles/eight-reasons-why-grandparents-love-529-plans-671 Name the top 7 benefits of 529 plans. savingforcollege.com http://www.savingforcollege.com/intro_to_529s/name-the-top-7-benefits-of-529-plans.php   728x90MW
//

Financial Wealth Strategies in Zionsville

With the complexity and volatility of a fluctuating market, conventional wisdom regarding investment management is becoming unexceptional at best. So where does exceptional wisdom exist? Would it surprise you to learn that a very successful private wealth management group with unconventional strategies to maximize assets while minimizing risk is situated in the state of Indiana?


Located in the heart of Indianapolis, just miles away from Zionsville, Midwest Wealth Management offers sophisticated investors an alternative when looking for a more strategic path for long-term investing. Through a private investor platform featuring a 5-stage investment process called The Wealth Guide ™, Midwest Wealth Management provides an alternative route to wealth creation and the protection that appeals to a more sophisticated investor. Through our private investor platform, we offer a proprietary trading platform, alternative investment offerings, and dedicated advisory support. We believe that not every investor is created equal. For the discriminating few, the path less traveled to Midwest Wealth Management, Inc. is the path they prefer.


As a private Indiana 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. Midwest Wealth Management
//

What to Ask When You Inherit a Home

Buying a home is one of the most stressful experiences and biggest financial commitments of many people’s lives. But inheriting a home from a parent or relative can be equally stressful and complex in ways you may not anticipate. As you cope with a loved one’s death and all the emotions it stirs up, you’ll need to decide whether you should sell the home, live in it, or rent it out.   Unfortunately, inheriting a house isn’t always a financial gain. The good news is that you can avoid many potential pitfalls by asking the right questions. Here are some key factors to consider before you make any decisions about the house you’ve inherited.   Is there a mortgage on the property? If so, will the estate assets be used to cover it? If there aren’t enough assets to pay off the mortgage, or if the other heirs don’t agree to do so, you can take on the deceased’s mortgage in order to keep the house—as long as you have the means and desire to assume the debt. In this case, you’ll want to consider refinancing to see if you can get a better rate or lower monthly payment.   If the house is “underwater” (i.e., the home’s current value is less than what is owed on the mortgage), you may decide to walk away from the property and let it go into foreclosure. Of course, before making any decision, you should seek the guidance of an estate attorney.   Would it make sense to keep the home? Although selling a family home can be a painful process, it’s important not to let nostalgia jeopardize your financial well-being. Even if you’re able to manage the mortgage, does the home have any other value to you? Ask yourself these questions:  
  • Is it a property you’re going to use, either for vacations or to live in yourself?
  • Do you have the time and money to handle the maintenance and upkeep the house will require?
  • If you plan to use it for rental income, would renovations be needed? Would you be willing to hire a property manager (if you can’t manage the rental yourself)?
  What does the local real estate market look like? If you’re thinking of selling or renting the home, do your due diligence on the local market. A knowledgeable real estate agent can advise you about the options in your area, discuss comparable properties and what they’ve sold or rented for, and help you determine if any renovations would be worth the time and money. (Real estate laws differ from state to state, so it’s important to work with a professional licensed in the state where the property is located.)   If you plan to sell, keep in mind that high-end finishes and other upgrades won’t necessarily get you your money back if the neighborhood isn’t made up of similarly designed homes. Rather than investing in renovations, listing the house “as is” for a lower price may result in a quicker sale.   What are the potential implications for your taxes? Upon inheriting the house, you will receive a stepped-up cost basis: the property’s fair market value at the date of the former owner’s death.  
  • If you decide to sell, this means that, even if the home has appreciated significantly since your loved one purchased it, you’ll only pay long-term capital gains on the sale price over that stepped-up basis.
  • If you decide to live in the house, you may face higher property taxes due to the step-up in cost basis. On the other hand, if you eventually sell, you can avoid capital gains if you reside there for at least two of the past five years.
  • If you decide to rent out the house, you can deduct certain improvements and the depreciation of the house itself against your taxable rental income. Just keep in mind that you’ll have to reimburse the IRS for that depreciation if you eventually sell.
  What do your professional advisors say? Working with professionals who have experience navigating these situations is key to a successful outcome. In addition to your financial advisor, you may benefit from enlisting the services of a qualified estate and tax attorney, as well as a real estate agent. Although dealing with inherited real estate is seldom simple, having an experienced team on your side will help smooth the process, no matter what you decide to do with the property.   This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a tax preparer, professional tax advisor, or lawyer.       Untitled design (40)
//

Benefits of Giving to Religious Establishments in Indiana.

Many of our clients in Indiana and around the country are extremely active in giving to religious establishments and in other philanthropic areas of their life. They feel a sense of commitment and pride in filling up the donation basket or giving back to organizations that were instrumental in their success.   As standard as this practice has become, individuals may not be benefiting themselves or their charitable recipient as much as they could. By providing your charity with an investment vehicle, rather than cash, both parties can benefit greatly over the long term: You’ll be offering the place you worship a much-appreciated asset boost, and you’ll help avoid big buildups in your portfolio in highly appreciated stock.   To start, you must first determine whether your religious institution or organization has an account with a financial institution. Once you know they can accept your gift(s), there are a few steps you should follow to make the transfer a smooth one:   Step 1: Obtain the transfer information from your organization’s financial institution. This would include both the routing and account numbers.   Step 2: Determine the monetary amount you’ll want to give your religious establishment or organization for the year. Then talk to your financial adviser about which appreciated stock you’ll want to donate and how many shares you will need to donate to meet your annual giving goal. If you still want to give on a weekly basis, determine how much you want to deduct from your annual amount to cover your weekly contributions.   Step 3: Have your Indiana financial adviser prepare an authorization form to transfer the stock to your institution’s brokerage account. You will need to initiate the transfer, which will require you to sign the appropriate paperwork. Your financial advisor can help you with this.   Step 4: Your financial adviser prepares a letter to be sent to your church/temple so that they are aware of the stock transfer as well as stock price on the day of the transfer.   If you would like to learn more about the tax advantages and other opportunities associated with charitable giving, we invite you to learn more at www.midwest-wealth.com.   Midwest Wealth Management, Inc does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.   Pelko, Lee. Why You Should Consider Donating Stock to Your Church in 2015. Rogers and Associates. 13, Jan. 2013. Cohen, Gail. Can You Make Your Church a Beneficiary of Your IRA?. ZACKS.
//

Why we sell and panic at the wrong times: advice from an Indiana Wealth Advisor.

Dalbar’s Quantitative analysis of investor behavior has become a popular resource for many Indiana wealth advisors in studying the psychology of investor’s decisions and how those decisions affect results. In the study, they talk about how behavioral biases that lead to poor investment decisions are the single largest contributor to underperformance over time.   It is these types of behaviors that can cause very smart and successful individuals to make choices they end up regretting — the type of emotional decisions that were made on a whim or formulated outside of the investor’s original plan.   The Dalbar study clearly illustrated just how poorly self-made investors perform relative to market benchmarks over an extended period. Granted taxes, trading costs and the internal dynamics of an index will affect the purchasing power of an investor against the index, but overall investors do underperform in the long run:  
    1. The average 2014 equity fund mutual fund investor underperformed the S&P 500 by a wide margin of 8.19% .(13.69% vs. 5.5%).
  1. In 2014, the 20-year annualized S&P return was 9.85% while the 20-year annualized return for the average equity mutual fund investor was only 5.19%, a gap of 4.66%.1
  Hiring an advisor to help manage these common pitfalls is where clients can take the emotional aspect out of the equation and rely on the advisors ability to look at the bigger picture. A good advisor will always ensure that the client has a highly diversified portfolio with a mix of traditional and alternative investments.  But most importantly, being able to build a comprehensive plan to manage the emotional side of the equation is showing to be just as important as the underlying investments themselves. To learn more about how you can achieve a successful investment strategy, visit Midwest Wealth Management at www.midwest-wealth.com, or call us at 317-288-4989. 1Roberts, Lance. Dalbar:Why Investors Suck and Tips For Advisors.  Advisor Perspectives. 8 April 2015 Midwest Wealth Management
//

Finance and Wealth Management with a Midwest Heart and Wall Street Brain.

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. Midwest Wealth Management  
//

Paying Taxes on investments that lost money- Mutual Fund Capital Gains

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.
//

Take our quick online quiz to see if you would benefit from our help. 

No email required.

take quiz