Founder & CEO
Timothy Baker, CFP® is the founder and CEO of WealthShape, a Connecticut based independent advisory firm built on innovation, responsibility and the real world application of research.
Tim has held positions as an advisor, consultant, portfolio manager, and vice president for institutional money management firms with billions of dollars in assets under management. He created WealthShape after spending more than a decade traveling across the United States educating investors from all walks of life. His goal is to help clients understand the benefits of disciplined investing, the importance of planning, and above all, the significance of focusing on the things they control to improve their quality of life.
WealthShape delivers evidence based investment solutions and high quality advice at a low cost. Clients are provided access to all investments, goals and progress in one easy to understand, secure location. The company operates under the belief that financial planning shouldn’t be static but rather vibrant and ongoing all while upholding the highest level of fiduciary responsibility.
Tim works with individual clients, businesses, and institutions in Connecticut and throughout the country. He has appeared numerous times as a guest on Wharton Business Radio and frequently contributes to media outlets including Financial Advisor IQ, The Wall Street Journal, CNBC and The New York Times.
He is a CERTIFIED FINANCIAL PLANNER™ professional holding a Bachelor of Science and Masters of Business Administration from Southern Connecticut State University where he was a 4 year member of the track and field team.
Tim and his wife Danielle are both avid runners and lifelong New England residents.
BS, Business Administration, Southern Connecticut State University
MBA, Southern Connecticut State University
WealthShape, LLC provides this communication as a matter of general information. No one should assume that any discussion or information contained in this material serves as a receipt of, or as a substitute for, personalized investment, tax or legal advice.
Advice and Investment Design Should Rely on Reason. Not Speculation.
Timothy Baker CFP® Advisor Insights
There are a number of reasons why some closed end funds trade away from their (NAV) net asset value, but it primarily has to do with just a few. Due to their limited number of shares, hence the name “closed” end funds, the market forces of supply and demand come into play creating potential deviations from the actual underlying value of the fund. Demand for the fund can come in many forms including: attractiveness of the manager, asset class, peer group, etc. It’s also important to pay attention to fees which can have a significant impact on the value of the funds holdings.
The biggest changes that you are going to see are generally going to be advantages no matter when these events take place.
The first item is your tax filing status. Once you’re married, your filing status will likely change from single to married filing jointly or married filing separately. Usually the married filing jointly status becomes the most advantageous due to the combined incomes and some credits and deductions not available otherwise.
The tax implications on the purchase of your first home are going to be more of a longer term item. Assuming you will be taking out a mortgage to help pay for your home, you will likely be able to deduct the mortgage interest on the loan providing you itemize deductions on your tax return. The interest on your mortgage will be tax deductible in for the length of the loan.
Congratulations! These are two huge steps. The question of whether it is easier to do in separate years often has more to do with the stress of the changes. There may be some ancillary items such as the deductibility of student loan interest or eligibility for certain income based programs, but these are the main changes to familiarize yourselves with.
Hope this helps. Best of luck to both of you!
I would caution against making any change for the reasons of speculation on what could, or could not, take place. If the target date 2025 is right for you from a long-term asset allocation perspective today, there’s no reason to suggest it should change. As we speak, markets are adjusting to the collective interpretations of millions of investors. We have to assume that current market prices are good estimates of underlying value because these sentiments are being absorbed into prices.
My recent Investopedia article: Democrats, Republicans and Your Investment Portfolio
Timing the market, even with slight adjustments, can have significant long term impacts on your portfolio. Research has shown that discipline is a far better ally to long term investors.
Hope this helps.
This is a difficult question to answer given the large number of variables that always come into play. I’ll do my best to comment from a high level perspective.
The US Dollar
When the US dollar is strong relative to other currencies, it means consumers can buy more international goods for less dollars. The downside is US companies that sell goods to foreign countries, in turn, earn less. When the dollar is weak, it simply means it buys less foreign goods or services, but also makes exporting them more attractive.
Conventional wisdom says that when the Fed tightens the monetary policy, spending is restricted and inflation slows. Conversely, a loose monetary policy is supposed to encourage growth. They have numerous methods to influence these environments. However, since 1980 we’ve seen interest rates ranging from the highs of 20% to lows of .5%. Given that large level of fluctuation, it’s hard to argue that they have the ability to hold sway over a normal inflationary environment through their actions.
According to the tax foundation, the US has the third highest marginal corporate income tax rate in the world at around 39%. That number is pretty much unchanged between 2015 and 2016. In 2015, US large companies collectively had a positive 1.4% rate of return for the S&P 500. Thus far, through 9/30 of 2016, the S&P 500 stands at a positive 7.84% for the year.
All that being said: If you subscribe to a transparent open and competitive market landscape, then you believe that a company’s first fiscal responsibility is to remain profitable and act in the best interest of its shareholders. The US equity market is by far the largest, accounting for approximately 52% of all global equity markets. Due to an ever expanding global workforce, domestic fiscal policies have arguably become less impactful to the domiciled company. The competitive environment is global and residual affects are often felt by domestic workforces. Ultimately, the evidence is inconclusive at best as to whether or not US fiscal or monetary policy has a lasting impact on financial performance.
Your participation in the 401(k) plan for that year makes you an active participant and therefore by IRS rules, you may not be eligible to claim a deduction for a “Traditional IRA” contribution depending on your compensation level. Once you become an active participant, you unfortunately retain that status for the year.
The income limitations change from year to year and your wife’s active participation status is also important. The IRA contribution would be deductible if both husband and wife were active participants who elect to file taxes jointly, and make under $98K in 2016.