Laurel Tree Advisors
Assistant Portfolio Manager
Alexander (Alex) Rupert is an Assistant Portfolio Manager at Laurel Tree Advisors. Alex joined the firm while earning his Bachelor of Business Administration degree focusing on Finance. He graduated from the University of Akron and joined Laurel Tree Advisors in his current role in 2014.
Alex is very active on the firm’s investment research committee, providing in-depth reports on securities and economic topics. He also reviews and analyzes investment portfolios as well as preparation and presentation of financial plans. He has developed multiple templates and tools that streamline portfolio allocation and apply investment research that the company currently uses in their business processes. Maintenance of the company website, social media and other various technological tasks are part of Alex’s routine.
In addition to creating financial plans and managing portfolios for clients that are nearing or in retirement, Alex specializes in creating financial plans for the younger demographic who want to maximize the efficiency of their income and resources.
Alex is a member of the Financial Planning Association of Northeast Ohio where he leads the technology committee and develops website strategies. Alex participates in virtual financial planning through Nerdwallet’s Ask an Advisor. Alex also participates in the Steering Committee of the Muldoon Partners at the Muldoon Center for Entrepreneurship where he helps with the strategy and direction of the group. Alex is also a member of the Estate Planning Council of Cleveland.
Alex is enthusiastic and creative, with an interest in health and fitness as well as developing relationships and becoming part of the Cleveland community.
Assets Under Management:
Answers given on Advisor Network do not include all of the information required to create a financial plan or take an official tax position. Advisor Network questions and answers will probably not apply directly to each situation. Before implementing any advice on Advisor Network, you should seek the advice of a professional expert.
In most circumstances, the answer to this question is no, but depending on your circumstances, this question could get complicated. The maximum you, the employee, are permitted to contribute to a 401(k) in the year 2016 is $18,000. If you are the age of 50 or older, you will be permitted to contribute an additional $6,000 for a total employee contribution limit of $24,000. This $6,000 is often referred to as “catch-up”. Essentially, your employer's matching contribution doesn't necessarily count towards the maximum you can contribute to your 401(k), but your employer's overall contribution can count towards how much is overall contributed to your 401(k).
Besides employee contributions, there are other forms of additions that can come into your 401(k). All forms of additions are listed below:
- Employee contributions
- Employer matching contributions
- Employer nonelective contributions
- Allocations of forfeitures
Employee contributions have a threshold of $18,000 ($24,000 catch-up) that is permitted in a year - employer matching contributions, employer nonelective contributions and allocations of forfeitures do not have individual thresholds, but all of them combined together have a threshold of $53,000. If your compensation is less than $53,000, 100% of compensation will be the threshold.
Here's an example to better understand this concept. Assume we have an individual that is 40 years old, earns $75,000 and receives a 100% employer match up to 4% of compensation. This person contributes the annual maximum they are permitted to them of $18,000. Their employer matches 100% of contributions up to 4% of compensation which, in scenario, is $3,000. Currently, we have total annual contributions of $21,000 ($18,000 + $3,000), this leaves $32,000 ($53,000 - $21,000) remaining that could potentially be contributed through employer nonelective contributions or allocations of forfeitures.
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The two main ways investors profit from investing in stocks is capital appreciation (an increasing stock price) and dividend payments. Dividend payments are a method in which a company actively shares a portion of their profits with its shareholders. If a company cuts their dividends or eliminates them all together, it should be an indication that you should dig a little deeper in your research to understand why.
The size of a company's dividend depends on its maturity as well as its industry. Generally, you will tend to see larger dividends from companies that are further along in the business cycle than companies that are fresh on the scene. This is because the younger companies need the money to invest in themselves and new projects in hopes of growing their business.
If a company cuts their dividend, analyzing the company's financial statements and current press releases can be a good place to start. The reason for the cut could be negative; they could be facing trouble maintaining earnings. The reason could also be positive; they could be using the money they would've paid out in dividends to invest in a new development that would hopefully produce more return in the future.
The decision to sell also depends on your investment strategy. If you own stock primarily for the income from its dividend payments and the dividends are cut, selling may be a good option. If you are investing in the stock for absolute return, then you shouldn't be utterly concerned with its dividend payments, you should keep more focus on the financial health of the company.
A company cutting their dividends isn’t always a sell signal, but it should catch your attention and a good investor will do their homework to figure out if the stock is still in line with their investment strategy.
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Homeowner's and renter's insurance are similar in the fact that they are both associated with your dwelling. The main differences in these two types of insurance is what is included in the coverage and if you are required to have homeowner's or renter's insurance while living in the dwelling.
Homeowner's insurance covers the actual building you live in (and other structures, such as garages) while renter's insurance does not. With renter's insurance, the landlord will be expected to have coverage on the building while your renter’s insurance will cover your personal property. Most standard homeowner's policies will have personal property coverage as well. With homeowner's insurance, you are covering a more substantial asset (the actual home), thus the cost of insurance should be expected to be higher. Most homeowner's and renter's insurances will also have liability coverage associated with them.
If you mortgage your home, homeowner's insurance will almost always be required. Although it is becoming more popular that landlords require their renters to have renter’s insurance, having renter's insurance isn't always required when renting.
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A mutual fund can be advantageous compared to an individual stock because of diversification and professional management. An individual stock has potential to face more risk than a fund because the entire investment will be focused in that sole company. If that company performs badly in the coming year, you may be punished with negative returns on your investment. A fund is invested in multiple, hundreds and sometimes more, of companies to negate this risk. If a company within the mutual fund were to perform badly, the thought is that the other companies will uphold the performance of the fund. This is the idea of diversification.
Professional management is also an appealing reason to invest in a mutual fund. A portfolio manager does all of the investment management and trading so you don't have to. Of course, there is a fee associated with this task and some mutual funds can be much more expensive than others.
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One might get the impression that dividends are passive income because owning a stock and receiving dividends is passive in nature. Often times, portfolio income, interest, and even lottery winnings will be confused as being passive income by investors. There are only two sources of passive activity: rental activity income or business income in which the taxpayer does not materially participate.
Dividends can be classified as either ordinary or qualified. Ordinary dividends are taxable as ordinary income, qualified dividends that meet certain requirements are taxed at lower capital gain rates. Ordinary dividends are the most common type of distribution you would receive from a corporation or a mutual fund. You can assume that any dividend you receive is an ordinary dividend unless the delivering firm tells you otherwise.
For a dividend to be considered qualified; the dividend must be paid by a US corporation or a qualified foreign corporation and you must meet a specific holding period. For the holding period to qualify you must hold the stock that is paying the dividend for 60 days during the 121-day period that begins 60 days before the ex-dividend date. There is also a list of distinct types of dividends that are automatically considered non-qualified. Some popular examples on this list are dividends paid by:
- Real estate investments trusts (REITs)
- Master limited partnerships (MLPs)
- Employee stock options
- Tax-exempt companies
I hope you found this helpful.