EverGuide Financial Group, LLC
Mark R. Painter, CFA is the Founder and President of EverGuide Financial group. He has been an investment manager for over 12 years at both the institutional and retail level having managed public mutual funds and individual client accounts. Additionally he has written for Seeking Alpha and been a speaker on various panels and industry conferences. Mark and his team's mission at EverGuide Financial Group is to help their clients navigate their financial course through cost effective wealth management and Everlasting education.
A graduate of Carnegie Mellon University Tepper School of Business, Mark went on to attain his CFA charter in 2009. Mark worked for Stanley Laman Group, Ltd from 2004 2016.
At Stanley Laman Group, Mark quickly went from analyst to portfolio manager in 2005 and helped create their portfolio management business. Not only was Mark responsible for portfolio management but also had large responsibilities in working with clients to understand their needs and financial goals. In 2014 Mark became the lead portfolio manager of a publicly listed mutual fund (American Real Estate Income Fund).
BS, Business Administration, Carnegie Mellon University
Assets Under Management:
What a great question and one that crosses peoples minds a lot. I will say that you are thinking a little differently in that most people want to go to cash AFTER the market has sold off.
Each investor is different and without knowing your age, time horizon, risk profile, etc it is difficult to give a precise recommendation, however I will answer in the broadest sense and hope it helps. I tell clients to look at their accounts with a certain objective in mind such as capital appreciation, capital preservation, or current income. Usually for a 401k, the objective is capital apprecaition in order to maximize account value for when you are ready to retire, at which time your objective will change towards income. Additionally, because of the long term nature of the account (taxes +10% penalty for early withdrawal) combined with contributions that are the best form of dollar cost averaging, a 401k should be used as a more passive investment. Trying to time the market and make binary (you either win or lose) active bets will most likely cause your portfolio to suffer in the long run.
With that being said, it is a great idea to periodically rebalance the portfolio. Depending on what is offered in your plan, there will inevitably be funds that have done extremely well and others that have not. By selling some of the strong performing funds and buying some of the weaker performing funds you can increase the expected return of your portfolio over the long term. I stress "long term" because it may take awhile to realize the benefit of rebalancing as momentum tends to stay in asset classes for longer than most people expect.
Given your current views, in the process of the rebalancing you can assess what would have an outsized exposure to a downturn in both stocks and bonds, such as high yield bonds, corporate bonds, and growth stocks and reduce your exposure there. As an example, even though a high yield bond is fixed income, if we were to go into a bear market, this asset class will most likely behave more like a stock than a bond and thus defeats the main goal of diversification. Additionally, there is nothing wrong with using cash as part of the allocation in your rebalance, it just should not be an all or none proposal like the question states. After all, if the fed continues to raise interest rates 3-5 times over the next year, that cash can become more valuable when other fixed income securities may not.
Best Wishes and happy investing!
This is a good question and a payout ratio is an excellent way to assess the health of a company and its dividend.
It is important to take this analysis a little bit deeper. While USA companies usually pay out a consistent dividend per share such as .25 a quarter, many international companies will use a payout ratio such as 50% that causes dividends to fluctuate more with the business.
In the USA, because of the importance of maintaining the dividend, companies will only cut as a last resort and will try to temporarily payout more than what they make. They can do this from cash on the balance sheet or through lines of credit.
Additionally, because a dividend payout ratio is calculated on Net Income, there may be significant non-cash charges that can effect this ratio such as depreciation and amortization(this is more common with REITS). You will also want to look at one time events that caused this ratio to spike such as a natural disaster. Looking for these potential explanations often reveals more about the business and prospects moving forward.
In the end, while a dividend payout ratio is a great place to start, it is good to dig a little deeper for more information as to why a payout ratio is so high. In any case, no company can continue to maintain its dividend with a payout greater than 100% for any prolonged period of time.
Yes a limited partnerhsip can have multiple limited partners. This is quite common in real estate and private equity. Typically you have an LLC that acts as the general partner which makes the investment decisions and the limited partners supply the capital.
It is important to work with a good lawyer and accountant to make sure that you have the documents formed properly, the investors are accredited, and the partnership financials are accurate. The last thing you want is a legal headache to interfere with a potentially good real estate investment.
This is a great question as the fee debate is one that continues to get more and more attention. Beyond the nominal level of the fee, it is even more important to figure out the total value of that fee.
First, you want to understand what services are included and if there are any hidden fees that are not obvious. There are many times when you have a management fee and then there are also underlying fund fees as well.
Next, you want to know what value add the advisor brings. A good financial advisor will justify the fee through careful tax planning, retirement planning, asset protection, estate planning, investment management etc. Additionally, the advisor can help guide you through different situations in the market that can better your return over time.
At the end of the day, your interests, level of attention, and care must be aligned with your advisor. There are different styles of advisors and making sure that your expectations match will go a long way towards future success.
This is a good question as you want to be careful with MLP investing in an IRA account as there is a possibility to cause a tax obligation in an otherwise tax deferred account. First off, unlike regular dividends that are reported on your 1099, MLP's have a K-1 tax statement.
There will not be an issue with having to pay taxes on distributions or capital gains until your unrelated business taxable income (UBTI) exceeds $1,000 for the year.
While it is hard to know exactly how much UBTI there will be in a given year you can estimate this by looking at what the MLP has categorized as UBTI in previous years.
One other option is to use closed end funds and ETF's that invest in MLP's and distribute a regular dividend. This is a way to gain exposure to MLP's in your IRA while avoiding the potential issues of UBTI.