Invest for the future, not the past

submitted by Michael Garry, CFP®, JD/MBA, Yardley Wealth Management, LLC

Much financial news purports to be about the future but is really just an account of the past. When stocks have fallen heavily in price, this is routinely reported as, “More bad news for investors today…” In fact, if you are a long-term investor, that could be good news unless you had to sell then. The key is how your portfolio performs from now on, not what happened yesterday. Investment is about the future, not the past. Because the future is unknown, you should strive to manage the uncertainty by diversifying across stocks, sectors, asset classes, and countries.

Everyone’s individual future is different, which means the investment strategy each of you adopts will vary. Some will want a strategy that delivers regular income; others will be more focused on capital growth. Some will be risk takers, others risk-averse.

This is why an assessment of the future and the uncertainty surrounding it should not just be approached from the level of the overall market but from the needs of each individual. That is the role of a qualified financial advisor: to help connect each individual’s circumstances and needs to their goals.

Nobody can control the future. One response to future uncertainty is to speculate and try to position one’s portfolio to take advantage of one possible outcome or another. Another response is to stay highly diversified and to use the information in market prices to stay focused on dimensions of expected return.

By hoping to diversify against risk and ensuring that your portfolio addresses your individual circumstances, this can help ensure that you are making the most of your investment. While you cannot prepare the future for your portfolios, you can still strive to prepare your portfolios for the future.

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Hatboro Federal Savings: Your hometown community bank

 

by June Portnoy 

Many people envision a bank as a cold, all-business operation with marble walls and a bank president you’ll never see, let alone talk to in person. And forget about having your call answered by a live person!

In contrast, Hatboro Federal Savings offers a warm, friendly environment with an accessible bank president on-site, as well as the conveniences of telephone banking, online banking and bill pay, and the worldwide Allpoint ATM network. During business hours, your calls will be answered immediately by a human voice without dealing with an automated phone line.

“Our primary focus is to provide exemplary service to families and residents in the communities that we serve,” says Joe J. Tyron, Jr., bank president and CEO.

Joe started working at this bank in 1970 as a teller, and ovimer the years has held practically every position. Hatboro Federal’s Senior Vice President Connie Wood has been with the bank since 1959, and together they have more than 100 years of dedicated service to this institution.

“Very few banks offer clients and customers the opportunity to come in and talk with the president and senior management, but I’m based in our Hatboro headquarters with an office visible to anyone passing by,” says Joe.  “I’m here to greet you, answer your questions, and will go to our other branches to meet with you if that’s more convenient.”

Hatboro Federal, established 73 years ago, has branches in Hatboro, Warminster and Warrington. Four years ago the bank opened its newest branch in Jamison. The Jamison branch has a unique appearance from its other offices, resembling a classic Colonial Williamsburg style that you would see around Independence Hall. All four locations offer the same welcoming feel with the Warrington branch including a museum room with antiques from the early 1800s.

“When you walk into our lobby, you’ll feel like you’re walking into someone’s home,” says Joe. “We want folks to feel comfortable here.”

There is minimal turnover of staff at Hatboro Federal, and most employees live within a five-mile radius from the branch at which they work. As a result, tellers and service representatives will know you by name and go out of their way to help you in anyway they can.

“What truly sets us apart is that when you take out a loan or mortgage with us, we won’t sell it to a third party,” says Joe. “So, if you ever have a question or concern, you can stop in and speak with us directly.”

Hatboro Federal takes a conservative approach, and as a result, is one of the strongest financial institutions in the region in terms of net worth. The bank posts assets of more than $514 million, and is considered one of the healthiest banks in the country earning a five-star rating from Bauer Financial year after year.

Hatboro Federal donates financial support, as well as countless hours of volunteer time annually to more than 50 nonprofit organizations. In 2013, the bank donated $222,222 to eight Bucks County and Eastern Montgomery County educational and community groups, including CB Cares, Centennial Education Foundation, Hatboro-Horsham Educational Foundation, Mercer Museum, Cradle of Liberty Council Boy Scouts of America, Upper Moreland Education Foundation, Outdoor School in Horsham/College Settlement Camp, and Union Library of Hatboro.

In 2013, the Central Bucks Chamber of Commerce recognized Hatboro Federal with a Lifetime Achievement Award.

Joe is president of the Greater Hatboro Chamber of Commerce, and he and many officers and directors on the board serve as Rotarians including Executive Vice President and COO, Linda Roehner.

Hatboro Federal truly offers the best of both worlds; large enough to provide the latest products and services, but small enough to offer personalized attention and community support.

For more information about Hatboro Federal Savings, go to www.hatborofed.com, or call 215.675.4000.

PHOTO CAP: Hatboro Federal donates $222,222 to eight Bucks County and Eastern Montgomery County educational and community groups. Front row center is Hatboro Federal Savings President and CEO, Joe J. Tryon, Jr. Photo by Aaron Mitchell Photography.

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Can I change my annuity for one with a better interest rate?

submitted by Rosemary G. Caligiuri, CASL™, President, Harvest Group Financial Services

Yes. However, to receive favorable tax treatment, the exchange must satisfy the requirements of a Section 1035 exchange. According to Section 1035 of the Internal Revenue Code, you can exchange one annuity for another without the immediate recognition of any gain or loss, as long as the following requirements are met:

  • The annuity cannot be cashed in and the proceeds then used to purchase a new annuity contract. Rather, the value of the old annuity must be transferred to the new annuity, usually by assigning rights to the old annuity to the company issuing the new annuity.
  • The exchange must involve like-kind property (i.e., property that is similar in nature or class and of equal value). If the annuitant receives cash or a payment in kind of cash or property, then that part of the exchange involves property that is not like-kind and may be taxable.
  • Under the new contract, the owner, along with the annuitant, must be the same as under the old contract. Both contracts must also be payable to the same person(s) (the beneficiary).

Also, be aware that surrender charges may reduce the value of the annuity you transfer. In addition, the new annuity likely will impose a new set of surrender charges.

Any information contained herein should not be construed as tax or legal advice. It is always recommended that you consult a qualified tax or legal professional regarding your personal situation.

Registered representative offering securities and advisory services through CentaurusFinancial Inc, a Registered Investment Advisor, Member FINRA & SIPC,Supervisory Branch: 3902 State Street, Suite 101, Santa Barbara, CA 93105,1-888-569-1982, Harvest Group Financial Services, Corp and Centaurus Financial, Inc Are Not Affiliated Companies.

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Consumer Troubleshooter

submitted by Bucks County Consumer Protection Agency

Q. I recently ordered a bundled package from a provider for my telephone, cable and Internet service. When the first bill came in I noticed a charge for almost ten dollars. I had no idea what the charge was for, so I called the company. I have still not received an answer. I would appreciate any help you can provide. L. H., Levittown

A. We applaud you for taking the time and actually going through the bill. Many consumers are so rushed they just take for granted that a bill from the utility or credit card company is correct and just send the payment. The charge you found is for a credit monitoring service and apparently was not ordered by you. The company is a third party billing service provider and works for numerous companies offering an array of products and services. On the bill the name and number of the provider is clearly stated and if disputed or not paid will not terminate your phone service. 

The company apparently did respond to your call, because when our office called they stated that a credit was applied and that the service was removed permanently. They claimed it was an error and will send you a letter stating what happened and showing a zero balance. Had you not been reviewing the bill and they charged you for several months it would have made it difficult to cancel. By paying the bill you would have inadvertently approved the service. Bucks County consumer protection encourages consumers to review all their bills carefully. Any charges or statements that are questionable or not stated clearly should be addressed immediately. We would also suggest that all terms and conditions for a service be sent to you in writing before agreeing to any contract. Remember always review the fine print.

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Check your beneficiary designations

submitted by Michael Garry, CFP®, JD/MBA, Yardley Wealth Management, LLC

Chances are, when you bought life insurance, you put a lot of thought into it. How much coverage did you need? Were you covering the potential loss of income due to premature death, or were the proceeds to pay estate taxes or provide an inheritance? What kind of coverage did you want?

But many people who shop for life insurance spend almost no time considering how to fill out one of the most important parts of their policy: the part of the form where you name the beneficiary. The contingent or alternate beneficiary designation is usually an afterthought. Once made, those decisions are almost never reviewed. They should be.

The same goes for 401ks, 403bs, IRAs, etc. It doesn’t matter what you want or what you put in your Will, it only matters how you fill out the form.

For retirement plans it is more important than ever to check your beneficiary forms. For the last few years, your beneficiaries have been able to use Inherited IRAs when you die, and they can be much more tax efficient than if you leave the beneficiary form blank or let it intentionally go to your estate (there may be times when you want it to go to your estate, but not many, so it had better be thought through with the help of an Estate Planning attorney).

If you have children, and they are not mature adults, you should probably have a Trust provision in your Will, and your life insurance and retirement plan beneficiary designations should reflect that. It’s not a good idea to leave money or benefits to minor children in their own names. Nor is it usually wise to leave outright gifts to most children in their 20’s. You would know if your twenty-something is the exception!

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I don’t know much about investing, should I let my husband make the decisions?

submitted by Rosemary G. Caligiuri, CASL™, President, Harvest Group Financial Services

Even if your husband is a financial expert, it’s a good idea to at least understand investing basics. For one thing, because women on average tend to live longer than men, the odds are extremely high that you could be responsible for making your own financial decisions at some point. If you suddenly had to make all the decisions yourself – and many women have found themselves in that position – you’d benefit from knowing enough to protect yourself from fraud and/or communicate effectively with a financial professional.

Also, even if your spouse is more knowledgeable about finances than you are, understanding enough to consider the pros and cons involved in an individual financial decision can often produce a better outcome; it forces both of you to address questions you might not have considered otherwise. Knowing why a decision was made can help minimize second-guessing on either side later.

If you disagree about a particular investment, remember that though diversification doesn’t guarantee a profit or prevent the possibility of loss, a diversified portfolio should have a place for both conservative and more aggressive investments. There may be ways to accommodate both spouses’ concerns, and a neutral third party with some expertise and a dispassionate view of the situation may be able to help you work through differences.

Any information contained herein should not be construed as tax or legal advice. It is always recommended that you consult a qualified tax or legal professional regarding your personal situation.

Registered representative offering securities and advisory services through CentaurusFinancial Inc., a Registered Investment Advisor, Member FINRA & SIPC, Supervisory Branch: 3902 State Street, Suite 101, Santa Barbara, CA 93105,1-888-569-1982, Harvest Group Financial Services, Corp and Centaurus Financial, Inc. Are Not Affiliated Companies. 

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The Credit Counseling Center

The Credit Counseling Center (CCC) is a non-profit community organization that has been serving Bucks and Montgomery Counties since 1994. With offices located in Doylestown, Richboro and Levittown, the CCC has served nearly 37,000 individuals who, with their help, were able to repay debt, improve credit scores, buy their first home and prevent foreclosure. In addition, the CCC has supported nearly 1,200 debt management clients and has dispersed $13 million back to creditors.

CCC is accredited by the Council on Accreditation for Children and Family Services (COA). CCC is approved by the Executive Office of the United States Trustees to provide Bankruptcy Counseling. CCC is a HUD approved housing agency, and is approved by Pennsylvania Housing Finance Agency to provide a Foreclosure Mitigation Counseling Program.

*Debt Consolidation - They stop the harassing creditor calls and ease your financial crunch by negotiating lower monthly payments and reducing interest rates.

*Credit Report Review - They explain the credit report and how to increase your score.

*First Home Buyer Counseling – $10,000 in closing cost assistance.

*Foreclosure Prevention/Loan Modification – HUD approved Foreclosure Mitigation Counseling, Bucks County Homeowner Mediation Program.

*Bankruptcy Counseling - Required for anyone filing for bankruptcy.

*Reverse Mortgage Counseling - For seniors.

*Financial Literacy Workshops – such as, Money in Motion, Credit Basics, and Financial Fitness for Life.

The CCC is supported by private and public funds allowing you the perfect opportunity to gain financial balance and the freedom to make your dreams come true. Start a new chapter in your life by calling them today! For more information about CCC you can visit their website, read their blog on tumblr, friend them on Facebook, or check out the videos on YouTube.

Contact them at www.ccc-credit.com or call them at 215-348- 8003.

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The Credit Counseling Center

The Credit Counseling Center (CCC) is a non-profit community organization that has been serving Bucks and Montgomery Counties since 1994. With offices located in Doylestown, Richboro and Levittown, the CCC has served nearly 37,000 individuals who, with their help, were able to repay debt, improve credit scores, buy their first home and prevent foreclosure. In addition, the CCC has supported nearly 1,200 debt management clients and has dispersed $13 million back to creditors.

CCC is accredited by the Council on Accreditation for Children and Family Services (COA). CCC is approved by the Executive Office of the United States Trustees to provide Bankruptcy Counseling. CCC is a HUD approved housing agency, and is approved by Pennsylvania Housing Finance Agency to provide a Foreclosure Mitigation Counseling Program.

*Debt Consolidation - They stop the harassing creditor calls and ease your financial crunch by negotiating lower monthly payments and reducing interest rates.

*Credit Report Review - They explain the credit report and how to increase your score.

*First Home Buyer Counseling – $10,000 in closing cost assistance.

*Foreclosure Prevention/Loan Modification – HUD approved Foreclosure Mitigation Counseling, Bucks County Homeowner Mediation Program.

*Bankruptcy Counseling - Required for anyone filing for bankruptcy.

*Reverse Mortgage Counseling - For seniors.

*Financial Literacy Workshops – such as, Money in Motion, Credit Basics, and Financial Fitness for Life.

The CCC is supported by private and public funds allowing you the perfect opportunity to gain financial balance and the freedom to make your dreams come true. Start a new chapter in your life by calling them today! For more information about CCC you can visit their website, read their blog on tumblr, friend them on Facebook, or check out the videos on YouTube.

Contact them at www.ccc-credit.com or call them at 215-348- 8003.

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Actively managed mutual funds vs. passively managed index funds

submitted by Michael Garry, CFP®, JD/MBA, Yardley Wealth Management, LLC

Mutual funds provide various benefits including diversification, convenience and cost advantage, so it’s no wonder that more than 13 trillion US dollars are invested in them. When deciding which mutual funds to invest in, there are many questions investors must ask themselves, including whether an actively or passively managed fund best matches their investment objectives. 

In actively managed funds, a portfolio manager attempts to outperform an index via stock picking, sector weighting and/or market timing. With passively managed index funds, the manager buys a portfolio of securities that replicate an index such as the S&P 500 or Barclay’s Aggregate Bond Index, or a portion of the market, such as large company stocks or small company stocks.

On the face of it, it seems like active management would be the way to go. Why not just pick the good stocks and forget about the bad ones? The problem is that it isn’t so easy to do.

On average, most actively managed funds trail the index that they try to beat. There are a few managers that do beat their indices over time, but it is as hard to pick a manager that will outperform as it is to pick a stock that will outperform.

Managers with good five- or 10-year track records tend to underperform over the next five or 10 years. The reason that this is so is because the markets are fairly efficient. There are literally millions of investors trying to beat the markets and what happens is that all of those investors trying to buy and sell to gain advantage wind up becoming the markets.

As a whole, they tend to underperform.

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What is asset allocation and how does it work?

submitted by Rosemary G. Caligiuri, CASL™, President, Harvest Group Financial Services

Asset allocation is a technique used to spread your investment dollars across several asset categories. The investment categories may include cash and cash alternatives, bonds, stocks, real estate, mutual funds, insurance products, or any other investment category imaginable. The general goal is to minimize volatility while maximizing return. The process involves dividing your investment dollars among asset categories that do not all respond to the same market forces in the same way at the same time. Though there are no guarantees, ideally, if your investments in one category are performing poorly, you may have assets in another category that are performing well. The gains in the latter may offset the losses in the former, minimizing the overall effect on your portfolio.

The number of asset categories you select for your portfolio and the percentage of portfolio dollars you allocate to each category will depend, in large part, on the size of your portfolio, your tolerance for risk, your investment goals, and how long you plan to keep your money invested. A simple portfolio may include as few as three investment categories, with a percentage of total dollars divided among, for example, cash alternatives, bonds, and stocks. A more complex portfolio may include many more asset categories or break down each of the broader asset categories into subcategories.

Generally, the asset allocation that best suits your needs may be determined with the help of a financial professional. Whether you hire a financial professional or not, be sure to periodically review your portfolio to ensure that the mix of investments you have chosen still serves your investment needs.

*Asset Allocation and Diversification does not guarantee profit, nor is it guaranteed to protect assets.

Any information contained herein should not be construed as tax or legal advice. It is always recommended that you consult a qualified tax or legal professional regarding your personal situation.

Registered representative offering securities and advisory services through Centaurus Financial Inc., a Registered Investment Advisor. Member FINRA and SIPC, Supervisory Branch: 3902 State Street, Suite 101, Santa Barbara, CA 93105, 1-888-569-1982.

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