logo small

financial advisor

10 Big Tax Mistakes That Can Lead to an Audit

The chart below demonstrates a sharp decline in the number of audits since 2010. The IRS audits only 0.5% of all returns as of 2017. That being said, that is still nearly 1 million taxpayers that may face the dreaded audit this coming tax year With that in mind, here is a list of red flags that may draw the attention of the IRS to examining your tax return.

CONSUMER CREDIT: 3,500 B.C. TO TODAY

Consumer credit is an integral part of modern life and might seem like a relatively new invention. However, historical evidence shows that it has actually been around for more than 5,000 years! This informative infographic takes us on a journey through the history of consumer credit from antiquity through to modern times.

history of consumer credit 01

Dimensional Fund Advisors Named Most Recommended Asset Manager by Advisor Perspectives’ Advisors Choice™ Awards

When it comes to choosing to work with asset managers on behalf of our clients there is no shortage of options. There is Schwab, AQR, American Funds, Vanguard, BlackRock and the list goes on. We have, for a long time, chosen Dimensional Fund Advisors as our primary asset manager for the funds we choose for our clients. The philosophy that they use is evidence-based investing. The choices that they make are backed by decades of research from Nobel Laureates and financial science. To us, this approach to investing just makes logical sense.

Every Single Cognitive Bias in One Infographic

 The human brain is capable of incredible things, but it’s also extremely flawed at times.

Science has shown that we tend to make all sorts of mental mistakes, called “cognitive biases”, that can affect both our thinking and actions. These biases can lead to us extrapolating information from the wrong sources, seeking to confirm existing beliefs, or failing to remember events the way they actually happened!

To be sure, this is all part of being human – but such cognitive biases can also have a profound effect on our endeavors, investments, and life in general. For this reason, today’s infographic from DesignHacks.co is particularly handy. It shows and groups each of the 188 known confirmation biases in existence.

How Evidence-Based Indexing Works

The strategy uses common sense, data, and financial science to boost performance.

In the hallowed halls of academia, noted professors at the top business schools are teaching entire semesters on the benefits of investment strategies using passive indexes instead actively managed mutual funds or picking stocks.

As of 2017, more than $4.5 trillion has flowed into passive index funds and exchange-traded funds. What is passive investing, why are trillions of dollars flowing to this strategy, and more importantly is there a better way to invest?

To fully understand passive investing, it is helpful to understand active investing. Here investment managers (or investors doing it on their own) try to outperform the overall stock market or a specific part of the market using strategies such as fundamental and technical stock picking or market timing.

How Our Fiduciary Standard Protects You

lady justice

You may have heard media reports about a new fiduciary rule for retirement accounts that President Trump has called for a review of just two months before it was to go into effect. Understandably, you have questions about how this might impact your accounts. The rule was designed to ensure recommendations made by financial advisors to their clients regarding their retirement accounts are always made in the best interests of the client without any conflicts of interest.

The good news is that doesn’t affect your accounts at all. As a Registered Investment Advisor, we are already under the highest fiduciary standard—so enacting the rule, changing it, or possibly rescinding it doesn’t change our status. We have had this higher standard in place all along and will continue to do so. It’s always been part of our DNA.

As your financial advisor, we have been serving you as a fiduciary all along

A “fiduciary” who manages an investor’s assets has a legal and ethical obligation to put the investor’s interests first. That means helping the investor make decisions in his or her best interests. This fiduciary standard has always been at the core of our firm’s mission to our clients.

Here’s how we protect you and your investments:

  • We always put your needs first. We are committed to the highest professional and personal standards, and this commitment remains as strong as ever. Our sole focus is on your financial needs and goals and how we can best help you pursue them.
  • We always act in your best interests. We are committed to putting your needs and goals before those of our firm. We strive to avoid any conflicts of interest, and if they arise and are unavoidable, we disclose these to you immediately. We provide a high level of transparency around any fees or expenses associated with your accounts so that you always know what you own and what you’re paying for it, so there are never any surprises.
  • We are an independent and objective resource. As an independent firm, we provide you with objective, unbiased advice based solely on your needs and goals. We provide guidance that is truly objective, unencumbered by any potential conflicts of interest. We have no vested interest in promoting a particular product or service. Our only interest is that your financial objectives are met.

UNDERSTANDING THE FIDUCIARY STANDARD

In financial services, there have traditionally been two types of standards: the suitability standard and the fiduciary standard.

The suitability standard is defined as determining whether an investment product or strategy is “suitable” for the investor based on his or her financial objectives and risk comfort level. Many advisors operate under the suitability standard where the advisor simply determines whether a recommended product or strategy is suitable for the client.

The fiduciary standard is a higher level of responsibility for the advisor. The fiduciary standard goes beyond suitability and requires that any advice on products and strategies be provided in the best interests of the investor. The fiduciary standard of care requires that the advisor take into consideration whether the fees are reasonable, whether there are any conflicts of interest, and whether the investments are adequately diversified.

OUR COMMITMENT TO YOU

As your advisor, we adhere to the fiduciary standard, and we believe this model of disclosure and transparency is in your best interests. In our view, you deserve to have your needs put first and the strategies and investment products we recommend should align according to those needs.

Our fiduciary standard mandates that every single recommendation we make must be based on your best interests, and there is no circumstance when we can place our interests above yours. By adhering to the fiduciary standard, we believe we can provide you with the highest standard of care for all your investment and retirement needs.

SAFEGUARDING YOUR FINANCIAL DREAMS

When it comes to managing your money, your financial relationships should be built on a foundation of trust, integrity and transparency. Not all firms and advisors adhere to the same legal and regulatory standards.

We remain committed to earning and maintaining your trust through expert advice and effective strategies custom tailored to your unique needs. We define our success by seeing you succeed in achieving your financial goals. And our focus remains on serving your interests first and foremost.

Is Your Investing Strategy Really a Strategy?

SPECULATION, RISK, AND A LONG-TERM PLAN FOR BUYING AND SELLING SECURITIES

Many people are hesitant to invest heavily in the stock market because they consider it similar to gambling or taking too much of a risk with their hard-earned money. With volatility on the rise in our current climate, more investors are pausing to consider the risk they are taking with their investments and whether they should be so bold.

The idea of losing more than they can afford to in advance of their retirement weighs heavier on them than the possibility of capitalizing on the money they invest. Sadly, this type of behavioral bias--fear and herd mentality--can do more harm than good.

Mind Over Model

speculation
Checking the weather? Guess what—you’re using a model. While models can be useful for gaining insights that can help us make good decisions, they are inherently incomplete simplifications of reality.

In investing, factor models have been a frequent topic of discussion. Often marketed as smart beta strategies, these products are based on underlying models with limitations that many investors may not be aware of.

To help shed light on this concept, let’s start by examining an everyday example of a model: a weather forecast. Using data on current and past weather conditions, a meteorologist makes a number of assumptions and attempts to approximate what the weather will be in the future. This model may help you decide if you should bring an umbrella when you leave the house in the morning. However, as anyone who has been caught without an umbrella in an unexpected rain shower knows, reality often behaves differently than a model predicts it will.

Most Valuable U.S. Companies Over 100 Years

HOW MUCH DOES THE BUSINESS WORLD SHIFT IN A CENTURY?

Today’s visualization comes from HowMuch.net, and it uses Forbes data to show how the list of the top 10 companies in the U.S. has evolved over the last 100 years.

top 10 companies 100 years
Courtesy of: Visual Capitalist

Over 2,000 Years of Economic History in One Chart

ALL MAJOR POWERS COMPARED BY GDP FROM THE YEAR 1 AD

Long before the invention of modern day maps or gunpowder, the planet’s major powers were already duking it out for economic and geopolitical supremacy.

Today’s chart tells that story in the simplest terms possible. By showing the changing share of the global economy for each country from 1 AD until now, it compares economic productivity over a mind-boggling time period.

The Future of Artificial Intelligence, According to Pop Culture

Storytellers of all kinds have long been fascinated by the possibilities artificial intelligence offers humanity.  Movies and books have given us a window into possible realities both good and bad resulting from the rise of the machines.
 

Today’s infographic from BBC Future provides an entertaining take on these scenarios, organized by potential likelihood.

The Future of Food: How Tech Is Changing Our Food Systems

The urban population is exploding around the globe, and yesterday’s food systems will soon be sub-optimal for many of the megacities swelling with tens of millions of people. Further, issues like wasted food, poor working conditions, polluted ecosystems, mistreated animals, and greenhouse gases are just some of the concerns that people have about our current supply chains. Today’s infographic from Futurism shows how food systems are evolving – and that the future of food depends on technologies that enable us to get more food out of fewer resources.

Tim Bock Featured on Investopedia: How to Raise Financially Savvy Children

Good financial decision making starts in childhood and follows you through adolescence, college and into your adult life. Parents who teach their children the fundamentals of money management, budgeting and making prudent financial choices are providing them with a sound financial foundation.

However, teaching money skills early in life can often fall by the wayside because it is not exactly exciting. The disadvantage to this is that by the time kids are starting to make their own financial choices, they have not been given the tools to avoid mistakes and weigh their options responsibly. One of the most impactful ways to encourage informed financial decisions is to lead by example.

Visualizing the Massive $15.7 Trillion Impact of AI

For the people most immersed in the tech sector, it’s hard to think of a more controversial topic than the ultimate impact of artificial intelligence (AI) on society.

By eventually empowering machines with a level of superintelligence, there are many different possible outcomes ranging from Kurzweil’s technological singularity to the more dire predictions popularized by Elon Musk.

Despite this wide gap in potential outcomes, most technologists do agree on one thing: AI will have a profound impact on the society and the way we do business.

What Drives Long-Term National Debt Growth?

With the current 106% debt-to-GDP ratio, there’s no doubt that today’s government debt is high. The last time the United States reached this mark, it was during the aftermath of WWII in the late 1940s.But despite nearly historic debt levels, it does not seem that the national debt is a key issue for most citizens and groups. What drives this accumulation of debt in the long run, and at what point does the debt level become so high that it becomes an undeniable and critical issue for the country?

Today’s infographic comes from the Peter G. Peterson Foundation, a NYC-based group that focuses on educating people about the fiscal challenges of growing government debt. The graphic illustrates the main factors driving the debt upwards, as well as the potential impact down the road.