Steps Academics Can Take Now to Protect and Grow Their Portfolios
()
About this ebook
This book reflects the collective knowledge of a team of advisors at Collegiate Capital Management, Inc. These advisors now pour their financial expertise and experiences into a single, invaluable workthe book youre holding right now.
Challenges that are unique to managing the portfolios of busy academics are explained in detail and little-known flexibilities are brought to your attention. Using real-life examples, this book provides insights to show you how our independence, knowledge, resources, and actions can help you pursue your retirement goals.
Related to Steps Academics Can Take Now to Protect and Grow Their Portfolios
Related ebooks
Summary of Steven Silbiger's The Ten-Day MBA Rating: 0 out of 5 stars0 ratingsThe Money Game Strategies to Win and Prosper Rating: 5 out of 5 stars5/5A Guide to Financial Success Rating: 0 out of 5 stars0 ratingsInternational Financial Statement Analysis Rating: 1 out of 5 stars1/5Financial Reporting under IFRS: A Topic Based Approach Rating: 0 out of 5 stars0 ratingsEmpowered Woman: A Guide to Financial Freedom Rating: 0 out of 5 stars0 ratingsManaging Customers Through Economic Cycles Rating: 0 out of 5 stars0 ratingsPersonal Investment Crash Course Rating: 0 out of 5 stars0 ratingsThe Financial Habits Code : Six Codes to Extraordinary Financial Freedom Rating: 0 out of 5 stars0 ratingsProven Financial Tactics for Growing Your Money" Rating: 0 out of 5 stars0 ratingsMorningstar Guide to Mutual Funds: 5-Star Strategies for Success Rating: 0 out of 5 stars0 ratingsFinancial Literacy and Investing Rating: 0 out of 5 stars0 ratingsThe Beginner's Handbook to Retirement Funds: Investing for a Secure Future Rating: 0 out of 5 stars0 ratingsInvesting Conservatively in Retirement: Make Your Money Work for You (For the Middle Class) Rating: 0 out of 5 stars0 ratingsFinancial Management Essentials Rating: 5 out of 5 stars5/5Play Smart with Your Money: A Comprehensive Approach to Securing Your Finances Rating: 0 out of 5 stars0 ratingsSchaum's Outline of Intermediate Accounting II, 2ed Rating: 5 out of 5 stars5/5Private Wealth Mangement 9th Ed (PB) Rating: 0 out of 5 stars0 ratingsMastering Corporate Finance Essentials: The Critical Quantitative Methods and Tools in Finance Rating: 0 out of 5 stars0 ratingsMaking Money Safely: A Guide to Financial Security: Course, #5 Rating: 0 out of 5 stars0 ratingsHow to Apply for Grants Rating: 5 out of 5 stars5/5Making Your Money Work for You: Practical Tips for Financial Success Rating: 0 out of 5 stars0 ratingsStrategic Corporate Finance: Applications in Valuation and Capital Structure Rating: 0 out of 5 stars0 ratingsHow to Retire Early on Dividends: Dividend Growth Machine: Mastering the Art of Maximizing Returns Through Dividend Investing Rating: 0 out of 5 stars0 ratingsDo I Need an Investment Policy Statement? Rating: 4 out of 5 stars4/5An Introduction to Stocks, Trading Markets and Corporate Behavior: Student Edition Rating: 3 out of 5 stars3/5Financial Literacy for Entrepreneurs: Understanding the Numbers Behind Your Business Rating: 0 out of 5 stars0 ratings
Personal Finance For You
Rich Dad Poor Dad Rating: 5 out of 5 stars5/5Summary of The 48 Laws of Power by Robert Greene Rating: 4 out of 5 stars4/5Legal Loopholes: Credit Repair Tactics Exposed Rating: 4 out of 5 stars4/5Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! Rating: 5 out of 5 stars5/5Rich Dad's Cashflow Quadrant Rating: 4 out of 5 stars4/5A Happy Pocket Full of Money, Expanded Study Edition: Infinite Wealth and Abundance in the Here and Now Rating: 5 out of 5 stars5/5The Psychology of Money: Timeless lessons on wealth, greed, and happiness Rating: 5 out of 5 stars5/5Personal Finance For Dummies Rating: 4 out of 5 stars4/5The Intelligent Investor, Rev. Ed: The Definitive Book on Value Investing Rating: 4 out of 5 stars4/5Good to Great: Why Some Companies Make the Leap...And Others Don't Rating: 4 out of 5 stars4/5Money Hacks: 275+ Ways to Decrease Spending, Increase Savings, and Make Your Money Work for You! Rating: 4 out of 5 stars4/5Investing For Dummies Rating: 4 out of 5 stars4/5The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness Rating: 4 out of 5 stars4/5Principles: Life and Work Rating: 4 out of 5 stars4/5Die With Zero: Getting All You Can from Your Money and Your Life Rating: 4 out of 5 stars4/5Same as Ever: Timeless Lessons on Risk, Opportunity and Living a Good Life Rating: 4 out of 5 stars4/5Summary of Timothy Ferriss' book: The 4-Hour Workweek: More time, more money, more life: Summary Rating: 5 out of 5 stars5/5The Millionaire Next Door Rating: 4 out of 5 stars4/5The Black Girl's Guide to Financial Freedom: Build Wealth, Retire Early, and Live the Life of Your Dreams Rating: 5 out of 5 stars5/5The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns Rating: 4 out of 5 stars4/5Financial Feminist: Overcome the Patriarchy's Bullsh*t to Master Your Money and Build a Life You Love Rating: 5 out of 5 stars5/5
Reviews for Steps Academics Can Take Now to Protect and Grow Their Portfolios
0 ratings0 reviews
Book preview
Steps Academics Can Take Now to Protect and Grow Their Portfolios - Tony W. Sigmon
Copyright © 2009, 2012 by Collegiate Capital Management, Inc.
All rights reserved. No part of this book may be used or reproduced by any means, graphic, electronic, or mechanical, including photocopying, recording, taping or by any information storage retrieval system without the written permission of the publisher except in the case of brief quotations embodied in critical articles and reviews.
The information, ideas, and suggestions in this book are not intended to render professional advice. Before following any suggestions contained in this book, you should consult your personal accountant or other financial advisor. Neither the author nor the publisher shall be liable or responsible for any loss or damage allegedly arising as a consequence of your use or application of any information or suggestions in this book.
iUniverse books may be ordered through booksellers or by contacting:
iUniverse
1663 Liberty Drive
Bloomington, IN 47403
www.iuniverse.com
1-800-Authors (1-800-288-4677)
Because of the dynamic nature of the Internet, any Web addresses or links contained in this book may have changed since publication and may no longer be valid. The views expressed in this work are solely those of the author and do not necessarily reflect the views of the publisher, and the publisher hereby disclaims any responsibility for them.
ISBN: 978-1-4401-5404-1 (sc)
ISBN: 978-1-4401-5403-4 (hc)
ISBN: 978-1-4401-5405-8 (e)
iUniverse rev. date: 1/17/2013
Table of Contents
Chapter 1 - Introduction
The Financial Markets
About Our Firm
Creating Flexibility With Your Investment Accounts
The Busy and Stressful Life of the Academic
Chapter 2 - Characteristics of University-Sponsored Retirement Plans
University-Sponsored Mandatory Retirement Plans
Additional Savings With Supplemental Retirement Plans
Constantly Changing IRS Regulations
Chapter 3 - Limitations of University Retirement Plans
It Is Important to Have Options
The Desired Spectrum of Equity-Based Investments
The Desired Spectrum of Fixed-Income Options
University Retirement Plans May Limit Your Choices
Biases of Vendors Within University-Sponsored Retirement Plans
Chapter 4 - Opportunities Presented by University Retirement Plans
Flexibility of Mandatory University-Sponsored Retirement Plans
Complementing Mandatory Plans With Participation in Supplemental Plans
Using Triggering Events to Add Flexibility and Efficiency
Using Non-University Accounts to Complete the Puzzle
Chapter 5 - Guidelines for Retirement Planning
The Cookie-Cutter Approach to Investment Management
The Investment Life Cycle
Long-Term Accumulation Phase
Short-Term Accumulation Phase
Retirement Income Phase
Chapter 6 - Factors That Drive the Redesign of the Academic’s Portfolio
Establish Investment Goals
Determine the Attainability of Retirement Goals
Determine Changes Needed to Meet Retirement Goals
Dealing With Uncertainties in Retirement Planning
Approaches to Withdrawing Retirement Income
The Importance of Getting Your Beneficiaries Correct
How Tax Rules Can Affect the Management of Certain Accounts
Chapter 7 - Restructuring and Managing Academics’ Portfolios
Restructure Portfolio to Gain Better Control
Make Initial Purchases and Exchanges
Monitor Markets and Holdings for Needed Portfolio Changes
Monitor IRS and Plan Changes
Glossary
Preface
This book provides university faculty and staff with an overview of several key investment strategies developed by our firm. These approaches have been tested and proven successful in helping our clients achieve their retirement goals.
We address those factors that affect the academic’s ability to attain his or her investment goals, identify the universe of investment options, explore the constraints and flexibilities inherent in university-sponsored retirement plans, and describe philosophies for managing retirement portfolios. Specific, real-life case studies help guide readers in applying various concepts to their individual circumstances. Although we have attempted to address a wide range of investor challenges, the infinite combination of potential market conditions and individual circumstances prevent us from suggesting approaches for all possibilities.
The book also provides a rationale for taking a comprehensive approach to asset management that treats all investor accounts as a single collective portfolio. Approaches are described that can be used to bring together these accounts under tactical unified management that is free of vendor bias.
Because of the intrinsic differences between public and private university retirement plans, certain generalizations have been made when discussing various retirement plan issues. However, the concepts described are applicable to academics at both public and private institutions.
Some of the concepts presented have tax implications. We advise individuals to discuss tax issues with an accountant to ensure that any actions that may be taken as a result of information presented in this book are consistent with tax law and carried out in the individual’s best interest.
List of Case Studies
Chapter 1 - Introduction
Case Study 1: Not Getting Unbiased Objective Information Can Be Costly
Case Study 2: Your Accounts Should Be Managed as a Cohesive Portfolio
Case Study 3: Don’t Assume Vendors Are Managing Your Accounts
Chapter 2 - Characteristics of University-Sponsored Retirement Plans
Case Study 1: It May Make Sense to Take the Pension From a Previous Employer Before You Retire
Case Study 2: Consider Starting Your Social Security Benefit Even While Still Working
Case Study 3: University Retirement Plans Can Be Used to Defer Taxes on Outside Sources of Income
Case Study 4: Are You Getting Consistent Information From Vendor Representatives
Case Study 5: Take Advantage of After-Tax Savings
Chapter 3 - Limitations of University Retirement Plans
Case Study 1: You Should Be Aware of Ongoing Changes to Your Retirement Plans
Case Study 2: Understand the Withdrawal Restrictions on Your Fixed-Income Investments
Case Study 3: Periodically Evaluate the Investments Offered by Vendors in Your Retirement Plans
Case Study 4: Don’t Assume That Bond Mutual Funds Can’t Lose Value
Chapter 4 - Opportunities Presented by University Retirement Plans
Case Study 1: Previous Employer Accounts Can Help You Expand Your Equity-Based Investment Options
Case Study 2: Previous Employer Accounts Can Help You Expand Your Fixed-Income Investment Options
Case Study 3: Attaining Age 59 ½ Triggers Your Ability to Rollover Supplemental Plan Assets
Case Study 4: Make Sure You Understand the Restrictions Placed on Your Fixed-Income Accounts
Case Study 5: You Can Access Individual Stocks and Other Targeted Investments With Previous Employer Account
Assets
Case Study 6: Gaining Access to a Larger Number of Socially Conscious Mutual Funds
Chapter 5 - Guidelines for Retirement Planning
Case Study 1: Make Sure Your Fixed-Income Investments Will Be Available When You Need Them
Case Study 2: Target Retirement Date Funds Do Not Allow You to Take Advantage of Market Dynamics
Case Study 3: Using After-Tax Assets to Lower Your Taxes in Retirement
Case Study 4: Think Twice Before Annuitizing Retirement Assets 72
Case Study 5: Avoid Paying Taxes on Your Social Security Benefit in Retirement
Chapter 6 - Factors That Drive the Redesign of the Academic’s Portfolio
Case Study 1: A Bear Market Has Created Buying Opportunities
Case Study 2: Lower the Risk of Outliving Your Money
Case Study 3: Get Your Beneficiary Designations Correct and Save Your Heirs Taxes, Trouble, and Market Losses
Case Study 4: After-Tax Accounts Should Be Weighted Towards Growth
Chapter 7 - Restructuring and Managing Academics’ PortfoliosCase Study 1: Gain Control of Your Fixed-Income Investments as You Near RetirementCase Study 2: Be Aware of the Volatility Inherent in Bond Funds
Case Study 3: Use Previous Employer Accounts to Broaden Your Choices of Socially Conscious Investments
Case Study 4: Concentrate Your Investments First Into the Best Funds Offered Within Your Most Restrictive Plan
Case Study 5: Attain Your Retirement Goals by Improving the Performance of Your Portfolio
Case Study 6: Use After-Tax Assets to Avoid Paying Taxes on Your Social Security Benefit6
Glossary
List of Figures
Figure 1 - Characterizing Equity Mutual Funds by Asset Class
Figure 2 - Most Mutual Funds Consist of Multiple Asset Classes
Figure 3 - Returns by Asset Class
Figure 4 - Characterizing Bond Mutual Funds by Maturity and Credit Quality
Figure 5 - Expanding Your Universe of Investment Choices
Figure 6 - Multiple Vendors Are Often Advantageous
Figure 7 - The Investment Life Cycle
Figure 8 - Range of Retirement Outcomes
Figure 9 - Factors That Affect Long-Term Portfolio Accumulation
Figure 10 - Planning for Retirement Income Bassed on Rolling Five-Year Income Needs
Figure 11 - Using After-Tax Assets to Manage Taxable Income
Figure 12 - Retirement Income Sustainability
Figure 13 - Enhanced Retirement Income Sustainability
Figure 14 - Sample Portfolio Redesign
Figure 15 - Effects of Enhanced Performance on Portfolio Value
Figure 16 - Increased Contributions Required to Offset Underperformance of Assets
Figure 17 - Effects of Fixed-Income and Equity Allocation on Portfolio Value
Figure 18 -