Good to Know
Avoid Turning $1,000,000 into $12,000
Good to Know Imagine an individual investor passionate about a specific stock (it happens more often than you might think). Assume the investor’s portfolio is worth $2 million, but $1 million is in just one stock. How could that $1,000,000 concentration hemorrhage into only $12,000 in just over one year? Sadly, that’s precisely what happened…
Read MoreManaging Concentration Wealth Risk — Swap (Exchange) Fund
Good to Know Purpose The goal of a swap fund is to reduce concentration of wealth risk through a unique approach to diversification. We will review this intriguing strategy’s operation, legal structure, tax implications, pros, and cons. Operation A swap fund (after this referred to as “the fund”) is a pool of concentrated positions in…
Read MoreCFP Board’s Disciplinary Actions: Implications for the CFP Board Exam
Good to Know Forewarned is forearmed when studying for the CFP Board exam or choosing a CFP® Certification program. In its latest release of public discipline, CFP Board telegraphs its continued priority for enforcing ethical conduct. Recent disciplinary actions include public censures, suspensions, and revocations. Public Censures Public censures were issued for: Selling securities without…
Read MoreWhat Do You Need to Know to Pass the CFP Board Exam?
Good to Know The question posed in this article’s title can be answered by applying the timeless wisdom of a Chinese general who died over 2,500 years ago. “If you know the enemy and know yourself, you need not fear the result of a hundred battles.” -Sun Szu, 544-496 BC While the CFP Board exam…
Read MoreInvestment Risk on the CFP Board Exam: Part IV
Good to Know This is the final article of our four-article series on investment risk for the CFP Board exam. Here’s a reminder of the risk concepts we’ve covered so far in the series: Part I: When to trust the “mean” return, Part II: Using standard deviation to manage investment risk, and Part III: Skewness—Do…
Read MoreInvestment Risk on the CFP Board Exam: Part III
Good to Know Question: Why should financial planners and advisors care about skewness? Answer: A negative skew can obscure excess downside risk in a portfolio. We discussed the mean (geometric average) return and standard deviation in our first two blogs. Now we’ll use those concepts to illustrate skewness in this, the third installment in our…
Read MoreInvestment Risk on the CFP Board Exam: Part II
Good to Know This blog is the second in a four-part series that includes: Part I: When to trust the “mean” return, Part II: Using standard deviation to manage investment risk, Part III: Skewness—Do we want negative or positive skew in our portfolio?, and Part IV: Kurtosis of a return distribution—Is more kurtosis a good…
Read MoreAbsolute Investment Risk on the CFP Board Exam: Part I
Good to Know This blog is the first in a four-part series that includes: When to trust the “mean” return, Using standard deviation to forecast outcomes, Skewness—Do we want negative or positive skew in our portfolio? Kurtosis of a return distribution—Is more kurtosis a good thing? We will begin with the average or mean return.…
Read MoreHow to Slash Gift, Estate, and Generation-Skipping Transfer Taxes: Part III
Good to Know This blog is the third of a three-part series that includes: Part I: Reducing the IRS valuation (but not the real value) of Client Assets, Part II: Creative Use of Installment Sales and Specialized Trusts, and Part III: Using Annuities, Charitable Trusts, and Other Techniques. Private Annuity Sale (PAS) A private annuity…
Read MoreHow to Slash Gift, Estate, and Generation-Skipping Transfer Taxes: Part II
Good to Know This blog is the second of a three-part series that includes: Part I: Reducing the IRS valuation (but not the real value) of Client Assets, Part II: Creative Use of Installment Sales and Specialized Trusts, and Part III: Using Annuities, Charitable Trusts, and Other Techniques. Background—Eliminate Transfer Taxes This blog combines the…
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