Tag Archives: Money Matters

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Money Matters | Episode 5: College Prep 101

Are your (parents) prepared to send your child away to college?  Not so much mentally, but are you fully prepared legally and have you prepared your child financially?
Money Matters: The Podcast is sponsored by Axiom Financial Strategies Group of Wells Fargo Advisors.  This monthly podcast is in addition to a monthly article titled, “Money Matters,” that is posted online at www.ExtolMag.com and www.axiomfsg.com.
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At Axiom Financial Strategies Group of Wells Fargo Advisors we sincerely appreciate our clients making opportunities like this possible. Without their support of our business, we would not be able to support programs like this.
Axiom Financial Strategies Group
of Wells Fargo Advisors
101 W Spring Street, Fifth Floor
New Albany, IN  47150
P 812.542.6475 | F 812.948.8732 | www.axiomfsg.com
At Axiom Financial Strategies Group of Wells Fargo Advisors, our team caters to a select group of family-owned businesses, entrepreneurs, individuals, institutions, and foundations, helping them build, manage, preserve, and transition wealth. We accomplish this while providing top-notch service through a team approach that puts our clients’ needs, goals, and interests first. To learn more visit our website at www.axiomfsg.com. Wells Fargo Advisors. Member SIPC.
The information provided is general in nature and may not apply to your personal investment situation. Individuals should consult with their chosen financial professional before making any decisions.
Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, Member SIPC, a registered broker-dealer and non-bank affiliate of Wells Fargo & Company.
CAR # for the podcast is 0417-02947
CAR # for the video is 0617-03279
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Money Matters by Michelle Floyd | Involve Your Child in the Finances of College

By Michelle Floyd

The cost to attend a university continues to increase: between the 2011–2012 school year and the 2016–2017 academic year, tuition and fees rose by 13% at private, nonprofit, four-year institutions, reaching an average of $33,479, according to The College Board.*

If you’ve diligently saved over the years to help pay for your child’s education, now is the perfect time to bring him or her into the equation. “When it comes to financing school, students need to be involved in the process,” explains Tracy Green, a Life Event Services consultant at Wells Fargo Advisors.

By walking through the financial steps of paying for college together, you’ll help your son or daughter understand the overall expenses and learn valuable fiscal skills for the future, especially the importance of goal-based saving.

Green recommends following these five steps to get your child involved before mailing in that acceptance notification and deposit.

  1. Start with a conversation. Before your child even begins applying for college, have a discussion about finances, suggests Green. A good time to have this conversation tends to be during the student’s junior year of high school.

When you sit down together, ask your child about his or her upcoming goals. Talk about expenses for school, as well as who will be covering costs or how they might be split. If you or other family members have contributed to a 529 plan, show it to your child and go through the details of how it can be used.

  1. Set a budget. As a family, consider setting certain guidelines and limitations for the college experience. Perhaps you agree to cover the cost of tuition and room and board, but ask your child to pay for his or her entertainment expenses while on campus.

“Having those discussions may prevent future disappointment,” adds Green. If your son gets accepted into his dream school, for instance, but later learns the family won’t be able to pay for it and he doesn’t want to take out his own loans, the reality could be difficult to face.

  1. Look at financial aid packages together. With your child, fill out and submit forms for financial help, such as the Free Application for Federal Student Aid (FAFSA). Learn more at https://fafsa.ed.gov/. To identify additional types of financial aid that may be available, visit https://studentaid.ed.gov/sa/.

Some universities have a net price calculator on their websites. With this tool, you’ll be able to see what the overall cost for the school is and then subtract any financial aid packages available to identify what your expected expenses will be. Once you start receiving acceptance notifications, go through aid packages with your child to compare and contrast them so that you and your child have a clear vision of what the bottom line is and how different aid options are treated.

  1. Think about work. If you want your child to be responsible for paying for part or all of their schooling, a part-time job may be a good fit.

As a family, you’ll want to decide if it makes sense for your child to work while he or she is at school, or only during summer and winter breaks. “Some kids may have a heavy class load or extracurricular activities,” notes Green. If certain scholarships require your child to attain or keep a certain GPA, you’ll want to weigh the time spent away from academics against the amount of money your student will be earning from a part-time job.

In addition to helping cover college expenses, employment can offer other key benefits for your child, including the chance to manage an income, build a strong work ethic, and grow in self-worth. If working during the school year will put too much of a strain on your child, set savings goals together for his or her summer job. 

  1. Understand scholarship possibilities. If your child wants to attend a school that doesn’t fit into the budgeted amount you planned to spend, consider sitting down to talk about the situation. It may be time to look at other options, or your child may want to increase his or her efforts to identify and apply for scholarships to help cover some of the costs.

The site TuitionFundingSources.com, sponsored by Wells Fargo, provides a database of scholarships available. After looking through the options together, help your child set up a schedule to apply for ones that are the best fit, paying close attention to deadlines and other requirements. Some scholarships involve writing an essay, but the rewards offered could make the effort worthwhile. 

*https://trends.collegeboard.org/college-pricing/figures-tables/tuition-fees-room-and-board-over-time

 Please consider the investment objectives, risks, charges and expenses carefully before investing in a 529 savings plan. The official statement, which contains this and other information, can be obtained by calling your Financial Advisor. Read it carefully before you invest.

This article was written by/for Wells Fargo Advisors and provided courtesy of Michelle Floyd, CFP®, Financial Consultant with Axiom Financial Strategies Group of Wells Fargo Advisors in New Albany, IN at 812-948-8475.
Investments in securities and insurance products are: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC, Member SIPC, a registered broker-dealer and non-bank affiliate of Wells Fargo & Company.

© 2017 Wells Fargo Clearing Services, LLC. All rights reserved.   0317-00810

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Money Matters | Episode 4: My First Real Job and What to do with the Money

I have my first real job and my first real paycheck; What to do?  The answer may actually be your first real job.  The gents from Axiom Financial Strategies Group of Wells Fargo Advisors give us the inside track.
Money Matters: The Podcast is sponsored by Axiom Financial Strategies Group of Wells Fargo Advisors.  This monthly podcast is in addition to a monthly article titled, “Money Matters,” that is posted online at www.ExtolMag.com and www.axiomfsg.com.
**************************************************************************************************************************
At Axiom Financial Strategies Group of Wells Fargo Advisors we sincerely appreciate our clients making opportunities like this possible. Without their support of our business, we would not be able to support programs like this.
Axiom Financial Strategies Group
of Wells Fargo Advisors
101 W Spring Street, Fifth Floor
New Albany, IN  47150
P 812.542.6475 | F 812.948.8732 | www.axiomfsg.com
At Axiom Financial Strategies Group of Wells Fargo Advisors, our team caters to a select group of family-owned businesses, entrepreneurs, individuals, institutions, and foundations, helping them build, manage, preserve, and transition wealth. We accomplish this while providing top-notch service through a team approach that puts our clients’ needs, goals, and interests first. To learn more visit our website at www.axiomfsg.com. Wells Fargo Advisors. Member SIPC.
The information provided is general in nature and may not apply to your personal investment situation. Individuals should consult with their chosen financial professional before making any decisions.
Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, Member SIPC, a registered broker-dealer and non-bank affiliate of Wells Fargo & Company.
CAR # for the podcast is 0417-02947
CAR # for the video is 0417-02942
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Money Matters ‘the poll’ | Investing 101

Please watch the below video for answer and/or listen to our podcast below:

MONEY MATTERS PODCAST (12 min 49 sec., Podcast goes into more detail about why and how)

Investing 101 PDF (written reference provided by Wells Fargo Advisors)

If you would like more information regarding investments or tips information like the ones, please contact our office for a free consultation: You can also follow Money Matters at www.Axiomfsg.com or www.ExtolMag.com.

Axiom Financial Strategies Group of Wells Fargo Advisors
101 W. Spring Street, 5th Floor
New Albany, IN 47150

www.Axiomfsg.com | 812.948.8475

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC, Member FINRA/SIPC, CAR 0417-00313

Axiom Financial Strategies Group of Wells Fargo Advosors, LLC

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Money Matters: The Podcast | Episode 3: Invest Early and Compounding

A Money Matter’s duo,  Eric Ballenger, Senior Vice President – Investments and Michael Grau, CFP®, RICP®, Vice President – Investment, start with the basics, Investing 101.  Its the moment when you realize that you must invest early, but why?  They explain how compounding works and how easy it is to set it and forget it.

Invest in Your Future Today Brochure
Money Matters: The Podcast is sponsored by Axiom Financial Strategies Group of Wells Fargo Advisors.  This monthly podcast is in addition to a monthly article titled, “Money Matters,” that is posted online at www.ExtolMag.com and www.axiomfsg.com.

**************************************************************************************************************************

At Axiom Financial Strategies Group of Wells Fargo Advisors we sincerely appreciate our clients making opportunities like this possible. Without their support of our business, we would not be able to support programs like this.

Axiom Financial Strategies Group
of Wells Fargo Advisors
101 W Spring Street, Fifth Floor
New Albany, IN  47150

P 812.542.6475 | F 812.948.8732 | www.axiomfsg.com

At Axiom Financial Strategies Group of Wells Fargo Advisors, our team caters to a select group of family-owned businesses, entrepreneurs, individuals, institutions, and foundations, helping them build, manage, preserve, and transition wealth. We accomplish this while providing top-notch service through a team approach that puts our clients’ needs, goals, and interests first. To learn more visit our website at www.axiomfsg.com. Wells Fargo Advisors. Member SIPC.

The information provided is general in nature and may not apply to your personal investment situation. Individuals should consult with their chosen financial professional before making any decisions.

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, Member SIPC, a registered broker-dealer and non-bank affiliate of Wells Fargo & Company. CAR 1216-02739

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Podcast Photo:

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Money Matters with Vaughan Scott | Social Responsibility Can Pay Dividends in Many Ways

By Vaughan Scott

Typically when we consider “Money Matters” we think about saving for retirement, saving for college, or other goals that we have set for ourselves or for our families.  However, more and more, we are having conversations with clients about how and what they want to do to “give back”.  And, we are building more philanthropic goals (big and small) into our clients documented plans for the future.

I don’t know about you, but when I hear the word “philanthropic”, I think about families like the Carnegie’s and the Rockefellers, but in reality, most of us are philanthropic in many ways and we don’t even realize it.  Today we tend to think more in terms of our “Social Responsibilities”.  Yes, charitable giving in any form is yet another way to be socially responsible.  Our clients often talk about the charitable giving and the service work that they do as being something they feel “an obligation” to do, “a duty” or “a responsibility” of theirs, but always with very positive, inspirational tone.  These feelings usually are born out of gratefulness for having been given great opportunities in their lives and this typically results in people giving of their time, talents and treasure (money) in traditional ways.

For example, people are often incredibly generous in the ways they give to their church, write checks to organizations that they want to support, work in soup kitchens, help build houses, help build churches, and/or donate gently used goods to Goodwill and other organizations that are funded through the sale of donated goods.  These are all typically very noble and worthy causes.  And, while the economic benefits that one might receive are not typically what motivates people to give, certainly anyone engaging in these types of activities should consult with their tax advisors about the deductibility of both cash and “in kind” gifts to charities.

At the same time, I also encourage individuals and families to expand their thinking about what they can do together to make a difference.  For example, a few years ago, during a particularly cold, harsh, winter, my mother came up with a great idea to buy sleeping bags, pairs of gloves, warm socks, and hats for the homeless in the region for Christmas. My brother and I bought a dozen or so of each and our mother and our children handed them out to homeless people in our region.   This experience was rather rewarding for all of us because, while we had done “Secret Santa” shopping in the past, we typically had fairly clear instructions on what to buy.

In this situation, we had the opportunity to think through the whole process with our children – a great learning experience for them and for us:  What types of sleeping bags did we need to buy that were rated for the temperatures that we were dipping into in the middle of the night?  How can we get enough of them since stores didn’t typically carry more than 3-4 of the kind we needed?

The conversations that we had together as we worked through the whole process were incredibly valuable, but the conversation our children had with the homeless people they met were even more valuable.  Many volunteered their stories about how they had fallen on hard times and everyone expressed their sincere appreciation for the thoughtfulness of the gesture.  Needless to say the goodwill and good feelings that our whole family was able to gain from the experience paid us dividends that had far greater value than any economic benefit that we might have gained from donating indirectly through a charity that served the homeless.   And, the whole process gave us a great opportunity to teach our children about the importance of “Social Responsibility” beyond protecting the climate, recycling, etc.  It also gave us a good reminder that we need to continue coming up with new and unique ways to help others.

In the interest of also trying to spark some interesting conversations around your dinner table, let me leave you with a few questions:

  1. What are the ways that you and your family are socially responsible?
  2. What are the new and unique ways that you and your family could give back or otherwise serve others?

This article was written by and provided courtesy of Vaughan Scott, MBA, CPWA®, Managing Director – Investment Officer with Axiom Financial Strategies Group of Wells Fargo Advisors in New Albany, IN.  He can be reached via email at vaughan.scott@wfadvisors or phone at (812) 948-8475.  Visit our website at www.AxiomFSG.com.

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC. Member SIPC.’  Wells Fargo Advisors is a registered broker-dealer and a separate non-bank affiliate of Wells Fargo & Company.  CAR 0317-03813.

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Money Matters by Michelle Floyd | Pay Yourself First

Fund Your IRA with Your Tax Refund

While most of us don’t intend to short change our retirement savings, competing priorities and unexpected expenditures can often get in the way of consistent retirement saving. An easy way to help fund your IRA is to have your tax refund deposited directly into your IRA. Because this represents money you’ve already paid out, it won’t be missed when you redirect those dollars.  And, if the refund dollars go directly to an IRA, you can avoid the temptation to splurge and spend that money on something else if it winds up in your checking account.

Many financial planners advise taxpayers to balance their paycheck withholdings so they break even – meaning they don’t overpay and then receive a refund at tax time. Using this strategy, you can make money that might be paid in taxes work for you throughout the year and avoid giving the government an interest-free loan. However, if you have trouble saving, a tax refund can be an effective form of forced savings.

Directing your tax refund to your IRA is easy and automatic. If you want your refund to go to just one account, you simply request a direct deposit of your refund on your tax return at the time of filing. If you want the refund to go to multiple accounts (e.g., IRA, checking, savings) you will need to complete IRS Tax Form 8888 when filing your taxes. Completing Form 8888 authorizes the IRS to transfer your tax refund to any number of IRAs or other savings or checking accounts via direct deposit.

While you’ll need to complete Form 8888 during tax preparation time, and with the advice of your tax advisor, here are some tips to help you:

  • If the deposit is into your IRA, check the “Savings” box under Lines 1–3 on Form 8888.
  • You must have an IRA already established at a financial institution in order to have your refund directed to this account.
  • You need to follow up with the financial institution that holds your IRA and specify which tax year your payment is for. Many providers will assume the payment is for the current calendar year unless you specify otherwise.
  • If you want your deposit to be credited as a prior year IRA contribution, you must verify that the deposit was actually made by the tax filing deadline for that particular year – generally, April 15.

 

Keep in mind that even if you already contribute to your retirement savings through a 401(k) or other employer sponsored plan at work, you are still eligible to contribute to an IRA to supplement those savings.

With corporate pension plans on the decline and Social Security making up a smaller share of most Americans’ retirement income, it’s important to take charge of your own retirement savings. Having all or a portion of your tax refund directed into an IRA is an easy way to help save for retirement. A Financial Advisor can help evaluate where you are on the path toward saving for retirement to help ensure you can live out your unique vision.

Our firm is not a legal or tax advisor.

This article was written and provided by Michelle Floyd, CFP®, Financial Consultant with Axiom Financial Strategies Group of Wells Fargo Advisors in New Albany, IN.  She can be reached via email at michelle.floyd@wfadvisors.com or phone at (812) 948-8475.  Visit our website www.AxiomFSG.com.

Investments in securities and insurance products are: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC, Member SIPC, a registered broker-dealer and non-bank affiliate of Wells Fargo & Company.

© 2016 Wells Fargo Clearing Services, LLC. All rights reserved. 0416-00668 [98729-v1BDC]

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Money Matters by Michael Grau | Connecting with Your Financial Advisor

Some of the most important conversations you may have will be with your Financial Advisor. That’s why he or she will want to get to know you as a person, not just as a client. Your advisor must understand your financial needs so he or she can help you reach your goals.

So talk. Listen. Share experiences and questions. Keep in mind a conversation with your Financial Advisor is not a one-time event. You should have the kind of relationship that allows you to talk regularly about life changes and how to best manage day-to-day needs while staying on the path toward your long-term goals.

Set the stage

We want to make the process of working with an advisor as simple and smooth as possible. Here are some tips on how to nurture a positive relationship and set the stage for working together toward your goals.

Disclose all of your goals and objectives.  Be as detailed as possible about what you want to achieve and by when. It’s also important to discuss what you’re willing (or not willing) to sacrifice financially in order to make each goal a reality. Discuss what financial changes or challenges could exist that may impact your ability to reach your goals.

Establish expectations. Every relationship is unique, and the one you have with your Financial Advisor is no exception. To make the advisor-client relationship successful, both client and advisor must agree to truly listen to and hear one another. Additionally, clients and advisors should agree upon how often they wish to meet and the best way to communicate — whether by email, over the phone, or in person — at the very start of the relationship.

Understand the fee schedule. To avoid any surprises, make sure you understand the fee schedule and how your Financial Advisor is compensated. Some advisor fees may be deducted directly from your portfolio, while others may be billed directly.

Always agree to next steps when you meet or communicate. Your doctor or dentist usually ends your appointment by scheduling a specific date and time for a follow-up — the same approach can work well with your Financial Advisor. In addition to scheduling your next meeting, it’s also important that your advisor communicates with you in lay terms that you can comprehend. Make sure that you leave every meeting with an understanding of everything that was discussed.

Keep your advisor informed. Life includes unexpected twists and turns — and many impact your finances. Make your advisor aware of your life changes — including the birth of children, death of a loved one, job changes, marriage, and divorce — as quickly as possible, and not just during agreed-upon meeting times. This knowledge will help you and your advisor better respond to events as they occur and shape the advice your advisor can provide.

Our commitment

As your relationship with your Financial Advisor progresses, you will find a high level of commitment on his or her part to helping you reach your investment goals. Your advisor will:

  • Take the time to build your relationship and get to know you and what matters in your life.
  • Help you build a holistic financial picture, even with money invested elsewhere.
  • Understand your lifestyle, financial needs, and goals.
  • Build your relationship based on your preferences and work style.
  • Provide transparency about fee structures and services.
  • Create an individualized plan optimized to help you reach your financial goals.
  • Help you stay on track with your plan that includes financial planning benchmarks, asset allocation, account performance, and risk tolerance.
  • Provide you with leading strategies and research applicable to your unique situation.
  • Be there throughout your entire financial journey.

Not only will your Financial Advisor honor your relationship, he or she will be fully invested in your success. To learn more about what to expect, visit our website at wellsfargoadvisors.com.

This article was written by/for Wells Fargo Advisors and provided courtesy of Michael Grau, CFP®, RICP®, Vice President – Investment Officer with Axiom Financial Strategies Group of Wells Fargo Advisors in New Albany, IN.  He can be reached at 812-948-8475 or at www.AxiomFSG.com.

Investments in securities and insurance products are: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC, Member SIPC, a registered broker-dealer and non-bank affiliate of Wells Fargo & Company.

© 2015 Wells Fargo Clearing Services, LLC. All rights reserved.  0915-00222 (100241-v1BDC)

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Money Matters: the Podcast | Episode 2: The Year End

A Money Matter’s Trio, Vaughan Scott, MBA, CPWA® Managing Director, Eric Ballenger, Senior Vice President – Investments and Michael Grau, CFP®, RICP®, Vice President – Investment, comes to the table and discusses the end of 2016, what the new President may or may not cause, along with a local look-in.
Money Matters: The Podcast is sponsored by Axiom Financial Strategies Group of Wells Fargo Advisors.  This quarterly podcast is in addition to a monthly article titled, “Money Matters,” that is posted online at www.ExtolMag.com and www.axiomfsg.com.

**************************************************************************************************************************

At Axiom Financial Strategies Group of Wells Fargo Advisors we sincerely appreciate our clients making opportunities like this possible. Without their support of our business, we would not be able to support programs like this.

Michelle Floyd, CFP®  | Financial Consultant

Axiom Financial Strategies Group
of Wells Fargo Advisors
101 W Spring Street, Fifth Floor
New Albany, IN  47150

P 812.542.6475 | F 812.948.8732 | Michelle.Floyd@wellsfargoadvisors.comwww.axiomfsg.com

At Axiom Financial Strategies Group of Wells Fargo Advisors, our team caters to a select group of family-owned businesses, entrepreneurs, individuals, institutions, and foundations, helping them build, manage, preserve, and transition wealth. We accomplish this while providing top-notch service through a team approach that puts our clients’ needs, goals, and interests first. To learn more visit our website at www.axiomfsg.com. Wells Fargo Advisors. Member SIPC.

The information provided is general in nature and may not apply to your personal investment situation. Individuals should consult with their chosen financial professional before making any decisions.

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, Member SIPC, a registered broker-dealer and non-bank affiliate of Wells Fargo & Company. CAR 1216-02739

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Money Matters by Eric Ballenger | Considering Alternative Investments

 

It’s no secret that the events and market volatility of the past few years continue to leave many individuals concerned about their investment portfolios. Despite what has proven to be a substantial market recovery, memories of the 2008-2009 market crisis and a number of ongoing global economic issues have prompted investors to seek investment solutions that can offer enhanced diversification, reduced volatility, and improved capital preservation.

Historically, investors have turned to fixed-income investments as a solution, and this time has proven to be no different. But the substantial flows into fixed-income assets in recent years – combined with the prospects for future interest-rate increases – have heightened concerns over diminished opportunities or potential “bubbles” within segments of the fixed-income market.

While the flight to quality and risk aversion in late 2008 and early 2009 was pervasive, many investors have continued to hold a conservative position throughout what has been a significant price recovery in both broad equity and credit markets. This strong asset price appreciation and unprecedented volatility have created a conundrum for investors who want to participate in equity and fixed income markets while limiting portfolio risk.

They find themselves asking, “Should I maintain a risk-off posture and merely accept the generally paltry returns offered by lower risk assets?” vs. “Do I chase returns through riskier investments despite the challenges still existing within the current overall environment?” This perceived all-or-nothing dilemma tends to leave many investors paralyzed.

While there are no simple answers to these questions, there are alternative solutions available to help investors diversify their portfolios beyond traditional stocks and bonds and complement their current asset allocation mix. Alternative investments – including hedge funds, managed futures, private equity, real estate, and commodities – offer investment solutions that best suit investors’ needs, objectives, and preferences.

Alternative investment strategies may deliver significant benefits to an overall investment portfolio, such as:

  • Greater potential for diversification
  • Historically low or non-correlation to traditional investments
  • Seek to minimize market cycle peaks and troughs
  • Exposure to a broader range of investment opportunities
  • Greater potential for improved risk-adjusted returns

While investors may benefit from the ability of alternative investments to potentially improve the risk-reward profiles in their portfolios, it’s important to remember the investments themselves can carry significant risks. Government regulation and monitoring of these types of investments may be minimal or nonexistent; returns may be volatile and present an increased risk of investment loss.

Here are some important considerations to keep in mind if you’re interested in pursuing opportunities in alternative investments for your portfolio with your Financial Advisor:

Complexity: Alternative investment strategies may span multiple markets, securities and risk factors. Because of the complex nature of these investment opportunities, an investor must rely on the experience, representations and credentials of advisors, fund managers and distribution agents. 

Fees and expenses: In most alternative investment strategies, managers are paid in two ways: They typically receive a fee calculated as a percentage of assets under management. They also typically receive a share of the strategy’s gains – a practice designed to reward the manager for positive returns. Trading fees and expenses may be significant with the potential to deplete trading profits. Funds of funds are subject to multiple layers of such fees. 

Holdings: Markets for a portfolio’s holdings may be relatively inactive and it is possible that trading in a specific portfolio holding could cease altogether. As a result, market valuations of specific portfolio holdings may not always be possible, causing accurate valuation of a portfolio to be difficult at times. 

Leverage: Because many alternative investment strategies seek to amplify mispricings that are relatively small, borrowing is often critical to delivering significant returns to investors. This use of leverage tends to amplify both gains and losses. 

Limited liquidity: A fund may not have a secondary market for its interests and none may be expected to develop, and there are restrictions on transferring interests of the fund. Performance figures may be based on valuations of illiquid investments that are difficult to value, and certain managers may carry such assets at cost until a realization event. 

Liquidity and redemptions: An investor’s ability to withdraw capital from funds or partnerships may be subject to specific limitations, including initial “lock-up” periods, advance notification requirements and predetermined “windows” for redemptions. 

Potential loss of investment: Speculative investments and are not suitable for all investors, nor do they represent a complete investment program. 

Tax risks: Investing in certain alternative investment funds may involve significant tax consequences. Investors should understand that they will likely be required to obtain extensions of the filing date for their income tax returns due to possible delays in the delivery of Schedule K-1. Nothing contained herein constitutes investment, legal, tax or other advice nor is it to be relied upon in making an investment or other decision.

Transparency: In order to preserve strategic advantage and the ability to transact nimbly, fund managers often significantly limit the ability for investors to review portfolio holdings. This practice – known as opacity or lack of transparency – can limit investors’ and advisors’ abilities to monitor managers and evaluate risks. 

Valuation variations: Investors should recognize that certain alternative investment funds are not required to provide periodic pricing or valuation information or information about their underlying investments to investors. 

Alternative investments and alternative strategies are not suitable for all investors.  Any offer to purchase or sell a specific Alternative Investment product will be made by the product’s official offering documents. Investors could lose all or a substantial amount of their investments in these products.   These investments carry specific investor qualifications which can include high income and net-worth requirements as well as relatively high investment minimums. They are complex investment vehicles which generally have high costs and substantial risks. The high expenses often associated with these investments must be offset by trading profits and other income. They tend to be more volatile than other types of investments and present an increased risk of investment loss. There may also be a lack of transparency as to the underlying assets. Other risks may apply as well, depending on the specific investment product. 

This information is for educational purposes only and should not be used or construed as financial advice, an offer to sell, a solicitation of an offer to buy, or a recommendation for any security. Global Alternative Investments and/or Wells Fargo do not guarantee that the information supplied is complete, undertake to advise you of any change of opinion, or make any guarantees of future results obtained from its use. Wells Fargo & Company affiliates may issue reports or have opinions that are inconsistent with, and reach conclusions from, this information. 

This article was written by/for Wells Fargo Advisors and provided courtesy of Eric Ballenger, Senior Vice President – Investment Officer with Axiom Financial Strategies Group of Wells Fargo Advisors in New Albany, IN.  Eric can be reached via email at eric.ballenger@wfadvisors.com or phone at (812) 948-8475.  Visit our website at www.AxiomFSG.com.

Investments in securities and insurance products are: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE

Wells Fargo Advisors, Member SIPC, is a registered broker-dealer and a separate non-bank affiliate of Wells Fargo & Company.  ©2015 Wells Fargo Advisors.  All rights reserved.                 0315-04805 [93576-v1]

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