Bullseye Newsletter – Christmas Edition
by Timothy Guthrie on Dec 15, 2017
It has been a great year. The market was very strong, and overall, we did even better. Though November 30th, our composite return (average of all accounts) was up 19% YTD. This was ahead of the S&P 500 (+18%), and well ahead of the NYSE composite index (+10.2%). Further, on average, our accounts had about 25% less downside risk than the S&P 500 (I prefer to use the NYSE composite index as compared to the S&P 500, the NYSE composite has about 4x the holdings, so it is more representative of the market, and the S&P 500 is about 22% tech, and this is too high an allocation to tech and distorts the index performance in up and down markets). Of course, the composite return may differ from your return. Please contact me to discuss the results of your accounts and review the holdings, and their purpose in the portfolio.
In global markets we are experiencing a very positive feedback loop. Energy prices are low, inflation is low, and economic growth is expanding worldwide. Faster economic growth supports higher sales and profits for companies, which in turn, supports higher stock prices. Investing always has risk, and even risks we cannot predict. However, right now we are experiencing a very good environment for business, and thus investing and it could persist for some time. I will continue to monitor these issues and keep you informed.
It has also been a good year for Bullseye Investment Management, LLC. This year has seen good asset growth driven by additional assets from existing clients, excellent investment performance of the accounts, and a new alliance with Ramsey Solutions ‘SmartVestor’ program. I have a new office in Cincinnati, and a new satellite office in Ashland KY. It has been a great year. Thank you.
Mark your calendars for Friday January 19th, 2018. I am having an open house at my new Cincinnati office, 11am to 7pm. There will be food (enough to make it your lunch stop or dinner) and an opportunity to catch up, discuss investing with myself, and a few representatives from the investment products we use the most, and see the new office. Please call or email to let me know if you can attend, I hope you can. The new office address is:
431 Ohio Pike (Known as the Waycross North Building – behind Beechmont Toyota)
Cincinnati, OH 45255
My email and phone numbers have not changed:
- 513-774-3325 Main number and cell
- 937-377-1234 Brown and Adams County- forwards to my cell
- 606-939-1196 Ashland – forwards to my cell
- 800-401-3513 Efax. You send a fax, it arrives in my email inbox
Investment Policy Statement Update
Time flies. For a good number of you, your initial investment paperwork (when you became a Bullseye client) is over ten years old. This winter, my son Peter Guthrie will be helping me (while he is on Christmas break from college) reach out and make sure that the asset allocations and investment goals we established in the past are still the best plan for you today. He may call or use email to reach you on my behalf. This is an important project, and we look forward to making sure that your accounts are still designed to meet your needs. To those of you who remember Peter as a little kid, he is a junior in college now majoring in software engineering and has already been helping me with technology issues for several years. Working with client data, he will sign a confidentiality agreement like any other employee or contract worker and I will also be very involved with this important project. I need to document that your investment account still conforms with your risk tolerance and goals. I appreciate your help in this project.
For those with taxable accounts, (not retirement accounts) we don’t have a lot of options this year. Most clients have no losses left, from anything (or at least in their accounts with Bullseye). In the past, in more volatile times, we could net gains against losses, as I practiced tax loss harvesting. This technique reduced the taxes we would incur on gains, and increases the net return of the account. This year, we just don’t have many (or any) losses. We just have gains. Gains are why we invest, but with gains comes the capital gains tax, and with results this good, please expect to pay some capital gains taxes. Short term capital gains are those from investments we have owned less than 1 year, and long-term gains are capital gains from investments we have owned over one year. Short term gains are taxed at your marginal income tax rate (10-39.6%), and long-term gains are taxed at lower rates (0-15-20%). The goal generally is to maximize the portion of gains that are held at least 1 year, and thus taxed at lower rates. While managing investments, however, sometimes investments are sold when they have been held less than a year, and it is still the correct decision based on protecting gains, preventing losses, or re-allocating to a new portfolio design. If you have ANY questions about your capital gains, and how they are taxed, or any investment tax issue, please contact me. I would be happy to discuss this with you. Additionally, I will be happy to send all your capital gain information to your tax professional including a spreadsheet of your gains that they can typically upload straight into their tax software, saving time and improving accuracy. If you need a referral to great tax pro, in Cincinnati, Southern Ohio or Eastern KY let me know, I know some great folks who can make sure you stay compliant and not overpay.
If your situation has changed, you have retired, changed jobs, or your investment goals have changed, please contact me so we can ensure your investments reflect your needs, or so that old 401k can be professionally managed. Further, please reach out if your cell number, home number or email address have changed. It is difficult for me to keep you informed if I don’t have the updated contact information.
Christmas Gifting Options
I have never written about this in relation to Christmas, but here is an idea if you desire to make gifts that can have a lasting impact: The COVERDALE EDUCATION SAVINGS ACCOUNT. With a Coverdale ESA any adult (attn Grandparents!) can open an account for any child. The ESA can receive up to $2,000 a year in contributions that can grow tax free for education. The ESA can be invested in a brokerage account at TD Ameritrade, and invested in the same investments I use now. Ask me to demonstrate how this type of program can work for your children or grandchildren, it really adds up.
Please find enclosed our family Christmas postcard. The photo was take Thanksgiving week in Pensacola FL while visiting Peter and Noah who both attend Pensacola Christian College. My entire family wishes you a Merry Christmas. Thanks again for your trust, business and friendship.