LWA NEWS

LWA is participating in answering questions in the “Biz Brain” column of the Star Ledger and has participated in the new Money Makeover column. 

Suzanne Low was re-elected to the Board of Directors of the Estate Planning Council of Naples, Florida for a 2-year term.

Chuck Jaffee interviewed Diahann for his July 9^th CBS.Marketwatch.com column titled “What you don’t know can hurt you.”  She will also be a guest on the “MoneyLife with Chuck Jaffee” radio show on July 21^st which airs from 11:00am to 1:00pm on Business 1060 AM WBIX in Boston or on the web at http://www.business1060.com.

Diahann appeared on the CNBC Power Lunch show on May 12^th. She also appeared on CNBC’s July 4^th Special with Sharon Epperson talking about retirement savings.  She was scheduled for July 15^th, but her segment was bumped by Alan Greenspan.

 The Chicago Tribune ran an article on high net worth women based upon a study published by the Center for Women’s Business Research.  Diahann was interviewed and photographed for the article.

PROXY VOTING -  IMPORTANT NEWS

Under the new SEC Rule 206(4)-6 of the Advisers Act, there are several new requirements.  Advisers must adopt proxy voting policies and procedures, and the policies and procedures must be in writing.  They must be reasonably designed to ensure that the adviser votes in the best interest of clients.  These procedures must be available upon request to clients who have given us the authority to vote proxies on their behalf.

Does Buy and Hold Still Make Sense?

by Diahann W. Lassus, CFP®, CPA

It seems like every time the market goes down for some period of time, the buy and hold approach to investing is termed as dead or dying.  These comments tend to come from the market timers and traders who have an interest in getting rid of folks like us with long-term views of investing. 

The first thing we need to do is define what we mean by buy and hold.  Historically it has meant buy a fund or a stock and hold it forever.  What we mean is really buy and manage.  Buy an investment with the intention of holding it forever, but keep the same percentage over time.  That means you sell to take profit when an investment is doing well, and you buy more when it is down.

However, there is one more step in this buy and manage type of program.  You actively review performance over time, and sell the investment if it underperforms expectations over time or violates its mandate or in some way changes so that it no longer meets our criteria for investment. 

The Real Story About Exchange Traded Funds

by Gigi Collins, CFA

Exchange Traded Funds (or ETFs) are index funds that trade like stocks.  ETFs track nearly every index you can imagine:  S&P500 (Spiders), Dow Jones Industrial Average (Diamonds), Nasdaq 100 (Cubes), bonds, countries, industries, sectors, etc.  ETFs can be bought or sold anytime the market is open, and they can be optioned, shorted or margined just like a stock.  This means that the price of the ETF during the trading day may not always reflect the underlying value of the stocks.  In contrast, an index mutual fund can only be bought or redeemed at the end-of-day closing price.

ETFs are very tax efficient since you don't pay any capital gains from internal turnover (the buying and selling of stocks in the index) like you would pay when you own a mutual fund.  You only pay taxes when you decide to sell your ETF shares. 

Fees on an ETF range from 0.1% to 0.65% and are deducted from dividends.  These fees either match or are below some index mutual funds.  You will, however, pay a broker commissions for trading ETFs which means that you need to be prepared to invest a larger dollar amount (you wouldn't want to dollar cost average into an ETF) and you'll need to be ready to hold on to the ETF and not be looking to "trade" in and out to make a quick profit. 

ETFs should be used as a long-term investment tool just like traditional index mutual funds except they can provide better tax management, low expenses and pricing throughout the day.  ETF’s don't rack up commission costs or the tax consequences of active trading, and the ETF could be great addition to your diversified portfolio.

National Advisors Trust Company, FSB

As many of you already know, we are shareholders in National Advisors Trust Company, FSB.  National Advisors Trust Company, FSB, is a federally chartered trust company that was formed by our firm and over 80 of the nation's top financial advisory firms to provide our clients with a new standard of excellence in trust and custodial services.

We are in the process of reviewing each client’s situation to determine whether they would be better served through National Advisors Trust or through the current custodial arrangement with Schwab.  Each institution has advantages and each also has significant disadvantages.  There are differences in cost and differences in the level of service that can be provided.

We are very excited about the capability of National Advisors Trust and will be providing additional information to you over time.  If you have specific questions or would like to discuss this topic, please feel free to call. 

ENJOY THE SUMMER…  STAY SAFE AND KEEP IN TOUCH.  J

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