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October 2020

Paul J. Carroll, CFP®
Paul J. Carroll, CFP® In Videos

The Value Trap

JTNDdmlkZW8lMjB3aWR0aCUzRCUyMjEwMCUyNSUyMiUyMGhlaWdodCUzRCUyMjEwMCUyNSUyMiUyMGNvbnRyb2xzJTIwcG9zdGVyJTNEJTIyJTJGd3AtY29udGVudCUyRnVwbG9hZHMlMkYyMDIwJTJGMTAlMkZUaGUtVmFsdWUtVHJhcC5qcGclMjIlM0UlMEElMjAlMjAlM0Nzb3VyY2UlMjBzcmMlM0QlMjIlMkZ3cC1jb250ZW50JTJGdXBsb2FkcyUyRjIwMjAlMkYxMCUyRlRoZS1WYWx1ZS1UcmFwLUZpbmFsLm1wNCUyMiUzRSUwQSUzQyUyRnZpZGVvJTNFLast week Dimensional released a report that showed an unprecedented negative outcome for value investing over the last few years. What is going on and how can we benefit from this information? So from July, 2010 to 2017 Value outperformed its historic performance by about one and a half percent, which is nice until we discover the Growth outperformed Value in the same period by 7.6%. That's a lot annualized over such a long period. In the last three years, Growth continued yet Value had an average annualized return of -3.3%. This has resulted in annualized spread of over -21%. That's pretty much unprecedented. We know the Value and Growth sort of do the seesaw thing, but right now we see this Growth's up here, Value's down there. Now for those of us who are diversified, who are disciplined, who've had a Value bias since basically the beginning of this…
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Paul J. Carroll, CFP®
Paul J. Carroll, CFP® In Articles

6 Steps to Protecting Your Wealth During Divorce

A divorce is one of the most difficult transitions you can go through. When you add uncertainty about money, that transition can get even more stressful. Here are six steps to help keep your finances intact during—and after—a divorce: Step 1. Assess your finances and make a budget As divorce proceedings get underway, take stock of your finances. Start by reviewing your income, retirement accounts, investment portfolio, and insurance policies. Next, make a budget that reflects your income and projected monthly expenses. Include both your personal debts and debts you share with your soon-to-be ex-spouse. Make sure to factor in expenses such as finding new housing or buying a car on a single income. Identify gaps in your budget where you come up short and see where you can make cuts to cover the difference. Step 2. Target shared debts first Debt on joint accounts can be problematic. Whatever your…
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Paul J. Carroll, CFP®
Paul J. Carroll, CFP® In Articles

Understanding Retirement Income Tax

When you retire, you’ll likely draw your income from several sources—such as retirement accounts, taxable investment accounts, and Social Security Benefits. Each of these sources is taxed according to its own rules. So, in order to accurately plan for your retirement, you need to know what these rules are, whether (and when) you’re required to make withdrawals, and how paying taxes on distributions will impact your overall financial goals. Here’s a breakdown of the most commons sources of retirement income and how they’re taxed: Traditional IRA and traditional 401(k) Withdrawals from traditional tax-deferred retirement accounts are taxed at your normal income tax rate. Once you reach a certain age, you must start taking—and paying taxes on—required minimum distributions (RMDs). The IRS changed RMD rules in 2020. If you reached age 70½ in 2019, you should have taken your first RMD by April 1, 2020. If you reached age 70½ in…
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