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    Risk

    How do you know if you have portfolio diversification?

    By Ron Piccinini, PhD This is inspired by a true story. There was this fellow named Edmund. Edmund's high-priced education had taught him the virtues of portfolio diversification. His job as a banker paid him a nice sum of cash every month, plus bonus; he had bought a house, and his retirement account was comprised of a diversified mix of domestic and international stocks. On his office wall was hanging this quote from the Merchant of Venice: "My ventures are not in one bottom trusted, nor to one place; nor is my whole estate upon the fortune of this present year." To the annoying Head of Risk he used to explain: "The five-year correlation between real estate and stocks is seven percent. And the correlation between my monthly paycheck and the stock market is even lower. Low correlation, diversification!"
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    In The News

    The 5-Minute Triage: Learn Quickly if an IRA Deduction is Double Dipping

    For many middle income people approaching retirement, a common question is whether to contribute to a traditional IRA or to a Roth IRA. Often, the rationale for contributing to the Roth or forgoing an IRA contribution altogether is that the client’s tax bracket in retirement is likely to be the same or potentially higher than it is now. Unfortunately, this shortcut often misses the point. When planning a retirement investment strategy, the client should be concerned less with the tax bracket and more with his effective marginal rate, or EMR. The EMR is the actual amount lost to taxes on each additional dollar of income, or conversely, it is the actual amount saved by making a contribution to the deductible IRA.
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    In The News

    Follow the Tax Map to Find Clients Nontaxable Income

    Imagine showing a prospect how to harvest $11,000 IRA income with no tax. Or a client how to harvest $67,500 of capital gain with no tax. Our “Practical Uses for Tax Clarity” video shows how simple it is with a customize Tax Map.
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    Free Download

    New white paper examines how advances in risk analytics are changing the client-advisor discussion

    Covisum’s new white paper explains the dangers of relying on traditional models of explaining and estimating portfolio risk, and how risk analytics have evolved, giving you amazing new opportunities to help clients more. You've seen it happen: losses accumulate in a portfolio, and the client ponders doing something unwise. Whether they're the most risk-averse client or extremely laissez-faire, they're vulnerable to emotional reactions. When they're paying you to help them make smart financial decisions, this leaves you in an unpleasant situation. How do you help people avoid behavioral mistakes that could cost them — and cost you your reputation?
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    Risk

    On-demand webcast: how to talk risk with clients

    The advisor and the quant What do clients need to know about risk? Is a portfolio too risky? When and how should you rebalance? In this on-demand webcast, advisor Joe Elsasser, CFP®, and quant Ron Piccinini, Ph.D., shed light on portfolio risk topics that are important for building trust with your clients. Effectively estimating and communicating a client's risk can help them avoid behavioral mistakes, significantly impacting their bottom line.
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    In The News

    The Three Biggest Problems CPAs Face & How You Can Help Solve Them

    A symbiotic relationship between CPAs and financial advisors can prove beneficial for your clients - as well as both businesses. Building this kind of relationship can provide balance that would otherwise be missing.
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    In The News

    Charting the retirement course on Covisum's Tax Map

    Case Study: The Real Tax System John and Jane are married and will be filing jointly. They are both over 65 years old. They have $50,000 in combined Social Security assets, $15,000 of net long-term capital gains, and $25,000 in IRA distributions.
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