2013 is in the Books- What can we do for an Encore?

2013 turned out to be a banner year for equity investors. As the nearby chart illustrates, most domestic equity indexes were up by 30% or more, International Developed Indexes 20% or more, while developing market indexes, for the most part, had slightly negative returns. Bonds had one of the worst years in decades with virtually all fixed income indexes showing negative returns. So called inflation protection strategies performed very poorly. Commodities and REIT’s both had negative returns. Fortunately, at Coldstream we have been believers in MLP’s and global infrastructure investments which both had stellar returns for the year. All in all, it is safe to say 2013 turned out to be a much better year for investors than prognosticators envisioned a year ago.READ MORE

State of Affairs – Our Perspective

Most likely you are asking the same question we are. What is going on in Washington? And how and when does it end? We clearly have an acrimonious situation in Congress that has caused a government shutdown.  Coupled with the looming debt ceiling deadline of October 17th, this state of affairs is creating mounting uncertainty and great angst for investors. It must be remembered this is a political problem and most likely not an economic problem. Most economists forecast a shutdown that gets resolved within 30 days will impact 4th quarter GDP by just 0.1-0.2% and have no ongoing negative impact. In fact, our best guess is that GDP growth over the next two years will be relatively steady around the 2% level. This is certainly not robust growth but better than most developed economies.READ MORE

2013 Year-End Personal Tax Planning Considerations & Checklist

As we approach year-end, tax planning considerations should be starting to take shape.  New tax legislation has brought greater certainty to year-end planning, but has also created new challenges.  The number of changes made to the Tax Code and the opportunities these changes bring may seem overwhelming.  However, early planning will help you to maximize your potential tax savings and minimize your tax liability.  Here is some key high level year-end tax planning strategies.READ MORE

Consider Dividend-Paying Stocks

In this low interest rate environment, income-minded investors, who have some tolerance for risk may find dividend-paying stocks attractive.  In fact, nearly 40% of S&P 500 companies have dividend yields above the 10-year US Treasury bond yield.

The appeal of dividend-paying stocks is easy to understand as they can provide investors with regular income regardless of market conditions. In addition, many dividend paying companies increase their dividends over time thereby creating a growing cash flow over time versus the fixed coupons of bonds.  It is important to note, however, that equities typically exhibit a higher volatility of returns than bonds, and the underlying company may choose to increase, decrease, and/or eliminate the dividend at any time.  Regardless, we consider dividend paying equities an important part of a well-diversified income-generating portfolio.READ MORE

Who Do You Rely On?

Recently I was completing a registration form to subscribe to an industry publication and a commonly asked question on the application struck me in a very peculiar way. It simply asked “Which best describes your primary business activity?”  I have seen this hundreds of times, yet this time it caused me to reflect differently. The first thought in my mind was the overwhelming array of service providers that are defined within our industry category (financial services) offering guidance and assistance to families of affluence, and secondly, how horrible it must be for the affluent to navigate our industry to make the right advisor decisions for their unique situation.READ MORE

Tax Implications after DOMA

On June 26, 2013, the US Supreme Court ruled Section 3 of the Federal Defense of Marriage Act (DOMA) was unconstitutional as it violates the equal protection clause of the Fifth Amendment of the US Constitution as applied to persons of the same sex who reside in states that recognize same-sex marriages.

This decision entitles same-sex married couples many federal tax related benefits.  These benefits will have an impact on their income tax filing status, estate and gift tax planning, employee benefits, and ability to inherit social security benefits, among others.READ MORE

2Q 2013 Market Commentary

“For the loser now will be later to win

For the times they are a-changin’”

– Bob Dylan

With a modest improvement in unemployment, a nascent housing recovery and continued accommodative Federal Reserve, the US markets continued to generate positive returns, albeit with considerable volatility in the second half of the quarter.  In the prior quarter’s Market Commentary in the Guardian, Randall Buck suggested that a short term pullback in the US market would not be surprising.  That forecast was prescient indeed, from late May to late June, the S&P 500® had a peak to trough correction of 7.5% then posted positive returns in the final days of the quarter. READ MORE

Market Update and Outlook – 2Q 2013

In every life we have some trouble

When you worry you make it double

Don’t worry, be happy…..

Bobby McFerrin 1988

While all of the problems the market has been worrying about for the last few years have not been solved, it seems that “the can was kicked down road” enough this quarter for investors to adopt the attitude of Bobby McFerrin. Stock market investors seem to prefer environments where the politicians in Washington “can do no harm”. Early in the first quarter clashes over the debt ceiling and spending cuts were deferred until later in the year and a compromise was reached over tax increases, turning the “fiscal cliff” into more of a “fiscal slope”. With worries about fiscal policy on the backburner, the continued pumping of liquidity into the economy through the Federal Reserve’s quantitative easing program and reasonable domestic economic growth, the stage was set for a market rally.  The S&P 500 continued its pattern of the three previous years with a very strong first quarter rising 10.6%. Small Cap U.S. stocks, as measured by the Russell 2000 index, also advanced 12.4%.READ MORE

Coldstream Co-Founder Honored

Don Gher

In recognition of his long time commitment to higher education and professional excellence, on May 4th Eastern Illinois University will bestow an Honorary Doctorate of Public Service upon Coldstream Capital Management co-founder, Don Gher.  Don joins an esteemed group of recipients at his alma mater which include U.S. Senator Paul Douglas, Governor Jim Edgar, entertainer Burl Ives, Assistant Undersecretary of Defense Sue Payton and, alongside Don this year, New Orleans Saints Head Coach Sean Payton.  As co-founder of Coldstream, Don was instrumental in our early success and the path we continue today to provide wealth management and investment expertise to our clients.  We congratulate Don along with his wife Mary, their two daughters Lindsay and Courtney, and their families for this great honor.  Go Panthers!

Tax Filing Reminders….

The filing due date for your individual income tax return is coming up and is due on April 15, 2013.  If you are not going to be able to file your return on time, you can request additional time by filing an extension by the April 15th due date.  The extension gives you an additional six months; until October 15th to file your return.   However, it’s important to note the extension does not give you any extra time to pay any taxes due.  If you do not pay the taxes that you owe by the April 15th due date, you will owe interest on the taxes due and you may owe penalties as well. READ MORE

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