Wealth Management Guide 2018

Wealth Management Guide 2018

Easy Way to Grow Wealth JUST LIKE A BUDGET A FINANCIAL PLAN WORKS BEST WHEN IT’S WRITTEN DOWN

By Eric Spangler

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or those seeking to protect their current wealth or those who want to grow their future wealth there’s really just one simple way, say experts—put a financial plan on paper.

“It’s important to have a written plan in place for what [investors] want to accomplish,” says Eric Ross, principal and financial planning specialist with Truepoint Wealth Counsel.

That advice holds true for investors in all stages of life and across the economic landscape, he says.

Not only is it important to have a written financial plan it’s also important to be able to measure success, says Ross. That way 88

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investors will know whether their written plan is on track, he says.

This is a great time of year to start a financial plan for those that have not already done so, says Ginger Ittenbach, principal and tax specialist with Truepoint Wealth Counsel. “It will help guide you through the year and make your year far more productive and beneficial to you if you start that now rather than waiting until the end of the year,” she says.

“Starting with this spending plan for the year and deliberately thinking about how you want to approach the year financially as an individual or as a family is critically important to be successful in reaching

goals,” says Ittenbach. “And if you don’t set [goals] they’re hard to reach.”

It’s also important this time to review your financial plan because the stock market has had a successful run for several years now, says Greg Achten, managing director in charge of the UBS Cincinnati market. “Our wealth management core strategy is to make sure everybody’s financial plan is updated given how the markets have run,” he says.

Updating a financial plan means making sure it is balanced for the investor’s objectives. In the bull markets of the last several years, certain asset classes have performed better, which means an investor’s plan will

Wealth Management Guide 2018 be weighted more heavily than they want in certain asset categories. It makes sense, he says, to readjust those asset allocations once a year, says Achten.

Ross says Truepoint Wealth Counsel recommends its clients sell assets or asset classes that appreciated higher than what they were expected to, relative to what else is in an investor’s portfolio. “We’ll kind of sell those winners, if you will, and use that as an opportunity to invest those proceeds in the asset classes that have underperformed,” he says.

Achten says the stock market should still be a good place for investors to grow their wealth in 2018. “We are still bullish on equities and stock investing in general,” he says. Investors should just be aware that the bull market will end at some point. “Obviously, we’ve had a nine-year bull market overall so caution should be considered on some levels,” says Achten.

But he says by no means is the bull market over just because it’s gone on for so long. “We believe that even though we’ve had a long bull market we don’t think it’s

“Starting with this spending plan for the year and deliberately thinking about how you want to approach the year financially as an individual or as a family is critically important to be successful in reaching goals.”

—Ginger Ittenbach, Truepoint Wealth Counsel

over,” says Achten.

That’s because he expects the U.S. and global economy to continue chugging along. “With unemployment as low as it is we feel the consumer is in really good shape and that that will help the economy as well and so we do feel the economy is going to continue to grow and that earnings as a result will be positive,” he says.

Predicting economic outlook is not always easy, says Ross. That’s why he rec-

ommends certain investing techniques that will work whether the economy is on an upward trajectory or headed for a recession.

Those tried-and-true techniques for any economic situation include maxing out and taking full advantage of a company’s retirement plan, making Individual Retirement Account contributions and saving for children’s college education by taking advantage of a 529 qualified tuition plan,

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“It’s important to have a written plan in place for what [investors] want to accomplish.”

—Eric Ross, Truepoint Wealth Counsel

Ross says. “Those will weather any kind of economic environment,” he says.

The great thing about 529 tuition plans is that families will be able to claim $4,000 per beneficiary starting in 2018, versus just $2,000 per beneficiary previously, says Ittenbach. “So that’s something we’re encouraging our clients who are in the mode of planning for college for their children to take advantage of the benefit of that $4,000 Truepoint_Cincy 1711_Nov_171013_F.pdf deduction each,” she says.

Are there investments that people may want to avoid in 2018? One that’s been a hot topic lately is bitcoin, which increased in value more than 1,000 percent last year.

Bitcoin is the largest type of digital currency created and exchanged independent of banks or governments.

“So that’s the thing that everyone wants to talk about right now is bitcoin,” says Achten. “And I just think you have to be 1cautious.

10/13/17 You’ve 12:21 PM got to be very careful

when investing in something like that that doesn’t have intrinsic value, per se,” he says.

For those that do want to include bitcoin in their investment portfolio Achten recommends understanding your risk tolerance. “When something is just that volatile and that exciting it also could have a downside, too,” he says.

Another issue investors may want to monitor this year is how the new tax code will affect them, says Ittenbach. Although most agree that that new tax code will be good for businesses—and therefore the economy and investors—it’s important to understand what changes have been implemented, she says.

One change is that people will no longer be able to take a tax deduction for home equity debt, Ittenbach says. “Some people would use [home equity debt] as a way to fund other things because you would have a low rate and you would get the benefit of a tax deduction,” she says. “Well, now you don’t have that benefit so you may need to rethink that piece of it.” n

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Ask the Expert FTB Financial Services, at UBS Financial Services, Inc. ubs.com/team/ftb What are the advantages of diversification of a concentrated position?

Kelly Wittich, CFP Vice President - Wealth Management

Holding a concentrated position subjects you to investment risk not typically associated with a well-diversified portfolio. While the investment returns for a well-diversified portfolio may more closely mirror the movement of the market in general, your investment in any single stock could suddenly lose most, or even all, of its value. This can happen with little or no warning, due to factors unique to that specific security, to the investment sector or to the economy generally. A well-crafted investment plan can meet your needs and reduce risk.

Horter Investment Management, LLC horterinvestment.com How will retiring now possibly be the wrong decision?

We have had nine years of a bull market in the stock market and an accommodating bond market with very low interest rates. Why would this be a bad time to consider retiring? What usually happens after an extended bull market in stocks? A large correction or bear market can occur, possibly devastating retirees and pre-retirees. To add insult to injury, the outlook for interest rates is up, which generally spells bond portfolio losses.

Drew K. Horter Chief Investment Strategist, Co-Founder

If you don’t have a portfolio that can go risk off to cash or is opportunistic in good times and defensive in bad times or potentially can make money if the stock market goes up or down or if rates go up or down, then you should consider a full-risk analysis of your current portfolio by Horter Investment Management.

Truepoint Wealth Counsel truepointwealth.com With the stock market at an all-time high in 2017, what should my investment philosophy be in 2018?

Steve Condon President & Principal

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There is a critical distinction between having an investment philosophy and having a market outlook—successful investors work from a philosophy rather than an outlook. While there’s no shortage of money managers suggesting an ability to forecast the market and pick individual stocks, the futility of this approach is demonstrated by decades of evidence. The most rational long-term philosophy is rooted in global diversification, low cost and a disciplined buy-hold-rebalance strategy.

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This presentation is for informational and educational purposes only and should not be relied upon as investment advice or the basis for making any investment decisions. The views and opinions expressed may not be those of UBS Financial Services Inc. UBS Financial Services Inc. does not verify and does not guarantee the accuracy or completeness of the information presented. FTB Financial Services and UBS Financial Services Inc. are not affiliated with Procter & Gamble.

Proctor & Gamble neither approves nor endorses this ad. As a firm providing wealth management services to clients, UBS Financial Services Inc. offers both investment advisory services and brokerage services. Investment advisory services and brokerage services are separate and distinct, differ in material ways and are governed by different laws and separate arrangements. It is important that clients understand the ways in which we conduct business and that they carefully read the agreements and disclosures that we provide to them about the products or services we offer. For more information visit our website at ubs.com/ workingwithus. © UBS 2018. All rights reserved. UBS Financial Services Inc. is a subsidiary of UBS AG. Member FINRA/SIPC. CJ-UBS-1412752430