KEVIN'S CONTRIBUTIONS TO THE NATIONAL PRESS
August, 2010: Exchange Traded Funds Can Add Value to Client Portfolios. I wrote an article about Exchange Traded Funds (ETFs) that appeared in the August edition of the PICPA Connection Newsletter. Click here for the full article.
What Kind of Investor are You?, August 2010: "I have some retirees that still have 60 percent equity positions," says Kevin Brosious, certified public accountant, CFP and president of Wealth Management in Allentown, Pa. "As long as they have the liquidity to pull funds out when they want to, that's fine." "It's really the lack of liquidity that will kill a plan or not allow a person to realize their goal," he says. With enough liquidity, long-term investors can ride out market volatility and wait out the recovery. http://in.us.biz.yahoo.com/brn/100806/8150321.html?.v=1
Stock Market Volatility, May, 2010: Kevin Brosious, president of Wealth Management, Inc in South Whitehall Twp and an adjunct professor at DeSales, said he also expects some challenges, especially in the near future. He agreed with Dickison that while the market was headline-driven in April and early May, the government debt and unemployment are real concerns longer-term. "There's still a lot of debt that has to be satisfied - not only the federal government but also the state and city governments are running a lot of deficits and have a lot of unfunded pension liabilities," Brosious said. As a result, Brosious said, interest rates will go up and increases in interest rates always hurt the stock market "because it tightens up money and doesn't allow companies to grow at a rate that they like to." Moody's has warned several times that unless the federal government gets its financial house in order, it will cut its bond rating from AAA to something lower. "What that will do is make it more expensive for the federal government to satisfy its debt. As Moody's lowers its rating on debt, you have to pay more interest because it's now considered a higher risk," Brosious said. Brosious also said that "there's not going to be any kind of full recovery if unemployment stays at around 10%."
Will Rising Rates Sink Your Portfolio, April 2010? Kevin was asked by a Motley Fool reporter to comment on appropriate bond investments if interest rates rise: "I advise investors only to buy short- or mid-term U.S. government debt or TIPS. I don't think corporate bonds have enough return for the risk you assume, and they are callable [which means that the issuer can redeem the bonds early, requiring the investor to scramble to find alternatives]. Long-term bonds do not adequately reward investors for the risk they assume. "http://www.fool.com/retirement/general/2010/03/19/will-rising-rates-sink-your-portfolio.aspx?source=isesitlnk0000001&mrr=1.00
Fifteen Ways to Slash Spending in Retirement, February, 2010: Investing is one area where customers get less by paying more. High fund expenses and investment fees can eat into portfolios, but there is no evidence that higher costs translate into better performance. Consider a typical managed mutual fund with an expense ratio of 1.4%, and compare it to an exchange-traded fund, or ETF, with an expense ratio of 0.09%, says Kevin Brosious, president of Wealth Management in Allentown, Pa. A $500,000 investment would save $6,550 per year in the lower-cost option. http://www.businessweek.com/magazine/content/10_07/b4166077340718_page_2.htm
To Retire in This Weak Market, the Magic Word is "Focus", October, 2009: Reporter Tara Seigel Bernard asked Kevin how people can still enjoy their retirement after the stock market has dropped 40%. For some people, it may simply be a matter of cutting out the excess — eating out less, sticking closer to home, taking the time to call your service providers to find savings. The same logic can and should be applied to your investment portfolio. Get rid of expensive investments and replace them with low-cost index funds or exchange-traded funds, which can easily cut your investment fees by 1 percent. On a $500,000 portfolio, that could save $5,000 a year, said Kevin Brosious, a financial planner in Allentown, Pa. “Not chump change.” http://www.nytimes.com/2009/10/15/your-money/15LIFE.html?scp=1&sq=tara%20seigel%20bernard&st=cse
.....Still, even those financial advisers who recommend the category are quick to offer caveats. Kevin Brosious, president of Wealth Management Inc. in Allentown, Pa., notes that real-estate funds carry a higher “beta,” a measure of market risk or volatility, than the S&P 500. The funds’ beta is usually about 1.5, he says, while the broader market has a beta of one. “Over the past year or so, this has absolutely been true of real-estate funds,” he says. To mitigate this riskiness, he and other advisers say, small investors are wise to use real-estate funds only as a small piece of a well-diversified portfolio, and to stick with highly diversified funds or ETFs like the index-tracking, low-cost Vanguard products. Morningstar recommends some actively managed funds, noting that managers at these can tip their exposure toward industries and sectors that have the best prospects. Its current picks are T. Rowe Price Real Estate and J.P. Morgan U.S. Real Estate funds. Q:Real-estate funds have certainly been battered over the past few years. Are they good bargains now—even after the recent run-up?A:The answer is yes, to enthusiasts like Mr. Brosious. In the three months after the broader market’s low of March 9 this year, Morningstar’s U.S. real-estate fund category soared 58.8%, compared with the Vanguard 500 fund’s 40.2% total return. But real-estate funds were so depressed going into the rally that the category remains down 9% so far this year through June 30, compared with a 3.2% positive return for Vanguard’s S&P 500 index fund. Q:What are the dividend and tax issues? ...Mr. Brosious, however, says that even trimmed dividends are still “tremendous,” and he believes that the mix of dividend cuts and recapitalization efforts “has put the confidence back into” real-estate funds. Recently, the Vanguard REIT fund had a dividend yield of 5.8%.click here to read the whole article: http://online.wsj.com/article/SB10001424052970204482304574223991004897998.html?mod=googlenews_wsj#articleTabs%3Darticle
Building a Sound Portfolio, June 2009: Reporter Sheyna Steiner asked Kevin to comment about building a sound portfolio. Kevin's Note: As the reporters would say, this article has a lot of legs. It originally appeared in Bankrate.com in October 2007, reprinted in December for Yahoo Finance, in April, 2008 for MarketWatch and The Boston Globe, in May, 2008 by Fox Business and July, 2008 by NY Daily News. In June, 2009, it was updated and republished by The Boston Globe and Boston.com. I contributed 3 of my model portfolios for this article. You can find them by clicking the links below the article. "Asset allocation will actually drive about 94 percent of the total return in your portfolio. That's been documented in a number of different places. That's why you need the right asset mix within the portfolio," says Kevin Brosious, CPA, CFP and president of Wealth Management Inc., in Allentown, Pa. "Risk profiles show me whether a person is willing to accept risk, is willing to accept a lot of risk or if they are risk-averse and want a very conservative portfolio," says Brosious, an adjunct professor of investments and other business courses at Penn State and DeSales University. However, Brosious would like to see those with a long investment time horizon develop a thick hide with which to weather market volatility. "I tell my younger clients, you are going to be rewarded for assuming this short-term volatility by being more aggressive. In the long-term the market has, over time, returned 10 (percent) or 11 percent. That's the historical return. In the short-term, don't even look at your portfolio," he says. ....In an ideal world, asset classes would move in opposite directions, but that will never exist, says Brosious. The best you can do is spread out investments into many different segments that have little to do with one another. http://www.bankrate.com/bos/news/Financial_Literacy/Oct_07_building_portfolio_a1.asp?caret=64c
Kevin was asked to comment about family emergency funds. Kevin Brosious, president of Wealth Management Inc., Allentown, Pa., recommends Vanguard Prime Money Market fund, part of Vanguard Group Inc., which offers check writing and low fees. "If you do get laid off, you can pull this out of the drawer and life goes on as usual for four or five months," he says. http://online.wsj.com/article/SB123862056350479797.html?mod=googlenews_wsj
5 Things to Know About Naming Beneficiaries: March, 2009: Your Will Has No Jurisdiction Accounts with beneficiary designations - such as IRAs, 401(k)s, insurance policies and annuities- aren't governed by your will, says Allentown, Pa. invsestment advisor Kevin Brosious. So even if you wrote an ex out of your will eons ago, he or she would still get, say, your IRA if you never changed its beneficiary. Lesson: Review choices periodically, especially after major life events. Also, don't leave beneficiary forms blank. Accounts then go to probate court for distribution, and rules on who gets what vary by state. http://money.cnn.com/2009/03/11/retirement/naming_beneficiaries.moneymag/index.htm
Kevin was asked how CPA's can help with financial education of the public through media outlets: Click here for the entire article: AICPA Planner (page 5)
Legacy of a Crisis: A Generation Shy of Risk: February, 2009: On Thursday night, Kevin Brosious, a financial planner in Allentown, Pa., polled the students in his financial management class at DeSales University on the percentage of their portfolios they would allocate to stocks right now. The majority would put less than half in stocks; among their reasons were fear of job loss, lack of accountability on Wall Street and economic fears amplified by the news media. The problem with their approach, according to Mr. Brosious, is that by investing conservatively they are probably guaranteeing themselves a smaller return and a more meager standard of living in retirement. http://www.nytimes.com/2009/02/14/your-money/household-budgeting/14money.html?ref=business
click on the book icon to see kevin's contributions to this newly released book
Lehigh Valley Style: January, 2009: A Newlywed's Guide to Finance Kevin offered financial tips to newlyweds on budgeting and saving for retirement. Click on the magazine icon to view the entire interview.
Session Offers Financial Planning for the Future - Oct 21, 2008Penn State Lehigh Valley's Adult Learner Success Series will offer a session focused on "Financial Planning for the Future" from 5:00 - 6:30 p.m., Tuesday, October 21, in the Atrium at the Fogelsville campus. Registration will begin at 4:30 p.m. and dinner will be provided. Reservations are requested by October 14. This informational session, sponsored by the Career Services office, will feature interactive presentations by local financial experts followed by an open Q & A period. In addition, a representative from Merrill Lynch will be on site with an information table. Kevin Brosious will present tips on investing, budgeting, and decreasing debt. Participants can download a cash flow worksheet that will be part of his presentation. Click here to download the worksheet. Brosious is the founder and president of Wealth Management, Inc., a fee-Only financial planning and Registered Investment Advisory firm. He is a CFP® practitioner, a CPA, and a member of the American Institute of Certified Public Accountants (AICPA). In addition, he is a Personal Financial Specialist (PFS) and is a registered financial advisor with the National Association of Personal Financial Advisors (NAPFA). Brosious is also an adjunct professor at both Penn State and DeSales Universities where he teaches personal finance, investments, and other business courses. He received his B.S. in Accounting from Villanova University and an M.B.A. from Wilkes University. September, 2008: Money-Market Funds still good for liquidity, risk, advisers say: Some investors are switching to funds that invest in Treasury bonds, said Kevin Brosious, president of Wealth Management Inc. in Allentown, Pennsylvania. "I guess you can't blame them," Brosious said of clients making that choice. "I did get a couple of calls on staying in the market with all the turbulence, and my answer is an emphatic `yes."' http://www.chicagotribune.com/business/chi-thu-money-markets-sep25,0,4529190.story
Kiplingers Retirement Report: Protect yourself from rising prices Kevin Brosious, president of Wealth Management in Allentown, Pa., says that as inflation rises, so do rents on commercial properties. "REITs will keep you abreast of inflation," he says. For a diversified fund, Brosious likes Vanguard REIT Index ETF (VNQ, 7.7% annualized three-year return). http://www.kiplinger.com/letters/KRR.pdf
August, 2008: "I like [large-caps] more," said Kevin Brosious, president of Wealth Management Inc. of Allentown, Pa., which does not disclose assets. "I wouldn't shy away from them at all, because of the dividend yield. http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20080818/REG/491717037
August 10, 2008: The Morning Call: Kevin's letter to the editor concerning credit card solicitations to college students: I'm used to getting at least one credit card application every day. Most times, I toss them away. Now, my son, a 20-year-old college student, has started receiving them also. Unfortunately, the credit card companies have enlisted some high profile organizations to hawk their wares. The latest was a Bank of America card that came with the endorsement of Kappa Delta Pi, an honor society in education committed to recognizing excellence and fostering support for education professionals. The front of the application, shows a 0 percent APR until August 2009 and no annual fee, with a credit line up to $15,000. Sounds pretty good so far. Turn the application over for the rest of the story. Not only does the student have to start paying for purchases in 2009 (just in time to compete with student loan repayments) but the rate becomes 14.24 percent or 21.24 percent for cash advances. However, should the student be late on one payment, the rate can become 30 percent. I'm a member of Kappa Delta Pi and expressed my concern to the administration for its tacit endorsement of this card. It said KDP hoped that students would make wise decisions about the cards and pay them off at the end of each month. Unfortunately, credit card companies don't make money from people who make wise decisions. Their bread and butter is those people who make poor decisions. They can then share some of their spoils for these poor decisions with the sponsoring organization, in this case Kappa Delta Pi. http://www.mcall.com/news/opinion/letters/all-brosious.6538132aug10,0,1550028.story
July, 2008: Financial Q&A: Picking Firms for Recession Investing: Kevin answers investor's questions from Christian Science Monitor readers. Public companies with their excessive CEO compensation and short-term outlooks for maximum profits are taking a beating in today's economy. Are private companies better suited to handle a recession? P.M., via e-mail A: There's little reason to believe that private companies will perform better than public ones. But Kevin Brosious, a fee-only financial planner in Allentown, Pa., says we'll never really know because they don't make any public report of their finances. In some cases, Mr. Brosious believes that public companies may actually be better off due to their larger size and vast resources to draw on (they can sell stock, for instance). The vast majority of private companies are small and may, in his opinion, be exposed during bad times to limitations that come with having a smaller resource base. Q: I contribute about $20,000 a year tax-deferred into a 401(k). My employer does not contribute. Since in the future (I'm two years from retirement), I'll roll this over into an IRA, would it be better to pay taxes now on the $20,000 and just invest in a regular account? Otherwise, when the money is withdrawn from an IRA, I'll be paying taxes on the entire investment as regular income, not just on the capital gains. I'm assuming that my tax bracket will be the same at retirement. K.K., via e-mail A: If your company doesn't match your contributions, Brosious believes that you should make contributions first to a Roth IRA. Then he suggests investing in your company-provided 401(k). Having both a 401(k) or traditional IRA, and a Roth IRA will allow you to have a mix of tax-deferred and tax-free investments when you retire. The tax landscape in the year you withdraw your savings will determine whether you pull from the tax-deferred account (and pay the tax) or pull from the tax-free one (Roth IRA). If you still have money after you have maximized your pretax contribution to your 401(k), then Brosious suggests that you consider Exchange Traded Funds for your taxable investments. ETFs will allow you to defer most of the capital gains on your investment until you sell; then they are taxed at the long-term rate. http://www.csmonitor.com/2008/0707/p16s01-wmgn.html
July, 2008: Fidelity Ads Trumpet Low-Cost Index Funds: Kevin was asked to comment on the new index mutual funds that Fidelity is offering. "Fees have everything to do with that decision," said Kevin Brosious, president of Wealth Management Inc. of Allentown, Pa., which does not disclose assets under management. "I would probably lean more towards an ETF rather than mutual fund indexes. You cannot get any lower fees than that." http://www.financialweek.com/apps/pbcs.dll/article?AID=/20080702/REG/228399128/1036
June, 2008: Building Blocks for Successful Investing: Kevin's Note: this article was originally published by Bankrate.com. It was picked up in June, 2008 by Yahoo Finance. Reporter Sheyna asked Kevin to comment about different investment vehicles. ....Individual Securities: Downturns in the market or within an industry can hit individual stocks pretty hard. "With an individual security you pick up something that is called nonsystemic risk, and that is the risk associated with one particular stock, associated with the management team of the company, their financial situation and the industry that they're in," says Kevin Brosious, CPA, CFP and president of Wealth Management Inc., in Allentown, Pa ....Index Funds: "Index funds outperform some 80 percent of the actively managed funds," says Brosious. "Over the long term they will outperform." .... Mutual Funds: Convenience also factors into mutual funds' popularity. "Most people elect to have their dividends and capital gains reinvested, and most mutual funds will do it for free; they just roll it right back into the fund," says Brosious. .... Bonds: "The returns on bonds will not move in the same direction as the returns on stocks, says Brosious. "So that tends to smooth out your portfolio earnings. One year you might have bonds gaining 5 percent and stocks maybe losing 10 percent. The next year you might have stocks gaining 15 percent and bonds being a little flat." ....Gov't TIPS: "It keeps abreast of inflation and is a stabilizer for a portfolio. It's a guaranteed low-risk investment. I think it's a great vehicle for everybody's portfolio," says Brosious. ....Reits: Commonly used as a tool for diversifying within a portfolio, REITs and other asset classes, such as commodities and natural resources, have a low correlation to the stock market. "Noncorrelating means that returns don't move in the same direction all the time. That tends to smooth out your portfolio earnings," says Brosious. ....ETF's: Exchange-traded funds, or ETFs, have been gaining in popularity in recent years, though they have been around for a while, says Brosious. Good for tax-conscious investors looking to pay less in expenses, ETFs work essentially like a mutual fund with some characteristics of stocks. "These actually trade like an individual security but they are a basket of individual securities, just like a mutual fund," Brosious explains. However, ETFs also lack a little bit of the convenience of mutual funds. "Because they trade like a stock, the option of having dividends and capital gains automatically reinvested is unavailable," says Brosious. http://biz.yahoo.com/brn/080620/23438.html?.v=1
MainStreet: May, 2008: Retailers Want Your Stimulus Check: Reporter Jessica Wakeman asked Kevin to comment about uses for the government stimulus checks. "Kevin Brosious, a financial planner and president of Wealth Management, Inc., in Pennsylvania, agrees that he'd advise clients with extra cash to pay down their credit card debt before hitting the stores. But, Brosious also sees the stimulus checks from the point of view of the retailers. "As the economy's going down, the retailers are certainly hurt and they want people to come in," he says. "I understand the purpose of it is to stimulate the economy." http://www.mainstreet.com/retailers-want-your-stimulus-check-here%E2%80%99s-list-five-big-store-deals Investment News May, 2008: FRC Halts Public Release of Funds Flow: Kevin was asked to comment on the decision by Financial Research Corp. to no longer make available firm specific funds flow data to the general public. "It's a shame that [FRC] would do that," said Kevin Brosious, president of Wealth Management Inc. of Allentown, Pa., which does not disclose assets under management. "A lot of clients right now are really tuned in to the whole transparency thing. It's like stepping back into the darkness. That's not good." http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20080519/REG/466029522/1030/MUTUALFUNDS
Kevin Brosious of Wealth Management, Inc. says "You can no longer use just US bonds and US stocks when building a portfolio. Long-short funds should be part of the mix, [along with] US and International REITS, Treasury Inflation Protected Securities (TIPS), private equity, International and Emerging bonds." There's no going back to the simple world of U.S.-only investing. [Ed. Note: See our recent article on this subject.] Brosious focuses on asset classes that are available as mutual funds or ETFs. http:// www.advisorperspectives.com/newsletters08/The_Four_Top_Investment_Strategy_Challenges_for_Financial_Advisors.html
Babble.com- the magazine and community for a new generation of parents The New Economics of Parenthood - April 2008 Somehow, though, we've got to get smarter about our money. At this rate, some of us will literally arrive at retirement with no means of support. Kevin Brosious, president of a wealth management company in Pennsylvania, says, "I asked one client to have their children sign a contract acknowledging that their parents will not have enough money to retire and they [the kids] will provide support for them during their retirement years." http://babble.com/content/articles/features/dispatches/rayworth/economics-of-parenthood/index4.aspx Investment News March, 2008: Mutual fund firms offer clients access to private equity: Kevin was asked to comment on the new mutual funds that offer clients access to private equity investments. Of course, investing in private equity has its advantages, said Kevin Brosious, president of Wealth Management Inc., a fee-only financial planning firm in Allentown, Pa. "Private equity doesn't correlate with the returns of the broader market and the returns are as good as the market," he added. "They're good investments if they are used properly." http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20080317/REG/297137382&ht= March, 2008: Lipper to Launch Fund Classifications: Kevin was asked to comment on the new Lipper fund classifications. The new categories are helpful, said Kevin Brosious, president of Wealth Management Inc., a fee-only financial planning firm in Allentown, Pa. "I often recommend international-real-estate funds," said Mr. Brosious. "This will be helpful to me to get a better handle on the risk-reward relationships between funds. I like to put a lot of non-correlating assets in people's portfolios." The diversified leveraged fund is another helpful addition, he said. "The long-short funds perform best when the market is going the other way," added Mr. Brosious. "I put it in as a stabilizer to mitigate some of the downside risk in a bear market." http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20080317/REG/902233767/1030/MUTUALFUNDS
On Wednesday, February 6, 2008 Kevin Brosious, president of Wealth Management, Inc, presented Portfolio 101: Building and Maintaining Wealth, at the Penn State Lehigh Campus in Fogelsville, Pa. The lecture is part of the 2008 faculty lecture series and is open to the public free of charge. Investment News February, 2008: Janus Rebound in Works Reporter Sue Asci asked Kevin to comment about the revival of the Janus Funds. "Caution is the word," said Kevin Brosious, President of Wealth Management, Inc, a fee-only financial planning firm in Allentown, Pa. "I see no reason to rush into these funds at this point. The departure of three of its seasoned managers from a couple of their top funds gives me pause." http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20080204/REG/877181776&ht= January, 2008: Advisers Wary About Magellan's Reopening Reporter Sue Asci asked Kevin to comment about the reopening of the Fidelity Magellan Mutual Fund. "I'm not going to jump in on [Magellan]," said Kevin Brosious, president of Wealth Management Inc., a fee-only financial planning firm in Allentown, Pa. "If I buy index funds or [exchange traded funds] I know exactly what I'm getting and how to measure performance. Magellan is a very big fund with average performance." http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20080121/REG/113042052&ht=
December, 2007: Hedge Your Nest Egg Against Rising Prices Reporter Joe Lisante asked Kevin to comment on how an investor might protect themselves against future inflationary pressures in the economy...Large companies have greater financial flexibility and often have more exposure to overseas markets. As the dollar falls, that can help boost earnings. More than 44% of sales of companies in the S&P 500-stock index came from outside the U.S. in 2006. Fee-only certified financial planner Kevin Brosious, of Allentown, Pa. - based Wealth Management, Inc., advocates a 60% allocation in equities for a moderate-growth portfolio, even for retirees. ...For moderate-growth investors, Brosious recommends holding 10% of assets in TIPS. You can buy them through Vanguard Inflation-Protected Securities (VIPSX) or iShares Lehman TIPS Bond (TIP), which is an ETF. http://www.compassbank.com/personal/preferred/pdf/KRR2007_12_compass.pdf Investment News December, 2007: Fitness and friends bigger concerns than money, survey finds Reporter Aaron Siegel asked Kevin to comment on what things pre-retirees should focus on to get prepared for retirement. Kevin Brosious, president of Wealth Management Inc., a fee-only financial planning firm in Allentown, Pa., recommends a few simple steps: paying credit card bills on time and increasing savings at work through a 401(k) plan. "Clients need to clear up their credit card debt and then get back to their retirement savings plan," said Mr. Brosious. "The last thing they should do is go into retirement with a lot of credit card debt."
November, 2007: Japan's economy stuck in neutral while China thrives. Reporter Joe Lisante asked Kevin to comment on the overheated China Stock Market. "We go through these cycles," said Kevin Brosious, a fee-only financial planner at Wealth Management in Allentown, Pa. "We went through the same thing with Nasdaq," he said, referring to the bursting of the dot-com bubble in 2000. So how should an investor approach China, whose companies' stocks represent 1.7% of the world's market? Or any hot region? Brosious believes asset allocation is the key to a successful investment strategy. In an allocation of 60% stocks, 40% bonds and cash, which he recommends for people seeking moderate growth, Brosious suggests 1% of the portfolio be invested in funds tracking Chinese stocks. If the Chinese market continues to soar, he will sell some of the position to lock in profits and return to the 1% threshold. Although Brosious thinks Chinese stocks are overvalued and possibly due for a correction, the modest allocation limits risk and still allows some upside exposure. "I don't want to leave any money on the table," he said.The juggernaut of the 1980s is stuck in neutral while a new one thrives. The lesson for investors: Don't lose your head. http://www.nydailynews.com/money/2007/11/12/2007-11-12_japans_economy_stuck_in_neutral_while_ch.html
Reporter David Bogoslaw asked Kevin if retirees should consider more conservative portfolios. "There's a lot of debate among financial planners about how conservative someone between 45 and 55 should be. Kevin Brosious, president of Wealth Management in Allentown, Pa., usually assumes each client will live into his early 90s and believes portfolios need to be designed for the long haul. "Don't change everything to a conservative portfolio," he said, just because you're getting ready to retire or are retired. "You're going to need [to plan for] the long term with growth [of assets] through retirement to maintain pace with inflation and purchasing power over that time." ...International securities are another way to diversify away from U.S. stocks. The more risk-adverse investor may want to stick to developed countries such as Japan and Britain, but for those hungry for bigger returns, emerging markets like China, India, and the Middle East are the places to be. Wealth Management's Brosious urges clients to limit their exposure to these markets to 7% or 8%. Often, foreign companies have a low correlation to U.S. equities because they don't hedge their currency risk. http://uk.biz.yahoo.com/04092007/244/age-appropriate-portfolio.html
Reporter Lauren Young asked Kevin to comment about the best places to invest a client's cash holdings. "With checkwriting features, money market accounts offer a lot of liquidity, but not all money market accounts are created equally. Kevin Brosious, president of Wealth Management Inc. in Allentown, Pa., is a fan of the low-cost Vanguard Money Market fund, which is yielding about 5.1% right now, and holds "safe" investments, with more than half of the fund invested in certificates of deposit. About 20% of the portfolio is invested in commercial paper and another 20% is in U.S. government agencies." http://www.businessweek.com/investing/insights/blog/archives/2007/08/where_to_stash.html?campaign_id=rss_blog_investinginsights
"I don't get them there," he admits. Most clients agree to about 40% in overseas stocks, and a few won't go higher than 25%. He recommends that about 8% of the foreign equity position be in emerging markets. If your overall asset allocation is 60% stocks, 30% bonds and 10% cash, a 50% weighting of foreign equities would amount to 30% of the overall portfolio. Whatever allocation you choose, you'll have to decide how you will invest in foreign securities. Brosious favors the low-cost index ETF approach, which "spreads your risk out among a lot of different countries and companies." Although you will pay brokerage fees to trade ETFs, the expense ratios of ETFs are low. IShares MSCI EAFE Index charges only 0.35%; the expense ratio for iShares MSCI Emerging Markets Index is a low 0.77%. Click here to see entire article >> http://www.kiplinger.com/letters/KRR.pdf Kevin's Note: any asset allocation is ultimately based on a client's risk profile; that is, their desire and ability to bear market volatility (risk). Allocation to foreign equities is no exception. If an investor finds it difficult to accept the additional volatility that investments in foreign equities will bring to their portfolios, then they should consider an alternative investment.
September, 2006: The Research Magazine Guide to REIT Investing Kevin Brosious was interviewed by David Drucker about investing in real estate after the bubble. Kevin Brosious, CPA, CFP® and president of Wealth Management in Allentown, PA, says, "I consider the home an investment in real estate and include it in the client's portfolio. " In general, Brosious guides clients towards or away from home purchases based on low interest-rate levels. "I may seem like a contrarian, but I tell new home buyers that historically it's been a good time to buy real estate when interest rates are higher because prices usually modulate or come down when rates go higher. A buyer can always refinance when rates drop." But how does he advise clients in this red-hot real estate market of Lehigh Valley, Pa., who have already bought and owned their homes for a number of years? "In the past five years here, the average home has increased 100 percent, and prices have begun to level off the past few months. So clients who need to sell haven't really missed the boat. But they've got to live somewhere, and real estate has increased everywhere [locally]." When clients consider the cost of selling, moving, sales taxes, condo fees and other new-home expenses, says Brosious, they will end up with less money than originally expected and the switch may not look so attractive. "If clients really like their current neighborhood but no longer want to cut the lawn, trim the hedges or perform other maintenance, they could consider hiring a lawn service or handyman. I think in most cases, this will be a less expensive option [than moving]."
Kevin Brosious was asked to comment for the "Building a Cash Cushion" article concerning investment mistakes that young workers make when saving for retirement. "I hear about too many young workers not rolling over their 401(k) balance but rather taking them in cash," says Kevin Brosious, president of Wealth Management, Inc, a financial planning company in Allentown, Pa. "They pay full tax on this amount, plus a 10 percent penalty, and worst of all they have now raided their retirement fund. Younger workers have to understand that defined benefit plans are a thing of the past and there will be more responsibility on them to save for their retirement years." click here for entire article. Investment News July 10, 2006 - Kevin Brosious was asked to comment on moving more investment assets into cash for the "Money Market Funds Appeal to Wary Investors and Advisors" article. It's not hard to understand the allure of CDs and money funds, said Kevin Brosious, principal of Wealth Management Inc., a financial advisory firm in Allentown, Pa. Rates currently are over 5% for a 90-day CD, which is "certainly an attractive option for that part of an investor's portfolio that is dedicated to cash or short-term investment," he said. The Vanguard Treasury Money Market Fund is yielding 4.55%, with an expense ratio of just 0.30%. "Pretty safe, steady returns," Mr. Brosious said. But he's not interested in sending clients' assets to such investments just because those investments happen to look good now. "With these returns, it's tempting to move into cash, but I resist the urge because I don't want to chase hot returns," Mr. Brosious said.
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The Four Top Investment Strategy Challenges for Financial Advisors- April 2008
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