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Category Archives: Investment Management

SBA Loans & CARES Act Implications

        Mueller Prost, one of our trusted CPA resources, conducted a webinar that answers questions about SBA Loans and planning opportunities surrounding the CARES Act that are available to practices and small business owners. Check out their Q&A below and click the link to receive a recording of their webinar.   [/vc_column_text][/vc_column][/vc_row]

As always, if you have additional questions, please contact your advisor or schedule a consultation.

General Loan Q&A

Provided by Mueller Prost. Written by MaryPat Davitz
*This content was published April 7, 2020 and is continually evolving. Please reference Mueller Prost’s original site for the latest source of any updated information.

Q: If I have 3 companies with separate EIN, can I apply for a SBA loan for each company? How will SBA treat this considering the “affiliates” as defined by SBA?

A: Yes, you can apply for and EIDL or PPP loan for each separate company with separate EIN. Each applicant should have payroll tax filings to support gross wages used to calculate the monthly payroll costs for PPP and other information may be requested for EIDL. The SBA will consider affiliate relationships to ensure that each entity that applies meets the SBA requirements as a small business as appropriate giving consideration to the requirements of the CARES Act.

Q: Can an S-Corp apply with only one shareholder/owner apply?

A: An S-Corp with only one shareholder may apply for either, or both the EIDL and the PPP loan.

Q: Understanding “double dipping” concerns by the government, how will this align with the FFCRA, which allows dollar for dollar tax credits for those who take COVID related sick leave, up to 12 weeks? Technically that pay is “forgiven” with the tax credits. Now we have a PPP loan forgiven.

A: Wages paid or expected to be paid under the FFCRA should be excluded from the calculation of payroll costs. PPP loan funds should not be used to pay wages that will be considered for the tax credit available under the FFCRA.

Q: If I get the PPP loan, can you also take advantage of the 6.2% payroll tax deferral program?

A: You cannot utilize the payroll tax deferral program for wages paid using PPP funds. You can utilize other programs as long as you do not “double dip”. So, wages that qualify for other programs cannot also be paid from PPP loan funds if you are receiving a benefit under those other programs.

Q: To confirm, the SBA loans need to go through the government website directly, and the PPP loan needs to go through a banking partner?

A: Correct. The EIDL is a direct loan with the SBA and you must apply through their website. The PPP loan is funded by banks and guaranteed by the SBA, so applications must be processed by banks.

Q: Can an employer apply for both EIDL and PPP loans?

A: Yes, a business entity, including sole proprietors, independent contractors and some not-for-profit organizations can apply for both EIDL and PPP.

EIDL Loans

Q: If you qualify for a loan for $10k, will it be 100% forgivable?

A: The $10,000 advance on the EIDL is 100% forgivable. However, there is no guidance currently available as to requirements or timing for forgiveness.

Q: Does there have to be a COVID-19 disaster declaration in your state before you can apply for EIDL?

A: The EIDL is available on a nationwide basis now. You do not have to have a separate declaration by the State to apply.

Q: Is EIDL is personally guaranteed?

A: EIDL amounts under $200,000 do not require a personal guarantee.

Q Should we apply for the EIDL now, or wait till we actually have losses? (i.e. commercial real estate would anticipate a losing rents due to tenants unable to pay.) So should we apply now or wait a month or two when tenants unable to pay?

A: Apply now. The SBA will request additional documentation including explanation and demonstration of need when you are contacted.

Q: Can a 501C (6) get EIDL?

A: 501C(6) are now eligible for the EIDL only.

PPP Loans

Q: Are there going to be P&I or interest only payments on PPP loan up until the point it is forgiven?

A: Principal and interest payments are deferred for six months after disbursement of loan proceeds under PPP. Loan amounts not forgiven will have a maximum amortization of 2 years and a maximum interest rate of 1%.

Q: Can anyone confirm at this time what constitutes forgivable?

A: There is current guidance related to the amount of the PPP loan that is forgivable. However, there is no guidance available related to how or when forgiveness will occur, or what documentation will be required to demonstrate compliance. Basically, the funds must be used to cover payroll costs and not more than 25% of the funds can be used to cover certain other allowable costs like rent, mortgage payments or utilities. We recommend that you carefully document the use of the funds and continue to monitor guidance related to forgiveness as it becomes available.

Q: Can you verify, the company paid health insurance benefit and the 401k match benefit should be individually calculated and added to each employee’s medicare wages?

A: Yes, to calculate payroll costs for the PPP, you should add the company paid portion of health insurance (including dental and vision) and the company contribution to 401k plans. The compensation component of total payroll costs is capped at $100,000 per individual employee. So, you should back out the excess wages or other qualified compensation for anyone included in the calculation with payroll costs over that cap amount.

Q: If “average monthly payroll” is based off 2019, but some have resigned at the end of the year, do you include their salary in the calculation? Likewise, what if you added employees in January or February of 2020?

A: The intention of the PPP loan is to retain your workforce by covering payroll costs for the 8 weeks following disbursement of the funds. Current guidance suggests that estimating average monthly payroll costs by using information from the prior year or the same period from the prior year or the most recent 12 months may be appropriate depending on specific circumstances and depending on the nature of your business. Your bank will ask you to provide supporting documentation to support the monthly payroll cost and may also ask for 941 forms to verify that information. Payroll costs include total medicare taxable compensation plus employer paid portion of insurance and 401k contributions.

Q: How are the number of employees calculated? Is it full-time equivalents or every employee, whether full-time or part-time, counts as 1?

A: The PPP loan application requires applicants to certify that documentation supporting the number of full-time equivalent employees as the payroll costs used to calculate the average monthly payroll underlying the amount of the loan requested. The number of employees reported on the application should represent the number of FTE employees used to compute the average monthly payroll costs.

Q: Banks are asking for documentation showing a total of all health insurance premiums paid for group health plan. What are companies providing that are self-insured?

A: The PPP allows you to include the employer portion of health insurance in payroll costs covered by the program. If you have a self-insured health plan in place, you may use actual historical information representing the employer paid portion of medical claims and premiums paid for stop loss coverage under the plan. You may estimate an average cost per FTE and use that amount to add to the calculation. Note that you will need to provide documentation supporting these costs if you include them in the calculation of average monthly payroll costs.

Q: Can you include temporary labor expenses when calculating your monthly average payroll costs?

A: In determining the number of FTE and wages for the calculation of payroll costs, all employees reported as such and included in wages for reporting payroll taxes on federal Form 941, other than those with primary residence outside the U.S. should be included. Independent contractors or outsourced/temporary workers who are not classified as employees for payroll tax purposes should be excluded.

Q: Can you include worker’s comp in the calculation of compensation on the PPP?

A: Yes. The calculation of payroll costs begins with gross wages. Current guidance indicates that gross wages includes: salary, wage, commissions or similar compensation; cash tips or equivalent; vacation, parental, family, medical or sick leave; dismissal or separation allowance; payment of any retirement benefit; payment of state or local taxes assessed on employee compensation subject to a cap of $100,000 per individual.

Q: Can guaranteed payments to LLC members be included in wages up to the $100,000?

A: Yes, guaranteed payments are the equivalent of compensation for certain types of organizations and can be included for the purpose of calculating average monthly payroll cost for the PPP.

Q: Are union payments for benefits and other fees included in payroll expenses for PPP?

A: The amount of union fringes that constitute health insurance and retirement benefits can be included in the calculation of payroll costs. Other fringe benefits, fees or costs for union employees may not be included.

For more details on the PPP, click here.

SP – 1099

Q: If a sole proprietor’s taxes have not been filed yet for 2019, can 2019 payroll numbers be used?

A: Yes. The payroll tax forms for 2019 should have been filed and available to support and verify wages paid in 2019 for calculation of payroll costs for the PPP loan.

Q: I’m a 1099 person that has no payroll. Do I do PPP or EIDL??? I can’t make any money and will not be able to pay bills.

A: The PPP loan amount is determined by payroll costs. If you are an independent contractor, your payroll costs may not have been paid to you in the form of a salary or wages. However you may still be eligible for the PPP loan based on 1099 payments you received. You may also be eligible for EIDL if you have lost revenue and can demonstrate need. You can apply for both programs.

Q: How can the EIDL help independent contractors?

A: The EIDL is available to independent contractors. This loan provides funds to cover working capital in the event of financial need. You may apply for this loan based on actual or expected losses and you may be required to provide information such as a financial forecast.

For more details on SBA Loans, visit Mueller Prost’s CARES Act landing page.

Advisory services offered through Larson Financial Group, LLC, a Registered Investment Advisor. Securities offered through Larson Financial Securities, LLC, member FINRA/SIPC.
Larson Financial Group, LLC, Larson Financial Securities, LLC and their representatives do not provide legal or tax advice or services. Please consult the appropriate professional regarding your legal or tax planning needs.
By clicking on any of the links above, you acknowledge that they are solely for your convenience and we are not responsible for the content, availability or privacy policies of these sites, and shall not be responsible or liable for any information, opinions, advice, products or services available on or through them. The opinions expressed by featured authors are their own and may not accurately reflect those of Larson Financial Group. This article is for general information only and is not intended to serve as specific financial, accounting or tax advice.

Coronavirus Market Perspective: A Long-Term Plan

As the Coronavirus spreads, so too do does the fear of what is to come. By now, many of us are seeing real life impacts from the Coronavirus. This may be in the form of having travel plans altered, or maybe you know someone whose school has been closed. President Trump even announced a travel ban to Europe and the NBA has suspended its season.

The stock market has been hit particularly hard over the past month as well. As of the close of the market on Wednesday, the US Market is now down over 15% from the start of the year1 and down nearly 20% from its peak in February.

In times like this, it is not uncommon to feel additional stress and anxiety. No one enjoys seeing declines to their portfolio’s value. Studies have provided evidence that our tolerance for risk is challenged in times like these2. As stress increases, we may be tempted to make financial decisions out of fear. At LFG, we believe that a strong antidote to fear is preparation.

Your financial plan and portfolio strategy have been carefully crafted by your financial advisor in order to be prepared and equipped to endure times like these. And that strategy is informed by facts and observations in capital markets that are worth repeating:

  • Markets have recovered from every disruption in the past. The 5-year average annualized return after a 20% market decline is 11.76%3.

  • This is not the first time we have seen a market drawdown close to an infectious disease outbreak4. In most cases, we see a recovery within 12 months.

  • Downturns are not uncommon over time. On average, we see market corrections of 15% or more once every four years; 20% and greater corrections occur about once every six years5.

  • Volatility is part of investing. It is this risk for which we expect to be compensated. We cannot reasonably expect a higher return on stocks (vs. a safer investment like cash) without embracing the reality that stocks have more risk.
  • The capital markets are efficient. As the markets get new information, prices adjust accordingly. In this current case, markets are pricing in the impact of short-term disrupted supply chains and lost production associated with the Coronavirus. As that short-term disruption is resolved, prices should also adjust accordingly.

Although it may feel like things are different this time, it is important to remember that the markets have withstood similar circumstances in the past. Valuations of stocks are based upon decades of expected cash flows, not just what we see in the coming months as we deal with the fallout of the Coronavirus.

Many of us vividly remember the Global Financial Crisis from the late 2000s. An investor in an 80% stock/20 bond portfolio6 starting out in 2008 would have lost over 40% of their value by March 2009. By April of 2011, they would have already recovered, and had a positive return.

Obviously, no one has a crystal ball and this message is not meant to imply the market has reached the bottom. But we do believe now presents an opportune time to strategically reposition assets in the market.

Our team is working diligently to keep your portfolio in line with your strategic, long-term allocation by selling the asset classes that become overweight and buying what is underweight. We also are harvesting taxable losses in this process to help lessen your tax burden when you file in 2021.

Are you concerned Coronavirus could impact your long-term financial strategy?

1 The US Market as represented by the S&P 500. https://www.wsj.com/market-data/quotes/index/US/S&P%20US/SPX?mod=md_home_overview_quote
2 https://www.pnas.org/content/pnas/111/9/3608.full.pdf?with-ds=yes
3 https://www.mydimensional.com/us-equity-returns-following-past-downturns
Eugene Fama and Ken French are members of the Board of Directors of the general partner of, and provide consulting services to, Dimensional Fund Advisors LP. Short-term performance results should be considered in connection with longer-term performance results. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio.
4 Source: Epidemics and Stock Market Performance; First Trust Portfolios L.P. Data from Bloomberg, as of 2/24/20. Month end numbers were used for the table on the right. *12-month data is not available for the June 2019 measles. This graphic is for Informational purposes only and is an authorized reprint from First Trust Portfolios L.P. Larson Financial Group (“LFG”) and Larson Financial Securities (“LFS”) are separate from and unaffiliated with First Trust Portfolios L.P. Material is believed current and accurate but is not guaranteed. Investments are subject to various market, political, currency, economic, and business risks, and may not always be profitable; further, neither LFG nor LFS guarantee financial or investment results.
5 https://www.capitalgroup.com/advisor/insights/articles/how-stay-calm-when-markets-stumble.html?cid=sm_og_fb_sf_cap_ci_6292026
6 Figures based upon performance of VASGX (Vanguard LifeStrategy Growth Fund). Figures represented do not reflect any advisor fees, expenses, or sales charges. Returns are based on price only and do not include dividends.
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. Consult your financial advisor regarding your specific needs. Past performance is no guarantee of future results.
Advisory Services offered through Larson Financial Group, LLC, a Registered Investment Advisor. Securities offered through Larson Financial Securities, LLC, Member FINRA/SIPC.
Larson Financial Group, LLC, Larson Financial Securities, LLC and their representatives do not provide legal or tax advice or services. Please consult the appropriate professional regarding your legal or tax planning needs. 

When Saving for Education, Have You Considered a 529 Plan?

As we enter our careers, we’re bombarded with messages about the importance of retirement savings. And it’s true: retirement is a very important event in your life, and you need to be prepared. There’s another expense that may be worth saving for, however: your children’s education.

Assisting in your child’s education expenses is a decision you (and your spouse or partner) should discuss. It’s crucial to decide a strategy before committing to college savings. Once you do commit, you may want to consider a 529 plan.

Many doctors may overlook a 529 plan because they don’t want money tied down for one specific purpose. A 529 plan is similar to an HSA in that, the money you invest is there for education expenses only. Any withdrawals for other purposes will be taxed as income with an extra 10% penalty tacked on.

An important factor to consider in a 529 plan are the tax advantages. Many stats offer tax benefits for contributions to a 529 plan, including deducting contributions from state income tax or matching grants. In addition, the earnings in a 529 plan grow tax-free.

The most important factor to consider in saving for children’s education is not to prioritize those savings over your own goals. Saving for your own retirement or other long-term goals should take precedence; education savings can be considered extra. It would make sense that a doctor who is well-situated financially would be in a better position to assist his or her child with education expenses.

Are you ready to review choices you have for education savings?

Advisory services offered through Larson Financial Group, LLC, a Registered Investment Advisor.

Securities offered through Larson Financial Securities, LLC, member FINRA/SIPC.

Larson Financial Group, LLC, Larson Financial Securities, LLC and their representatives do not provide legal or tax advice or services. Please consult the appropriate professional regarding your legal or tax planning needs.

The ABCs of Education Investing

With school back in session in most of the country, many parents are likely thinking about how best to prepare for their children’s future college expenses. Now is a good time to sharpen one’s pencil for a few important lessons before heading back into the investing classroom to tackle the issue.

THE CALCULUS OF PLANNING FOR FUTURE COLLEGE EXPENSES

According to recent data published by the College Board, the annual cost of attending college in the US in 2017–2018 averaged $20,770 at public schools, plus an additional $15,650 if one is attending from out of state. At private schools, tuition and fees averaged $46,950.

It is important to note that these figures are averages, meaning actual costs will be higher at certain schools and lower at others. Additionally, these figures do not include the separate cost of books and supplies or the potential benefit of scholarships and other types of financial aid. As a result, actual education costs can vary considerably from family to family.

To complicate matters further, the amount of goods and services $1 can purchase tends to decline over time. This is called inflation. One measure of inflation looks at changes in the price level of a basket of goods and services purchased by households, known as the Consumer Price Index (CPI). Tuition, fees, books, food, and rent are among the goods and services included in the CPI basket. In the US over the past 50 years, inflation measured by this index has averaged around 4% per year.1 With 4% inflation over 18 years, the purchasing power of $1 would decline by about 50%. If inflation were lower, say 3%, the purchasing power of $1 would decline by about 40%. If it were higher, say 5%, it would decline by around 60%.

While we do not know what inflation will be in the future, we should expect that the amount of goods and services $1 can purchase will decline over time. Going forward, we also do not know what the cost of attending college will be. But again, we should expect that education costs will likely be higher in the future than they are today. So, what can parents do to prepare for the costs of a college education? How can they plan for and make progress toward affording those costs?

DOING YOUR HOMEWORK ON INVESTING

To help reduce the expected costs of funding future college expenses, parents can invest in assets that are expected to grow their savings at a rate of return that outpaces inflation. By doing this, college expenses may ultimately be funded with fewer dollars saved. Because these higher rates of return come with the risk of capital loss, this approach should make use of a robust risk management framework. Additionally, by using a tax-deferred savings vehicle, such as a 529 plan, parents may not pay taxes on the growth of their savings, which can help lower the cost of funding future college expenses.

While inflation has averaged about 4% annually over the past 50 years, stocks (as measured by the S&P 500 Index) have returned around 10% annually during the same period. Therefore, the “real” (inflation-adjusted) growth rate for stocks has been around 6% per annum. Looked at another way, $10,000 of purchasing power invested at this rate over the course of 18 years would result in over $28,000 of purchasing power later on. We can expect the real rate of return on stocks to grow the purchasing power of an investor’s savings over time. We can also expect that the longer the horizon, the greater the expected growth. By investing in stocks, and by starting to save many years before children are college age, parents can expect to afford more college expenses with fewer savings.

It is important to recognize, however, that investing in stocks also comes with investment risks. Like teenage students, investing can be volatile, full of surprises, and, if one is not careful, expensive. While sometimes easy to forget during periods of increased uncertainty in capital markets, volatility is a normal part of investing. Tuning out short-term noise is often difficult to do, but historically, investors who have maintained a disciplined approach over time have been rewarded for doing so.

RISK MANAGEMENT AND DIVERSIFICATION: THE FRIENDS YOU SHOULD ALWAYS SIT WITH AT LUNCH

Working with a trusted advisor who has a transparent approach based on sound investment principles, consistency, and trust can help investors identify an appropriate risk management strategy. Such an approach can limit unpleasant (and often costly) surprises and ultimately may contribute to better investment outcomes.

A key part of maintaining this discipline throughout the investing process is starting with a well-defined investment goal. This allows for investment instruments to be selected that can reduce uncertainty with respect to that goal. When saving for college, risk management assets (e.g., bonds) can help reduce the uncertainty of the level of college expenses a portfolio can support by enrollment time. These types of investments can help one tune out short‑term noise and bring more clarity to the overall investment process. As kids get closer to college age, the right balance of assets is likely to shift from high expected return growth assets to risk management assets.

Diversification is also a key part of an overall risk management strategy for education planning. Nobel laureate Merton Miller used to say, “Diversification is your buddy.” Combined with a long-term approach, broad diversification is essential for risk management. By diversifying an investment portfolio, investors can help reduce the impact of any one company or market segment negatively impacting their wealth. Additionally, diversification helps take the guesswork out of investing. Trying to pick the best performing investment every year is a guessing game. We believe that by holding a broadly diversified portfolio, investors are better positioned to capture returns wherever those returns occur.

CONCLUSION

Higher education may come with a high and increasing price tag, so it makes sense to plan well in advance. There are many unknowns involved in education planning, and no “one-size-fits-all” approach can solve the problem. By having a disciplined approach toward saving and investing, however, parents can remove some of the uncertainty from the process. A trusted advisor can help parents craft a plan to address their family’s higher education goals.

Have Questions?

Source: US Department of Labor, Bureau of Labor Statistics, Economic Statistics.

There is no guarantee investing strategies will be successful. Investing risks include loss of principal and fluctuating value.

Diversification neither assures a profit nor guarantees against loss in a declining market.

Risks include loss of principal and fluctuating value. Investment value will fluctuate, and shares, when redeemed, may be worth more or less than original cost.

The S&P data is provided by Standard & Poor’s Index Services Group.

Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission.

Advisory Services offered through Larson Financial Group, LLC, a Registered Investment Advisor. Securities offered through Larson Financial Securities, LLC, Member FINRA/SIPC.
Tax loss harvesting is a complicated issue and cannot be fully covered within the context of this article. This article should not be construed as tax advice. Please contact a qualified tax professional with knowledge about your specific needs.

Larson Financial Group, LLC, Larson Financial Securities, LLC and their representatives do not provide tax advice or services. Please consult the appropriate professional regarding your tax planning needs.

This mode of content is for Informational purposes only and is an authorized reprint from Dimensional Fund Advisors LP (“DFA”). Larson Financial Group (“LFG”) and Larson Financial Securities (“LFS”) are separate from and unaffiliated with DFA. LFS has entered into a selling agreement with DFA whereby LFS may sell and receive compensation for the sale of DFA funds. Material is believed current and accurate but is not guaranteed. Investments are subject to various market, political, currency, economic, and business risks, and may not always be profitable; further, neither LFG nor LFS guarantee financial or investment results. This material is not to be construed as an offer to buy or sell securities or other products and services of LFG or its affiliates. Before taking action on a financial plan, please review any offering documents available, including prospectus and consult an appropriate investment professional regarding your specific needs. Past performance is not an indicator of future results. Note: you can change “article” to article depending on the forum being used.

E+R=O, a Formula for Success

Combining an enduring investment philosophy with a simple formula that helps maintain investment discipline can increase the odds of having a positive financial experience.

“The important thing about an investment philosophy is that you have one you can stick with.”

-David Booth Founder and Executive Chairman

 

AN ENDURING INVESTMENT PHILOSOPHY

 

Investing is a long-term endeavor. Indeed, people will
spend decades pursuing their financial goals. But being
an investor can be complicated, challenging, frustrating,
and sometimes frightening. This is exactly why, as
David Booth says, it is important to have an investment
philosophy you can stick with, one that can help you
stay the course.

This simple idea highlights an important question:
How can we, as investors, maintain discipline through
bull markets, bear markets, political strife, economic
instability, or whatever crisis du jour threatens progress
towards our investment goals?

Over their lifetimes, investors face many decisions,
prompted by events that are both within and outside
their control. Without an enduring philosophy to inform their choices, they can potentially suffer unnecessary
anxiety, leading to poor decisions and outcomes that
are damaging to their long-term financial well-being.

When they don’t get the results they want, many
investors blame things outside their control. They might
point the finger at the government, central banks,
markets, or the economy. Unfortunately, the majority
will not do the things that might be more beneficial—
evaluating and reflecting on their own responses to
events and taking responsibility for their decisions.

 

e + r = o

 

Some people suggest that among the characteristics
that separate highly successful people from the rest
of us is a focus on influencing outcomes by controlling
one’s reactions to events, rather than the events
themselves. This relationship can be described in
the following formula:

 

e + r = o (Event + Response = Outcome)

 

Simply put, this means an outcome—either positive
or negative—is the result of how you respond to an
event, not just the result of the event itself. Of course,
events are important and influence outcomes, but not exclusively. If this were the case, everyone would
have the same outcome regardless of their response.

Let’s think about this concept in a hypothetical
investment context. Say a major political surprise,
such as Brexit, causes a market to fall (event). In a
panicked response, potentially fueled by gloomy media
speculation of the resulting uncertainty, an investor sells
some or all of his or her investment (response). Lacking
a long-term perspective and reacting to the shortterm
news, our investor misses out on the subsequent
market recovery and suffers anxiety about when, or
if, to get back in, leading to suboptimal investment
returns (outcome).

To see the same hypothetical example from a different
perspective, a surprise event causes markets to fall
suddenly (e). Based on his or her understanding of the
long-term nature of returns and the short-term nature
of volatility spikes around news events, an investor is
able to control his or her emotions (r) and maintain
investment discipline, leading to a higher chance of
a successful long-term outcome (o).

This example reveals why having an investment
philosophy is so important. By understanding how
markets work and maintaining a long-term perspective
on past events, investors can focus on ensuring that
their responses to events are consistent with their
long-term plan.

THE FOUNDATION OF AN
ENDURING PHILOSOPHY

An enduring investment philosophy is built on solid
principles backed by decades of empirical academic
evidence. Examples of such principles might be:
trusting that prices are set to provide a fair expected
return; recognizing the difference between investing
and speculating; relying on the power of diversification
to manage risk and increase the reliability of outcomes;
and benchmarking your progress against your own
realistic long-term investment goals.

Combined, these principles might help us react better
to market events, even when those events are globally
significant or when, as some might suggest, a paradigm
shift has occurred, leading to claims that “it’s different
this time.” Adhering to these principles can also help
investors resist the siren calls of new investment fads
or worse, outright scams.

THE GUIDING HAND OF A TRUSTED ADVISOR

 

Without education and training—sometimes gained
from bitter experience—it is hard for non-investment
professionals to develop a cogent investment
philosophy. And, as we have observed, even the most
self-aware find it hard to manage their own responses
to events. This is why a financial advisor can be so
valuable—by providing the foundation of an investment
philosophy and acting as an experienced counselor
when responding to events.

Dimensional has an enduring investment philosophy
that is shared by the advisors we work with and is the
foundation for how we view the world of investing.
We trust in the power of markets to deliver reliable
returns over time and focus our efforts on helping
investors benefit from as much of the return of the
market as possible.

We know that investing will always be both alluring and
scary at times, but a view of how to approach investing
combined with the guidance of a professional advisor
can help people stay the course through challenging
times. Advisors can provide an objective view and help
investors separate emotions from investment decisions.
Moreover, great advisors can educate, communicate,
set realistic financial goals, and help their clients
deal with their responses even to the most extreme
market events.

In the spirit of the e + r = o formula, good advice, driven
by a sound philosophy, can help increase the probability
of having a successful financial outcome.

Have Questions?


Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission.

Past performance is no guarantee of future results. There is no guarantee investment strategies will be successful. Investing involves risks including possible loss of principal. Investors should talk to their financial advisor prior to making any investment decision. There is always the risk that an investor may lose money. A long-term investment approach cannot guarantee a profit.

All expressions of opinion are subject to change. This article is distributed for informational purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, products, or services.


Advisory services offered through Larson Financial Group, LLC, a Registered Investment Advisor. Securities offered through Larson Financial Securities, LLC, member FINRA/SIPC.

This handout is for Informational purposes only and is an authorized reprint from Dimensional Fund Advisors LP (“DFA”). Larson Financial Group (“LFG”) and Larson Financial Securities (“LFS”) are separate from and unaffiliated with DFA. LFS has
entered into a selling agreement with DFA whereby LFS may sell and receive compensation for the sale of DFA funds. Material
is believed current and accurate but is not guaranteed. Investments are subject to various market, political, currency,
economic, and business risks, and may not always be profitable; further, neither LFG nor LFS guarantee financial or
investment results. This material is not to be construed as an offer to buy or sell securities or other products and services of
LFG or its affiliates. Before taking action on a financial plan, please review any offering documents available, including
prospectus and consult an appropriate investment professional regarding your specific needs. Past performance is not an
indicator of future results.