The Isanti County News http://isanticountynews.com The Isanti County News covers community news, sports, current events and provides advertising and information for the cities of Cambridge, Isanti, and Braham, Minnesota and their surrounding areas. Sat, 02 May 2015 00:20:11 +0000 en-US hourly 1 Isanti hears positive review of 2014 audit http://isanticountynews.com/2015/05/01/isanti-hears-positive-review-of-2014-audit/ http://isanticountynews.com/2015/05/01/isanti-hears-positive-review-of-2014-audit/#comments Sat, 02 May 2015 00:20:11 +0000 http://isanticountynews.com/?p=121014 The Isanti City Council received positive news during its 2014 audit presentation during the April 23 council meeting.

Matt Vos, with Abdo, Eick and Meyers, explained the firm has audited the accompanying financial statements of government activities, business-type activities, each major fund and aggregate remaining fund for the city of Isanti for the year ending Dec. 31, 2014.

Vos said city staff was excellent to work with. Vos noted one area most cities the size of Isanti have concerns with is segregation of duties; however, he said Isanti does a good job in that area.

“Isanti is unique in that fact of the 100-plus cities of similar size we audit, there is usually an issue with segregation of duties,” Vos said. “But you have figured it out and leveraged the staff where it needs to be. You have a good checks and balances system in place, and it’s good to see what is in place is being followed.”

Vos noted the following financial highlights:

• The assets of the city exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $43,544,778. Of this amount, $6,338,584 (unrestricted net position) may be used to meet the city’s ongoing obligations to citizens and creditors.

• The city’s net total position increased by $410,631. This was largely a result of operating income within business-type activities of $778,743 as well as capital contributions of $488,942 within business-type activities.

• At the close of the current fiscal year, the city’s governmental funds reported combined ending fund balances of $4,555,033, an increase of $346,008 in comparison with the prior year.

• At the end of the current fiscal year, unrestricted fund balance for the general fund was $1,681,887.

• The city’s total noncurrent liabilities increased $2,009,281 (13.8 percent) during the current fiscal year.

Vos noted the largest revenue variance is within intergovernmental revenues, which was $583,572 more than budgeted. This is primarily due to $545,485 received for Local Government Aid, all of which was unbudgeted.

Isanti Mayor George Wimmer explained due to state budget fluctuations and constant discussions at the state level of reducing and-or eliminating LGA, the city doesn’t include LGA in its budget, and if LGA is received that year, it utilizes the funds the following year.

Vos also noted revenues from nonbusiness licenses and permits were $115,969 more than budgeted due to more activity than anticipated.

Wimmer noted the city’s net per capita taxes are 30 percent lower than peer cities, and spending is 15 percent less per capita as well. He added city administrative costs are 39 percent less per capita than peer cities.

“The city has a number of mandates we have to follow where we can’t control the costs, but these numbers show the actual spending of city government, and it shows we have a tremendous city administrator, department heads and council commitments,” Wimmer said. “Our city is unique in a number of ways. We have very few cities of our size that have commitments from council members to work on different committees. We have well-credentialed people in our City Administrator Don Lorsung, Finance Director Sarah Cotton, Community Development Director Roxanne Achman, Economic Development Director Sean Sullivan, Human Resources-Deputy City Clerk Karissa Henning and Liquor Store Manager John Jacobi. We have a lot of good, dedicated staff that runs the city incredibly efficiently.”

Wimmer noted the audit highlights the city’s commitment to long term investment in infrastructure, capital equipment and public safety. Wimmer said the city is investing 83 percent more in long-term capital to ensure the city’s heavy equipment and infrastructure are of the highest possible quality.

Wimmer noted the city is on track with its long-range financial plan.

“From an operations standpoint, the audit shows what we are trying to do here,” Wimmer said. “We always try to take as little as we can and spend it as wisely and efficiently as possible, and our audit reflects that. We have a city on good financial ground and good infrastructure, and we have plans in place to keep us successful.”

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Property owners in Isanti County: Notice of re-assessment http://isanticountynews.com/2015/05/01/property-owners-in-isanti-county-notice-of-re-assessment/ http://isanticountynews.com/2015/05/01/property-owners-in-isanti-county-notice-of-re-assessment/#comments Sat, 02 May 2015 00:15:22 +0000 http://isanticountynews.com/?p=121012 In the next few weeks, the Isanti County Assessor’s office will begin the re-assessment of properties in the following townships: Isanti, Dalbo, and Stanchfield for the 2016 Assessment for Property Taxes Payable 2017.

The office is required by statute to physically re-assess properties a minimum of every five years. This notice is an opportunity for you to make an appointment rather than having one of their appraisers appear un-announced at your property. All improvements will be reviewed and the exterior will be examined for any changes. The interior will also need to be examined.

Office hours are 8 a.m. to 4:30 p.m. Monday through Friday. The telephone number is 763-689-2752 to schedule an appointment with your appraiser.

If the appraiser is denied access or are otherwise unable to inspect the improvements, they will estimate the property’s market value by making assumptions believed appropriate concerning the property’s condition and finish.

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Princess Party coming May 15 http://isanticountynews.com/2015/05/01/princess-party-coming-may-15/ http://isanticountynews.com/2015/05/01/princess-party-coming-may-15/#comments Sat, 02 May 2015 00:10:29 +0000 http://isanticountynews.com/?p=121010 The Cambridge Ambassador Program invites little princesses to join them for some royal fun at their annual Princess Party on Friday, May 15. The event runs from 6-8:15 p.m. at the Cambridge Armed Forces Reserve and Community Center.

Princess attire is encouraged, and guests will participate in a variety of royal activities with lots and lots of “real” princesses. Activities are geared for ages 4-8, but any aged little princess who wants to have fun is welcome.  Parents may stay and watch or drop off. The “Princess Parade” will begin at approximately 7:45 p.m.

Earlybird registration is $20 per princess if postmarked by May 8. Registration after May 8 or at the door is $25 per princess. Visit the Cambridge Ambassador Program Facebook page for a registration form, or send names and ages along with the registration fee to “Princess Party,” c/o Laurie Solle, 28626 Drake St. NW, Isanti, MN 55040. Checks can be made out to Cambridge Ambassador Program or CAP.

The Cambridge Ambassador Program is a 501(c)(3) nonprofit organization focused on supporting the young women and girls of the area.

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Little Miss Cambridge openings http://isanticountynews.com/2015/05/01/little-miss-cambridge-openings/ http://isanticountynews.com/2015/05/01/little-miss-cambridge-openings/#comments Sat, 02 May 2015 00:05:48 +0000 http://isanticountynews.com/?p=121008 The Little Miss Cambridge Program will be accepting registrations from first-graders and 5-year-olds not yet in kindergarten to fill several places not take by kindergarten girls.

The registration form, contract, and further information is available to download from the link on the Cambridge Ambassador Program Facebook page or by e-mail request to jasminedybvig@yahoo.com.

Although Little Miss Cambridge will be selected from registered kindergartners, the fun and friendship of the experience will be exactly the same for all participants regardless of age. First event and parent meeting is Monday, May 4.

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‘Moms and Muffins’ at Cambridge Library http://isanticountynews.com/2015/05/01/moms-and-muffins-at-cambridge-library/ http://isanticountynews.com/2015/05/01/moms-and-muffins-at-cambridge-library/#comments Sat, 02 May 2015 00:00:00 +0000 http://isanticountynews.com/?p=121006 Enjoy a special “Moms and Muffins” program at the Cambridge Public Library.

The fun begins Saturday, May 9, at 10:30 a.m. Come for a special tea-themed storytime, a tea cup bookmark craft, and to get your face painted. Girls ages 4-7 are encouraged to bring their favorite gal (mother, grandmother, aunt or friend). Registration is required and space is limited.

Stop at the library or call 763-689-7390 to sign up. This program is sponsored by the Friends of the Cambridge Public Library.

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Anniversary Announcement http://isanticountynews.com/2015/05/01/anniversary-announcement/ http://isanticountynews.com/2015/05/01/anniversary-announcement/#comments Fri, 01 May 2015 22:07:19 +0000 http://isanticountynews.com/?p=121111 Anniversary Announcement

Community Partnerships Annual Bowl-O-Rama Fundraiser was a great success again this year. Thanks to community members and our sponsors for supporting Youth FIRST Club, our after school program for 4th-7th graders in Chisago and Isanti counties: Hazelden Betty-Ford, Wyoming First State Bank, Prefer Paving and Ready Mix, Fairview Lakes Medical Center, Lakes Region EMS, Verizon Wireless Zone Premium Retailer, Plastic Products Company, Remax Forest Lake, Chisago Rotary, Anderson Koch Ford, Rush Printing, Lake State Credit Union, Picket Fence Gals, East Central Energy, and North Branch Floral. Youth FIRST Club provides over 250 youth with a safe, structured place to hang out until mom or dad return home from work. For more information contact Jamie Nelson at 651-674-4085.

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How Risk Sways Investing http://isanticountynews.com/2015/05/01/how-risk-sways-investing/ http://isanticountynews.com/2015/05/01/how-risk-sways-investing/#comments Fri, 01 May 2015 19:00:02 +0000 http://isanticountynews.com/?guid=f9c562832cce42c23845e33a7036ac3e We all know that the market is volatile with a lot of dizzying ups, downs and turns. On roller coasters, some of us enjoy the thrill and some find the ride terrifying. Ditto with stocks. Finding out how you tolerate market swings greatly helps set your direction of investing.

Playing the market is an emotional experience that carries omnipresent degree of risk. Sure you want to make money and see your investments soar. How much risk can you live with to achieve great returns?

Historically, stocks provided greater returns and occasioned sharper greater risk. Bonds seem safer but usually provide smaller payback. Once you decide how much risk you want to take, you can determine how to construct your portfolio.

Almost all financial institutions offer tolerance questionnaires to help you develop your profile. Questions often include hypothetical scenarios in which you can take a small amount of money in hand or gamble it on diminishing chances at larger and larger amounts. Your answers typically result in a score indicating whether you are best off investing conservatively, moderately or aggressively from a risk-tolerance perspective.

General definitions for these three categories:

  • Conservative: You aim to preserve your portfolio’s value via low-risk investments such as fixed-income and money market securities. Your risk tolerance probably ranges from low to moderate. 
  • Moderate: Sometimes called balanced investing, this means you seek to counterweight your risk and return. Your model portfolio could carry equal amounts of equities and fixed-income securities.
  • Aggressive: You shoot for the best returns no matter the potential downside. Your primary objective is capital appreciation rather than income or safety of principal. Your optimum portfolio could lean heavily on stocks.

Don’t make a questionnaire your only decision tool. For example, if the questionnaire indicates that you are a moderate investor, yet your stomach knots up every time the market declines, maybe a conservative allocation is better for you.

Other questions when determining your tolerance: How much emergency cash have you set aside? What are your investment objectives? When will you need the money?

Emergency fund. You need a certain amount of cash set aside for the unexpected, such as loss of your job or a big car or home cost, for example. (Most advisors recommend at least three months’ expenses.) Extra funds can help you avoid early withdrawals from your retirement funds.

If you have no substantial emergency fund, consider investing more conservatively.

Objectives. Your investment goals can also affect your preferred level of risk. If you only want to grow your investments, aggressive allocation can work for you.

Perhaps you took a hit in the market in the past and only want to protect what you have without seeing a lot of movement up or down. In this case, you may want to be more conservative.

Time. How long until you need the payoff from the money you invest?

If you are young and saving for retirement or for your future child’s education, you can afford more risk right now. The more time you enjoy, the longer your funds can take to recover if the market dips.

The closer you are to needing the money, the less time you have to recover from setbacks and the less volatility you want to see.

Managing emotions. It’s important to weather the inevitable ups and downs and to stay invested – even when your feelings kick in and tell you to bail out.

Allowing emotions to drive your investment decisions can derail your meeting your goals. When the market drops, resist panic. When the market skyrockets, resist jubilation. Get comfortable with the range of returns you expect over the long haul.

Remember, your risk profile isn’t static. As you near retirement or as your life changes, your profile can also change – just like the market.

Follow AdviceIQ on Twitter at @adviceiq.

Carolyn Kelly is a senior associate consultant at Hewins Financial Advisors LLC in San Mateo, Calif.
 
The information presented herein is standard information and intended only as a broad discussion of generally available incapacity-planning tools that a reader might consider
discussing in detail with their attorney or other qualified professional advisor(s). None of the information contained herein is specific to the laws, rules or regulations of any state or other governing body, and as such cannot be construed as, or used as a substitute for, legal advice. Further, none of the information contained herein has been written or personalized for any individual, and the information may not be applicable or beneficial to anyone’s personal situation(s). The documents and processes identified herein can be complicated, and in many cases require the assistance of a qualified attorney to execute effectively. To the extent that you have questions about or wish to make use of any of the tools or processes identified herein, you are encouraged to seek the advice of your attorney. You assume full responsibility for your use of the general information contained herein and acknowledge and agree that by using the information contained herein Hewins Financial Advisors, LLC, its affiliates, agents and/or employees shall have no responsibility or liability for any claim, damage or loss resulting from your use of such information. 
 
Hewins Financial Advisors, LLC and Wipfli Hewins Investment Advisors, LLC (together referred to as “Hewins”) are independent, fee-only investment advisers registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940. The views expressed by the author are the author’s alone and do not necessarily represent the views of Hewins or its affiliates. Hewins is a proud affiliate of Wipfli LLP. A copy of Hewins’ current ADV Part 2A discussing our investment advisory and financial planning services and fees is available for review upon request..

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

 

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We all know that the market is volatile with a lot of dizzying ups, downs and turns. On roller coasters, some of us enjoy the thrill and some find the ride terrifying. Ditto with stocks. Finding out how you tolerate market swings greatly helps set your direction of investing.

Playing the market is an emotional experience that carries omnipresent degree of risk. Sure you want to make money and see your investments soar. How much risk can you live with to achieve great returns?

Historically, stocks provided greater returns and occasioned sharper greater risk. Bonds seem safer but usually provide smaller payback. Once you decide how much risk you want to take, you can determine how to construct your portfolio.

Almost all financial institutions offer tolerance questionnaires to help you develop your profile. Questions often include hypothetical scenarios in which you can take a small amount of money in hand or gamble it on diminishing chances at larger and larger amounts. Your answers typically result in a score indicating whether you are best off investing conservatively, moderately or aggressively from a risk-tolerance perspective.

General definitions for these three categories:

  • Conservative: You aim to preserve your portfolio’s value via low-risk investments such as fixed-income and money market securities. Your risk tolerance probably ranges from low to moderate. 
  • Moderate: Sometimes called balanced investing, this means you seek to counterweight your risk and return. Your model portfolio could carry equal amounts of equities and fixed-income securities.
  • Aggressive: You shoot for the best returns no matter the potential downside. Your primary objective is capital appreciation rather than income or safety of principal. Your optimum portfolio could lean heavily on stocks.

Don’t make a questionnaire your only decision tool. For example, if the questionnaire indicates that you are a moderate investor, yet your stomach knots up every time the market declines, maybe a conservative allocation is better for you.

Other questions when determining your tolerance: How much emergency cash have you set aside? What are your investment objectives? When will you need the money?

Emergency fund. You need a certain amount of cash set aside for the unexpected, such as loss of your job or a big car or home cost, for example. (Most advisors recommend at least three months’ expenses.) Extra funds can help you avoid early withdrawals from your retirement funds.

If you have no substantial emergency fund, consider investing more conservatively.

Objectives. Your investment goals can also affect your preferred level of risk. If you only want to grow your investments, aggressive allocation can work for you.

Perhaps you took a hit in the market in the past and only want to protect what you have without seeing a lot of movement up or down. In this case, you may want to be more conservative.

Time. How long until you need the payoff from the money you invest?

If you are young and saving for retirement or for your future child’s education, you can afford more risk right now. The more time you enjoy, the longer your funds can take to recover if the market dips.

The closer you are to needing the money, the less time you have to recover from setbacks and the less volatility you want to see.

Managing emotions. It’s important to weather the inevitable ups and downs and to stay invested – even when your feelings kick in and tell you to bail out.

Allowing emotions to drive your investment decisions can derail your meeting your goals. When the market drops, resist panic. When the market skyrockets, resist jubilation. Get comfortable with the range of returns you expect over the long haul.

Remember, your risk profile isn’t static. As you near retirement or as your life changes, your profile can also change – just like the market.

Follow AdviceIQ on Twitter at @adviceiq.

Carolyn Kelly is a senior associate consultant at Hewins Financial Advisors LLC in San Mateo, Calif.
 
The information presented herein is standard information and intended only as a broad discussion of generally available incapacity-planning tools that a reader might consider
discussing in detail with their attorney or other qualified professional advisor(s). None of the information contained herein is specific to the laws, rules or regulations of any state or other governing body, and as such cannot be construed as, or used as a substitute for, legal advice. Further, none of the information contained herein has been written or personalized for any individual, and the information may not be applicable or beneficial to anyone’s personal situation(s). The documents and processes identified herein can be complicated, and in many cases require the assistance of a qualified attorney to execute effectively. To the extent that you have questions about or wish to make use of any of the tools or processes identified herein, you are encouraged to seek the advice of your attorney. You assume full responsibility for your use of the general information contained herein and acknowledge and agree that by using the information contained herein Hewins Financial Advisors, LLC, its affiliates, agents and/or employees shall have no responsibility or liability for any claim, damage or loss resulting from your use of such information. 
 
Hewins Financial Advisors, LLC and Wipfli Hewins Investment Advisors, LLC (together referred to as “Hewins”) are independent, fee-only investment advisers registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940. The views expressed by the author are the author’s alone and do not necessarily represent the views of Hewins or its affiliates. Hewins is a proud affiliate of Wipfli LLP. A copy of Hewins’ current ADV Part 2A discussing our investment advisory and financial planning services and fees is available for review upon request..

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

 

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How to Diversify Correctly http://isanticountynews.com/2015/05/01/how-to-diversify-correctly/ http://isanticountynews.com/2015/05/01/how-to-diversify-correctly/#comments Fri, 01 May 2015 16:00:03 +0000 http://isanticountynews.com/?guid=c4147da5b50a1f5e21292365a1bcf228 Some think that diversification calls for simply splitting your holdings between stocks and bonds. A really good asset allocation, however, is a bit more complicated, and involves gauging how much risk you can stomach.

To diversify properly, spread your investments among asset categories, including stocks, bonds and cash, and within them.

The advice has been around since the 17th century, and it’s just as good today as it was then: Don’t put all your eggs in one basket. The goal, of course, is to reduce the odds of losing everything all at once.

Drop the basket and you risk smashing all your eggs. But if you divide the eggs into a few baskets, you still have some eggs left for breakfast if you accidentally drop one.

As an investor, you don’t put all your money in one investment. Imagine an Enron employee who only invested in company stock. When the company went bankrupt in 2001, the poor worker lost both a job and his or her entire life savings.

That’s why diversification matters. It is the strategy of spreading out your investments to reduce risk and smooth out the ups and downs of the market. Diversification is a two-step process.

1. Diversify among asset categories. You choose a certain percentage of each asset class according to your goals and your situation.

The basic asset classes are stocks, bonds and cash. Historically, stocks have a higher return over long timespans – but are more volatile in the short term. Bonds provide regular income and vary less than stocks, and historically have a lower return. Cash accounts are the safest of all, although they return the least over time.

This distribution of stocks, bonds and cash is called your asset allocation. Consider two important things when making your decision:

First, your time horizon. If you’re investing for a short-term goal, such as a house payment in five years, you want more low risk, lower return assets. If the money is meant for retirement, include more high return, higher risk stock investments.

Second, your risk tolerance. Can you sleep at night if your investments drop in value? How much of a drop can you take? If your tolerance is low, it may prompt you to sell at a loss. In that case, you want less exposure in the stock market and more in low risk investments.

2. Diversify within asset categories. You choose investments in different countries, sectors and companies.

For stocks, think about owning companies of different sizes or market capitalization, which represents a company’s value. For bonds, consider buying different types like governments, corporates and junk, aka high-yield. Foreign stocks and bonds help your portfolio continue to grow when the U.S. market is struggling. Also important is owning a wide variety of sectors, for example, technology and energy.

How are you supposed to buy all those different assets? Mutual funds or exchange traded funds (ETF) are an excellent way to do exactly that. When you buy a mutual fund or ETF, you buy a collection of many stocks or bonds at once. Index funds that track the market are an even more diversified choice, since some mutual funds or ETFs only focus on one sector.

Let’s put this all together with an example. Say you’re in your 20s, have a high risk tolerance and a few decades before you touch your investments for retirement. You decide to put 90% of your investments in stocks and 10% in bonds, allocating half your portfolio to U.S. investments and half to international investments.

An ideal asset allocation might be holding four different index funds: a domestic stock market index (45%), international stock index (45%), U.S. bond index (5%), and international bond index (5%).

Now that you know how to diversify your portfolio, focus on growing your nest egg — in more than one basket.

Follow AdviceIQ on Twitter at @adviceiq.

Mary Beth Storjohann, CFP, is the founder of Workable Wealth, an RIA in San Diego. She is a writer, speaker and financial coach who is passionate about working with individuals and couples in their 20s and 30s to help them organize and gain confidence in their financial lives. She has been quoted or featured in various industry publications on the local and national level. You can find her on Twitter at @marybstorj.

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

 

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Some think that diversification calls for simply splitting your holdings between stocks and bonds. A really good asset allocation, however, is a bit more complicated, and involves gauging how much risk you can stomach.

To diversify properly, spread your investments among asset categories, including stocks, bonds and cash, and within them.

The advice has been around since the 17th century, and it’s just as good today as it was then: Don’t put all your eggs in one basket. The goal, of course, is to reduce the odds of losing everything all at once.

Drop the basket and you risk smashing all your eggs. But if you divide the eggs into a few baskets, you still have some eggs left for breakfast if you accidentally drop one.

As an investor, you don’t put all your money in one investment. Imagine an Enron employee who only invested in company stock. When the company went bankrupt in 2001, the poor worker lost both a job and his or her entire life savings.

That’s why diversification matters. It is the strategy of spreading out your investments to reduce risk and smooth out the ups and downs of the market. Diversification is a two-step process.

1. Diversify among asset categories. You choose a certain percentage of each asset class according to your goals and your situation.

The basic asset classes are stocks, bonds and cash. Historically, stocks have a higher return over long timespans – but are more volatile in the short term. Bonds provide regular income and vary less than stocks, and historically have a lower return. Cash accounts are the safest of all, although they return the least over time.

This distribution of stocks, bonds and cash is called your asset allocation. Consider two important things when making your decision:

First, your time horizon. If you’re investing for a short-term goal, such as a house payment in five years, you want more low risk, lower return assets. If the money is meant for retirement, include more high return, higher risk stock investments.

Second, your risk tolerance. Can you sleep at night if your investments drop in value? How much of a drop can you take? If your tolerance is low, it may prompt you to sell at a loss. In that case, you want less exposure in the stock market and more in low risk investments.

2. Diversify within asset categories. You choose investments in different countries, sectors and companies.

For stocks, think about owning companies of different sizes or market capitalization, which represents a company’s value. For bonds, consider buying different types like governments, corporates and junk, aka high-yield. Foreign stocks and bonds help your portfolio continue to grow when the U.S. market is struggling. Also important is owning a wide variety of sectors, for example, technology and energy.

How are you supposed to buy all those different assets? Mutual funds or exchange traded funds (ETF) are an excellent way to do exactly that. When you buy a mutual fund or ETF, you buy a collection of many stocks or bonds at once. Index funds that track the market are an even more diversified choice, since some mutual funds or ETFs only focus on one sector.

Let’s put this all together with an example. Say you’re in your 20s, have a high risk tolerance and a few decades before you touch your investments for retirement. You decide to put 90% of your investments in stocks and 10% in bonds, allocating half your portfolio to U.S. investments and half to international investments.

An ideal asset allocation might be holding four different index funds: a domestic stock market index (45%), international stock index (45%), U.S. bond index (5%), and international bond index (5%).

Now that you know how to diversify your portfolio, focus on growing your nest egg — in more than one basket.

Follow AdviceIQ on Twitter at @adviceiq.

Mary Beth Storjohann, CFP, is the founder of Workable Wealth, an RIA in San Diego. She is a writer, speaker and financial coach who is passionate about working with individuals and couples in their 20s and 30s to help them organize and gain confidence in their financial lives. She has been quoted or featured in various industry publications on the local and national level. You can find her on Twitter at @marybstorj.

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

 

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Slighting Overseas Stocks? http://isanticountynews.com/2015/05/01/slighting-overseas-stocks/ http://isanticountynews.com/2015/05/01/slighting-overseas-stocks/#comments Fri, 01 May 2015 14:00:03 +0000 http://isanticountynews.com/?guid=583e7a022a24eda0396126cbe744daac A strengthening dollar is tempting many to abandon overseas investments. That can wreak havoc with ensuring their portfolios are well-diversified. Because this too shall pass: Currencies move up or down in any year.

Investing statistics show how thoroughly U.S. investors are cooling on overseas stocks. According to the Investment Company Institute, investment inflows to overseas equity mutual funds in this year’s first three months slowed to a trickle: Just under $4 billion, which is only 8.5% of the first quarter 2013 inflow and 11.5% of 2014’s comparable period. The current trend is very shortsighted.

Last year, the U.S. dollar gained more than 10% against other major currencies around the world (such as the euro and the yen). Was that a good thing?

Well, if you spent significant time traveling in Europe or Japan, you might find it great as hotels and restaurants became more affordable. But what about your investment portfolio? Was a stronger dollar good for your investments?

The answer depends on your asset allocation. Let’s look at what happened last year. The MSCI EAFE Index for developed international markets like Europe, Japan and Australia was down about 4.9% for U.S. investors. But for foreign investors in their own country, the index was up 5.7%. Why? The stronger dollar in the second half of 2014 created a negative currency return for U.S. investors. As the dollar rises, your international investments go down in value.

The Standard & Poor’s 500 index was up 13.5% in 2014. If you were only invested in U.S. stocks, you had a pretty good year. If you just made investment decisions based on last year, then you might be tempted to abandon the concept of global diversification. But this would be a big mistake.

Take a look at this chart from investment advisory firm Callan Associates that recorded the annual returns of some key indexes. In the 20 years from 1994 to 2013, the MSCI EAFE index did better than S&P 500 half of the time. From 2005 to 2007, the international index outperformed the U.S. index by 8.63, 10.55 and 5.68 percentage points. Much of that advantage was due to a weaker dollar.

You may have also noticed the MSCI index for emerging market equities was at the very top of the charts from 2003 to 2007. While these stocks certainly did well during those five years, currency further boosted those positive returns for U.S. investors.

Are we in the phase of a cycle where the dollar will strengthen for years to come? The honest answer is nobody knows. (If you see people on television claim they know, turn the channel.) The best hedge to this uncertainty is to invest small portions of your portfolio in various asset classes globally.

Many investors are over-weighted in U.S. stocks. People tend to invest in things that are familiar. But the U.S. stock market only represents 50% of the global market. A rational investor should want to participate in the gains the whole capital markets have to offer.

One thing we need to remember is that there are years when our international investments disappoint, but there are also years when they provide outsized returns compared with our U.S. investments.

If the dollar strengthens, our international investments relatively decline in value. But when the dollar weakens, our international investments become more valuable. Since no one knows whether the dollar will strengthen or weaken in any year, the best strategy is to stay globally diversified.

Follow AdviceIQ on Twitter at @adviceiq
 
Ken Weingarten, CFP, is the president of financial planning services at 
Weingarten Associates in Lawrenceville, N.J.

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

 

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A strengthening dollar is tempting many to abandon overseas investments. That can wreak havoc with ensuring their portfolios are well-diversified. Because this too shall pass: Currencies move up or down in any year.

Investing statistics show how thoroughly U.S. investors are cooling on overseas stocks. According to the Investment Company Institute, investment inflows to overseas equity mutual funds in this year’s first three months slowed to a trickle: Just under $4 billion, which is only 8.5% of the first quarter 2013 inflow and 11.5% of 2014’s comparable period. The current trend is very shortsighted.

Last year, the U.S. dollar gained more than 10% against other major currencies around the world (such as the euro and the yen). Was that a good thing?

Well, if you spent significant time traveling in Europe or Japan, you might find it great as hotels and restaurants became more affordable. But what about your investment portfolio? Was a stronger dollar good for your investments?

The answer depends on your asset allocation. Let’s look at what happened last year. The MSCI EAFE Index for developed international markets like Europe, Japan and Australia was down about 4.9% for U.S. investors. But for foreign investors in their own country, the index was up 5.7%. Why? The stronger dollar in the second half of 2014 created a negative currency return for U.S. investors. As the dollar rises, your international investments go down in value.

The Standard & Poor’s 500 index was up 13.5% in 2014. If you were only invested in U.S. stocks, you had a pretty good year. If you just made investment decisions based on last year, then you might be tempted to abandon the concept of global diversification. But this would be a big mistake.

Take a look at this chart from investment advisory firm Callan Associates that recorded the annual returns of some key indexes. In the 20 years from 1994 to 2013, the MSCI EAFE index did better than S&P 500 half of the time. From 2005 to 2007, the international index outperformed the U.S. index by 8.63, 10.55 and 5.68 percentage points. Much of that advantage was due to a weaker dollar.

You may have also noticed the MSCI index for emerging market equities was at the very top of the charts from 2003 to 2007. While these stocks certainly did well during those five years, currency further boosted those positive returns for U.S. investors.

Are we in the phase of a cycle where the dollar will strengthen for years to come? The honest answer is nobody knows. (If you see people on television claim they know, turn the channel.) The best hedge to this uncertainty is to invest small portions of your portfolio in various asset classes globally.

Many investors are over-weighted in U.S. stocks. People tend to invest in things that are familiar. But the U.S. stock market only represents 50% of the global market. A rational investor should want to participate in the gains the whole capital markets have to offer.

One thing we need to remember is that there are years when our international investments disappoint, but there are also years when they provide outsized returns compared with our U.S. investments.

If the dollar strengthens, our international investments relatively decline in value. But when the dollar weakens, our international investments become more valuable. Since no one knows whether the dollar will strengthen or weaken in any year, the best strategy is to stay globally diversified.

Follow AdviceIQ on Twitter at @adviceiq
 
Ken Weingarten, CFP, is the president of financial planning services at 
Weingarten Associates in Lawrenceville, N.J.

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

 

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Cambridge discusses local sales tax option http://isanticountynews.com/2015/04/30/cambridge-discusses-local-sales-tax-option/ http://isanticountynews.com/2015/04/30/cambridge-discusses-local-sales-tax-option/#comments Fri, 01 May 2015 00:25:25 +0000 http://isanticountynews.com/?p=121003 The Cambridge City Council discussed whether it should call for a referendum vote on a one-half percent local sales and use tax as part of the state’s general election in November 2016.

During the April 20 City Council meeting, City Administrator Lynda Woulfe presented information on the local sales and use tax option offered to cities and counties as authorized by the state Legislature.

She noted that proceeds of a local tax must be dedicated exclusively for the payment of a specific capital improvement.

She said the purpose of the local tax option could be used to fund payments for the $12.17 million bond issuance for the Cambridge Public Library and East Central Regional Library headquarters, and the Cambridge Community and Aquatics Center.

Woulfe explained the bonds would be issued from Jan. 1, 2017, to Dec. 31, 2036, for a total of $18 million that includes principal and interest. Woulfe noted these figures are just “estimates” and based on $225 per square foot.

While the council did not take any action on the matter,  it did reiterate it wants to hear from Cambridge residents on the issue.

Woulfe explained a one-half percent sales tax would have generated $930,506 in funding for the city in 2013 and $905,511 in 2012.

Council Member Howard Lewis said the one-half percent sales tax is about local control.

“This doesn’t say anyone wants a sales tax; this is simply about local control,” Lewis said. “The citizens of this community would decide to implement the one-half percent sales tax to go along with the state sales tax. The sales tax wouldn’t apply to vehicles, and I don’t think one-half percent is too much. I don’t know if I’d vote yes or no on the issue, but I do know we should have local control in Cambridge.”

Lewis said the local sales tax could be a way to have everyone contribute to the building of a new library and aquatics facility.

“If we want to build a new library and aquatics facility for everyone to use, the Cambridge citizens can’t afford that alone,” Lewis said. “The citizens of Cambridge do not want any more property tax. But what mechanism do we have to have everyone contribute to these projects? The citizens of Cambridge can’t afford it by themselves. We are maxed out on property taxes.”

Woulfe explained currently 29 cities and 13 counties across the state utilize the local sales and use tax option.

“This doesn’t impact or increase our property taxes,” Woulfe said. “This is not a property tax.”

Council Member Tiffany Kafer questioned if the sales and use tax would deter businesses from locating in Cambridge.

“If we have amenities here, it increases our quality of life,” Lewis said. “It may actually bring businesses into our community.”

When asked by Mayor Marlys Palmer for his thoughts on the issue, Economic Development Director Stan Gustafson said he really didn’t have an opinion. He said businesses do their own due diligence before deciding to locate in a community.

“I look forward to hearing from the citizens about their thoughts on the issue,” added Council Member Lisa Iverson.

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