Horizon Advisors

Spring 2012 Market Commentary

Owen Murray — Thu, 19 Apr 2012 02:15:22 +0000

The end of the first quarter marked the three year milestone for the tremendous stock market rally that has followed the recent financial crisis. However, many investors have completely missed this rise and stubbornly remain on the sidelines. We discuss this topic and more here in our spring 2012 market commentary.

Tax Reform for 2013

Larry Maddox — Mon, 16 Apr 2012 16:36:15 +0000

We are getting reform of some sort, either by default or by Congressional action. Recommended read from NYT. Click here to access article.

Warren Buffett’s 2012 Annual Chairman’s Letter

Horizon Advisors — Mon, 16 Apr 2012 16:34:00 +0000

We regularly read these annual epistles to the shareholders of Berkshire Hathaway. This one is particularly good and we wanted to share it. Click here to read the entire letter.

Businessweek: Hedge Funds Pile Into Stocks After Missing Rally

Horizon Advisors — Wed, 28 Mar 2012 21:55:26 +0000

We believe that the best strategy for long-term investment success is to build a portfolio tailored to your specific needs. Once a strategy has been determined, it is extremely important to remain patient through good markets and bad. As the article highlights, it is very difficult to predict the movements of the stock market in the short-term; even for the supposedly “smart” money. Click here to read the full article.

Behavioral Biases: An Investor’s Worst Enemy

Owen Murray — Wed, 29 Feb 2012 22:55:25 +0000

An article recently published on SmartMoney.com highlights of one of the best reasons to hire a financial advisor; the help of an experienced professional to guide you through turbulent markets and to (hopefully) help you avoid making costly decisions driven by emotion. By the author’s measure, individual investors have lost more than $100 billion over the last five years by making the classic behavioral mistake of buying high and selling low. Read this interesting article here.

Horizon Advisors Spring 2012 Newsletter

Horizon Advisors — Thu, 23 Feb 2012 23:29:44 +0000

Read our Spring 2012 edition of “On the Horizon.”

Interesting post on “Endowment Investing”

Horizon Advisors — Thu, 16 Feb 2012 23:03:45 +0000

Should you follow a simple investment strategy with basic blocking and tackling or should you subscribe to the concept of “endowment investing” followed by large institutions? Whatever you do, favor fundamentals over fads. See this article from the Wall Street Journal.

2011 and 2012 Contribution Limits for IRAs and Retirement Plans

Horizon Advisors — Thu, 09 Feb 2012 16:00:00 +0000

With the approaching April 17^th contribution deadline looming, we thought it would be a good time to remind you of the 2011 and 2012 contribution limits for IRAs and the more common defined contribution retirement plans. We have summarized these limits here.

Contributing to Roth IRAs for High Income Earners

Henry Bragg — Thu, 09 Feb 2012 14:00:31 +0000

Roth IRAs allow for annual non-deductible IRA contributions which grow tax-free and there are never any required distributions as with a tax deductible IRA. This makes Roth IRAs a very appealing savings option for those who are looking for additional retirement savings. However, if you earn more than $125,000 in 2012 ($183,000 Married Filing Jointly), you do not qualify to make a direct Roth IRA contribution. Fortunately, there is a way to work around this. It is a technique known as a “backdoor Roth.”

With this strategy you first open a traditional IRA, make a non-deductible contribution ($5,000 in 2011 and 2012 or $6,000 with catch-up if 5o or over), and then convert it to a Roth IRA. If you have previously converted your tax deductible IRAs to Roth IRAs, this is a no-brainer as there will be no taxable income due on the conversion. However, if you have other holdings in a traditional IRA, this technique needs to be carefully considered as some of the money converted may be subject to current tax by virtue of the “pro-rata rule.” When you convert IRA accounts to a Roth, you must factor in all your IRA assets (not just the new non-deductible contribution) to determine taxability. For example, if you have $90,000 in a traditional IRA from a 401(k) rollover, and you make two nondeductible $5,000 contributions (2011 and 2012) to a new IRA, the conversion would be 90% taxable.

If you have questions about this technique or how it might affect you personally, please discuss this with your CPA or contact us for further assistance.

2011 – A Difficult Year for Active Investors

Owen Murray — Tue, 24 Jan 2012 22:04:18 +0000

2011 was a very difficult and frustrating year for active investors. According to a recent Bloomberg article, this was the worst year for actively managed mutual funds since 1997. For the year, the S&P 500 was up 2.1% but most investors in stock oriented mutual funds actually lost money. Why did this widespread under-performance occur and what should investors do now? Horizon Advisors examines these topics and more in this study titled: 2011 – A Difficult Year for Active Investors.