January 2017 - Stop and Take a Breath!

Earlier this year Shannon and I felt very strongly to start sorting through and eliminating our excess possessions.  We realized that after 39 years of marriage we had accumulated so much “stuff” that we were being affected!  We have always lived a frugal lifestyle but have inherited several households over the years and true to the American way there was always more coming into our home than leaving! 

So the downsizing began and we have been very diligent.  It takes a lot of effort and planning to make this successful.  A strong dose of ruthlessness is essential as inevitably most items have distinct levels of emotional attachment.  It is hard work but it must be done!

One of the benefits for me has been reacquainting myself with many of my books collected over the years and the reasons why I acquired them.  One particular book stood out, Failure of a Mission, by Sir Nevile Henderson.  Henderson was England’s ambassador to Germany from 1937-1939 under Prime Minister Neville Chamberlain.  He said, “The German controlled press, those essential pieces of the machinery of Nazism, were already at work.  Their tales of Czech atrocities grew, Germans were reported as being ill-treated and massacred, …refugees described as streaming in thousands across the border and so on and so forth ad nauseam.  It was these stories that led Hitler to change his mind about peace negotiations, and implement a full military occupation.”  This ended the brief sovereignty of Czechoslovakia.

Chamberlain became famous for his ill-advised boast after Hitler signed a peace accord saying, “We have Peace in our time!”  Then the world watched in horror as the events leading up to world war unfolded.  The ambassador’s peace mission to Germany totally unraveled because Hitler was master of hype and exaggeration.  It reminded me of a point that is worth remembering and repeating. Hitler’s propaganda machine was so exceptional that he repeatedly fooled the world.  He even got caught believing his own propaganda!  “On his arrival at Prague on March 15, 1939 Hitler asked to visit the hospitals to see all the wounded victims of Czech ill treatment, which was the alleged justification for invading.”  I would not have wanted to be one of Hitler’s subordinates who had to explain that there were no wounded!   It was all extreme exaggeration!

Lesson:  The press is powerful.  Don’t believe everything you see or hear.  Don’t get caught up in all the hype!  It just may not be true! Why is that important now? 

First:  Can you say “election?” 

Second:  The financial services industry is facing massive changes on April 10th of this year, instituted by the Department of Labor (DOL.)  The requirements for financial representatives and institutions are enormous, expensive, and could be game-changing.  It will probably affect everyone reading this newsletter.  Regardless of what you read or hear, please know that our firm has always been, and will continue to be, interested in doing what is in the best interest of our clients.

Third:  Making IRA contributions for 2016 is still possible and could be a wise decision.  Don’t assume you know all the details.  If you have questions, ask your financial adviser –NOW.  There is still time.

Fourth:  Making a Charitable contribution directly from your IRA to a charity of your choice is a tremendous opportunity.  It is called a Qualified Charitable Distribution.  You must be 70½ to use this option.  Every giving person should be aware of this option.

Fifth:  Are you aware of your In-Service Distribution options?

Is there some legitimate reason why you haven’t talked to your financial adviser lately? 

Happy New Year!

Have things changed for you — new home, new phone number or email, new child, family changes?  Do you need to change or review your beneficiaries? Please take a moment and send a quick email to kdunlap@cfdinvestments.com   We may simply need to update our files, but certain types of information should also be reported to the companies who hold your investments. Let us help you stay up-to-date!

We consistently add people to our mailing list who we think may benefit from the material.   If this is one of your first newsletters, WELCOME!!  We hope you enjoy it!  We try to be informative and share our thoughts and our lives with you.  We know you are busy and also realize that perhaps you are served well by another adviser and don’t “need” to hear from us.  If that’s the case and you’d rather not receive these mailings, feel free to email kdunlap@cfdinvestments.com or call us at 419-358-4207 to ask to be removed.

The financial industry is in a time of transition. New rules from the Department of Labor are being implemented (starting in April 2017) that attempt to protect retirement account holders.  According to dol.gov:

RETIREMENT SAVINGS…

are supposed to receive special protections under federal retirement and employee benefits law. However, the regulations underlying these laws on retirement advice have not been updated in almost 40 years. When the Employee Retirement Income Security Act of 1974 (ERISA) was first passed 40 years ago, professional pension managers were the ones making complex decisions on retirement investing. Individual Retirement Accounts (IRAs) were created at the same time, and 401(k) plans did not even exist. But there has been a dramatic shift in our retirement system in the intervening decades: today, workers are largely responsible for managing their own savings through 401(k)-type plans and IRAs, and so millions of Americans turn to experts for advice on how much to save and how to manage those savings. With $7.3 trillion invested in IRAs and more than $4 trillion in 401(k)-type plans, we need to modernize these outdated rules that were designed for a world where those decisions were made by professional pension managers, not individual workers

The DOL rule has vague language and it is expected that much of its true meaning and impact will not be fully known until it is contested in court.

What we do know about the DOL is that we cannot provide advice for clients’ retirement accounts (those funds specifically tax protected for retirement such as IRAs, 401(k)s, Roth IRAs, etc.) after April 2017 without having additional paperwork signed.  Some clients don’t require active advice and we don’t anticipate signing paperwork with them until (or unless) advice is given down the road.  We are undergoing a thorough review of our retirement accounts and we (or our broker/dealer cfd Investments) will be in contact with those individuals who need to sign paperwork.

It is our intention to keep providing high-quality service to our clients.  New regulatory burdens never make that easy, of course, but we are committed to you.   This rule only affects tax-protected retirement accounts and, even then, there is no action you need to take unless contacted to sign new paperwork.

Congratulations to Linda G. of Lima, OH and Shawn R. of Middleport, OH—the most recent winners in our referral drawing.  Twice a year, we look at where our new clients and friends are coming from and we acknowledge those who have taken the time to talk about us with their friends. Each referrer is placed in the drawing and the winners receive a $100 VISA gift card — as a simple way of showing our thanks. 

Our business grows by referrals and we really appreciate it when you tell folks about us. Feel free to direct people to our website www.myfaithinvestments.com or give us their basic contact information so we can send an introductory letter or email to them.  As you know, we are committed to a no-pressure environment.