Broker Check

Tom Maikowski - Addison, TX

 
Call us: (972) 267-7526

Our Practical Planning Approach

The recommendations in the categories stated below are intended to keep our clients on-plan with the goals and objectives of prudent investing.

Investment Style

In our firm, we concentrate equity (stock) investing into the nine asset classes identified by the financial services industry: Large Cap, Mid Cap, and Small Cap investments utilizing the Growth, Blend and Value styles of asset management. We focus on the Growth and Value styles of management into large, mid and small cap asset categories.

“Cap” is an abbreviation for capitalization; an indicator used by Money Managers in measuring the size of a company for purposes of investing your money.

Asset allocation and diversification is more important now than ever before. Focusing on these two objectives, along with careful Investment Selection, helps to maximize returns and minimize risk.

Investment Planning

Investment planning is broken down into four categories: tax-deductible investing, tax-deferred investing, tax-favored investing, and finally cash and cash equivalents.

Each level has specific goals, objectives, and timing. Generally the progression is establishing liquidity in cash-on-hand, followed by tax-favored, tax deductible, then tax deferred investing.

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Tax-Favored Investing

Accounts in this level:
Diversified, non-sector portfolio of mutual funds and ETF’s.

Primary Investment Goal:
Emergency / non-retirement funds invested for potentially higher returns than savings accounts.

  • The assets in the tax-favored level of investing have access without penalty of withdrawal. In addition, when owned longer than one year, withdrawals receive the tax-favored long-term capital gain rate versus taxed as ordinary income.
  • As a rule, the goal for this level is to accumulate an approximate balance of $25,000 to $50,000. Continued investing towards that goal is recommended.

Tax-Deferred Investing

Accounts in this level:
Roth IRA; 529 Plans; Variable Annuity Alternative Strategy; Annuities.

Primary Investment Goal:
Retirement and Educational funding.

  • The contributions into the tax-deferred level of investing are not tax deductible but grow tax-deferred (Roth IRA, 529 Plans and annuities) until withdrawn. Money withdrawn from a Roth IRA after 59 ½ and held 5 years is distributed tax-free. The maximum allowable contribution for 2015 is $5,500; a catch-up provision allows for $6,500 for ages 50 or more.
  • Money withdrawn from a 529 Plan for IRS qualified college expenses are distributed tax-free. For 2015 the maximum contribution is $14,000 per donor per student per year however a special 5-year provision allows for a single deposit of $70,000 per donor per student per 5 year period. Distributions of earnings for non-qualifying educational expenses incur a lifetime penalty of 10% and regular income taxation.

  • Similarly, contributions into annuities are not tax deductible but grow tax-deferred until withdrawn. Withdrawals (of earnings only) taken after 59 ½ are taxed; withdrawals prior to 59 ½ are penalized and taxed. There is no limit to contributions into an annuity.

  • The assets in Roth, 529 Plans and annuities can be allocated to securities. Tax-free exchanges are allowed within these programs. Currently 529 plans allow for 2 investment allocation changes per year.

  • The Variable Annuity Alternative Strategy is discussed in this box as it is designed to compete favorably and replace variable annuities. The Strategy is a basket of low cost tax-free and tax-favored holdings having the same characteristics as the holdings recommended for the Tax Favored level of investment planning above.

Based on the objective, these investments include:

  • Municipal investments tax exempt at the federal and state level
  • Master Limited Partnerships
  • Individual stocks
  • Exchange traded funds

Tax-Deductible Investing

Accounts in this level:
Traditional IRA; 401(k); Solo 401(k); 457; 403(b); Simple IRA; Simplified Employee Pension (SEP);Profit Sharing.

Primary Investment Goal:
Retirement funding.

  • The contributions into the tax-deductible level of investing are tax deductible, according to the limits of the plan selected. In addition, assets grow tax-deferred until withdrawn. Withdrawals taken after 59 ½ are taxed; withdrawals prior to 59 ½ are also penalized (with few exceptions).
  • The assets in any of the retirement plans can be allocated to securities. Also tax-free exchanges are allowed within these programs without any taxation.

Conclusion

The strategies stated above seek to establish a balanced, practical approach to investing,
utilizing both the growth and value styles of money management diversified across multiple asset
classes.

The intended result is to preserve account value and capture good appreciation in all markets.




Disclosures

The recommendations in this review are intended for your use in arriving at a reasonable, fully explained investment decision. Opinions expressed are subject to change without notice. The information contained herein is obtained from reliable sources. We have not attempted to verify the accuracy or completeness of any of the information. Cetera Advisor Networks cannot ensure the tax consequences of any transaction.

All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful. Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns, and a diversified portfolio does not assure a profit or protect against loss in a declining market.

The portfolio review is not a compilation of the only possible investment choices.

A prospectus should be read carefully when considering any investment in securities. Past performance is not a guarantee of future results and none of the investments you own or proposed are insured or FDIC guaranteed unless otherwise stated. All investments involve risk including loss of principal.

No liability is assumed resulting from the use of the information contained in this review. You assume responsibility for all financial decisions.