If you have one or more taxable accounts at Folio or if you received one or more IRA distributions from a Folio IRA in 2010, your tax documents are now available on Folio's website.  Remember to access these documents for current accounts as well as any accounts that you may have closed in 2010.

Note:  Folio will not mail these tax documents; you must login in and download them.

For information on how to access your tax documents, go here.

I am now using account aggregation technology to allow clients (free of charge) to easily and securely provide me with up to date financial information regardless of where their accounts are held.

The interface talks to my planning software to allow for more precise planning inputs and less manual effort (for me or you!).

If you are interested in utilizing this technology as we collaborate together on your financial plan, check out the details in this user guide.

Shoot me an e-mail and I can hook you up!

The most publicized firm in the life settlements business, Life Partners, is under investigation by the SEC.  Meanwhile, its investors aren't happy.

A recent Wall Street Journal article details the checkered history of the firm and its founder and highlights many of the risks of investing in life settlements, including bad life expectancy estimates:

In 2002, for instance, Life Partners brokered investments in 297 life policies. Actuaries say if life-expectancy calculations on a group of people are well done, half should die by their projected dates. But in 95% of these policies, the insured was still alive at the end of the life expectancy the company supplied to investors. Policies brokered in 2003 and 2004 show similar patterns.

Not to mention the troubling bio of the firm's founder and chief executive:

Mr. Pardo, 68, is a college dropout who became a decorated Vietnam War helicopter gunship pilot. He started a solar-heating business, American Solar King, that became a stock-market favorite in the early 1980s. The renamed ASK Corp. later filed for bankruptcy, and in 1989 the SEC accused it and Mr. Pardo of overstating revenue and profits. He settled in 1991 without admitting or denying wrongdoing.  The same year, he moved into the nascent life-settlement industry by founding Life Partners. Mr. Pardo found himself in the SEC's sights again in 1994, when it charged his new firm with selling unregistered securities. Life Partners won a federal-court ruling that U.S. securities law didn't cover its products

Read the entire Wall Street Journal article.

The recent tax legislation includes a provision that disallows computers and related technology expenses as "qualified" 529 plan expenses unless the student's college requires such expenditures as part of its admission process.

The term "hedge" implies risk reduction.

A recent hedge fund cost study conducted by Cliffwater LLC found that the typical hedge fund levies a total annual cost of 3.53%, equal to 32% of expected gross profits when it weighed outcomes by their likelihood of occurence (source:  Pension & Investments, 2/7/2011).

Additionally, the study ignored the potential that hedge fund investors may pay a performance fee despite negative returns due to "clawback" provisions which allow a fund to recapture a greater performance fee in good years to make up for bad years ("heads they win, tails you lose").

That leads to the inevitable question:  how can hedge funds really "hedge" (ie, reduce risk) if they have to post 1/3 greater profits just in order to break-even?

The answer is "they can't and they don't."  In fact, most hedge funds utilize leverage (borrowed money), derivatives, and/or other risky strategies in an attempt to inflate their returns.

A headline in the same issue of Pensions and Investments (02/07/2011), reads:  "Funds pump 55% more into hedge fund strategies."

Dan Bortolotti has written an excellent blog piece on why "dividend stocks are better" is a myth.

A few excerpts:

In 1961, Merton Miller and Frank Modigliani published a landmark paper that became the basis for what is now known as the dividend irrelevance theory. They argued that whether or not a company pays dividends should not matter to shareholders, because it does not affect their overall returns. Dividend policy simply determines whether investors end up with a share valued at $20, or a share worth $19 plus $1 in cash.

Investors categorize $1,000 in dividends as income that they will happily spend, but the idea of selling $1,000 worth of stock is “dipping into capital,” which causes them great anxiety. This idea is deeply ingrained in many investors, but it is an illusion, because a company that pays a dividend to shareholders is depleting its own capital.

Read the entire post, Debunking dividend myths, part one.

"Human flight in a machine might be evolved by the combined and continuous efforts of mathematicians in from one million to ten million years."