Gil’s
Musings
Navigating Economic Cycles: Finding Stability Amidst Crisis
As we discern our crazy economic landscape, it’s important to reflect on the cyclicality of the crises that have shaped the U.S. economy over the decades. From rising energy prices…
Oddity or Anomaly? (Segment Ranked #20 in TX)
Segment Wealth ranked in the “Top 20 in Texas” by Barron’s. Once again, Segment ranks among Barron’s Top 1200 Advisors in America, landing in the “Top 20 in Texas” for the second…
The Role of Misaligned Incentives in Economic Recessions
Fear of recession is causing current turmoil in stock prices. Recessions are often precipitated by an abrupt return to reality, a moment when the market corrects itself after a prolonged…
A Few ETFs You Must Own and 1,000 ETFs You’re Better Off Avoiding
Written By Ryan Farias, Senior Portfolio Manager When most people hear “ETF,” their first thought is usually “Index Fund.” For years, ETFs (Exchange-Traded Funds) have been synonymous with low-cost, passive investing. We…
Cash Flow is Not King
We have several clients who use cash flow as the indicator of successful wealth building. I will admit, it does feel good to “clip coupons” and deposit the checks in…
Why We Don’t Like Mutual Funds
Segment has always run its own strategies. We build portfolios out of individual stocks and exchange-traded funds because they have exceptionally accommodative tax results. What we generally don’t buy is…
The Cash-Sweep Lawsuits Make a Strong Argument–for Fiduciary Advice
Never has cash been so controversial in wealth management. Merrill Lynch, Wells Fargo, LPL, and many other brokerage firms are currently facing lawsuits over the low interest rates they pay…
Segment Ranked on HBJ’s List of Top Wealth Management Firms in Houston
For the eleventh consecutive year, Segment has been included on HBJ’s list of the Largest Houston-Area Wealth Management Firms. Segment ranks in the top “Private and Family Wealth Management Firms”…
Recession and Volatility
For over two years, economists have been predicting a recession. As their timing has proven quite poor, recent market gains were built on the expectations that they were flat-out wrong…
Estate Tax Considerations
Back in 2017, Congress made changes to the tax code via the passage of the Tax Cuts and Jobs Act (TCJA). One of its provisions raised the Lifetime Gift Tax…
So You Can Retire, But Should You?
As investors approach the age of retirement, many of us are faced with a difficult decision: should we retire or continue working? I still enjoy my work, so I have…
Election Posturing
As we head into election season, you will surely hear more rhetoric claiming that the rich don’t pay their fair share of taxes. Warren Buffett is famous for once saying…
The Intricacies of IRA Distributions: A Case Study of James Caan’s Hedge Fund Mishap
Individual Retirement Accounts (IRAs) provide tax advantages for savers. However, managing these accounts can be a complex endeavor, particularly when it involves intricate investment vehicles like hedge funds. This complexity…
Regulators Need to Do More to Curb Egregious Annuities Sales Practices
“The Department of Labor is under pressure to release its new Retirement Security Rule, which would impose fiduciary obligations on more financial professionals working with retirement clients. But from my vantage point as…
Gil Baumgarten Ranked by Forbes: Best-In-State Wealth Advisors
Segment is proud that our leader and advisor, Gil Baumgarten, has been named on Forbes’ Best-In-State Wealth Advisors list for the second year in a row. Gil is ranked #8…
Segment Ranked #19 in Texas: BARRON’S Top 1200
We are proud to be included once again in Barron’s “Top 1,200 Financial Advisors,” where we are ranked #19 among advisors in Texas and #5 in Houston. We have made the list…
Smart Money? Maybe. Brilliant Money? Never.
Like all industries, there is a pecking order in the investment arena, a hierarchy, if you will. At the top of the financial pyramid are the hedge fund and private…
2024: The Year of Reversals
Clearly, investors see the coming year as one of change. I am asked with some frequency my predictions about what part of our economy will break first. The expectation is…
Tax Efficiency: Vast Benefits Easily Overlooked
Traditional investment advice normally focuses on allocation into buckets. These buckets could be traditional mutual funds, or ETFs, or managed accounts holding individual stocks. In most cases, the allocation buckets…
Challenging the Status Quo
We get puzzled looks from new clients when we explain our position on taxable fixed income (bonds) in IRAs. Traditional planning advice recommends placing your highest growth assets in an…
Structured Notes Deconstructed
We occasionally see portfolios come in for review containing structured notes. There are a wide variety of them, so I will speak generally. Not everything I will say applies to…
Market Optimism
Longtime readers of my musings will surely perceive me as part cynic with an optimistic bias. I would never be perceived as a pessimist. I’m a cynic when it comes…
COVER STORY: 10 Most Influential Finance Executives to Watch
From Financial Advisor to Published Author: Gil Baumgarten’s Multi-Faceted Success Our very own Gil Baumgarten was featured on CIO View’s May 2023 cover as an “Influential Finance Executive to Watch…
ESG Shortcomings Are Exploitable
The impending recession that the bumbling federal reserve seems intent on creating will present some risks and some opportunities. While they signal that they may be finished with hiking rates,…
The Importance of Tax Strategy
Just in time for Tax Day 2023, Gil talks tax strategy with the Houston Business Journal. “With tax season upon us, it seems an appropriate time to discuss tax strategy…
Silicon Valley Bank Debacle
You may have heard on Friday or over the weekend that a very large bank in California went belly up. Silicon Valley Bank was a very popular bank with emerging…
Death and Taxes: Not So Certain After All
Gil published a piece in Forbes Council titled, “Death and Taxes: Not So Certain After All.” After years of writing about the subject, long-time readers will surely realize how degrading…
Beware of Email
People believe that email communications are secure and private. Unfortunately, nefarious operators exploit this misconception, crafting elaborate schemes to separate you from your money. We all need to reset our…
When Good News Is Bad
Last Friday’s non-farm jobs report was a blowout. Forecasts estimated that +200,000 jobs were added in January, but the number came in at +517,000. The market seemed to like it,…
ETF Anniversary
This week marks two anniversaries of significance for me. Thirty years ago this week, the first exchange-traded fund (ETF) had its initial public offering (IPO). I bought shares in my…
Recession? Who Knows?
Economist Paul Samuelson famously quipped that “the stock market has predicted nine of the past five recessions.” This tongue-in-cheek expression reflected his view of jumpy stock investors’ impact on the…
Expect to Bleed at the Cutting Edge
It is quite fun to try to predict the future and invest in companies in the sweet spot of your prognostications. Investing in long-term growth trends with short-term dislocations is…
Beware Self-Justification
We all know that market timing doesn’t work. It is a fool’s errand to sell it all, hoping to buy it back lower. But the temptation to do so is…
Election Investing
Maybe it’s wishful thinking, but trending election results seem to be going my way. I’m a low-tax, pro-business supporter, and I’m unashamed about my leanings because I believe that a…
Roller Coaster Market 2022
The market continues its roller coaster ride for 2022. Typical stock mutual funds are down 20%. This decline is problematic enough, but adding insult to injury, taxes are about to…
Why Are ETFs Better Than Mutual Funds?
Rather than count the ways, let’s just discuss one for today – tax efficiency. Traditional Mutual Funds Traditional mutual funds, like those from Fidelity, Putnam, or any other fund company,…
Rising Rates
The poor economic policy of the past is coming home to roost in the form of rising rates and spiraling inflation. To make matters worse, policy leaders spent months gaslighting…
Extreme Market Moves
At the extremes of market moves, whether up or down, prognostications of the future begin in rapid-fire succession from soothsayers. When downside prevails, the predictions get increasingly dire. But this…
Segment Unveils Initiatives to Navigate Market Volatility
With almost 40 years of investing experience, Baumgarten is revealing how he applies keen knowledge and his eye for tracking the latest financial developments to Segment Wealth’s advisory practice. “During…
College Loan Forgiveness
I was going to begin this musing with “don’t get me started,” but it’s too late for that. I could rant all day about how unfair it is to take…
Resist ESG Investing
Environmental, Social & Governance (ESG Investing) is the new popular trend in investment evaluation whereby investors use non-financial factors to screen investment options. As it gains popularity for its feel-good…
Dubious Economic Thought
Hapless or Inept? Webster’s Dictionary defines Hapless as “Unlucky or unfortunate;” whereas they define Inept as “Lacking in judgment, sense or reason; Foolish.” In the case of the Fed, I’m…
Protecting Gains? It’s Complicated.
Clients generally understand how our low-turnover methodology equates to better returns over time. For example, with enough tax deferral, an 8% return can be augmented to a 10% return (in…
Stick with Energy
Segment’s strategies have been overweight to energy since the collapse in prices drew us in back in 2020. We did trim some positions earlier this year as oil prices got…
Roth Conversions
Roth conversions remain one of the most underutilized tax planning strategies around. Imagine the limited benefits of continued tax deferral for a 90-year-old retiree with a $500,000 IRA and an…
Estate Taxes & IRAs – Collision Course
There are very few tax issues more complicated than the intersection of estate taxes, income taxes, and IRAs. Very few couples exceed the $24million exemption amount to begin with, and…
Frankenstein Tax Policy
Mr. Biden’s new tax policy has proposed yet another angle to get more tax revenue from the “millionaires and billionaires.” This time he’s circling back to see if he can…
Recession on the Horizon
In my last musing, I wrote about the current odd situation where the 30-year Treasury bonds yields 2.58%, but inflation is running at 8% annualized. Who would loan their money…
ESG? Not So Fast.
Gil penned a piece on ESG Investing in Financial Advisor Magazine! Do well by doing good. That’s the trendy, feel-good mantra of ESG (environmental, social, governance) investing proponents. It’s much the…
Russian Surprises
As the tragedies in Ukraine and other Russian surprises have unfolded, I was most amazed by how unprepared the Russian army seems and that a ragtag team of civilians defending…
Oil Politics and Energy Prices
It is surely apparent by now that a confluence of events is causing energy prices to spike like none seen before. In 2008, when oil prices breached $140, the recession…
Long Live Volatility
For those who know me well, you then know about my family’s long-term friendship with Walter Thomas. Walter has worked for my family since 1963 when he was 16, and…
Figures Don’t Lie, But Liars Do Figure
A new study released in October 2021 revealed the sneaky behavior of mutual fund managers in selecting their comparative benchmarks. The SEC requires mutual funds to illustrate how fund performance…
Tax Loophole
There’s much wisdom in exercising caution when stirring up things long undisturbed. Politicians often run amok in efforts to garner “points” with their constituents. In this case, Mr. Biden ought…
Percentage Returns Are Not Created Equal
There is nothing more mesmerizing than eye-popping percentage returns. While investors equate high returns to transactional intelligence, studies routinely show that randomness and luck are the far more likely explanations…
Direct Indexing: “New” Trend We’ve Been Doing for Decades
Segment’s strategies are grounded in decades of experience of dealing with things as they are and not as we wish them to be. Sometimes this puts us twenty years ahead…
Tax Rule Changes: Build Back Better Act
Through tax rule changes, President Biden and his allies in Congress are taking aim at high earners and the wealthy in general. Their tax increase proposal is being called the…
Profound Power Of The Unrealized Gain
Gil published a piece in Forbes Council titled, “The Profound Power Of The Unrealized Gain.” Unrealized gains have a benefit that doesn’t show up in percentage return. “Money managers and…
Habits of Behavioral Finance
Since early 2020, the stock market has made headlines with its unexpected ebbs and flows. This prompts people who otherwise had their money invested elsewhere to try their hand at…
Inflation? Yes, Then No.
Twenty-five years ago, I had an archery deer lease in Refugio County, Texas. One time, I headed down there after a long day at work and arrived at Two-J’s Restaurant…
Advisory Practice Evolution
Gil penned a piece on Advisory Practice Evolution in Financial Advisor Magazine! “Many advisors get stuck in the path of least resistance methods and never evolve to scale.” “Over my…
Predictably Irrational Investing
The field of economics has long assumed that people make decisions that optimize their own utility, and to derive the greatest benefit for themselves. However, psychological studies show that we…
Don’t Overvalue Dividends
Gil published a piece in Advisor Perspectives entitled “Don’t Overvalue Dividends.” “My advisory firm is a big fan of stocks that pay dividends. Segment’s tax-efficient rising dividend portfolio is…
Implications of Biden’s Proposed Tax Changes
Gil published a piece in Forbes Council titled, “The Implications of Biden’s Proposed Tax Changes.” “Investors are understandably concerned about President Biden’s plans for additional tax revenue. In my experience,…
The Great Inflation Debate
Signs of inflation abound with chip shortages, car shortages, and sky-high lumber prices, among others. Many forecasters are predicting 70s style inflation or even stagflation. Given the similarities in Jimmy…
Death and Taxes
Everybody has heard the old saying that nothing is certain in life except death and taxes. But not everyone knows how death and taxes are inextricably linked.
The Lost Art of the Handwritten Note
Gil recently wrote a piece for Adivsor Perspectives on The Lost Art of the Handwritten Note. Here’s a snippet… you can read the entire article on Advisor Perspectives, at the…
2021 Tax Law Changes and Strategy
By now, you’ve likely heard that the Biden administration is angling for more of our hard-earned cash. Clearly, low tax rates are wonderful for the economy, but politics often drive…
The Math of Buying the Dips
Segment is a big advocate of buying market exposure on dips. However, an investor must use this strategy within a certain context; otherwise, the tail can wag the dog. Buying…
Ego Rush of Short-Term Investment Victories
Back in the pre-Covid glory days, when you could have charity golf tournaments, I played in the LifeHouse tournament at Carlton Woods. I’m not much of a golfer, and because…
Hedge Funds Comeuppance
Hedge fund managers are far and away the wealthiest and most powerful operators on Wall Street. This is despite producing some of the worst overall results for investors. Their periodic…
Odds-On Favorite Stock For 2021
Whatever you are doing that’s working, stop it. The cyclicality in investing is profoundly impactful. Unfortunately, most investors misread the signals and misplay their hand. They look for trends that…
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