Gil’s
Musings
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…
Segment Ranked by HBJ among Houston’s Top Wealth Management Firms
For the ninth consecutive year, Segment has been included among the Largest Houston-Area Wealth Management Firms by the Houston Business Journal. For 2022, Segment ranks 17th among the largest firms…
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…
Segment Ranked in Barron’s Top Financial Advisors
We are proud to be ranked once again on Barron’s “Top 1,200 Financial Advisors List” for 2021, and as one of the Top 50 Advisors in Texas! Segment is dedicated…
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…
Playing the Stock Market Long Game
2020 was certainly an interesting year for stocks. We are glad it ended on a high note in the face of very challenging economic conditions. One reason for the divergence…
Dividend Payers’ Worst Year Yet?
Segment’s business model is focused on compressing client costs and taxes and letting the market do its work. We operate this way because taxes and costs are controllable to a…
Staying Power of Investing
When you’ve been in the investment business for 36 years, you tend to get the same sort of questions over and over again. One that I hear repeatedly surrounds how…
Investor Trendspotting
One of the greatest misconceptions investors have embedded in their psyche is the assumption that predictions about the future are accurate or even valuable. I struggle with it too. To…
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…
Investing is All About Perspective
As investors attempt to navigate choppy waters, we often come to realize how difficult it is to predict the future. Most tend to project today into tomorrow and more dangerously,…
Emotional Investing Mistakes
This year marks my 36th as an investment advisor. While I have memorized in great detail many of the curveballs the market has thrown my way in the last four…
Making Lemonade with Roth IRAs
Recent large stock market swings bring about possible benefits by revising our personal tax strategies. For investors with large stock holdings in an IRA, the brutal market reset could make…
Why Long Term Investing Pays Off
Hopefully you’re not tired of reading my blog posts about why long term investing pays off and why short term events are irrelevant. Surely they are not irrelevant to your…
Confidence: COVID-19 vs Economy
In times of crazy market gyrations, there are always reasons. Those reasons seem imperative at the time and often portend a terrible fate. Yes, there have been some dark times,…
The Gut Instinct of Investing
One of the most difficult parts of investment decision making is just how much to trust your gut instinct. Every day presents a new set of variables, so there is…
Confounded by COVID Fears
Stock prices have been plunging for the last three weeks as coronavirus fears shut down many swaths of the global economy. Conferences and festivals are getting cancelled and surely cruise…
Bernie and the Coronavirus
Yesterday was a complicated day in the stock market. It was dealing with coronavirus fears, along with coming to grips with Bernie’s surge in the Nevada primary and what a…
SECURE Act Changes IRA Rules
Happy New Year to all! While most of us were busy this holiday season preparing gifts to exchange with our loved ones, Congress was busy giving us “gifts” by adjusting…
Free Trades? They’ll Still Get Paid
When I was just a kid, my dad showed me how to catch a Chameleon lizard with my hands. The technique is to slowly wiggle your fingers closer and closer…
Annuities: World’s Misunderstood Vehicle
With annuities boasting one of the most lucrative commissions in the investment sales world, you can imagine why meals at the local eatery while listening to the pitch are “free.”…
China Trade War
The Dow Jones market index fell 3% yesterday on news that the China trade war is escalating. President Trump is hiking tariffs on China in round two, with China responding…
Using IRA’s for Charity
The ability to use an IRA for charitable giving is the result of several recent rule changes. Originally introduced in 2006, it was a political volleyball until gifting IRA’s was…
Investing: To Play or Be Played
There are a multitude of reasons why investors who are transactional do very poorly relative to the market as a whole. The emotion of what and when is fraught with…
Invest Like Alvin: Stocks Bounce Back!
Anyone who knows me, knows I love to tell stories from which we can learn real life lessons. Some stories might be pretty lame, but I don’t think this is…
Should You Start College Fund for Unborn Child?
“It’s never too early to start saving for college.” You’ve probably heard that before, but as education costs rise, the word “never” is becoming increasingly important. It’s not too early…
Time to De-Risk Your Portfolio?
We’ve been getting a few calls about volatility and advisability of reducing stock risks in portfolios. The short answer is that we generally don’t do it. The reasons are abundant….
Don’t Get Yield Myopia
Investors love dividends, and for good reason. Getting paid to hold a profitable stock is always an added bonus, and dividends receive preferential tax treatment too, being capped at a…
FREE! FUNDS!
Fidelity upped the ante earlier this week in the mutual fund price war by declaring that two of their index funds would carry zero cost for investors. This goes to…
Exotic Investment Strategies That Don’t Really Work
Most investors think of stock ownership decisions as somewhat binary: buy/avoid; sell/keep. There’s another choice: Sell what you don’t own in hopes of it declining. This is called shorting. Segment…
Segment Ranked in 300 Top Investment Advisors
Segment Wealth Management is pleased to announce that it has been named to the Financial Times 300 Top Registered Investment Advisers, as of June 18, 2015. The list recognizes top…
Worried About a Market Bubble?
Investors are increasingly worried that a bubble is coming in both stocks and bonds. That’s the main findings of a recent fund manager survey by Bank of America Merrill Lynch. The…
Ways to Reveal Hidden Costs in Your Portfolio
In speaking with investors and advisors over the past few months, I have come to realize that a serious misunderstanding exists when it comes to the facts on advisory fees….
3 Factors That Drive Portfolio Performance
“The two primary factors that drive performance are beta exposure and low costs.” Segment Wealth’s very own Gil Baumgarten was recently quoted in Forbes! Keep Reading: 3 Factors That…
Disingenuous ETF Arguments
Any routine reader of this blog will know I’m a fan of Exchange Traded Funds (ETFs). ETFs are fast becoming the world’s most popular investment product. The king’s crown of…
Market Volatility is Back!
Ok, now people are getting jumpy. The market being down more than 1,000 points in one day gets people’s attention. That’s happened twice in a week. Many people are asking…
Power on, ETFs!
Many articles are starting to surface acknowledging and critiquing the groundswell movement to passive investment strategies and near-wholesale movement to Exchange Traded Fund (ETF) investing. Several of these articles take…
So You Want Bitcoin?
Bitcoin is all the rage with prices up a whopping 900% for 2017. One bitcoin breached the psychologically important $10,000 mark Tuesday for the first time and then shot up…
The Tough Stuff That Separates Investors From Savers
October 9th, 2017 marked the tenth anniversary of the stock market peak in 2007. In the months that followed this peak, the market plunged deeper and deeper until the week…
The Annuity Conundrum
Many advisors, like Ken Fisher, make their living by bashing annuities. I too have had some harsh words for annuities, and still often do. They are often over-priced, and some…
How to Reclaim Your Child’s Tax Benefits
As an investor, you may often feel like the crosshairs of government intent are often squarely aligned on your back. Targeting the wealthy has become political sport. But one of…
Are Harvey’s Next Victims MUD Bonds?
As people work through the wreckage of Hurricane Harvey, more damage may be on the way, and it won’t come in the form of more rain. Investors in municipal bonds…
In the Wake of Harvey
The devastation from Hurricane Harvey is widespread and disheartening. However, the outpouring of aid and the community spirit that have arisen in the face of the tragedy are inspiring, and…
Framed by Your Investor Behavior
I have written many past musings on the topic of investor behavior. I point out these human idiosyncrasies and how they play out with the hope that some investors will…
Obama’s “Fiduciary Rule”
“GOING OFF HALF COCKED.” That old saying was one of my Dad’s favorites when he was describing taking on a task for which one is ill prepared to complete. Such…
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