On February 12, 2026, the Trump Administration announced a major regulatory shift, eliminating the Obama-era 2009 Greenhouse Gas Endangerment Finding, which previously imposed stringent emissions standards on vehicles. This striking deregulatory move is poised to benefit American consumers in several significant ways, ultimately aiming to restore affordability, enhance vehicle choices, and support the U.S. auto…
By Gil Baumgarten and Micah Morris: Investor behavior is rarely driven by statistics alone. More often, decisions are shaped by emotion; how outcomes feel rather than how likely they are. This tendency leads many investors to overestimate certain risks while quietly accepting others that are far more damaging over time. Understanding this imbalance is central to how…
Longtime readers will remember my love/hate relationship with life insurance. From my perspective, life insurance is a bit too much like a Vegas game, reminiscent of the roulette wheel and the craps table, and the insurance company is always the house. Life insurance often seems complicated and daunting, leaving many people unsure of its true…
Segment is proud to announce that we have been named one of Barron’s “Top 100 Independent Advisors” nationwide! Since 2017, Segment has been annually recognized among Barron’s “Top 1,200 Advisors in America,” but achieving a spot in the Top 100 is a new milestone that reflects the trust of our clients and the growth of…
In recent times, we have witnessed significant market volatility that has understandably shaken the confidence of many investors. It’s important to acknowledge that while no one enjoys seeing periodic losses, these fluctuations serve a vital purpose in the marketplace. If asset prices consistently rose without interruption, they would likely skyrocket to unsustainable levels, driven solely…
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 in the 1970s to today’s concerns over tariffs, each period presented challenges and adaptation opportunities. History proves that volatility cannot sustain, and things return to…
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 year in a row. For many reasons, Segment is a bit of an anomaly in the advice business. We just do things a little differently….
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 period of distorted perceptions and misaligned incentives. Historically, we have witnessed how such misalignments can lead to the mispricing of assets, which can ultimately culminate…
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 the bank. Investors who value this metric tend to gravitate to real estate investments because it can generate rents. Real estate is also perceived as…
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 open-end mutual funds. These investment products with five digits in their ticker symbol are typical of what you would find in a retirement account like…
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 on accounts that hold clients’ uninvested cash. The hoopla over cash sweeps—which has attracted regulatory notice as well—hinges on whether clients are entitled to the…
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” category. We are proud to serve our clients and are grateful for their continued trust in us. Subscribers can follow this link to see the…
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. Proper perspective is that recent market profits provide ballast to endure all the downside the market can throw at us, rather than letting our risk…
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 Exemption, the amount of assets each person can pass to heirs without estate taxation. TCJA raised the exempt amount from $5.49million to $11.18million per person….
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 no current plans to retire. So don’t think this musing is prompted by my impending retirement. You can’t get rid of me that easily! For…
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 that he paid less in taxes than his secretary did. If Warren really wanted to fix this, he could simply declare a dividend for Berkshire…
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 is exemplified in the case of the renowned actor James Caan and his investment in a hedge fund, which highlights the potential pitfalls of inadvertent…
“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 a fiduciary advisor, regulators’ focus on individual retirement accounts overlooks more egregious activity in non-IRAs happening right under their noses. Particularly absent from the discussion about…
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 in Houston’s High-Net-Worth category, out of the 88 other Houston-area firms listed. See the full ranking and research methodology. Please see IMPORTANT DISCLOSURE information. *Please Note: Limitations….
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 equity businesses. At the base of the pyramid is the bank teller. While often grouped together, the hedge fund and private equity businesses are very…
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 that the cracks we all see will accelerate into some type of economic explosion. I, too, see cracks in the wall, but I think they…
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 are tactically rearranged, and the securities within mutual funds and managed accounts are also actively rearranged. This process of rearranging can easily result in realized…
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 IRA to maximize the tax deferral. We usually recommend the complete opposite approach, which becomes more and more preferable the higher the income of the…
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 all, but likely most. A structured note is a bond from a brokerage firm or sponsor which represents an underlying derivative. Most often, this derivative…
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 to the nature of humans but an optimist when it comes to the nature of markets. To be a pessimist, I would have to believe…
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 in 2023.” Gil shares the journey of his career, how to navigate the tax code, and his future plans for Segment Wealth Management. “In today’s…
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, current employment numbers are still too high, and the Fed will hike until they break something. One could argue that the first cracks are showing…
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 with a local specialist. Investors might assume that the frontline professionals for advanced tax strategy are CPAs. However, some investors find that their CPAs work…
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 companies and venture capitalists. Details are still emerging about how the bank was mismanaged, but liquidity dried up when the bank said they needed to…
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 taxes are to returns. With market liquidity at all-time highs and trading commissions now free, investors are seemingly incentivized to trade their accounts. The math…
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 beliefs about email and remain vigilant in communications. I’ll share a few close calls we’ve encountered to drive home this point. Once upon a time,…
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 own account on the IPO of the Standard and Poors Depository Receipt (SPDR), which tracks the S&P500. I knew it was a game changer. This…
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 market, who pile in and out, often letting fear win out over fact. Current tea leaf readings might have one conclude that a recession is…
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 a viable strategy, and we do this often. But finding the “next big thing” is entirely different and is fraught with pitfalls. Such positioning comes…
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 heady when the market is in decline. When the near future looks scary, it’s easy to think that perhaps selling now and buying back later…
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 strong economy benefits the whole of society. With energy stocks on a tear into the final days of the midterms, I have some concerns about…
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 make it worse for fund owners. Long-time readers will remember my numerous posts about the tax differences between various mutual fund structures. Since deferral or…
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, have a particular type of accounting that results in tax inefficiencies for investors. Accounting rules for these open-ended mutual funds force all fund shareholders to…
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 us all, denying inflation’s presence when the signs were in plain sight. This lag in taking action has surely exacerbated the situation because it’s best…
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 makes for huge missteps when an unforeseen event feeds a violent upside reversal. Just such a reversal happened earlier this week, with the market jumping…
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 inflation, cash is under attack, so items such as property and investments will generally do better. Specifically assets like collectibles, ranches, prime real estate, even…
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 money from one group and give it to another, especially when blue-collar taxpayers will end up footing the bill for white-collar kids. Giveaways like student…
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 effects, it is currently enjoying outsized results as investors jump on the bandwagon. But as ESG separates its winners and losers, as is clearly the…
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 going with inept. We expect ineptitude at the county DMV office. However, we should expect more from the highest offices in the land. The Federal…
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 dollars). But that’s not all. Preserved gains that remain untaxed until death are tax-free in many circumstances. This can make low-turnover methodologies even more compelling….
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 lofty. Last week was a rough one for energy, and we went back to full overweight accordingly. We also raised cash in our reallocation, reflecting…
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 income of $100,000 a year. That income is comprised of pension distributions, IRA required minimum distributions (RMD), and some dividend income. Let’s say she has…
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 even fewer get this part of their planning correct. If not navigated well, this confluence of factors can conspire to cause 80% of an IRA…
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 get a tax on unrealized (unsold) taxpayers’ gains after all. The new twist is that this tax policy is limited to those folks with more…
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 to the government for three decades while it is currently depreciating at a rate three times that? To add insult to injury, Treasury bond interest…
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 same claim as electric cars being environmentally friendly. The carbon footprint of an electric car battery is far worse than a gas-powered car’s lifetime of…
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 their homeland could put up such a fight. I always love an underdog. Along with showing the scrappiness of the Ukrainians, this serves to expose…
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 that followed quickly brought it crashing back down to the $30s. Prices today would need to be $200+ to match 2008 in inflation-adjusted terms. Rising…
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 I was 4, and I still introduce him as my brother. To this day, Walter takes care of my mom, doing her shopping and honey-dos….
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 compares to an index for 1, 5 & 10 year periods. The purpose is to help investors measure the value added from the wisdom of…
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