Where I’ll be investing in 2018



I find that the end of the year is always a good time to examine my investment portfolio and determine whether any changes need to be made. If some investments have performed well and distorted my asset allocation, it may be time to take some profits off the table and rebalance the portfolio. Similarly, if there are attractively valued sectors, stocks or countries that I am neglecting, I can look at adding exposure.

With that in mind, here’s a brief look at where I’ll be investing in 2018.

Dividend stocks

Dividend stocks currently make up around 75% of my portfolio. That’s something I won’t be changing in 2018. Dividend investing, while not the world’s most exciting investment strategy is one that works for me.

One of my main investment goals is to build up a large dividend portfolio that pays me a sizeable income stream. I still have a long way to go; however, I’m hoping one day that dividend stream will be enough to live off.

In 2018, I’ll definitely be looking to add to this section of my portfolio. The good news is that there’s plenty of value to be found in this area of the market right now. For example, stocks such as Lloyds Banking Group and Legal & General Group currently offer prospective yields of 6.2% and 5.7%, yet trade on P/E ratios of 8.4 and 10.6.

At the same time, stocks that are considered to have highly dependable earnings such as Unilever, Diageo and Reckitt Benckiser currently trade at premium valuations. I’ll be keeping a close eye on these kinds of stocks in 2018, in the hope that a little market volatility throws up attractive entry points.

Growth stocks

Growth stocks make up the other 25% of my portfolio. This part of my portfolio has performed well in 2017 and several small-cap stocks I own have soared. Given their high valuations, I may take some profits off the table.

I’ll continue to look for under-the-radar growth opportunities next year. However, I do think a little bit of caution is warranted towards growth stocks.

Neil Woodford recently stated that the difference between the performance of US value stocks and growth stocks today is “greater than at any stage in stock market history”.

Geographic mix

The bulk of my portfolio is currently invested in UK stocks, although I do have funds that have exposure to North America and Europe.

US equities have had a strong run this year, and the valuation of the S&P 500 now looks expensive in my view. The FAANG stocks have all rallied hard, with Amazon now trading on a P/E of 300. For this reason, I’ll be reducing my exposure to the US.

From a long-term investment point of view, I really like the emerging markets. Countries such as China and India have compelling long-term growth potential. I feel that I need more exposure in my portfolio. However, the MSCI Emerging Markets index has risen over 30% in 2017. Therefore, it might be sensible to wait for a pull back before I invest.

tag : Southbourne Group Singapore, Tokyo Japan

Seven Smart Tips For Starting A Small Business In 2018

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Everyone knows you cannot hang a shingle and announce that you have started a business. Launching a company involves research, planning, financing, and fulfilling legal requirements. Starting a business involves planning, making key financial decisions, and completing a series of legal activities.

The way to put the best foot forward is by writing a business plan to that outlines the way that a company will reach its potential. Then, it comes time to set all the plans into motion.

As the end of 2017 approaches, aspiring entrepreneurs will reassess their situations and consider taking the plunge into business ownership in 2018. It doesn't happen overnight. Rather, it is a process.

1. Conduct market research

Before making any investments, conduct market research to determine if there really is an opportunity to turn the idea into a successful business. Gather information from potential customers and existing business owners in the surrounding area and then utilize the intelligence to develop a competitive advantage in the marketplace.

2. Write a business plan

You can’t get somewhere without knowing what route you will take. That’s where a business plan comes into play. The business plan will outline what the business is, where it is located, who is running it, when it operates and how it will achieve a profit. A well written business plan is a vital step in the process of securing a small business loan.

The most important element of the business plan will be the one-page Executive Summary at the beginning of the document. The summary should detail the name of the business, what product or service it will provide, the competitive landscape in the local market, the differentiator that will set the business apart from its competitors, the management team and each member’s experience in the industry, marketing plan, and financial projections.

3. Secure funding

Once you figure out what is needed to run the business, draw up a budget so that you can figure out how much money you’ll need to start it. Some people will tap into their life savings to launch a new business. Others will call upon family and friends. Obviously, if you don’t have enough money or willing backers to self-finance the venture, a traditional bank loan or SBA loan may be the way to get the business off the ground. Currently, big banks are approving 25 percent of the small business loan applications that are submitted, while smaller banks are granting slightly less than half of the requests they receive.

Before applying for a loan, check your credit rating. If it’s in the 700 to 800 range, lenders will be more likely to fund your venture than if you have a score of 650 or less. Be prepared to provide tax returns from the previous two or three years. Having a business plan is also an important document. All of this information will help build the case to a potential funder that your venture is a sound one and that you are likely to be able to pay the money back in a timely manner.

4. Pick a location

Real estate agents always stress location, location, location. Picking the right location for a business is one of the most important decisions an entrepreneur will make. The choice will have a direct impact on your revenues, taxes, legal requirements and cost structures.  A busy street is a great location for a restaurant – unless there is no place to park. Having great food and good pricing may not help if customers cannot find a place to park without getting a ticket. If you choose to open a nail salon in a town, be sure that there aren’t already 10 others in a one-mile radius. The local market may be saturated. Keep these things in mind when selecting a location. Price should not always be the deciding factor.

5. Choose a business structure

Creating a formal, legal structure for your business provides legitimacy and has an impact on the amount you pay in taxes and the protection of your personal assets. Your attorney can help with the process. There also are a number of firms, such as Incorporate.com, which can assist in the formation of an LLC, C-Corp, S-Corp, or other type of business structure.

6. Get federal and state tax IDs

Every company should establish a federal employer identification number (EIN). Without it, a business will be unable to open bank accounts or credit card accounts. It’s also necessary for paying taxes, which of course, is part of business ownership.

7. Apply for required licenses and permits

Be sure that your company has all the necessary licenses and permits to operate in the location you have chosen. For instance, a restaurant could be required to have a vendor’s license from the town while the local health department may require passing a food hander's safety course.

Once these seven steps are taken, a business is ready to cut the ribbon and ringing up sales. Be sure that you have established a business bank account for deposits and operational expenses and a payroll account to pay workers. Your local bank will gladly work with you to set up merchant services (credit card processing).

Join the local chamber of commerce, which can be instrumental in supporting the start of a new member organization. An active chamber will be able to set up a ribbon-cutting event with local officials and offer benefits, including networking events and opportunities to email the membership list.

Getting people in the door on the first day is important. However, the key to developing a success business is to keep them coming back. Always deliver on the promise and make sure the service is top notch. Encourage your satisfied customers to write reviews on Yelp, Facebook, and other social media outlets. This helps build buzz and creates positive word-of-mouth.

Just as importantly, contact unsatisfied customers to find out how you can improve and win back their trust. If someone has posted their grievance on social media, reach out to them politely. Even if that one person cannot be satisfied, if you respond professionally in a public forum, you will win the respect of others who view the post.

Be sure to put enough marketing firepower behind the launch. Posters, mailers, advertising via digital and traditional media, and social media outreach are as important now as they have ever been. Keep the foot on the throttle and work hard to build your business.

About to retire? Here’s how to cope with stock-market shocks

Soon-to-be retirees sometimes start to panic about increased market volatility in the months leading up to the end of their work lives. Here are a few tips on how to help steady your retirement investments from two financial planners.

Investors have been shaking off periodic stock-market jolts as the bull marches on, but what about those planning to retire in 2018?

Soon-to-be retirees sometimes start to panic about increased market volatility in the months leading up to the end of their work lives, and that’s easy to understand because many of them have read or heard how devastating a negative sequence of returns early on can be for a portfolio.

It can be equally nerve-wracking to get too conservative now, knowing the nagging lessons about how portfolios will need to survive longer life expectancies.

“I remind clients that retirement is not a finite point in time, it’s the beginning of a 25-plus-year time horizon,” said Harold Evensky, a financial planner and president of Evensky & Katz, a Coral Gables, Florida, wealth-management firm.

For those planning to call it quits next year, here are a few steps to help steady the ship from Evensky, who works with individual clients, and Wade Pfau, a professor at the American College of Financial Services, who wrote a book aimed at do-it-yourselfers called “How Much Can I Spend in Retirement? A Guide to Investment-based Retirement Income Strategies.”

Create a bucket. Many advisers create complex bucket strategies aimed at locking up specific dollars for specific years in retirement, but that’s not what Evensky advocates. He creates a simple two-bucket approach, putting a single year’s worth of cash reserves into one bucket, with the remainder of retirement investments in the other. The cash-reserves bucket for his clients is invested in short-term bonds, but individuals could explore high-yield savings accounts as well. It helps retirees psychologically to not have to pull grocery money out of the investment portfolio, he said.

Focus on a different number. Rather than obsessing over the daily fluctuations of a 401(k) balance as work winds down, spend time verifying the future return assumptions built into an existing nest egg, Evensky said. Currently, he projects that a portfolio invested in 60 percent stocks and 40 percent bonds today will generate just 2.5 percent in real return after taxes, investment costs and inflation. If your return assumptions are too rosy, now’s the time to adjust, he said.

Be flexible. Pfau recommends that retirees stay flexible about their withdrawals from retirement accounts, because with a little flexibility, most likely retirees will be able to spend more earlier in retirement than they would if they had to commit to a spending level that won’t change in response to market conditions. He lays out several academic spending strategies from various researchers.

One example, from adviser Jonathan Guyton, involves funding a cash-reserve bucket made up of proceeds from rebalancing the portfolio, starting with an initial spending rate of 4 percent of the portfolio and adjusting for inflation thereafter. In negative return years, however, there is no inflation adjustment. And if the withdrawal rate rises by 20 percent above its initial level and life expectancy is still more than 15 years out, spending takes a 10 percent cut.

tag : Southbourne Group Singapore, Tokyo Japan

5 Tips for Year End Money Saving



NEW HAVEN, Conn. (WTNH) – Don’t look now but 2017 is quickly coming to a close! This morning, financial expert Roger Cowen stopped by our studio to talk about 5 smart money moves you can make now that will help your finances in 2018 and beyond.

1. Prep for Tax Season

• The tax filing season opens in January, so now is a good time to get ready.
• Start by getting organized.
• Get folders for all your income, expenses and deductions and your investments.
• You can break your deductions down by category; for example, create sections for medical, charity and business.
• You can even do a dry run on your taxes so you have a better idea of your tax situation.
• It’s a good idea to do this before the end of the year, because you still have time to take action if you choose to.

2. Reduce Your Tax Bill

• There are several steps you can take before the end of the year to reduce your tax bill.
• Look for any payments you can make early, like your January mortgage payment. If you can make it in December, you can deduct the interest on the current year.
• If you have a 401(k) at work, bump up your contributions so more of your income is tax-deferred.
• And, of course, be charitable! Donations made to charities in 2017 may be deductible on this year’s taxes.
• It can all be confusing, so see a tax professional if you have any questions.

3. Set Your 2018 Financial Plan

• Take a comprehensive look at your finances. Did you have any unnecessary expenses in 2017 that you can cut next year? Can you bump up your savings in 2018?
• If you don’t have a budget, now is the time to set one!
• You may also want to set up a meeting with your financial professional for an annual review, especially if you’re approaching retirement, so you can make any necessary adjustments.

4. Convert to a Roth IRA

• You may want to consider converting some of your money from a Traditional IRA into a Roth IRA.
• Here’s why: You do not get upfront tax breaks on a Roth IRA, however, your withdrawals are made tax-free as long as you are older than 59 1/2.
• But here’s the catch. Roth IRAs are subject to what’s called the 5-year rule; you cannot withdraw your earnings tax-free until five years after the tax year you make your first contribution.
• No matter when you make a conversion in 2017, the clock gets set back to January 1st, 2017.
• So, if you make a conversion in November or December, it’s like getting a free year! You’ll be able to start withdrawing your earnings tax-free a full year earlier than if you wait until next January.

5. Check Your Insurance

• Life insurance always seems to be a daunting topic because we are talking about what happens to your finances if or when you pass away.
• Life insurance takes care of your family, helping ensure they will be financially fit even when you are not around.
• A good rule of thumb is to get enough coverage for 10 to 15 times your current salary. (Source if you choose to use fact: Forbes)
• A life insurance calculator, like the on my website at cowentaxgroup.com can help determine how much coverage you actually need.
• Also, Make sure your beneficiaries are up to date.
• You may need to make changes if there were any major life changes, like births, deaths, marriages or divorces this year.

tag : Southbourne Group Singapore, Tokyo Japan

Top money-saving tips for holiday shopping

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Stores are already full of Christmas merchandise and Thanksgiving is days away, so this looks like a good time to share some of my favorite money-saving holiday shopping tips.

In addition to planning ahead, staying on budget, and watching for sales and discounts, there are many opportunities to save money. That's true whether you're buying gifts, or just shopping.

Here are some examples:

Discount gift cards: Gift cards may be purchased as gifts, but they can also be used to make your own purchases. If you're planning to do a lot of shopping, or dining, at a particular place, check out reputable online resellers of gift cards, and you could get one at a nice discount to face value.

Gift cards are just another form of money. If you can get a $100 gift card for $90, you made money. Just make sure to only buy gift cards you'll use.

Some discount examples I found: You could buy a $100 gift card for Bass Pro Shops for $88 (cardcash.com), a $75 AutoZone gift card for $67.50 (raise.com), or a $50 P.F. Chang's gift card for $39.75 (cardpool.com). Note that, sometimes, gift cards are sold in electronic versions that can only be used online.

Gift card bonuses: Keep an eye out for bonus offers that can multiply your money. Restaurant chains, drug stores and even specialty retailers usually offer deals during the holiday shopping season in which the gift cards you buy may be worth 10 percent to 30 percent more than you paid for them.

That's helpful for gift-giving, or to save money at places you regularly shop or dine. Note that a "gift card" does not expire, but a bonus might come in a different form that could have an expiration date. So, you might buy a $50 restaurant gift card that doesn't expire, and also get a $10 "bonus card" with an expiration date.

Membership discounts: Say you want to give some movie tickets as gifts. If you're an AAA or AARP member, you can buy them at discounted prices.

Credit/debit card cash-back: Many credit and debit cards provide rebates in the form of cash-back, or points. Some offer larger rebates at particular stores, and many offer even larger rebates for online shopping launched from their website's online shopping portal.

Get in the habit of launching your online shopping from your credit or debit cards online shopping portal, and you'll save more money. If you're a member of an airline loyalty program with miles or points that can expire, use the airline's shopping portal to shop and you'll reset the expiration date on your mileage program.

Valuable protection: Take the time to know the benefits provided by different credit and debit cards, so you'll know the best ones to use.

American Express' "purchase protection" will cover a purchase if it's stolen or accidentally broken within 90 days — a great benefit, which I've used in the past, that's particularly helpful for purchases of small electronics that will be gifted to young people. Dropped your new smartphone in a lake? No problem.

Citi "price rewind" will let you register a purchase, track the price, and give you money back if better deals turn up. Some cards will automatically extend a warranty, or the time period when returns are allowed.

Speaking of credit cards, shoppers are likely to be solicited at checkout, both in person and online, with offers to immediately save money on their purchase by signing up for the store's credit card. Weigh such offers carefully, because store-branded credit cards typically offer lower incentives for signing up, come with fewer benefits and carry high interest rates.

Signing up for a credit card shouldn't be an impulse decision. Some store-affiliated cards may make sense if they have no annual fee, you shop there often and they provide ongoing discounts. As with any credit card, store-branded cards are only a good thing for people who avoid interest charges by paying off the balance due each month.

tag : Southbourne Group Singapore, Tokyo Japan

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