Financial Planning Podcast Hosted By Certified Financial Planners

Revisiting the value of dividends in a portfolio | TRANSCRIPT

Speaker 1:
Information presented on this program is believed to be factual and up to date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. Discussions and answers to questions do not involve the rendering of personalized investment advice, but it’s limited to the dissemination of general information. A professional advisor should be consulted before implementing any of the options presented. Certified Advisory Corp is registered as an investment advisor with the SEC and only transacts business in states where it is properly registered or is excluded or exempted from registration requirements.

Speaker 2:
Stay tuned for On The Money, Central Florida’s most listened to financial call in show, brought to you by Certified Financial Group in Altamont Springs. It’s the only show hosted exclusively by certified financial planner professionals. Monday through Friday, their CFPs provide financial planning and investment advice for a fee. But on Saturdays, the advice is absolutely free and has been for more than 30 years for their WDBO listeners. If you have a financial question you want answered by real fiduciaries, the lines are wide open. Call 844-580-WDBO. That’s 844-580-WDBO and enjoy the show.

Josh McCarthy:
Hello, and welcome to On The Money right here on WDBO 107.3 FM AM 580, always streaming live in your very own WDBO app. My name is Josh McCarthy, sitting here today with two fantastic certified financial planners with the Certified Financial Group. If you want to hop on the air, we got Gary Abeley and Aaron Burt standing by ready to answer your financial questions, planning your financial future to get you on the best foot. And this is what we do every single weekend, a live call-in show, one of the only live call-in shows of its financial kind in the country.
Of course, we’ve been doing this for decades at this point and I believe Gary and Aaron, correct me if I’m wrong, but in your building there’s over 400 years of experience of giving some of this financial advice out.

Aaron Burt:
Yeah, I stopped counting after like-

Gary Abeley:
Sadly so, I think you’re right.

Aaron Burt:
It’s just a lot. Let’s just say there’s a lot, a lot, a lot. And when you have 16 people with a lot of experience, it kind of starts to add up pretty quickly. That’s just kind of how it works. Yeah, we have a lot of experience, a lot of brain power in this office and we all get together every Tuesday, sit around the table and talk about the markets and about the economy and about our clients and about this business. And it’s really an opportunity for us to all get together and talk about those kind of things. That’s the power of having experience and knowledge and credentialed people within the office. It’s a good source of information. We can bounce ideas off of each other, so we’re really proud of the team that we have here at Certified Financial Group.

Josh McCarthy:
And you may not realize it, but some of those side conversations you have around the table on Tuesdays are filled with vast information that someone like me who doesn’t really know much about the retirement world or the planning world or the tax season world, there’s a lot of juicy information in there. That’s the whole point of this show is we want to invite anybody who had a question or had a conversation on their own dinner table last Tuesday, “I wonder what would happen if I put this much aside or how can I plan for this? Or I just sold my house, where should I put the money if I’m looking to buy again in such and such fashion? Or I want to plan for retirement,” this is the time for you to call in because on the line here we have Gary Abeley and Aaron Burt with the Certified Financial Group, one of the top 100 firms in the country as named by CNBC.

Aaron Burt:
Yeah, we’re very proud of that distinction and it actually came to a surprise to us. It’s not something that we applied for or submitted information from. They actually sent us a heads-up that, “Hey, you’re going to be named to our top 100 this year,” and it’s we’re something that we’re proud of as a team. I think it’s because, again, because of our credentials and our experience and our knowledge and the size of our firm and how long we’ve been around and probably our CFEC certification, which is really distinguishes us from a lot of the firms around here that we go above and beyond to prove our fiduciary status within the community, within the industry. And we’re very proud of that CFEC certification. I think that’s a distinguishing factor that kind of put us on that list and we’re again very proud of that.

Gary Abeley:
Well, and Aaron, for listeners that don’t know much about the CFEC certification, as you were talking earlier about us getting together and kind of sharing our brain power, it’s not a day that goes by that I don’t receive at least six emails from Joe in the office on things to read, something new in the industry, some new product, and we get together, we have a new product committee.

Aaron Burt:
Yes, we do.

Gary Abeley:
Have an investment committee. So, one that vets different funds and vets different products, and then we get together as a team frequently to bounce ideas off of one another. And that’s the beauty of it is every day I learn something new, every day.

Aaron Burt:
Right, every day.

Gary Abeley:
And when you don’t have an answer to something that a client asks you, you throw it out to the group and usually get dinged back within a couple minutes of, “Oh, I just dealt with that and here’s how you go about that.”

Aaron Burt:
Right.

Gary Abeley:
So, that’s the beauty of shared information.

Aaron Burt:
The other thing about our firm is people probably don’t realize it, that we have industry experts that are knocking on our door constantly wanting to get in front of us and talk to us about what they do, how they do it, how they’re different, giving us investment ideas, giving us information about the economy. We have a standing meeting now on Thursdays where people come in and just talk to us about what’s happening in the industry and it’s experts from all the leading companies across the world really.
It’s really a opportunity for us to continue to learn and hone our craft here as certified financial planners. But otherwise, so for our show, we are here, Gary and I are here to do what we do Monday through Friday for clients. Clients call us and they want to talk about their, “Am I going to have enough money for retirement? Am I properly allocated? How do I save on taxes? What should I be doing with this annuity that I have? What’s long term healthcare?” I don’t know, there’s just all sorts of… thousands.

Gary Abeley:
When do we start social security?

Aaron Burt:
Social security, what’s a mutual fund? There’s thousands of things.

Gary Abeley:
Yeah. It runs the gamut. And our job here is really to give peace of mind. I had a friend ask me, I told him I looked forward to Mondays as much as I look forward to the weekends. Obviously I look forward to that as well. But one of the things that gives me great joy is when you provide peace of mind to your client where the client says, “Gary, I get out my dual pack of the big Tums,” and I share that with a client. If I’m doing a Zoom call, I pull it out and I say, “Look, stop worrying. You’re paying me to do the worrying. You’re paying me to get you through retirement. You’re paying me to handle that volatility and smooth out the bumps.” It gives you great pleasure in this business. It’s a wonderful field where you can help people.
So, that’s what we’re here for. We’re here to help you. And just as we learn every day, we hope that we can educate everyone out there on their questions. You kind of teed it up for me, Aaron, when we talked about value and basically investing. We had a meeting this past Thursday where a company came in, it’s a subsidiary I think of American Century Mutual Funds, and they came up with an interesting product that we are vetting now. I think it only has about a three-year history. And generally, that’s not something we’re going to use for client accounts yet, but we have a whole list of these types of innovative products that we’re going to continue to watch.
If the results look good, then once we get a five-year history, we’ll start deploying those in client accounts. But back to the value, this was an interesting idea where they screen all different kinds of companies, but the ones they focused in on the meeting were small companies. And they look at, oftentimes you look at an index, like a small cap value index, for example, and many of those are formed by just looking at the balance sheet, a price to book. Is this a cheap stock? But you know what? Sometimes cheap stocks are cheap for a reason. Right?

Aaron Burt:
Yep, that’s exactly right.

Gary Abeley:
And so what this company does, it also looks at cash flows from operations, looks at profits, and it does a really neat screening. And so far their results look pretty good. I see we’ve got a call and Josh, if you want to tee that up.

Josh McCarthy:
Of course. If you want to hop on the air with Gary and Aaron, the number to call is 844-580-9326. 844-580-WDBO. Charles is calling in from Titusville with a question about the future. Go ahead, Charles.

Charles:
I have a question. I have a good IRA. Retired, [inaudible 00:08:55] security. I got a couple million dollars in my IRA, so I’m set. The only thing is, you’re talking about peace of mind, but I’m looking at a $33 trillion national debt and I said, “How could you ever plan that?”

Gary Abeley:
Charles, I love that question and I’m going to make you feel a little worse this morning. It’s not just a $33 trillion debt. Our unfunded liabilities for social security, Medicare and Medicaid are really the iceberg waiting to hit us. If we don’t solve those issues, the $33 trillion debt is nothing. We have over $100 trillion of what I would call true debt because we-

Aaron Burt:
Liabilities.

Gary Abeley:
Yeah, we have off balance sheet, if you will, liabilities that make that 33 trillion look silly. We had on our website, and I don’t know if you’ll remember this, Aaron, but years ago we had on our website the solution to social security, Medicare and Medicaid shortfall. Yes, unfortunately it does involve raising taxes. You can’t have a three and a half trillion dollar government and continue to collect two and a half trillion in taxes. I wish we could, I wish there was some way of doing that, but we’ve got to have leaders that get together and solve the issues of this country and make social security, Medicare and Medicaid solvent.
Now, to your point, Charles, most economists believe the tipping point for real disaster, if you will, is when your debt to GDP ratio gets above 200%. Now, our GDP, it’s really hard to assess what that is right now because we’re coming out of this pandemic, but call it somewhere around 22 to $25 trillion in GDP. We’ve got a debt of, as you mentioned, I think it’s a little bit more now than the 32 trillion, but anyway, the thereabouts.
Clearly, if we don’t get our act together and we let that debt run up to $50 trillion, we’re going to look like Japan and how they suffer for decades with stagflation. I echo your concern and let me tell you what you want to own when you’re concerned about inflation. What happened during the pandemic? Well, the companies were getting hit really hard. So, what did they have to do? Well, some of them had to raise prices. That happened a lot because their supply costs went way up. Energy costs went way up. But in addition to that, in addition to raising prices, a lot of them had to lay off people because their actions were disrupted.

Aaron Burt:
Cut expenses.

Gary Abeley:
Exactly. But the neat thing about the stock market is if you look long-term, companies gain about 8% in positive free cash flow of late. And incidentally, that’s about what we should expect from stock market returns. 8% is a pretty good target. You go back 95 years, you say, “Well, the gains were 10%.” Now forget about that. How many car companies were there 95 years ago? Right?

Aaron Burt:
That’s true.

Gary Abeley:
We’ve got global competition now. But the best way to fight the concerns of inflation, which is what you get when you have long-term debt the way we’re having and spending the way we’re having is by making sure you own companies that have the ability to pivot and continue to grow their cash flows. But Charles, I am equally concerned with our nation’s problems. And the good news is there are solutions, and they’re not bad solutions.

Aaron Burt:
Right. Especially on the social security front. It’s little things around the edges that they can do, whether it’s raising the retirement age, not giving those delayed retirement credits as generously of as they’ve been doing. It’s raising the cap on taxes, like you said, on what they’re taxing with [inaudible 00:12:44].

Gary Abeley:
Well, not only the cap. If you asked every American out there today, if you said, “You can solve social security by increasing the payroll tax from… ” Now, social security is 6.2 and the employer pays 6.2. But if you brought that up to say 7.5, 1.3% and you did that over a 10-year period, nobody’s going to argue about having a pay 10 or 15 basis points like 0.1 or 0.15% per year because most people get a raise of 3%.
So, you’re given a little bit of your raise every year, but slowly and surely, we collect a reasonable amount for the benefits we are providing.

Aaron Burt:
Sure.

Gary Abeley:
We never intended on social security giving people a positive return. It wasn’t meant to do that. But right now, if you’re on social security, you get a positive return on your money, believe it or not.

Aaron Burt:
Yep. Agreed.

Gary Abeley:
Guess we’re up on a break. I hear music.

Charles:
Thanks.

Aaron Burt:
Appreciate the call, Charles, thank you very much.

Josh McCarthy:
Thank you, Charles. That opens up a line for you to hop-

Gary Abeley:
And stay on if you have more questions on that.

Josh McCarthy:
Oh, certainly, Charles, if you want to hang on. If you dropped already, which it looks like you did, and you want to call back or if you want to hop on with Aaron or Gary, they’re available here answering your questions for the low, low price of free. 844-580-9326 is the number to call. I’ll answer you, put you on with the pros here at Certified Financial Group. 844-580-WDBO, or you can always send us an open mic and we’ll get you on the air that way. You are listening to On the Money where we’re planning tomorrow…

Aaron Burt:
Today.

Josh McCarthy:
With the Certified Financial Group.
Welcome back to On the Money, brought to you by the Certified Financial Group Office right here in Orlando. Here answering your questions, planning your financial future, whether the time is now and you’re thinking about retirement and retirement’s only a couple of ways or retirement is many decades away, but you want to be on the right foot, ready to go when you clock out for the last time.
The number to call is 844-580-9326. 844-580-WDBO. Or you can always stream us live in the WDBO app, push the open mic button, send in your question that way, and we will handle it accordingly. By we, I mean the pros here. I’m sitting with Gary Abeley and Aaron Burt of the Certified Financial Group. Guys, and the topic today is the value of dividends.

Gary Abeley:
That’s right, Josh. I’m going to read a little clip from Warren Buffett, Berkshire Hathaway’s annual report, and I think this is really illustrative of the value of dividends. Back in August, 1994, Berkshire completed a seven-year purchase of 400 million shares of Coca-Cola. And yes, he’s the fellow who you always see when you see Warren Buffet, he’s usually got a Coke in his hand, which is amazing because what is he now? like 92.

Aaron Burt:
He’s up there.

Gary Abeley:
Yeah, he’s up there and he’s still sharp as anything. Anyway, the total cost was 1.3 billion, which is a pretty good sum of money for that holding company. Now interestingly, back in 1994, Coca-Cola paid Berkshire $75 million in dividends. But now here’s the catch. By 2022, so what are we talking about? About 28 years later, the dividend had increased to $704 million.

Aaron Burt:
On a 1.3 billion purchase, that’s pretty good.

Gary Abeley:
I’ll say that’s pretty damn good, Aaron. That’s really good.

Aaron Burt:
I’d take that.

Gary Abeley:
So, let’s talk about value. If we go back and we say we expect stocks, as we were talking earlier, to earn about 8% a year, if we look at the dividend yield today of the S&P 500 index, it’s a little over one and a half percent. If we expect 8% in stocks and you were going out and buying an index fund, you’re only going to get about 20% of your total return from dividends, which is simply the one and a half divided by roughly eight. And years ago, I mean, if you go back a hundred years, you would get about 60% of your total return from dividends.

Aaron Burt:
Dividends.

Gary Abeley:
So, there’s not a lot of dividends. And I’ll tell you why there’s not a lot of dividends.

Aaron Burt:
Why is that, Gary?

Gary Abeley:
Well, I’ll tell you why, Aaron. The reason is our index, our big stocks are growth heavy. The growth companies, these are companies like Apple, Netflix, Google, Amazon, Microsoft, they don’t pay as much in dividends. A company like Apple might pay six or seven tenths of 1%, right? Now you take a company like Verizon, its dividend yield is more like 7%. Company like Verizon trades at around eight times earnings, company like Apple trades at probably, I don’t know, 26, 28 times earnings.
So, that’s the difference between growth and value. Growth companies typically hold their money because they’re growing their business, they don’t give it back to shareholders. Value companies on the other hand-

Aaron Burt:
Are paying it out.

Gary Abeley:
… they’re paying it out. Now, Vanguard and other companies do these 10 year projections on where do they think the growth is going to come from, growth in assets. And what they’re saying more often than not is that that growth is going to come more from value-oriented companies because growth companies have just been on a tear. Now, not last year, but the five years prior, you had returns in the thirties many years for growth companies. Well, if we expect 8% and you’re getting 30%, you know there’s going to be a reversion to the mean soon, and that’s what we see happening.
A typical growth stock, you go back 20 years, has averaged around 22 times earnings. Meaning if a company earns $2 a share, you’re paying about $44 a share for it. Value companies on the other hand are trading long-term averages around 12 to 14 times earnings, so much, much different than growth companies.

Aaron Burt:
Well, the key to all of that though is to have a little bit of both. That’s and maybe have a tilt one way or the other.

Gary Abeley:
Exactly, exactly.

Aaron Burt:
We’re up against the break here though, so we’ll be back with more conversation on this here in a minute.

Gary Abeley:
Sounds good.

Josh McCarthy:
If you want to hop on with Gary and Aaron, the number to call is 844-580-9326. 844-580-WDBO. Send an open mic, we’ll play those as soon as we receive them. You are listening to On the Money where we’re planning tomorrow…

Aaron Burt:
Today.

Josh McCarthy:
… with the Certified Financial Group.

Speaker 2:
Welcome back to On the Money, Central Florida’s most listen to financial call and show, brought to you by a Certified Financial Group in Altamont Springs. It’s the only show hosted exclusively by certified financial planner professionals. Monday through Friday, their CFPs provide financial planning and investment advice for a fee. But on Saturdays, the advice is absolutely free and has been for more than 30 years for their WDBO listeners. If you have a financial question you want answered by real fiduciaries, the lines are wide open. Call 844-580-WDBO. That’s 844-5900-WDBO and enjoy the rest of the show.

Josh McCarthy:
Welcome back to On the Money, brought to you by the Certified Financial Group. Sitting here with two fantastic certified financial planners, Gary Abeley and Aaron Burt from the Certified Financial Group, answering your financial questions. If you want to hop on the air, ask your questions away, 844-580-9326. 844-580-WDBO, or feel free to send us an open mic. We’ll pop that on the air. You can listen to it at your own leisure, or if you have more of a personal question and you want to get right down to the brass taxes, as the smart people say, or maybe you once said, you can call Charles Kurdi, he’s standing by in the office. That number is 407-869-9800. 407-869-9800. Or if you want even more ways of seeing the team at Certified Financial Group, we have an option for you to come and see them live in person. Isn’t that right, guys?

Aaron Burt:
Yeah. Next Saturday, one week from today, Matt Murphy and myself will be hosting this show live in studio at the WDBO studios. That show obviously starts at nine o’clock. It’s also going to be livestreamed. We are going to have a live studio audience, but you do need a RSVP for that. And then following up to that, Matt is going to be hosting a seminar, how tax planning changes to the four stages of retirement again onsite at WDBO. That seminar is going to run from I think 10:30 to 12 I believe is what it’s going to do.

Gary Abeley:
10 to 11:30.

Aaron Burt:
All that information is on our website at financialgroup.com. You click on workshops up at the top, you can RSVP for all of these events. But next week’s a big week with Matt and I being live in studio, taking your questions on the air and hopefully giving you good advice. Additionally, we have social security planning on the 10th of May. That’s another workshop. All these are available, like I said on our website if you go to those. And then a very popular one, which Gary is going to be hosting, the Healthcare Options in Retirement on the 27th of May. That one is in our office as well. And what do you cover in that one, Gary?

Gary Abeley:
Well, actually I want to talk about all three of them.

Aaron Burt:
Okay, go for it.

Gary Abeley:
Because you know what? I talked about all three of these with a client that came in who’s getting close to retiring. The first part, first of one that’s going to be addressed on April 29th at the WDBO studios is going to be on basically tax strategies throughout the four stages of retirement. Honestly, what I always say to clients is it’s not what you make, but it’s what you keep. And taxes are a big part of retirement planning and unfortunately, and I’m a CPA myself, and I’ve been guilty of it. People years ago, they hire you to do the tax return, they don’t hire you to do tax planning.
Unfortunately, and let me emphasize unfortunately, people tend to not want to pay for tax planning advice, which is nutty in my opinion, because what you can do and planning can save people tens of thousands of dollars. Talking about Roth conversions, making sure you don’t get up with hit up with that Medicare surcharge by timing the purchases, big ticket purchases like cars, et cetera. Making sure you have different buckets of money to pull from. Tax-free buckets of money, taxable buckets of money. Making sure you use all of your 12% bracket if you’re going to be in a higher bracket-

Aaron Burt:
Charitable giving. That’s a big one.

Gary Abeley:
Exactly. I mean, this thing, I don’t know how you’d… Frankly, I’m going to be doing one later as well, but I don’t know how you cover that topic in an hour and a half. There is so much you can save when it comes to planning. Now the next one, social security, unfortunately, this particular client I met with actually yesterday or day before yesterday, he told me he’s going to start collecting social security at 67. I said, “Well, why?” This particular client doesn’t need to start it early. And mostly we would recommend folks start that later.

Aaron Burt:
What’s the top reason you get for why when people say that? When people want to start early?

Gary Abeley:
Start early. Well, they’re worried about it being [inaudible 00:24:02].

Aaron Burt:
That’s exactly right.

Gary Abeley:
And getting back to Warren Buffet, he said very succinctly, it’s silly for people to worry about this government not meeting its obligations because we print our own money.

Aaron Burt:
Right.

Gary Abeley:
Now we’re back to that whole inflation argument that Charles brought up earlier in the segment. So, the social security plan. Now in his particular situation, he had a health concern and we always say, if you’re healthy and you can afford to defer, it’s simple. The answer is defer.

Aaron Burt:
Delay.

Gary Abeley:
Yep, exactly. Delay. You get 8% a year each one. Social security strategies are very important. A lot of people take that too early. Now, healthcare in retirement, and another separate client I met with this week had not put on their budget, any healthcare costs.

Aaron Burt:
How’s that?

Gary Abeley:
Well, because they’re working for a very nice company. I think Hartford and provides not only great benefits for themself, an insurance company, but also for their spouse. It’s just something you forget. When you’re not paying it and you’re looking at what are my expenses? And you’re going through your checkbook, you’re going through your credit cards, well there’s no healthcare expenses there unless you’re sick and take a lot of medicines or something. But the insurance cost is largely paid by your employer while you’re working.

Aaron Burt:
Right.

Gary Abeley:
Well, Medicare is not free.

Aaron Burt:
No, it’s expensive.

Gary Abeley:
It’s very expensive. And I break down why you should budget if you’re a couple around 1,200 a month for medical, dental, vision, hearing, et cetera. And most of that money by the way, is going to be insurance premiums. Medicare is not free. And if you’ve done well saving, sadly, you could be spending 1,200 a month just on your Medicare Part B premium if you’ve done a great job saving.

Aaron Burt:
Right. Most people don’t know about the IRMA.

Gary Abeley:
No. Yeah, the income modification. If you done a great job planning, I’m afraid the government is going to get some money from you-

Aaron Burt:
That’s right.

Gary Abeley:
… to help shore up where we’re short. All of these workshops are hopefully to give our clients or prospective clients an idea of what they should be doing in life to plan, to minimize taxes, to do the right strategies to plan for long-term care expenses. In fact, we just started doing a workshop just on long-term care. My healthcare options is kind of a combination of your healthcare pre and post-retirement and then also long-term care. But it’s great to go to both of the workshops, get different perspectives on long-term care. I mean, I could talk on the next hour on that topic.

Aaron Burt:
And we see it more and more, because most of our clients right now I’d say are dealing with their parents or have dealt with their parents.

Gary Abeley:
A lot of them are, yes.

Aaron Burt:
And so they’re experiencing those types of expenses and what it costs and the stress that it puts on the family and on the resources. And so then they’re circling back to us to say, “Well, I don’t want to put my kids through that. I don’t want to put my spouse through that. How do I solve for this?” And really you’re looking at insurance options if they can afford to do so.

Gary Abeley:
Well, and I will say that more often than not, you’re looking at legal options today.

Aaron Burt:
Well, that too, the Medicaid plan.

Gary Abeley:
Because for most, even if you come up with a sum of money of a million dollars for retirement, if you’re at age 65, yes you can buy long-term care insurance, but you’re going to find going to be allocating a very large part of that nest egg. So, if most of your assets are in what we call protected bucket, like your main home, your primary residence, retirement accounts are exempt from Medicaid now. Not the required distributions from the retirement accounts, so it’s complicated.
And Matt Murphy in our office has a lovely wife, Jody Murphy, who often attends our workshop. She is basically an estate planning attorney and she can also help with Medicaid planning, et cetera. It’s wonderful to have that resource right in house. And she’s done a fabulous job for many of our clients helping them on the legal front because gosh, most people just can’t afford the insurance today.

Aaron Burt:
Yeah. That’s true. There’s a particular group. So, you’re either self-insuring, you’re buying insurance, or you’re using the government insurance through the Medicaid program. Is that what ends up happening?

Gary Abeley:
Or if you’re like one couple, you say, “Well, I took care of my kids when they couldn’t take care of me.” Well, that works in some cultures beautifully, but not always in all of culture.

Aaron Burt:
And that’s how it always used to be. The family always took care of the elders, but it’s not so much anymore, and everyone’s diverse. They’re all spread across the country.

Gary Abeley:
Exactly right.

Aaron Burt:
So, it becomes challenging in that regard.

Gary Abeley:
It sure does.

Aaron Burt:
Throw out one more thing, Josh, while we’re at it. We are having our annual shred event. Those people who are interested in having… Tax season just ended, people have all these prior tax returns, all these statements that they may want to get rid of. May 6th in our office, we’re going to have a shred truck and we do a really slick, it’s like a drive through shred event. You just kind of drive through and you can park and talk to us if you want, but really it’s a matter of driving through. We empty out your shredding from your trunk, we throw it in the shred truck, it gets all gobbled up and shred by our shredding company, and then you can move on your way.
It’s really an opportunity for us to help the community, help you destroy some of those things that maybe are a little too sensitive that you shouldn’t be throwing into your trash can, and so that’s on May 6th in our office. We are going to be broadcasting two hours of the show live. I think it’s from 9 to 11, we’re going to be broadcasting this show. I think the shred event runs from 9 to 12. So, if you’re interested, May 6th at our office, 1111 Douglas Avenue over here in Altamont Springs, right on the corner of 434 and I4 in that little corridor. Feel free to stop by on May 6th and bring us your shredding. There’s more information on our website, financialgroup.com and you can again check out the workshops and get information on the shred event.

Gary Abeley:
Hey, Aaron, do we have on our workshop, I should know this, but do we have how many years of tax returns and so forth you should keep?

Aaron Burt:
Yeah, on the shred event, we have a whole thing of shred and what you should keep and what [inaudible 00:30:10]-

Gary Abeley:
Okay, good.

Aaron Burt:
Yeah, there’s the little flyer on it.

Gary Abeley:
I’m just going to throw out the tax information. I mean, generally speaking, if you haven’t done crazy things on your return, omitted half of your income, things like that, you really need to keep the current and three prior years and the backup for that. However, that being said, if you’ve got situations where returns would show a prior cost basis or some evidence that you might need to support at a later time the sale of an asset, then those are things you should keep permanently, that kind of evidence. The tricky part for many of our clients, they got into a dividend reinvestment plan years ago and back before custodians kept track of your cost basis. And then they say, “Well, Gary, I’ve know I’ve got too much of this stock, I want to start divesting of it, but I have no idea what my cost basis is.”

Aaron Burt:
Yeah. We see that all the time.

Gary Abeley:
And we can help folks with that. That’s one of the services that we provide for our clients is helping do the research and the analysis going back those years to see what exactly is your cost basis. Anyway, definitely get rid of that material.
One of the other workshops we do is on cybersecurity, really a hot button issue. You can’t go a week without hearing about some company’s information being hacked and all of a sudden, you may have been one of those of their clients with the data that was not secure. Fortunately in our office, we take great care with our client information and so it’s so important to keep everything secure.

Aaron Burt:
Yep. It’s becoming worse and worse, it seems. Yeah, we do have a workshop on that. We don’t have one scheduled, I think Charles just did one last week I believe. There will be another one on cybersecurity that’s probably going to be on the website soon. If you’re interested in any of these, like I said, the shred event, any of our workshops upcoming, if you want to be in the live audience next week to see Matt Murphy and myself, feel free to go to our website, financialgroup.com and all the information is there for you to sign up or get more information about those events.

Josh McCarthy:
One more break coming up. 844-580-9326. 844-580-WDBO. If you want to hop on with Aaron Burt or Gary Abeley of the Certified Financial Group. Charles Curry is standing by off the air if you want to talk right to somebody in the office, that number is 407-869-9800. 407-869-9800. You are listening to On the Money, where we’re planning tomorrow…

Aaron Burt:
Today.

Josh McCarthy:
Certified Financial Group. Welcome back to On the Money, brought to you by the Certified Financial Group office right here in Central Florida. As this show comes to an end, if you had a question pop up in your head, you’re like, “Oh, I missed my chance to get the expert advice of the Certified Financial Group,” wait no more. There is an off-air number you can call.
Charles Curry is standing by in the office at 407-869-9800. 407-869-9800. I want to thank Gary Abeley and Aaron Burt for joining us today. And before the end of the show we have a little cool something called Score My Funds that we like to talk about.

Aaron Burt:
Score My Funds is a website that we created. It’s actually scoremyfunds.com where you can go on and submit your ticker symbols of your mutual funds or ETFs and we will run them through our diagnostic system that we use internally. We have a system from the Center for Fiduciary Studies called Fi-360 where it has 11 distinct criteria where it grades all the investments against their peers and then it spits out a score when comparing those funds against each other.
It’s really a way to have a quick check and filter through some of the noise out there in the investment universe to see the quality of the investments that you may have within your portfolio. It says nothing about your diversification, it says nothing about your allocation. It says nothing about anything but whether or not your fund, whether it’s-

Gary Abeley:
Meeting high fiduciary standards.

Aaron Burt:
Yes, whether the fund meets the criteria.

Gary Abeley:
There’s 11 criteria, they’re all independent. Nothing subjective. This isn’t something we’ve come up with. This is something we use and it allows for a second opinion. What I say to all of my clients is, I’m confident in your portfolio, I’m confident it’s adequately diversified, I’m confident it’s in accordance with your risk profile, your risk tolerance. And if you want to go out and get a second opinion, I would welcome it. And when people come to us for a second opinion, we run their funds through this analysis and we give them an objective evaluation of how their funds are scoring.
And that is essential because oftentimes we’ll have a fund, somebody will have a fund that does 20%, let’s say in 2021. And they said, “Wow, I did 20%.” And I said, “Well, I’m sorry, but the peers in that asset category, say large cap growth, did 28%.”

Aaron Burt:
Right. Yep.

Gary Abeley:
This fund is a dog, right? It’s not keeping up with its peers. So, it’s very important to periodically evaluate your portfolio and make sure that it is on target. Make sure that you are meeting high fiduciary standards. And that’s something we can provide to folks free. Just send us, as Aaron mentioned, go to scoremyfunds.com and put in your ticker symbols. We’re happy to give that to you as a public service.

Aaron Burt:
I will say that that is what we do for all of our clients. Every month now we’re going through and running their funds through all of our scoring, because things change within mutual funds and ETFs throughout the month and throughout the quarter, throughout the year. We’re constantly evaluating those funds against their peers and using that to make decisions about whether or not we want to keep or watch or replace the funds within the portfolios that we manage.

Gary Abeley:
Well, that’s exactly right. And we believe in transparency, so we provide this report to our clients quarterly so they see it as well. And the beautiful thing is, it’s color coded.

Aaron Burt:
Colors are easy. Colors are-

Gary Abeley:
Green is good, right? Yellow, not so much. And red, get rid of it.

Aaron Burt:
That’s exactly right. That’s exactly right. Try and keep it simple. So, scoremyfunds.com if you’re interested in that free service, please go there and we will get back to you with the report on the quality of your investments.

Josh McCarthy:
Thank you so much, Aaron Burt and Gary Abeley. If you want to call the Certified Financial Group, the number is 407-869-9800. 407-869-9800. You’ve just listened to On the Money, where we’re planning tomorrow…

Aaron Burt:
Today.

Gary Abeley:
Today.

Josh McCarthy:
The Certified Financial Group.

 

Leave a Comment

Your email address will not be published. Required fields are marked *

Translate »