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So far Sycamore Financial Group has created 50 blog entries.

Indiana Inheritance Tax Repeal

Good news on the tax front if you are an Indiana resident. And better still if you are an Indiana resident’s beneficiary. Indiana’s inheritance tax will be completely repealed by year 2022. Starting in the year 2013, the tax will be reduced by 10% each year until it phases out entirely by 2022.

The current tax rate for Class “A” beneficiaries is from 1% to 10%. Class “A” beneficiaries include parents, children, stepchildren, grandparents, grandchildren, other linear descendants and other lineal ancestors and spouses of children or stepchildren. For these beneficiaries, the exemption has been increased from $100,000 to $250,000.

Class “B” beneficiaries, which include brothers, sisters and lineal descendants of brothers and sisters, currently pay a tax-rate between 7% and 15%. The exemption amount for this group remains at $500.

Class “C” beneficiaries, which include everyone who is not a class “A” or “B” beneficiary, are currently subject to tax rates between 10% and 20%. The exemption for this group remains at $100. This is not a typo. It’s $100. Indiana’s Inheritance Tax law is retroactive to January 1, 2012. Of course, spouses and charities are entirely tax exempt.

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Comments contained above are meant to be generic in nature and are not meant for specific action.

By Sycamore Financial Group|2022-07-21T12:11:36-04:00October 10th, 2012|Craig's Commentary 2012|0 Comments

What Does A Share of Stock Really Represent? – Fall 2012

Hello from Sycamore,

We strongly encourage our clients to meet with us once a year. We do this for several reasons. Your investment portfolio reflects the short and long-term financial goals you’ve set for yourself. These objectives are a moving target. As you close on one goal and look to the next, we may need to rebalance your portfolio. We are often asked during an annual review whether a portfolio comprised primarily of stock is adequately diversified. This is a very good question.

When you own shares of stock in a company, your investment is with the company represented by the shares you own – not with the stock itself. Here is a simple example. Let’s say that you and I decide to buy a 100-acre farm in Howard County. We could choose many ways to own this farm. We may own it as a partnership, as joint tenants or… we could elect to form a company and issue shares of stock to ourselves that would represent our relative ownership of the farm. We would then be ‘stockholders’ but would we be invested in the ‘stock market’? Well…I guess we could call it that but since our company’s only business is to own 100 acres of farmland in Howard County, you and I as shareholders would actually be invested in farmland. The number of shares we hold (which represent the overall percentage of individual ownership) make distribution calculations simpler at the end of the year. And should the need arise, the shares are also a convenient way to sell some of our farmland to another investor. Bottom line: our money was not invested in stock but in farmland. The stock is simply an easy, and potentially a more liquid way, to own the farm. It’s easy to look through the stock ownership in our farm to the actual business of owning the farmland. This is the same way that we look through the stocks in your portfolio and focus on their business operations.

So… if your portfolio with Sycamore is all or mostly stocks, just what do you own? When we build portfolios from scratch, we generally purchase about 45 or 50 different companies. The percentage of your ownership is represented by the number of shares of stock that you own in each of the companies. But your actual investment is in the operations of the given companies.

We usually spread your total investment over all sectors of the economy. We do not try to guess which sector will be the best performer. Within your portfolio, you will likely own shares in companies that produce basic materials such as chemicals and steel. You may have equity positions in companies that drill for oil or produce electricity. Other companies you hold may produce a wide range of grain products or even soap – staples of modern life. You’ll have shares in companies that own and operate real estate holding, ideally in different regional markets. Additionally, you will likely own some small, medium and large companies.

Our goal is to keep you broadly diversified in all sectors of the economy. It’s the best way we know to fend off the unknown risks that are always coming down the road. In the future when other investors speak of being invested in the stock market…you can correct them.

Running the numbers…

I’d like to leave you with one last thought. Because we are wholly focused on the fundamentals of the companies that you own, we do not pay much attention to the “stock market” as a whole. We asked ourselves several key questions about a company before any recommendation or purchase.

Is this company well managed?
Does this company make a good product that is needed?
Has this company demonstrated consistent growth of dividends and earnings?
How much debt does this company carry?

You’ve probably got the picture. We believe that numbers are a better and certainly more objective measure of a company’s potential profitability than a glossy prospectus. A picture may be worth a thousand words, but I’ll take a balance sheet any day of the week. Take it from someone who’s been in the game for nearly 40 years, predicting the U.S. or any international market is a fool’s errand. At Sycamore, we gather data, crunch numbers, draw conclusions and act on the result.

Thanks for your business and trust!

Craig
Sycamore Financial Group

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Past performance does not assure future results. Investors cannot invest directly in the stock market indexes such as the S&P 500. Invest return and principal value of an investment will fluctuate. Investor value, when sold, may be worth more or less than their original cost. The material in this presentation is for illustrative purposes and does not reflect any particular investment.

By Sycamore Financial Group|2022-07-21T12:21:45-04:00October 2nd, 2012|Craig's Commentary 2012|0 Comments

Multi-Taskers from Old

A couple of weeks ago, I began reading Daniel Patrick Forrester’s book, “Consider”. The book tackles the question of how well the average person processes the tremendous amount of data that pours into our conscious mind each day and why we need to actively include periods of reflective thinking in our daily routine. Forrester’s book includes some fascinating information about multi-tasking.

Multi-taskers are in high demand across the board. In fact, the ability to juggle several tasks simultaneously happens to be one trait that successful fry cooks and Fortune 500 CEO’s share. But how well does the average person multi-task? Not well, according to Stanford researcher Richard Nass, who has conducted multiple studies on the topic. While 2.5% of the population can multi-task effectively, the rest of us simply wind up doing two things poorly. My experience has convinced me that I am not one of the lucky 2.5%; I need to concentrate on one task at a time.

About one hour after finishing “Consider”, something interesting happened. I picked up a book that was owned by Susan’s grandmother, Josephine Jack.entitled “1000 Inspirational Things”. (Not my usual read, but it caught my eye that day.) Complied in 1957 by Audrey Stone Morris, this book included the following quote attributed to Syrus on page 13:

“To do two things at once is to do neither.”

After my previous read, I was interested to learn more about this Syrus fellow. Turns out Syrus, who was a favorite of Julius Caesar, made his observation on multitasking in 46 BC. Nothing changes!

Thanks for your business and trust,

Sycamore Financial Group

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By Sycamore Financial Group|2022-07-21T12:14:33-04:00September 29th, 2012|Craig's Commentary 2012|0 Comments

European Debt and Pepper – Spring 2012

Hello from Sycamore,

European Debt and Pepper

Have you decided whether the whopping Greek debt problem will topple the Euro zone?

There are major players, including Germany, who are optimistic a deal can be brokered, but there are many countries and cultures involved and it could be a serious problem. Streaming video of Athens in flames makes it easy to imagine a worst-case scenario where the individual European economies fall like dominos – leading to a decline of markets and economies worldwide.

Faced with uncertainty we tend to fill in the blanks; to some extent, it’s how we are hardwired. But this instinct (a.k.a. emotion) doesn’t always work to our financial advantage. Here’s why. The news media – which must be fed daily – seems to have discovered that good stories have an element of uncertainty. Experts can debate the facts for the next couple of weeks. Earthquakes or economies, it’s all the same. So…when Europe coughs, our markets sneeze. The pundits trumpet “this could be the big one” and Wall Street makes the expected knee-jerk reaction. The market stalls under the weight of conflicting headlines. After time to reflect, investors refocus on fundamentals like corporate profitability and the markets return to more normal valuations. This pattern of stall and surge can drive us all nuts and – after 2008 and 2009 – it’s a short drive!

We believe that it’s sometimes helpful to boil situations like these down to their basics. If you are a market timer (the new term for this is “Tactical Reallocation”) the ripples caused by situations like Europe are important. If you’re an investor, it may be less so. Consider the case of McCormick & Co., the spice company. McCormick is, we believe, a well-run mid-size company located here in the U.S. Many of our clients own McCormick. If you’ve made a trip to the grocery you’ve likely seen their display and possibly picked up some of their products. When Europe coughs, McCormick can decline. Should we sell? For that answer, I think it’s helpful to reframe the question. Let’s ask ourselves instead, “If Greece defaults on their debt… will I stop buying pepper?”

As always, please feel free to contact us with any questions or thoughts.

Thanks for your business and trust,

Sycamore Financial Group

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By Sycamore Financial Group|2022-07-21T12:06:45-04:00April 12th, 2012|2012 Newsletters|0 Comments

Volatility Since the 1900’s – Winter 2010

Hello from Sycamore,

In early fall of 2008 we sent you a brief history of the frequency and amount of market declines. Since the Dow Jones Industrial Average has declined about 3.5% this January, we thought it would be a good time to refresh history and remind us all of what to expect.

Market declines are normal and more common than most of us realize. In fact, they are so common that when we go an extended period without one, we (as your investment manager) begin to get uncomfortable.

Since 1900:

1) A correction of 5% or more occurs about three times each year* and lasts about 48 days**.
2) A decline of 10% happens about one time each year* and lasts about 115 days**.
3) A 15% drop can be expected about once every 2 years* and will likely last about 217days**.
4) A bear market is defined as a drop of 20% or more (generally a wonderful time to buy) and we should expect these about every three and one half years*. These generally will last about 338 days**.
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(Capital Research and Management Company is source, 3/2009)
*Assumes a 50% recovery of lost value except for the most recent decline.
** Measures market high to market low.

While we certainly do not look forward to market declines, we’ve learned that they are a regular part of investing in equities. They’ve been with us for the last 110 years and will likely be with us for the next 110.

We sometimes refer to corrections, or fast run ups in overall market value as “the emotion of the market”. Underlying fundamentals such as earnings and dividends generally are not the reason for these fluctuations. Frequently, it’s something that could only be loosely tied to your portfolios fundamental value.

While we monitor uncertainties such as market fluctuations, changing political winds and recessions (to name a few), they are not our primary focus. We cannot predict or control their occurrence. We choose instead to concentrate on items where we have some control. One of our main goals is to have your portfolio invested in companies that tend to do well through bad times as well as good.

The last two years or so have been a very strenuous time. It’s difficult to not allow short term memory to override our long term perspective.

Thanks for your business and trust,

Sycamore Financial Group

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By Sycamore Financial Group|2022-07-21T12:30:30-04:00February 3rd, 2010|2010 Newsletters|0 Comments

Investments are Insured by FDIC – Summer 2008

Hello from Sycamore,

How Your Account with Sycamore is Insured?

With the recent failures of Bear Stearns and Lehman Brothers, we thought that this would be a good time to tell you about the protection that you already have for your accounts with Sycamore.

First, we feel it’s important for you to understand that Sycamore does not have custody of, or access to, any of your account assets. All account assets are held by our clearing broker, Southwest Securities.

Sycamore Financial Group and Southwest Securities are both members of SIPC (Securities Investors Protection Corporation). SIPC protects each customer against any shortage caused by the failure of Sycamore Financial or Southwest Securities up to $500,000 (including $100,000 in cash). Southwest Securities has purchased additional insurance to cover customers accounts up to an aggregate of $100,000,000.00.

Many of you own bank CD’s purchased through Sycamore and may be concerned about the solvency of the bank backing these CD’s. These investments are insured by FDIC the same as they would be if you entered a bank and made a like purchase.

We are confident that your accounts are safe, but want to be certain that you are confident as well. If you would like a SIPC brochure or simply would like to call and discuss the protection of your account, simply reply to this e-mail requesting a brochure.

As always, please feel free to contact us with any questions or thoughts.

Thanks for your business and trust,

Sycamore Financial Group

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By Sycamore Financial Group|2022-07-21T12:13:12-04:00August 15th, 2008|2010 Newsletters, Craig's Commentary 2008|0 Comments

Riding Out the Stock Market – Summer 2008

Hello from Sycamore,

We thought it may be prudent to give you information on the markets in general, and to pass onto you some of our thoughts on all this.

As you likely know by now, the market has declined significantly this year. The Dow recently suffered its biggest percentage drop in more than six years, and is now down about 25% from its record close just last year, Oct. 9, 2007 Markets do go up and do go down. You know this, but when the market goes down, especially when it drops appreciably, it is unsettling. The volatility in the market is a common and normal activity of the stock market and should be expected.

Declines are common, take the following: The stock market since 1900.

A routine decline of 5% or more happens about three times a year and lasts about 47 days.
A moderate decline of 10% or more happens about once a year and lasts about 113 days.
A severe decline of 15% or more happens about once every two years and lasts about 215 days.
A bear market of 20% or more happens about once every 3 ½ years and lasts about 329 days.

(Capital Research and Management Company is source, flyer Sept. 2008)

Realistic Expectations on Stock Returns: As of 12-31-2007.

Over the past 60 years, stocks averaged 11.8% per year.
Over the past 40 years, stocks averaged 10.6% per year.
Over the past 20 years, stocks averaged 11.8% per year.
Over the past 10 years, stocks averaged 6.4% per year.

(From Global Financial Data, Stocks are Wilshire 5000 Index)

Good news you do not hear much about in the media.
(They want you to tune in tomorrow or buy another paper).

Interest rates are relatively low.
Inflation is moderate.
Our dollar has declined against other countries currencies, allowing other countries to buy goods and services produced in America for less.
Unemployment is not low but not high either.
We have been at this down market for almost a year now (See above).
We believe there are many companies that are good bargains.

What to do? While we wish we could predict the future of the markets, we cannot. We are advising you the best we can, but remember that there are no guarantees when it comes to investments in stocks, bonds or other financial instruments.

1) Don’t panic-Stay invested. You should have your monies diversified enough so that your short term needs are in a safe-liquid account and your longer term investments are in a broad basket of stocks, bonds and CDs.

2) Buy low-Sell high. We are likely in the “Buy low” part of this saying. This could be a good time to look at purchasing-not selling. Trying to time the market is difficult as it requires two near-perfect actions-getting out at the right time and getting back in at the right time. If you wait to get back in when you feel “comfortable” you may have missed most of the upswing in the market.

3) Re-evaluate your risk assessment. What percentage of your portfolio should you have in stocks? We can help on this one. We can then make any necessary change upon market recovery.

4) Invest regularly. Investing on an ongoing basis will take the guesswork out of timing the market. You buy in both up and down markets.

5) Seek professional guidance and review annually. We think it prudent to take a thorough look at your assets and investments once each year, make adjustments based on your risk-reward profile and go forward.

Markets do go up and down. The down part is no fun but is part of the package. If we can assist you in reviewing your investments, assets and risk assessment, please contact us.

Thanks for your business and trust,

Craig
Sycamore Financial Group

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By Sycamore Financial Group|2022-07-21T12:19:19-04:00August 8th, 2008|Craig's Commentary 2008|0 Comments

Save Taxes with an IRA – Spring 2008

Hello from Sycamore,

There is Still Time to Save Taxes with an IRA!

Under the current tax law, there are two significant ways that you may be able to benefit today by contributing money to an IRA.

If you qualify for a deductible IRA, you can likely deduct the amount of the contribution from your taxable income and reduce your current year tax bill. The following is a brief description of who qualifies for a deductible IRA
a) If you did not have a qualified plan available to you through your employer in 2007 you can likely contribute to an IRA and deduct the contribution from your taxes.
b) If you had a qualified plan available at work, but your adjusted gross income was below $103,000 (if married) or $62,000 (if single) then you may be able to deduct part or all of your IRA contribution. We suggest checking with us or your accountant for details about your particular situation.

2) Depending on your adjusted taxable income, you may qualify for a tax credit of up to 50% of the contribution to your IRA. This credit would apply to contributions made to both Regular deductible IRA’s and Roth IRA’s.

For your convenience, we have attached more information about this tax credit. As you can see the credit applies only to lower income couples and individuals. We realize that most of you cannot benefit from this credit but you may know someone who is “just getting started’. Many of these individuals may be able to benefit from this tax credit. Feel free to pass this information along to them.

Don’t forget that there are additional benefits to investing into an IRA.

The accounts grow without current taxes and in the case of a Roth IRA they grow tax-free.
Roth IRA’s allow contributions with higher income limits.
*You can contribute to a Roth if your adjusted gross income is below $166,000
(for married couples) or $114.000 (for individuals).

This is a very brief overview of the benefits and rules regarding IRA’s. For information about your individual situation, we recommend you contact your accountant or give us a call.

*Past performance does not assure future results. Investors cannot invest directly in the stock market indexes such as the S&P 500. Investment return and principal value of an investment will fluctuate. Investment value, when sold, may be worth more or less than their original cost.
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Uncle Sam Helps Pay for Your IRA or Pension Contribution…
Get Tax Money Back!

Tax Credit – Depending on your adjusted gross income, you may be able to receive a non-refundable tax credit of up to 50% on the first $2,000 of contributions made to a qualified retirement plan or IRA. These savings are in addition to any tax deferral that may already be available on the contribution. Please refer to the accompanying table to determine how you may benefit for tax year 2007.

WHAT TO DO

Maximize contributions to your IRA(s) or retirement plan.
Enroll in your Company’s plan if you are not currently enrolled.
Increase your contribution.
Keep this paper with your current year tax records for your tax person.
Call Sycamore Financial Group for more information or with questions.

Thanks for your business and trust,

Sycamore Financial Group

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By Sycamore Financial Group|2022-07-21T12:19:39-04:00February 8th, 2008|2008 Newsletters|0 Comments

Beneficiary Decisions – Summer 2007

Hello from Sycamore,

Beneficiary Decisions

Many of you have IRA’s, pension plans or annuities with beneficiary designations. Some of you have basic accounts that are designated as TOD (transfer on death), and more than a few of you have all four. These designations are designed to transfer your assets to your beneficiaries quickly and efficiently (they generally are passed without probate costs).

Our purpose in this communication is simply to ask that you invest a few minutes of your time reflecting on these designations. Review them for any changes that may be necessary due to a marriage, divorce, birth, death, adoption etc. It’s not uncommon to make a quick decision about these designations when asked during an application process, but we’re not certain serious thought is always given to this very important decision.

Beneficiary designations have several benefits, but are not appropriate for everyone, so consider your individual circumstances to determine that they will accomplish your wishes.

Generally, if you have what you would consider a “regular family circumstance” these beneficiary designations are adequate and efficient. However, if you have special circumstances or concerns, you may want to check with your attorney to determine if transferring your assets through a will or trust would suit your situation better.

Many times we can help to guide you on this decision but we cannot replace legal counsel.

Thanks for your business and trust,

Sycamore Financial Group

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By Sycamore Financial Group|2022-07-20T15:23:30-04:00June 2nd, 2007|2007 Newsletters|0 Comments

529 College Savings Plans – Winter 2007

Hello from Sycamore,

Using 529’s and the Indiana Plan for College Expenses

Two important changes were made in 2006 that affect section 529 college savings plans and their use by Indiana residents . First the Federal government extended the tax free status of earnings withdrawn when used to pay secondary education expenses. Second, the state of Indiana offers a tax credit to taxpayers funding college expenses through it’s “CollegeChoice” 529 plan. This credit is available to taxpayers starting in 2007. We now believe that everyone saving for college expenses should take a serious look at 529’s and in particular the “CollegeChoice” plan offered by Indiana.

Let’s take look at some of the basics of 529 plans:

Contributions to the account are made with “after tax” dollars where the earnings grow tax deferred. When these earnings are withdrawn to pay for qualified* college expenses, they are tax free. Expenses that are paid by scholarships, Pell grants, Veterans’ educational assistance or other similar programs cannot be used.
Anyone over the age of 18 can start a 529.
Anyone of any age can be named as beneficiary of the account. The beneficiary can be changed as long as the new beneficiary is a member of the original beneficiary’s family. The definition of “family” goes out as far as first cousin.
Almost any accredited secondary school qualifies.
You can transfer assets from one 529 to another, and transfer assets from Education/Coverdale IRA’s into a 529. No tax is paid during this transfer.
If the earnings are not used for qualified college expenses,they will be taxed as ordinary income and are subject to a 10% tax penalty when withdrawn from the account.
Any individual taxpayer can contribute as much as $60,000 in any one year for each beneficiary without triggering gift tax consequences, provided they do not make additional gifts to that same beneficiary within a five year period. This essentially allows you to make five years of gifts “up front”. This may be helpful with your estate planning.
The owner of the account maintains control over the account and has the option to change the beneficiary. This control does not negatively affect the estate planning or gifting.

Now for a quick look at Indiana’s “CollegeChoice” plan:

Each individual filing a single return, or married couple filing a joint return, will receive a 20% credit on their Indiana income taxes on the first $5,000 contributed to the plan each year. This equals a tax savings of $1,000. To claim this credit, simply claim it on your Indiana state tax return. Of course, keep proof of your contributions.
While the department of revenue does not define how long money has to remain invested to receive the credit, Senate bill 500 stipulates that the account remain open for at least 12 months. This requires maintaining a minimum account balance of $500 or having some activity such as a deposit or withdrawal during the proceeding calender year. Additionally, if withdrawals from the account are used for something other than qualified expenses, the account owner may be required to repay part or all of the credit previously received.
Accounts can be started with as little as $50. Minimum additional contributions to an account can be as low as $25.for each portfolio. Maximum contributions per beneficiary are$298,770. You must maintain a $500 minimum balance per account or make a purchase or liquidation within the previous calender year to keep the account open.
Fees: $10 per year for Indiana residents. This fee will be waived if the account balance exceeds $25,000 or if the owner has established periodic contributions.
You will be limited to the investment options available within the plan. We have reviewed these investment options and feel they are adequate.
You can invest directly into the program without paying any sales fees. If you elect to do this, you will be limited to the “Age-Based” investment option. To make other investment choices, you must use a broker.

All in all, we think that Indiana’s “CollegeChoice” plan is an excellent way to save for college expenses and recommend that you consider using this plan.

This overview has focused on what we feel are some of the more important aspects of 529’s and Indiana’s CollegeChoice plan, if you would like more information on Indiana’s CollegeChoice 529 go to www.collegechoiceplan.com, give us a call or set an appointment to stop by and see how this plan may benefit you. How much will you need to save? E-mail or call in your particular situation and we will send you an estimate. Kokomo 765-455-1554 Anderson 765-643-9333.

More information about 529’s can be found at http://www.irs.gov/publications/p970/ch08.html

Thanks for your business and trust,

Sycamore Financial Group

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By Sycamore Financial Group|2022-07-20T15:14:17-04:00January 4th, 2007|2007 Newsletters|0 Comments