Managing Personal Cash Flow

Dear Clients and Friends:

The topic of this blog entry might seem basic to many of you, but we do get questions from clients and prospective clients regarding how to begin accumulating wealth.  People can accumulate wealth in various ways.  Inheritance, growing a business, or saving and investment are classic ways for people to become affluent.  If there isn’t an inheritance on the horizon or you aren’t self-employed, you are left with saving and investing as your main wealth-building option.

To invest you first must save, and saving involves managing your cash flow.  Those who simply earn income and pay bills are merely surviving day to day, not managing cash flow.  The process of cash flow management involves understanding where money comes from and where it goes.

The five essential components of cash flow management include:  Read more

Summer 2017 Client Update

Dear Clients and Friends:

Our Summer 2017 Client Update is now available here on our website.  This edition offers insights on five midyear tax moves that should be considered now.  With the potential for significant tax reform on the horizon, additional tax planning may be needed later in the year.  However, it is never too early to start thinking about what you can do to reduce your tax liability.

To read the newsletter please click here.

Aside from midyear tax planning moves, the following is a list of additional topics covered in this issue:

  • Can I work while receiving Social Security benefits?
  • Mark Your Calendar – 2017 tax dates
  • Age and taxes – What every parent should know
  • Watch out for these two common scams
  • Consider the risks of credit cards with rewards
  • 10 money-saving tax provisions you may not know about
  • Tax Talk – Tax statistics from the IRS; IRS is now using outside collection agencies; and Catching up on correspondence

If you would like to discuss any of our Client Update newsletter topics in more detail or schedule a midyear tax appointment now, please call Steve at (818) 449-3122 or send him an e-mail at

We hope you find this information both useful and interesting. Please let us know if there is anything we can do to help with your tax or investment needs.

Warm regards,

Berkson Asset Management, Inc.
Registered Investment Advisor

The Uncertainty Paradox

Dear Clients and Friends:

“Doubt is not a pleasant condition, but certainty is an absurd one.”

“The market hates uncertainty” has been a common enough saying in recent years, but how logical is it? There are many different aspects to uncertainty, some that can be measured and some that cannot. Uncertainty is an unchangeable condition of existence. As individuals, we can feel more or less uncertain, but that is a distinctly human phenomenon. Rather than ebbing and flowing with investor sentiment, uncertainty is an inherent and ever-present part of investing in markets. Any investment that has an expected return above the prevailing “risk-free rate” (think T-Bills for US investors) involves trading off certainty for a potentially increased return.

Consider this concept through the lens of stock vs. bond investments. Stocks have higher expected returns than bonds largely because there is more uncertainty about the future state of the world for equity investors than bond investors. Bonds, for the most part, have fixed coupon payments and a maturity date at which principal is expected to be repaid. Read more

Social Security Benefits Calculator

Dear Clients and Friends:

Have you ever wondered how much you can expect to receive in Social Security benefits?  Social Security benefits are the main source of retirement income for most people.  This week’s email features a calculator that can help estimate your Social Security benefits.  It is important to remember that this is only an estimate. Your actual benefits will vary because, in computing actual benefits, Social Security uses a more detailed record of your work and income history.  Although the calculator provides a fair estimate, it does not work well in cases where people are already retired.

Click here to access the Social Security Benefits Calculator, which can also be found under the Resources tab on our website.

How to use the tool:  Read more

April 2017 Quarterly Letter

Dear Clients and Friends:

The post-election stock market rally extended into the first quarter of 2017.  U.S. equity markets reached new highs during the quarter and stocks in all developed market countries, and most emerging market countries, delivered positive returns. In fact, Russia, Hungary and Greece were the only emerging market countries to suffer negative returns during the quarter.  Despite prospects for higher short-term interest rates, the U.S. bond market also enjoyed solid gains in the first quarter.  At the same time, global bonds experienced slight declines.

The following are first quarter 2017 broad index returns:

U.S. Stock Market (Russell 3000 Index) 5.74%
International Developed Stocks (MSCI World ex USA Index) 6.81%
Emerging Market Stocks (MSCI Emerging Markets Index) 11.44%
U.S. Bond Market (Bloomberg Barclays U.S. Aggregate Bond Index) 0.82%
Global Bond Market ex U.S. (Citi WGBI ex USA Hedged to USD -0.35%

Most financial news outlets are attributing the post-election stock market rally to Read more

Impact of Being Out of the Market

Dear Clients and Friends:

As we have pointed out many times in past correspondence, market timing is not an effective investment strategy.  Investors who attempt to sell when they think the market is priced too high, and buy when they think it is too low, inevitably get it wrong and realize inferior returns when compared to low-cost, buy-and-hold strategies.

The basic reasons market timing strategies fail are 1) there are significant transaction costs related to buying and selling, 2) there are significant tax costs, and 3) odds of successfully picking the market highs and lows are extremely low.

This week’s graphic demonstrates why the odds are against market timing.  Read more

Quarterly Market Review – First Quarter 2017

U.S. and International equity markets performed well during the first quarter of 2017.  Similarly, almost all fixed income sectors posted positive returns in the first quarter.

We examine first quarter 2017 performance in the Quarterly Market Review, which offers insights, graphs, and charts covering world capital market performance and a timeline of events for the past quarter.  Click here to view the Quarterly Market Review.

The featured topic this quarter is “Investment Shock Absorbers”, which considers how owning an undiversified portfolio can trigger similar reactions to a car with worn-out shock absorbers.   Read more

Income Replacement Needs Vary by Household Income

Dear Clients and Friends:

Have you considered how much of your pre-retirement income you will need to replace when you retire?  For example, if you are currently earning $50,000 per year, to maintain an equivalent lifestyle, how much will you need to draw from your savings and investments each year after you retire?  We have provided a graphic that breaks down income replacement needs based on household income.  Click here to view the graphic.

The graphic shows that income replacement needs vary widely depending on household income.  For example, Read more

Maximizing Social Security Benefits

Dear Clients and Friends:

For many Americans, Social Security benefits are the foundation of retirement income.  Because maximizing that stream of income is critical to funding your retirement, we thought it might be helpful if we provided a graphic that demonstrates how to maximize your Social Security benefits.  Click here to view the graphic.

As many of you may already know, you can start collecting Social Security retirement benefits as early as age 62.  However, as the graphic illustrates, the longer you postpone collecting Social Security, the greater the possible benefit. This is something to consider as you plan for your retirement.  Read more

Going Global: A Look at Public Company Listings

Dear Clients and Friends:

Going global can be a smart investment move.  This is because investors can take advantage of different economic conditions, reduce risk, and benefit from higher growth potential abroad.  More importantly, foreign investments can help investors build well-diversified portfolios.

Click here to read the article entitled Going Global: A Look at Public Company Listings, which examines the implications of current trends and the necessity for investors to structure a well-diversified investment portfolio.  The article also analyzes U.S. publicly listed companies relative to listings in non-U.S. markets and expands on the global approach.

We sincerely appreciate your continued business and hope that you find the article interesting and useful.  If you have any questions or concerns, please contact Steve at 818.449.3122 or

Very truly yours,
Berkson Asset Management, Inc.
Registered Investment Advisor
Steven M. Berkson, CPA\PFS, CFP®, MBT