Learning from Expensive Mistakes

Dear Clients and Friends:

As always, there are two ways of learning in life.  You can either be taught how to do something the right way or learn from the consequences of doing it the wrong way.  This concept is especially relevant in the world of investments where it is advantageous and less costly to learn from others’ mistakes.

As many may recall back in November of 2015, two San Fernando Valley men were sentenced to multiple years in prison for running what prosecutors have called “one of the largest Ponzi schemes ever seen in the Southland” (Fred Shuster, Los Angeles Daily News).  The $134 million Ponzi scheme lasted a duration of 13 years, hurting many people along the way.

According to prosecutors, hundreds of millions of dollars were lost by more than 1,300 investors who were falsely told that their money would be used to purchase ATMs that would generate annual profits of at least 20 percent.  In other words, the two con men told investors that each would pay a flat amount to buy a specific ATM that was to be installed at a specific location and that they, in turn, would pay the investors 50 cents per transaction performed at their particular ATM while guaranteeing annual returns of at least 20 percent on each ATM.  The con men were the owner-operators of Calabasas-based Nationwide Automated Systems Inc. (NASI), which guaranteed to place, operate, and maintain the ATMs. Read more

Spring 2017 Client Update

Dear Clients and Friends:

Our Spring 2017 Client Update is now available on our website.  This edition offers insights on education tax breaks.  If you are eligible, education credits and/or deductions can result in significant tax savings which will reduce the cost of furthering your own education or sending a child to college.

To read the newsletter please click here.

Aside from educational tax breaks, the following is a list of additional topics covered in this issue:

• Savings Bond Interest Exclusion
• Small Changes Can Equal Big Gains in Employee Retention
• Mark Your Calendar – 2017 Tax Dates
• New Foreign Asset Reporting Requires Attention
• 2017 Tax Numbers
• Six Facts About Traditional IRAs Everyone Should Know
• Tax Talk – Why all the questions? Where’s my refund?

If you would like to discuss any of our Client Update newsletter topics in more detail, please call Steve at (818) 449-3122 or send him an e-mail at steve@berkson.net.

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


100 Days of Change – Trade Policy Chess

Dear Clients and Friends:

Trade policy has become a hot issue since President Trump took office.  Many investors are finding that his proposed trade policy may be his most significant initiative.

Click here to read the article entitled Trade Policy Chess by Dr. David Kelly and J.P. Morgan, which compares a value-added tax (VAT), a tariff and a border adjustment tax (BAT).  The article concludes that a VAT is the better solution.

Dr. Kelly makes the following points in his article:

  • While the first days of the new administration have featured many important statements and decisions, policy changes on trade and corporate taxes could be the most consequential for markets.
  • When analyzing policies in this area, it is crucial to understand the differences and similarities among a tariff, a value-added tax (VAT) and a cash-flow tax with border adjustments (BAT).
  • One possible outcome could be a relatively low-rate BAT as a replacement to the U.S. corporate income tax.  A BAT would likely boost U.S. inflation, interest rates, the value of the dollar and after-tax corporate earnings.  It would also reduce foreign investments and could trigger damaging retaliation from trade partners.

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 steve@berkson.net.

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

Check Out Our Traditional IRA Calculator

Dear Clients and Friends:

A few weeks ago, we highlighted the Retirement Planner Calculator on available on this website.  Aside from the Retirement Planner Calculator, our website has 13 additional financial planning and personal finance tools.  One of those tools is the Traditional IRA Calculator which we are highlighting today.

Contributing to a Traditional IRA creates a current tax deduction, plus it provides for tax-deferred growth. For those who qualify for Traditional IRA deductions, it is a great tool for retirement saving.  Note, some people are better off contributing to a Roth IRA rather than a Traditional IRA.  You should seek professional advice when deciding between Traditional and Roth IRA’s.

Click here to access our Traditional IRA Calculator. Read more

A Look Back at 2016

Dear Clients and Friends:

We found the article titled A Look Back at 2016 by Weston Wellington at Dimensional Fund Advisors (DFA) interesting because he shares our view that it is difficult to outguess the market and using a diversified asset allocation strategy without making changes in response to news events is more sensible.

Click here to read the article, which serves as a follow-up to our January 2017 Quarterly Letter.

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

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

BAM Quarterly Letter – Winter 2017

Dear Clients and Friends:

In 2016, the U.S. equity market reached new highs and stocks in most developed and emerging market countries delivered positive returns. The year began with anxiety over China’s stock market and economy, falling oil prices, a potential U.S. recession, negative interest rates in Japan, and the U.S. equity markets in steep decline (the worst start of any year on record). As the year unfolded, the equity markets improved mid-February through late June when the Brexit vote rocked investors causing a short, steep, stock market decline.  The markets recovered quickly from Brexit and then, starting in late September, began a slow and steady descent that lasted until the November 8th U.S. presidential election.  After the presidential election, the markets improved significantly. Read more

Retirement Planner Calculator

Dear Clients and Friends:

Do you know what it takes to work towards a secure retirement?

We thought it might be helpful if we highlighted one of our retirement planning tools, which are located under the Resources tab on our website. By using our retirement planner calculator, you can create your own retirement plan. The tool will generate a report to help you monitor your plan.

Click here to access the retirement planner calculator.

How to use the tool: 

Read more

Quarterly Market Review – 4th Quarter 2016

Dear Clients and Friends:

We hope the new year is off to a great start for everyone.

2017 will be the third year we produce our Quarterly Market Review and we hope you find the information interesting and useful. Click here to read the review.

This quarter’s market review features graphs combining the world stock market performance (based on the MSCI ACWI index) with timelines of selected news headlines. These graphs cover both the past quarter and the past year.

The market review also features returns of stock and bond market asset classes in both US and international markets and provides returns for globally diversified portfolios that can be used as performance benchmarks.

Finally, this quarter’s market review features an article titled “The Power of Markets”. The article uses an essay by the economist Leonard Read about all of the market-related factors that go into making a pencil to drive home our view that attempting to outguess the market is foolish and leads to a high probability of underperformance.

We hope you find the content informative and useful. If you have any questions or concerns, please don’t hesitate to contact us.

Warm Regards,
Berkson Asset Management, Inc.
Registered Investment Advisor

The Tax Planning Letter – New Year

Dear Clients and Friends:

Our 2017 New Year Tax Planning Letter is now available on our website to offer insights on how to minimize your taxes and keep more of your hard-earned money.

To read the letter please click here.

Listed below are the valuable topics covered in this issue:

  • Reap the most savings with early planning for changing conditions
  • Tax highlights for 2016 returns and 2017 planning
  • What’s new in 2017, what’s the same, and 2017 due dates at a glance
  • Is your business liable for taxes in other states?

If you would like to discuss any of our Tax Planning Letter topics in more detail, please call Steve at (818) 449-3122 or send him an e-mail at steve@berkson.net.

We hope you find the letter to be both informative and helpful. Please contact us if we can assist you in your planning and in meeting your tax filing obligations.

Warm regards,

Berkson Asset Management, Inc.
Registered Investment Advisor

Muni prices decline in November

Why did municipal bond (muni) prices decline so much in November?

Donald Trump’s surprise victory caused a swift adjustment in muni prices. The president-elect’s policy proposals affected munis in two main areas, listed below. The first broadly affected most U.S. bonds, while the second was more muni market specific:

  1. Trump’s proposals are anticipated to increase U.S. economic growth and fuel higher inflation, which sent interest rates generally higher across the U.S. bond market.
  2. Trump’s proposals would cut federal personal and corporate income tax rates, and increase infrastructure spending. Lower tax rates reduce the value of the taxable-equivalent yields offered by munis, while increased infrastructure spending could boost muni supply by increasing muni bond issuance to finance infrastructure projects.

Muni yields tend to follow Treasury yields directionally. That held true as the potential for stronger growth and higher inflation caused Read more