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Going It Alone Can Be Detrimental To Your Financial Future!
With more than 9,000 mutual funds, 8,500 companies listed on the New York Stock Exchange, 3,900 companies listed on the NASDAQ, and hundreds of other investments to choose from, it’s little wonder that investors of every skill level find it difficult to sort through the myriad options in order to build a winning portfolio.

Worse, for many investors, having too many choices can result in them taking no action at all as indicated in the following list of the most common individual investor mistakes:

Becoming paralyzed by too many choices
Not saving enough
Not making saving automatic
Failing to prepare a financial plan
Not maximizing a 401(k) and the employer’s match
Borrowing from retirement savings, particularly tax deferred accounts
Failing to diversify
Taking early distributions from tax deferred accounts

BCG’s clients enjoy peace of mind knowing they have a coordinated strategy for achieving their personal financial goals and objectives. Whether our clients have an investment portfolio of $100,000 or $10 million, we consistently provide objective analysis, personalized advice, and comprehensive investment strategies.

A Plan Just For You
Every investor’s needs are different. More importantly, individual investors vary widely in their ability to tolerate risk and since some risk is inherent in investing, we focus heavily on determining each client’s absolute degree of risk tolerance.

Once your objectives and constraints are identified, we work closely with you to design your unique plan within those parameters. We then consider a variety of diverse asset classes and investment strategies to determine the most effective plan that meets your return objectives at minimum risk levels.

Asset Allocation
How you allocate your investable assets is the single most important factor affecting portfolio performance. BCG uses some of the most sophisticated asset modeling capabilities in the industry to customize your plan’s asset allocation to match your risk profile.

In developing your plan’s asset allocation strategy, we consider all asset classes, weightings, your risk tolerances and target returns among other factors such as the micro and macro environments. BCG’s team of specialists provides expert assistance in the following areas:

Asset Allocation and Modeling

Investments

Individual Stocks and Bonds

The stock of a business is the value of the original capital paid or invested into the business by the founders of the business. A company’s stock is divided into a number of shares that is determined at the time the business is formed. A share has a declared value (face value) that a company may issue and sell shares for. Owning a share is equivalent to owning a fraction of the company. When you purchase share you are essentially becoming an owner of the company although a business may declare different types (classes) of share that varying ownership rules and privileges.

When you purchase shares of a company, the company provides you with a stock certificate (issue), a legal document that states the amount of shares owned, class of shares and value. Publicly trades company shares may be bought and sold in the open market (stock market) where they are listed.

A bond is a debt security that a company, municipality or government issues for the purpose of raising money to finance their debt. By issuing bonds to sell to the public, the issuing entity can raise money they need to retire old debt or finance new purchases or projects. The issuer of the bond is obligated to pay interest (the coupon) or repay the principal at a later date (at maturity). A bond is a formal contract stating that the issuer will repay the bond purchaser with a predefined amount of interest at fixed intervals. A bond is essentially a loan made by the “buyer” of the bond (creditor) to the issuer (debtor).

Bond and stocks are both securities. However, unlike stockholders who, when they purchase a stock, become an owner of the company issuing the stock, bondholders are simply making a loan to a company in exchange for the return of their original investment plus interest. Another difference is that bonds usually have a defined length of time that the issuer must repay the loan (term or maturity), whereas stocks may be outstanding indefinitely.

Mutual Funds and ETFs

Investors who wish to invest their money in stocks, bonds or other investment securities are faced with the daunting task of researching investment option, deciding how each option will fit with their investment profile for risk and return, meeting minimum investment requirements for each option, and then monitoring all of those securities they purchase. A truly daunting task! Additionally, some investment options required substantial minimum investments. For example, investor wishing to purchase certain bonds directly from the issuer might have to invest a minimum of $50,000 or more to be accepted. This might not be possible or suitable for many investors.

There is an easier way: mutual funds. Mutual funds are funds that pool money from thousands of investors. These funds are professionally managed by highly trained money managers who pay close attention to the many types of investments in which the fund is invested, and continually adjust the investments to ensure that the fund is invested in the style as defined in the fund’s prospectus. (A prospectus provides information about the fund’s investment objectives, investment strategy, shareholder information, risk, past performance, fund fees and expenses and financial information.)

Each mutual fund defines what its goals for investment are so that investors may decide if the fund is right for their needs. For example, a fund may promote itself as a conservative fund, investing in an appropriate mix of stocks and bonds that will provide an investor with some growth but will limit the risk of losing money in a down market. Other mutual funds may be even more specific, investing only in environmentally-friendly or animal-friendly investments for example. With more than 9,000 mutual funds available, today’s investors have enormous flexibility to invest not only in the manner that best suits their tolerance for risk, but also meets their personal objectives.

The real beauty of mutual funds is that you can invest as little as a few hundred dollars and be very well diversified. Mutual funds offer a simple, efficient way to invest for retirement, education or other financial goals. Your BCG investment planning expert can walk you through the choices and help you design a successful retirement.

Like mutual funds, ETFs are another form of security available to investors that holds a number of other securities within the fund and trade on a stock exchange. An ETF is similar to a mutual fund because it allows individual investors to invest amounts as small as $100, pooling it with thousands of other investors’ money to provide the production of diversification. Unlike traditional mutual funds that are priced at the end of each day, ETFs are valued in real time based on supply and demand.

Another distinction and potential advantage of ETFs is that you have the option of investing in either “passive” or “active” ETFs. Passive ETFs are for more prevalent and are ETFs that operate similar to an index mutual fund in that the fund manager does not take an active role in buying and selling investments within the fund. Therefore, expenses are very low for passive ETFs. Active ETFs are those whose fund managers are actively buying and selling securities within the fund.

One potential advantage of buying ETFs over mutual funds is that you are able to diversify your investments across many types of mutual funds and other securities, achieving a greater level of diversification within the broader market or even specific market segments.

ETF have become increasingly popular over the last few years, largely due to their low expenses and ease of buying and selling. Your BCG investment professional can help you better understand if ETFs are right for you.

CDs and Money Market Accounts

A Certificate of Deposit (CD) is a loan you make to a financial institution in exchange for a specific amount of interest to be paid to you over a set period of time. CDs are short-, medium- or long-term investments ranging from as short as seven days to ten years or longer. More typically, CDs are are available in durations of three months, six months, one year and three years. The fixed interest rate paid to you typically increases the longer the term of the CD.

CDs have maturity dates, or the date that your money must remain invested. One potential down-side to purchasing CDs is that if you withdraw your money before the maturity date, you will have to pay a penalty. Once you have loaned your money to a bank, savings and loan or other institution in the form of a CD, you will be paid interest on a monthly basis and is typically reinvested along with your initial investment during the life of the CD. Another form of CD is a “zero-coupon” CD which pays no interest until the maturity date.

The most prominent advantages of investing in CDs are that they are insured (up to $100,000 per institution) by the Federal Deposit Insurance Corporation (FDIC), offer a very low-risk means of earning interest, and offer the flexibility of choosing how long you wish to tie your money up. However, CDs typically offer a very small return for your investment.

A money market is a network of banks, institutional investors, money dealers and others that make short-term loans (typically 90 days) to each other, usually to loan to companies for short-term needs. Money markets also earn money by buying and selling liquid (easily sold) financial instruments such as commercial paper, CDs, government securities such as treasury bills, foreign currencies, and gold. To fund all of this trading, the money markets borrows money that individuals, companies and institutions have deposited in banks, brokerages, and other savings and loan companies. These loans take place in the form of money market mutual funds where many depositors’ funds are pooled together.

Money market funds, like CDs, offer investors a very safe investment option allowing them to earn a small amount of interest in exchange for depositing (loaning) money in a bank or other institution. While not insured by FDIC, money market funds are required to redeem all investors’ shares at the net asset value (NAV), or the original amount that was invested.

The most significant benefits of purchasing money market mutual funds is that they provide very good protection against losing your original principal, and offer excellent flexibility in terms of liquidity because you are typically able to write checks from your funds. The most obvious drawback to money mutual funds is that they typically pay very little interest to you for using your money and the interest rate can change rapidly and dramatically with market conditions.

CDs and money market funds offer a great way to put your short-term money to work for you. However, they’re just one part of a strong portfolio that will meet your future needs. Ask a BCG investment professional how CDs and money market mutual funds can work for you.

Asset Management
Brokerage Services
Rollovers

Financial Planning
Retirement Planning
Estate Planning
Insurance and Annuities
IRA, 401(k) and 403(b) Plans

Fully funding any available tax deferred plans is one of the surest ways to grow your wealth and ensure a comfortable retirement. Among the available tax deferred options, the 401(k) may very well be the best option for the typical investor since the 403(b), a close relative, is available only to certain employees of public schools, tax-exempt organizations and ministers.

A 401(k) qualified retirement plan is one that is established by employers and allows eligible employees to save a portion of their salary before taxes are removed from their pay. This presents an excellent way to reduce your taxable income in the year that you earn it and allows your nest egg to grow (compound) more quickly tax deferred. Employers offering a 401(k) plan may also make matching or non-elective contributions to the plan on behalf of eligible employees—in effect, FREE MONEY! Many employers may also add a profit-sharing feature to the plan. Earnings accrue on a tax-deferred basis.

In 2009 the maximum pretax contribution allowed in a 401(k) is $16,500, or $22,000 if you're 50 and older. If you can't afford to max out your 401(k), you should contribute at least enough to get the matching contribution that your employer is paying.

An Individual retirement account (IRA) is an account that is allowed by the U.S. government where you can save money to grow tax deferred. IRAs are a great way to save for your retirement.

Each year, based on your income and other factors, you may be allowed to set aside a portion of your income into a Traditional IRA tax free. This offers you two important benefits: First, by investing in an IRA, you reduce your taxable income in the year you save. Second, your IRAs are allowed to grow tax-deferred, meaning that there is more money in your accounts that can grow faster through the magic of compounding.

There is a caution: IRAs are intended for retirement savings, so if you think you will need the money before you retire there are substantial penalties. The IRS designed IRAs specifically for you to set aside savings until “retirement age” which it defines as 59-1/2 (2009). If you take money out of your IRA before that, you may have to pay a 10% penalty as well as any income tax that is due. There are a few exceptions so you should consult a financial planner, your accountant, or an investment planning specialist to learn what your options are. You can also learn more about IRAs rules and regulations by visiting www.irs.gov and search for “Publication 590.”

Another type of IRA is a Roth IRA. Roth IRAs offer unique advantages, but like Traditional IRAs, carry certain restrictions and penalties for early withdrawal. With a Roth IRA, must pay your normal income tax on the money you earn before you invest in the Roth IRA. However, once you have invested in your Roth IRA, your money is allowed by the government to grow tax free and you will never have to pay tax on your money or any interested earned when you withdraw them. (Tax rules do change so you should always consult your tax advisor or a financial planner.)

Once you open your IRA, you have the flexibility to invest in a wide array of investment options including mutual funds, stocks, bonds, CDs and more. A BCG investment planning specialist can help you establish a solid investment plan.

Deciding whether to open a Traditional IRA or a Roth IRA will depend on your age, income and other factors, so you should consult a financial planner, your accountant, or an investment planning specialist.

Insurance and Annuities
Insurance products including annuities are valuable investment planning tools and should be part of every serious investor’s portfolio.

Life insurance is most often thought of as a way to provide money to survivors of someone who dies that will help to pay the bills and pay for burial costs. But life insurance is so much more than a check at death! Life insurance is far more flexible and valuable for protecting your loved ones and your lifestyle! Because life insurance is so flexible, virtually no investment plans should be without it. You can use life insurance to:

There primarily three types of life insurance that you can use to accomplish all of the above. Each has its distinct benefits:

Whole Life Insurance that provides a death benefit plus provides an accumulating cash value. The death benefit is guaranteed and you can borrow from the cash value. Whole life insurance’s greatest feature is that the annual premium you pay will never increase. Learn more!

Universal Life Insurance, like whole life insurance, offers a death benefit and a cash value component that grows tax deferred, but universal life insurance offers more flexibility to change the policy as your life needs change. For example, with a universal life insurance policy, you are able to change the amount of death benefit and the amount you pay annually to fit your needs without surrendering the policy and buying a new one as you would have to do with a whole life insurance policy. Learn more!

Unlike Whole Life and Variable Life where you pay fixed premiums, Universal Life offers adjustable premiums that give you the option to make higher premium payments when you have extra cash on hand or lower ones when money is tight.

Universal Life allows you, after your initial payment, to pay premiums at any time, in virtually any amount, subject to certain minimums and maximums. You also can reduce or increase the death benefit more easily than under a traditional Whole Life policy.

Most Universal Life policies will also provide a guaranteed rate of return on your cash values, with one important exception. It is possible that you will not accumulate any cash value if any, or all, of the following circumstances occur: administrative expenses increase, mortality assumptions are changed, the insurance company's investment portfolio underperforms, premium payments are insufficient.

In recent years, there’s been considerable interest in what’s commonly referred to as Universal Life with Secondary Guarantees (also known as a “No-Lapse Guarantee”). With an ordinary Universal Life product, the policy could lapse under certain circumstances (e.g., interest rates fall below projections, insurance costs or administrative expenses rise, etc). When you buy a policy with a “secondary guarantee,” you’re guaranteed that the policy won’t lapse even if the above factors come to pass.

One of the most attractive things about Universal Life policies with Secondary Guarantees is that they provide lifelong coverage at rates that can be considerably lower than other forms of permanent insurance. That’s one of the main reasons why these policies have become so popular for estate planning purposes. If you have a federal estate tax liability (in 2008, estates valued at over $2 million are taxed), your main concern is liquidity at death. When you die, you don’t want your heirs to have to hastily sell off assets in order to pay estate taxes. With a Universal Life policy with Secondary Guarantees, the death benefit is guaranteed for life and you have the flexibility of adjusting your premiums, a valuable feature since estate tax rates and exclusion amounts keep changing from year to year.

You may be unsure which life insurance is right for you. We can help! Call your BHL insurance specialist today for a free, no obligation consultation.

Term Life Insurance provides a death benefit only and is the least expensive type of life insurance available. A level-premium term life insurance policy can be purchased where you pay the same premium amount each year for a given period, usually up to 20 years before the premium begins to rise with your age. Learn more!

Term insurance provides insurance protection for a specific period of time. Unlike permanent life insurance, term life insurance typically pays a benefit—in the face amount of the policy—only if you die during the term of the policy.

You can purchase term insurance for periods up to 30 years although a 20-year term where the amount of the monthly, quarterly or yearly premium payment remains the same for each year of the term is the most common.

One of the greatest advantages of term insurance is its lower initial cost in comparison to permanent insurance. This is possible because unlike permanent insurance which offers a cash value that grows over time, term life insurance simply pays the face amount of the policy when you die. There is no cash value and 100% of your premium is used to pay the death benefit.

Why is it cheaper when initially purchased? Because with term insurance, you're generally just paying for the death benefit, the lump sum payment your beneficiaries will receive if you die during the term of the policy. With most permanent policies, your premiums help fund the death benefit and can accumulate cash value.

Term insurance is often the best choice for people as they establish themselves in the workplace, start families and begin to accumulate assets. This is when their needs are growing but they are often strapped for cash. Term insurance is also a good idea when you only need insurance for a period of time. For example, you might purchase term life insurance to provide a college education for your children should you die. But after 15 or twenty years, you might no longer need this protection. Typically with term insurance, as soon as you stop paying the premium, your policy ends, freeing up money that can be applied in another manner. So if you are thinking about purchasing a term policy, make sure you carefully consider how long you'll need the coverage. If you're pretty sure that your needs are temporary, then term insurance is probably the right choice for you.

There is one option is very important and that you should be sure your term policy includes and that is a provision that ensures “convertibility.” This valuable feature allows you to convert your term policy to a permanent policy such as a whole life insurance policy without having to undertake a physical examination or submitting evidence of insurability.

Let our investment planning and insurance specialists introduce you to the innovation solutions possible with insurance as part of your financial planning.

An annuity is an investment vehicle available primarily from insurance companies. Annuities play an important role when planning your investment portfolio. The most obvious advantage of owning an annuity is that it can provide you with a steady stream of income when you retire or when you decide. Annuities are available in two basic forms: an immediate annuity in which begins paying the insured as soon as it is purchased, and a deferred annuity that begins paying out at some date in the future that you decide. Both types of annuities are available either as fixed where the payout is guaranteed at a specific payment each month, or as variable which offers results that vary with annuity’s investment performance.

The advantage of the fixed is a steady, consistent income that you can count on. Fixed annuities are a great strategy to consider if you anticipate living a long time in retirement. In fact, you can think of a fixed annuity as a “reverse life insurance policy.” While you purchase life insurance to protect you against dying prematurely, you can use a fixed annuity to protect you against living a long life. Still, most investors utilize a fixed annuity to provide them with a steady stream of income in retirement without worrying about their investments.

The advantage of a variable annuity is that you may enjoy increased income if the annuity’s underlying investments do well. A variable annuity is an investment vehicle designed specifically for retirement savings. A variable annuity invests in stocks or bonds, has no specified rate of return, and offers a possibility of earning far more than with a fixed annuity.

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