June 2019 Newsletter to Clients

Enjoy this month’s edition that describes our process for seeking new, suitable investment options as well as an introduction to the newest member of our team, Amy Wiseman, and shred date announcement.

Investment Committee Commentary: We continuously search for the most suitable investment options that will help meet our clients’ needs. We meet with representatives of mutual fund companies and we conduct a lot of research on our own. We, of course, continually monitor the funds we recommend to our clients, and also invest in ourselves, to examine whether they are still doing the job in our portfolios that we intended when we first added them. Sometimes that means making a change. For instance, last year we added the JP Morgan Small Cap Growth (PGSGX) fund to some clients’ portfolios.

Oftentimes, however, we examine an additional course of action only to decide what we’re currently doing continues to make more sense than making a change. For example, we were recently reviewing the 2018 tax return of clients who are retired and, as much of their wealth is in their Joint taxable account, we examined adding a municipal bond mutual fund to help save on income taxes. As a reminder, the interest paid on municipal bonds is exempt from federal income tax and, sometimes, from state and local tax, too.

As we compared the yields of the Lord Abbett Short Duration fund (LALDX) with the new potential municipal bond fund also managed by Lord Abbett, we discovered that the risk of the bond would increase dramatically in order to achieve the same amount of income. (Yield is the amount of dividend per share price of the fund) To be more specific, the Duration of the fund would move from 1.9 years to 8.8 years. In English, this means the municipal bond fund owns bonds that mature on a much longer time horizon, adding the risk that interest rate changes will negatively affect the value of the bonds. So, our research determined staying the course is the better option for our clients.

Whether or not this is interesting, please know we are constantly evaluating options to help you achieve your goals. And, like New Coke, sometimes the original is just better.

Meet Our Team: If you’ve called the office recently you may have talked with an additional friendly voice – Amy Wiseman. Amy joined Moneywatch in April as Client Support Specialist. She is assisting Lee Chapman, Operations Manager, by helping manage client data and reports, opening new accounts for clients, processing applications and requests for cash and a whole host of other duties.

Amy grew up in Fort Wayne, Indiana and attended Hollins Women’s College. After she moved to Lexington in 1994, she graduated from the University of Kentucky with a degree in Psychology. She has been in the investment services industry for 20 years and has a son, Colton Tate, who is 21 and attending UK and majoring in Education.

Shred Day:  Moneywatch Advisors will host a shred day on Wednesday, July 31 from 8:30am-12:00pm at our office at 121 Walton Avenue. We will share more details in our next month’s newsletter.

Thank you for your continuing confidence.

Past performance is no guarantee of future results. The opinions expressed are those of Moneywatch Advisors, Inc. and are no guarantee of the future performance of any particular fund. This information is for educational purposes only and is not intended as investment advice. Please consult your financial advisor for more detailed information or for advice regarding your individual situation.