Super Bowl Sunday Prep List

Wow your guests for the big game with these essentials

Sound System Upgrades – Porsche 911 GT3 Soundbar

Wearable Subwoofer Vest


Table Decorations – Grass Table Runner 

Fashion Swag - Vintage 70’s Big Mac Belt Buckle


Food- Potato and Mozzarella Croquettes

Condiments – Sriracha2Go

Fanduel / Draft Kings Parlay Cash – Prop Money Series 2000s Blank Filler Bundles $500,000



Gear - LeatherHead Black Bison Football


Extra Drink Storage - Marshall Beverage Vault

Additional Seating – Tailgate Backpack Cooler Chair


Don’t Forget your millennial hipster guests - Beard Wipes





Which Tax Payer Are You?

Taxes = Fear, I don’t know where to start.

Taxes = Worry, I hope this software works!

Taxes = No big deal, my people have this under control.

Within the next few weeks, you will have most of your information to file your 2015 tax return, and some of you will rely on me or another CPA to help you through that process.  Hopefully, when the process is complete, you will feel a sense of calm about filing your tax return.

The IRS and Congress don’t make it easy to feel that sense of calm.  As has become the norm lately, Congress waited until December to pass a tax deal that was retroactive for all of 2015.  However, this deal did make some breaks permanent, which will allow us to plan for future years. 

Some of the tax breaks that have been made permanent are:

  1. Tax-Free direct payments from your IRA to a charity of up to $100,000.
  2. The itemized deduction of state sales tax for those in states without an income tax.
  3. The write-off of $250 for teacher classroom supplies

On an almost daily basis, I see the fear and worry that many people harbor deep inside them related to taxes and the IRS.  Those feelings come from the abundance of difficult tax codes and horror stories circulated through social media.  If you are tired of the anxiety that taxes bring, I’d love to assist you in a transition to quality professional tax preparation. 

The transition can be easier and less expensive than you may think.  At Leconte Wealth Management, our clients have tax preparation included as part of our comprehensive wealth management package.  If this sounds like an appealing option to you, please give us a call.


Groundhog Day - Making the Most of "Life Resets"

As we tire of winter, pine for warmer days and look to Pennsylvania for hope, I wanted to revisit the enduring theme from Bill Murray’s 1993 classic. To quickly recap for the 5% of society that hasn’t see Groundhog Day, Mr. Murray plays Phil Conners a misanthropic weatherman who loathes the monotony of the Groundhog Day remembrance but is forced to cover it for his local station. Through freak circumstance he finds himself stuck repeating, repeating the day and its events. Phil isn’t released from exile until he confronts and corrects his moral defects. As he triumphantly reinvents the worst day of his life into his best, he finds freedom and happiness.

Like Phil, we inevitably face moments where we have to it the reset button. In 2016 you may encounter something on your personal or professional life that requires a fresh perspective. It could be a financial or health issue that forces you to change courses. Each of these scenarios will require a different response to find a workable solution.

After a 5% loss on the S&P and a 7.8% loss on the NASDAQ, investors are looking at the worst January in memory. They need to discern if this is the start of really bad times or time to buy more. Here’s my decision tree for investment uncertainty:

  1. Understand where you are.
    1. How old are you?
    2. How much time do you have to invest before needing your funds?
    3. What caused the declines in your portfolio?
  2. What is the worst case scenario?
  3. Is there an opportunity for improvement in this?
  4. Who can help me get through this?

This list is helpful beyond investment problems and number 4 is the most critical advice to follow. Don’t go through it alone. You have people around you that can offer help and encouragement. A little hint, they are usually the folks who have already hit the “life reset” button a few times themselves.

Phil Conners learned that we are only destined to repeat mistakes if we fail to recognize that a change needs to happen. Use Life Resets as an opportunity for growth and stronger relationships.


Can you Invest Like a Billionaire?

Let’s role play the part of a billionaire investor and see how good you would be at it. Here is the scenario: You own 61.5 million shares of this stock trading at $93. That puts your stake at 5.7 billion dollars. It’s an oil stock and in just the last two months it drops from $93 to $79/share. Your paper loss would be somewhere around 860 million dollars.

The outlook calls for oil to continue to drop and global supplies are growing each day.  You’re a billionaire so you could buy more if you wanted to. The wait for a turnaround won’t be immediate. What do you do?

Option 1

Do not dwell in the past, sell, cut your losses and look for something better.

Option 2

Despite being down, buy more shares now and even more if it goes lower.

Option 3

Keep what you have but dont add anymore to a losing position.


Warren Buffett’s company, Berkshire Hathaway owns this stock. Do you want to compare your decision with Buffett? He bought 759,000 more shares on January 6th when the stock closed at $78. The next day the stock dropped to $76, adding another 124 million dollars to a paper loss that is now almost one billion dollars on the whole position. What would you do at this point? How would you handle losing a billion dollars in a couple of months?

Buffett bought twice as much on the 7th when it dropped again. It dropped to $75 on the 8th. He bought another 1.74 million shares. He didn’t let the immediate pain of losing a billion dollars in 2 months cloud his judgement about the long term opportunity. He was following his own well-rehearsed advice. He was being “greedy when others were fearful”. Here’s the chart of his continued purchases in January as oil stocks were getting hammered.

You may be tempted to reply that it’s easier for billionaires to invest like this since they have such deep pockets and are in charge. Realize that Buffetts company stock, Berkshire Hathaway was also down 15% last year and his personal stake of 350,000 shares in the company dropped over 12 billion dollars!

The lesson for mere mortals is a behavioral one. Buffett has mastered the fear that prompts rash decisions. He uses situations where other investors are capitulating to their fears as an opportunity to buy solid long term assets “on sale”. To mimic his approach you will have to divorce your investment decision making from the emotions of near term moves which is easier said than done.


8 Questions to Ponder at the Start of 2016

The party is over and it's back to work. Take a minute before your schedule returns to warp speed and think about your financial future:

Looking back:

Did we save enough money last year?
Did we spend money that we shouldn’t have?
What was the biggest financial surprise of 2015 and how did you react?
What was your biggest financial regret of 2015?
Before looking forward, go back over these questions and answer the “Why” behind your answer. This will reveal a deeper level of motivation and behavior that you should address in 2016.

Looking Forward

What should I change to make 2016 better than 2015?
Is there any “easy money” within my reach?
What should I be doing different than my friends to achieve financial freedom?
What is the main financial item that I have to pay closer attention to in 2016?

Start this year different by picking one idea from your thoughts that will reduce your financial stress and take action on it today. If you that includes help with your taxes, investments and financial planning, click here to learn about our services or call us for a no-obligation consultation.

Put Your Snow Tires on Before the Blizzard Hits

We don't get as much snow in East Tennessee as I would like. Seeing everything covered in white and my two Wheaten Terriers bounding, chasing each other through the powder puts a smile on my face. Trying to get out of my subdivision and into the office is another matter. The main roads are usually fine (thank you City of Maryville Roads Department). It's the road at the end of my driveway that becomes impassible until the city brings a plow through. East Tennesseans don't need to prepare for winter like our northern friends do. As a result we typically find ourselves unprepared if a big storm descends on us. 

Rates are going up. Probably not by much and not in a hurry, but investors have definitely entered into a new financial era. It's been three years since the Fed started promising to raise rates so we've had plenty of time to prepare. Only a few of my colleagues have actually been through these interest rates cycles first hand. Bond manager, Jeff Gundlach at Doubleline Funds observed that two thirds of portfolio managers have never managed money in a rising rate environment.

Janet Yellen tried to temper expectations for the pace and magnitude of rate increases in her press conference yesterday. She explained that the Fed's path will be guided by new information as it develops. The reality is that investors don't have the Feds deep pockets to rely on as a buyer of last resort anymore. Stocks will sink or swim on more traditional measures - earnings, revenue, sales, expenses, debt etc. 

Markets experienced an increase in volatility in the second half of 2015 as the Fed slow-walked the world to their first rate increase in nine years. I expect this elevated level of volatility to become a more familiar characteristic as the Fed struggles to find their footing and normalize rates at some unknown, higher level. Rookie fund managers and investors will have to figure out how to deal with this day-to-day uncertainty. Here are four underrated techniques to provide traction to your portfolio when the roads seem impassible:

  1. Define your investment goals and attach an accurate time horizon to each goal. When the day to day gyrations freak you out, remind your self that time is your friend. If you don't have time to stay in the market, put your money in savings instead and accept a fixed return with lower risk. 
  2. Make sure you understand the relative risk and reward of ALL of the assets in your portfolio. Risky assets haven't acted like risky assets in the last 5 years but they are starting to. This is normal and especially so as rate increases make business growth more difficult to forecast accurately.
  3. Once you map out the risk profile of all your holdings, reallocate to reduce volatility if you are prone to short-term bouts of fear. The first goal is to stay in the game until you master your own emotions. The end result is to learn to spot when less experienced investors are acting on their fear and providing you an opportunity to buy cheap.
  4. Have a plan to buy more if prices decline and relative value comparisons justify it. Since 2011 this strategy hasn't been necessary as constant Fed stimulus kept a lid on volatility and pushed valuations higher and higher. In the next few years, without this stimulus, valuation differences between various industries will likely vary dramatically as these industries react differently to higher rates. Businesses that require more capital to operate and grow will see their costs increase more than ones who need less capital. Businesses that sell higher ticket items like houses and cars will face tough sledding when customers try to finance these purchases at higher rates. The broad market will become less homogenized and valuations will vary more dramatically than in the past.

Storms are unavoidable so weather proof your portfolio now. This is a two step process. First, where needed, adjust your investments to this new interest rate reality with the tips above. Second, re-calibrate your expectations for higher short term volatility so that your emotions wont send you into a ditch. Or, call us to help with the process. After three decades of market experience, we've been here before.
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