Financial service firms do a good job of promoting their key messages—Vanguard and its mantra of reducing fees, T. Rowe Price and its call to maintain stock exposure throughout retirement. Other companies provide adequate boilerplate, such as American Funds’ drumbeat of steady investing in all environments. All sound strategy for the long-term investor, but not a lot of comfort in the short run.
When it comes to providing useful advice, there are a few standouts—Vanguard’s retiring Chief Investment Officer Gus Sauter (“Why stay in the stock market?”) and T. Rowe Price Chief Economist Alan Levenson (“Is the U.S. Approaching a Fiscal Cliff in 2013?”) come to mind. They balance corporate messaging with market realities. To that list I’d add Rande Spiegelman, a CPA who serves as vice president of financial planning at the Schwab Center for Financial Research.
Spiegelman has written a guide on how to play the impending fiscal cliff. He charts historic tax rates for income and dividends as well as figures that show what would happen should Congress allow Bush-era cuts to expire at the end of this year. It’s not only sound reporting but useful information. Case in point: some pundits urge investors to take gains and pay taxes now, while the long-term rate stands at 15 percent for high earners. Spiegelman suggests staying the course will yield a bigger net profit, charting a hypothetical investment at today’s rates as well as the higher rates politicians have floated.
Hats off to Schwab for trying to make sense out of uncertainty.