*Holiday updates* This holiday season, the Weatherly team is especially thankful for the opportunities to work with our clients and for our community. Our holiday hours are as follows: 12/23: 6am-3pm PT, 12/24: 6am-11am PT, 12/25: closed with the markets, 12/26- 27 & 12/30: 6am-3pm PT, 12/31: 6am-2pm PT, 1/1: closed with the markets. We will resume normal business hours on Thursday, January 2nd. We continue to collaborate in person and virtually to ensure access to your team of investment professionals. We look forward to our work together into the New Year!
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The Bipartisan Budget act was passed in and signed into law at the end of 2015, with several key changes:

File & Suspend:  This is a well-publicized strategy where a person (usually the higher earner) files for benefits at full retirement age (usually age 66), and immediately suspends receiving those benefits until a later date (usually age 70).  This allows their spouse to begin collecting spousal benefits on their record while the higher earning worker’s benefit increases at 8% per year.

 

Restricted Application:  This allows a person, who has reached full retirement age, to file benefits restricted to their spouse’s record, while their own benefit increases at 8% per year.  The person could then switch to their own record at age 70 when the maximum benefit has accrued.  This is also important for divorcees who would be eligible for benefits on their ex-spouse’s record.

  • What has changed?
    • They are eliminating this strategy for anyone born on or after January 2nd, 1954
      • Those who have already filed for this benefit are unaffected.
    • If the spouse suspends their benefits, their spouse will not be able to receive any benefits during that suspension.
  • Who is eligible?
    • Any spouse married for at least one year and at full retirement age.
    • Any ex-spouse married for at least 10 years and hasn’t remarried (the wage-earning spouse can remarry)
  • What should I do if I’m eligible?
    • Check with your advisor to see if this affects your retirement planning.  You may need to consider the risk of a spouse filing, and then deciding they made a mistake, and suspend.  Their suspension may also suspend the benefits you are receiving on their record.  Other implications like Medicare payments may also come into play.
      • There is an exception for ex-spouses; if your ex-spouse suspends benefits, it will not affect the benefits you are receiving or your ability to file on their record.
  • Additional information here:

 

If you are younger than 62 and were expecting to use one or both of these strategies in your retirement, there are other strategies worth considering as you approach retirement.  Consider discussing this topic with your advisor in light of these changes.

** The information provided should not be interpreted as a recommendation, no aspects of your individual financial situation were considered. Always consult a financial professional before implementing any strategies derived from the information above.

The luxury of always being “connected” comes with the unfortunate risk of being compromised. To best serve our clients, the Weatherly crew has an established compliance culture that keeps all team members fully trained and abreast of the latest in regulations and information security.   Weatherly’s Identity Theft Prevention, Business Continuity, Information Security and Privacy Policy Programs aim to proactively protect our business and our clients against:

  • Fraudulent wire, trading, account set-up, electronic fund transfer, and email requests
  • Theft of identity, passwords & log-in credentials
  • Malware, phishing, social engineering

Some of the measures Weatherly employs to safeguard data include:

  • Identity verification via copies of clients’ driver’s licenses
  • Firewalled network security with 24/7 monitoring
  • Email and email attachment encryption
  • User authentication in addition to passwords
  • Verbal confirmation of certain trade & account requests
  • Offering guidance to clients on a number of different protection and data breach issues

Some simple things you can do right now to protect yourself from unnecessary extra holiday stress are outlined below, as well as a few resources & articles that provide more detail.

  • Create ROBUST passwords on all devices and shared documents; change your passwords often
  • Consider a password management application
  • Employ “find my device” functionality
  • Update your operating system, browser, anti-virus and other critical software
  • Secure your home & business networks; use public wi-fi with discretion for certain activities
  • Review your social media privacy settings
  • Sign up for text alerts of account activity
  • Report lost or stolen items immediately
  • Teach your friends… remember, you can control your online activity, but not that of the sender
  • Verify certain activities by an outbound phone call (vs. email or inbound phone verification requests)
  • Minimize secure information provided to third parties
  • Only open links & attachments from trusted senders

The links below offer further guidance on the topic.

** The information provided should not be interpreted as a recommendation, no aspects of your individual financial situation were considered. Always consult a financial professional before implementing any strategies derived from the information above.

Weatherly Asset Management’s Option Strategies

Weatherly Asset Management has the ability to utilize multiple option strategies for our clients, dependent on their individual needs, financial situation and equity holdings. We implement covered call strategies for clients to generate additional income and add to the total return of portfolios. For clients with concentrated stock positions, we mitigate the downside risk with covered put options. We also employ covered collars, at either no cost or minimal cost to the client. Weatherly feels these strategies are valuable when the stock market or a particular equity holding is experiencing high volatility or trading at a range. 

Covered Calls – Used to generate additional income for total return of portfolios

  • Strategy – An individual writes (sells) a call option contract while at the same time owning an equal amount of shares of the underlying long equity position. The call option contact gives the buyer the right the purchase the shares at a set price and pays the seller a premium for this right.
  • How we implement – We looks to generate 3-5% of annualized income premium using this strategy. We analyze positions on a weekly basis and generally write covered call contracts 10-15% above current market prices to allow our clients to enjoy a reasonable level of price appreciation; we write calls on only a portion of the position, so if the option is exercised, the portfolio still holds some of the stock. We use covered call positions to generate income in during periods of market volatility to capture income as prices fluctuate.
  • Advantages –
    • Call options help generate income in uncertain times
    • Clients reap the benefits of owning the equity position (voting rights, dividends) unless the position is called
    • Covered calls allow for reasonable stock appreciation while adding cash to the portfolio to implement alternative buying opportunities
    • The client has the option of buying back the call option and retaining the shares before the strike price is met

Covered Puts – Used as a protective strategy for concentrated stock positions

  • Strategy – An individual purchases a put option while at the same time owning an equal amount of shares of the underlying long equity position. The put contract gives the buyer the right to sell the shares at a set price and pays the seller a premium for this right.
  • How we implement – We utilize covered puts as a method of providing protective portfolio insurance for clients with concentrated stock positions. This strategy helps to mitigate the effects of downside momentum and provides protection against loss of total return. We generally employ puts when a client has an unrealized profit accrued from the increase in value of the underlying stock and wants to limit the downside loss from any large decline in the stock price.
  • Advantages –
    • There is no limit to the gain on the underlying stock
    • Upon reaching the expiration date, the client has the option of selling the contract to regain some of the premium paid
    • The put option guarantees the right to sell shares at the specified price, no matter how much the underlying stock declines in value

Covered Collars – Used as an alternative to covered puts for additional protection for concentrated stock positions, can be costless or obtained at a minimal cost

  • Strategy – An individual writes (sells) a call option while simultaneously purchasing a put option on an equal amount of shares of the underlying long equity position.
  • How we implement – We implement covered collar strategies on concentrated stock positions while considering cost basis and holding periods. The collar essentially places a floor on the stock price while simultaneously placing a ceiling on the appreciation, allowing us the ability to manage risk and reduce volatility for clients.
  • Advantages –
    • There is a limit on the amount of capital gains the client can incur
    • The put option allows the client to retain any unrealized accrued gains
    • The covered call portion of the collar helps to compensate for the risk of downward price pressure

*Options strategies contain varying degrees of risk. You should carefully consider whether it is appropriate for your situation in light of your experience, objectives and other relevant circumstances.

** The information provided should not be interpreted as a recommendation, no aspects of your individual financial situation were considered. Always consult a financial professional before implementing any strategies derived from the information above.

Carolyn Taylor was included in Barron’s June 2015 Top 100 Women Financial Advisors list. The full list can be viewed on Barron’s website.

The criteria for ranking reflects assets under management, revenue that the advisors generate for their Firms, and the quality of the advisor’s practices. Investment performance is not an explicit criterion because the advisors’ clients pursue a wide range of goals. In many instances, the primary goal is asset preservation. The scoring system assigns a top score of 100 and rates the rest by comparing them with the top-ranked advisor.

Carolyn Taylor was nominated for inclusion in the list. There are over 100 nominations, but only 100 published ranking spots. Barron’s uses a proprietary method to rank advisors based on the criteria above. Weatherly provides this data to Barron’s in the form of a survey response. Initial ranking is done by Barron’s; publicly available data is verified by Barron’s against SEC and FINRA reports. Barron’s then conducts the next level of ranking. Data that is not independently verified by Barron’s is then sent back to the Firm for verification. Barron’s then incorporates any required changes into the ranking, and finalizes the list for editorial use and publishing.

No payment was required for nomination or inclusion in the ranking. After receiving notice of inclusion in the top 100 ranking list, Weatherly paid Dow Jones & Company for glossy reprints of the piece; Weatherly paid Dow Jones through RightsLink for permission to link to a Dow Jones WebReprint from our corporate website.

No organizational memberships were required of the Firm or individuals. Ranking on this list is not representative of any one client’s experience and is not indicative of Weatherly’s future performance. Weatherly is not aware of any facts that would call into question the validity of the ranking or the appropriateness of advertising inclusion in this list.

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