College Savings Reminders. The Difficult Path to Investment Success.
Mariposa Capital Management, LLC
Newsletter: June 2014

College Savings Reminders

With the school year ending, now is a great time to review your child's college fund. If you need to make a contribution or set one up, don't wait until December, you can do it today.

529 Contribution Limits

The federal gift tax exclusion this year is $14,000, which means each parent or grandparent (or anyone else, really) can contribute up to $14,000 for each child. If you want to make an even larger contribution, speak to your tax advisor about making an accelerated gift that uses 5 years of exclusions today.

Setting Up a 529 Plan

For most families, our recommended college savings plan is The Vanguard 529 Plan. If, like New York, your state offers tax benefits for using your in-state plan, you should evaluate that plan as well.

Here are our 529 plan recommendations for the most common states among our clients.

State Recommended Plan
California Vanguard 529
Hawaii Vanguard 529
New York New York 529 Direct
Washington Vanguard 529

If your state is not listed, email me and I will let you know which plan I would use.

Featured Article

The Difficult Path to Investment Success

"[To be a superior investor,] this is the bottom line: not whether you dare to be different or to be wrong, but whether you dare to look wrong." - Howard Marks, Oaktree Capital Management

The toughest qualification for being a successful investor is the ability to stick with a strategy even when it's not working. Even when the strategy is making you look foolish. Even when there was much money to be made by following a different strategy.

One consequence of following an evidence-based investment strategy is that your portfolio does not look like a traditional portfolio. Your level of diversification is much higher. Unlike your friends, you may not even own a single stock -- only disciplined, diversified funds. Your level of trading? Very likely much lower.

The expected result from this deviation is superior performance over time. Why else would we choose this strategy in the first place? However, to be able to earn this superior performance, returns would have to be different over any given month or year. Different, which can mean either higher or lower. And when that difference is lower, investing can be quite unenjoyable.

Let's focus on diversification as an example. Most US investors primarily hold US stocks in their long-term portfolio. More sophisticated investors tend to accept the rationale for diversification and end up with far more diversified portfolios. To explore these two approaches, let's compare the historical performance of US stocks vs the performance of ...

Read the rest of the article

Blog Articles

Are Markets Efficient?
When I tell people that I use index funds and ETFs to build client portfolios, they seem a bit surprised that I would consider markets to be efficient.

Using 529 Plans Effectively
Over the years, my clients and I have developed strategies to use 529 plans effectively when building a college fund. Here are three to get you started.

Value and Momentum: April 2014
Let’s look at what our value and momentum analysis of asset classes told us in April 2014.

Interesting Reads

Managing the Mental Aspect of Investing -- AAII Journal
A finance professor discusses the mental hurdles investors face when making investing decisions.

Two Costly Self-Delusions -- The Wall Street Journal
Expecting money to buy happiness, and trying to beat the market, can hurt you.

The Mo the Merrier -- The Economist
If there is a greater mystery in financial markets than momentum, it is hard to think of one.

About Mariposa

Mariposa Capital Management is a boutique investment advisory firm designed for individuals and families who want a more thoughtful way to invest.

Learn more about Mariposa

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