Happy Holidays! Investment Options in Emerging Market Stocks.
Mariposa Capital Management, LLC

Happy Holidays!

Every year, I tell myself to send out the year-end newsletter earlier. And every year, it gets pushed closer and closer to New Year's Eve. In case you are looking to get one last task in before the new year, here are a few last minute reminders. Be sure to go over any tax-related strategies with your tax advisor.

Tax Loss Harvesting

  • You can realize losses in your taxable accounts to reduce your taxes for 2014. Asset classes that are likely candidates are foreign stocks, emerging market stocks, commodities, and commodity stocks.

Retirement Savings

  • If you expect your 2014 tax rate to be lower than usual, converting Traditional IRAs and old 401k's into a Roth IRA could be a smart move. The deadline to convert is December 31.
  • If you are self-employed or own a business without full-time employees, Individual 401k's are a great way to save for retirement. The deadline to set one up for this year is December 31.

College Savings

  • 529 plans are a great way to save for your child's future college expenses. For 2014, the deadline to open accounts and make contributions is December 31 and the annual gift exclusion is $14,000.
  • Already have a 529 account opened and funded? Remember to use your annual trade by December 31 if you are not using an age-based option.

Charitable Giving

  • If you're going to make charitable donations, consider donating appreciated investments to avoid the capital gains tax.
  • If you want the tax benefits of a charitable donation, but are not ready to decide on a charity, you can open a donor-advised fund. You get the tax deduction when you contribute and you can decide which charity gets the money later.
Featured Article

Investment Options: Emerging Market Stocks

Driven by growth in countries like China and Brazil over the last few decades, Emerging Market (EM) stocks have grown from representing less than 1% to now over 10% of the world's stock market value. It has been a dramatic shift, yet many US investors tend to own very little to no EM stock investments.

With today's endless menu of low-cost Emerging Market stock funds, there's very little reason to keep them out of your strategic portfolio. Once you decide to include them, the tough decision is selecting a fund to use.

As with other asset classes, I prefer index funds and ETFs that hold hundreds of stocks instead of buying individual stocks directly -- keeping costs low and diversifying as much as possible. With EM stocks, this really is the only viable option since buying individual stocks is unrealistic for the average investor.

Here are some of my basic requirements when selecting an investment for a given asset class:

Read the rest of the article

Blog Articles

What is Smart Beta?
Traditionally indexing has meant something that looks like the S&P 500 index. In recent years, indexing has grown far beyond its traditional roots and it now seems more common for index funds and ETFs to track ...

Options for Old 401k Accounts
If you have ever switched jobs, you probably have more than one old 401k (or 403b) account with past employers, with the occasional unexpected statement as your only reminder that they even exist.

Value and Momentum: October 2014
A look at what our value and momentum analysis of asset classes told us in October 2014.

Interesting Reads

Legends Of Indexing: Robert Shiller -- ETF.com
An interview with Yale professor Robert Shiller who was awarded the Nobel Prize in Economics in 2013.

Global Aging: More Headwinds for US Stocks? -- Federal Reserve Bank
The retirement of baby boomers is expected to cut US stock values in the future. Since population aging is widespread across the world, this raises the question of whether global aging could adversely affect the US stock market even further.

Most Research on Why Investments Do Well is All Wrong -- Slate
For several months, Duke University economist Campbell Harvey has been busy delivering some unpleasant news to the world of finance. Most of the existing research about why some stocks outperform others is likely false.

About Mariposa

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

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