Many see risk tolerance as a simple measure of their financial ability to withstand market losses. While there are many financial factors to consider (including income, net worth, liquidity, and time horizon), the emotional component of managing risk can’t be underestimated. Recognizing that emotions like fear and exuberance are reactionary mechanisms that tend to flare up over short-term events may keep you in check when examining risk tolerance in the context of your long-term strategy.
Gifting and charitable donations are often used to reduce taxable incomes and redistribute wealth within a family. Annual tax-free gifting limits reset each year, but some high-net-worth individuals may wish to instead take advantage of 2022’s relatively high lifetime gift tax exemption to maximize a tax mitigation strategy.  

Talking to your Aging Parents about Finances

by Casey Bear on
As your parents age, they may become less capable of managing their own finances. Here are some ways to approach the subject and ways advanced planning can help ease elder care transitions.
Charitable giving can be a rewarding part of many wealth management plans.  Not only does it feel good to help worthy causes, your monetary or asset donations to qualified charitable organizations may be used as a tax write-off.  However, recent tax law changes enacted with the 2017 Tax Cuts and Jobs Act have drastically reduced the ability of some taxpayers to itemize deductions. Coupling that with the proliferation of phony charitable appeals online, now more than ever, donors must carefully and diligently plan their giving strategy. 
Once you officially retire, the transition from nest egg “saver” to “spender” can be a big psychological hurdle to clear.  Even diligent savers may wonder if their nest egg can cover the many spending “wants” of retired life amid the uncontrollable variables that will almost certainly affect their savings over time, so our investment professionals recommend a few strategies to prepare for retirement spending.
With large enough balances in a taxable account, margin loans may be a wise option for high-net-worth individuals under certain circumstances. Recognizing the appropriate situations in which to draw a margin loan is an important part of a sound wealth management strategy, and at Cranbrook Wealth, we carefully evaluate individual client situation before recommending this option.
When the world wakes up to dramatic geopolitical headlines, like today’s unprovoked invasion of Ukraine by Russia, investors can get spooked.  That fear often results in a sell-off and retreat into “safe” investments, but the truth is major global or national events rarely change the trajectory of equity markets for a sustained period. 
Short-term volatility is an almost-certain fact of life in the capital markets, one investors and advisors must handle with a clear and rational approach. The instinct to move money out of a quickly-dropping market and "sit on the sidelines" during a correction can present a host of challenges, not the least of which is deciding when it is safe to get back in.

SPAC market glitters, but may not be golden

by Casey Bear on
Special-purchase acquisition companies—or SPACs— are enjoying a moment of unprecedented popularity. Despite their reputation as this year’s “shiny new thing”, SPAC investments should still be approached with caution.