The Value of a Long-Term View

The Value of a Long-Term View

The Value of a Long-Term View

  • Insert Text here

    Imagine someone ringing your doorbell every minute from 9:30 a.m. until 4:00 p.m., Monday through Friday, to tell you a price they would pay for your house even though it was not for sale. Would you sell?

    Would you sell if each time you opened the door they offered you less and less? Obviously not — that would be irrational because you know the true value of your house. The same applies to stocks of quality companies — they have value despite their daily price movements.

  • The Value of a Long-Term View

    Insert Image here

Economic Worth of A Business

However, investors often perceive “value” in the stock market as “price” and forget the economic worth of the business attached to the stock. During selloffs, markets can drop because of uncontrollable factors that are not purely economic in nature,  despite sound company-level fundamentals. Many perceive this day-to-day volatility as “risk,” but you certainly wouldn’t consider daily price movements as risk to your home’s long-term value. Perhaps the long-term view that real estate investors often take could be a good lesson for stock investors.

Similar to your home, companies have actual economic value despite their stock price on any given day. They are not just pieces of paper or a blip on the computer screen. We favor quality U.S. businesses and, ultimately, a stock’s performance depends upon the underlying company’s ability to grow economically — not how the market prices its stock on a daily basis.

Time in the Market, Not Market Timing

Investors often let their emotions get in the way of rational decision making. They become fearful and sell when they should buy. The typical result is that they miss the market upswings and their gains are much less than what they would have been if they had just stayed the course. Trying to time the market just does not work consistently enough to build wealth over the long term.

Additionally, there is an overwhelming amount of research that shows that long-term investing — even through a stock market downturn — yields better results over the years than trying to time a decline, remove capital, and return when “things are better.” In fact, studies of 20-year periods demonstrate that missing just 10 of the best days in the stock market over two decades can dramatically affect an investor’s rate of return.

Maintain A Long-Term View

Solid, fundamental business characteristics do not make a stock impervious to daily price movements, and all asset classes fluctuate including bonds and real estate. However, just as your home’s value can grow over time, stocks of quality, financially sound companies also possess long-term growth potential. We believe that stocks are essential in order to outpace inflation and generate real wealth over the long haul.

If you focus on your long-term financial goals and not short-term stock market fluctuations, you can be successful. So as stock market volatility causes people to be fearful, try to focus on quality businesses that can help defend against what we believe is true risk – the permanent loss of capital.

SHARE ON


Back

Continue reading

Coverdell ESAs

Coverdell ESA

Coverdell ESA

Help the child in your life achieve a bright future.

A Coverdell education savings account (ESA) may be an easy way to start saving for a child’s education.
Contributing to a child’s ESA will help jump‑start his savings—and give him tax‑free money later—to pay for education expenses.

With an ESA, individuals can make annual nondeductible contributions on behalf of a child until the child reaches age 18. The earnings generated remain tax deferred while in the ESA. When the child uses the ESA assets to pay for qualified education expenses, the contributions and the earnings come out tax free.

Anyone—family member or nonfamily member—can contribute to a child’s ESA, as long as their modified adjusted gross income (MAGI) is less than or within the applicable IRS limits.

DOWNLOAD PDF


SHARE ON

Coverdell ESAs PDF


IMPORTANT FENIMORE ASSET MANAGEMENT DISCLOSURES

The views and opinions expressed in this article are those of Ascensus and do not necessarily reflect the views of Fenimore Asset Management or its officers. Fenimore Asset Management or its officers have no editorial control over the content of the article or subject matter, and is independent of Ascensus.

The information herein is subject to change and is not intended to be complete or to constitute all of the information necessary to evaluate adequately the consequences of investing in any securities or other financial instruments or strategies described herein. These materials also include information obtained from other sources believed to be reliable, but Fenimore does not warrant its completeness or accuracy. In no event shall Fenimore be liable for any use by any party of, for any decision made or action taken by any party in reliance upon, or for any inaccuracies or errors in, or omissions from, the information contained herein and such information may not be relied upon by you in evaluating the merits of participating in any transaction.

In part, the purpose of this presentation may be to provide investors with an update on financial market conditions. The description of certain aspects of the market herein is a condensed summary only. This summary does not purport to be complete and no obligation to update or otherwise revise such information is being assumed. These materials are provided for informational purposes only and are not otherwise intended as an offer to sell, or the solicitation of an offer to purchase, any security or other financial instrument. This summary is not advice, a recommendation or an offer to enter into any transaction with Fenimore or any of their affiliated funds.

We undertake no duty or obligation to publicly update or revise the information contained in this presentation. In addition, information related to past performance, while helpful as an evaluative tool, is not necessarily indicative of future results, the achievement of which cannot be assured. You should not view the past performance of Fenimore funds, or information about the market, as indicative of future results.

All projections, forecasts and estimates of returns and other “forward-looking” information not purely historical in nature are based on assumptions, which are unlikely to be consistent with, and may differ materially from, actual events or conditions. Such forward-looking information only illustrates hypothetical results under certain assumptions and does not reflect actual investment results and is not a guarantee of future results. Actual results will vary with each use and over time, and the variations may be material. Nothing herein should be construed as an investment recommendation or as legal, tax, investment or accounting advice.

Clients or prospective clients should consider the investment objectives, risks, and charges and expenses carefully before investing. You may obtain a copy of the most recent mutual fund prospectus by calling 800-932-3271 and/or visiting www.fenimoreasset.com.

There is no guarantee that any of the estimates, targets or projections illustrated in this summary will be achieved. Any references herein to any of Fenimore’s past or present investments, portfolio characteristics, or performance, have been provided for illustrative purposes only. It should not be assumed that these investments were or will be profitable or that any future investments will be profitable or will equal the performance of these investments. There can be no guarantee that the investment objectives of Fenimore will be achieved. Any investment entails a risk of loss. An investor could lose all or substantially all of his or her investment. Unless otherwise noted, information included herein is presented as of the date indicated on the cover page and may change at any time without notice.

Fenimore Asset Management Inc. is an SEC registered investment adviser; however, such registration does not imply a certain level of skill or training and no inference to the contrary should be made.


Back

Continue reading

Inherited IRAs

Inherited IRA

Inherited IRA

Understand your beneficiary distribution options.

As an IRA beneficiary, you have some choices.
If you’ve inherited an IRA, make sure you understand your options.

Because of the IRS rules, your options as an IRA beneficiary depend on certain factors.
First, answer this question…When did the IRA owner die?

  • Before January 1, 2020: Continue the same method of payment that you previously elected. If you have not yet made an election, consult with the financial organization holding your IRA or review the IRA document for your options.
  • On or after January 1, 2020: See the distribution options described in this brochure. Because there may be exceptions to these options, consult further with a competent advisor or with the financial organization holding the IRA.

DOWNLOAD PDF


SHARE ON

Inherited IRAs PDF


IMPORTANT FENIMORE ASSET MANAGEMENT DISCLOSURES

The views and opinions expressed in this article are those of Ascensus and do not necessarily reflect the views of Fenimore Asset Management or its officers. Fenimore Asset Management or its officers have no editorial control over the content of the article or subject matter, and is independent of Ascensus.

The information herein is subject to change and is not intended to be complete or to constitute all of the information necessary to evaluate adequately the consequences of investing in any securities or other financial instruments or strategies described herein. These materials also include information obtained from other sources believed to be reliable, but Fenimore does not warrant its completeness or accuracy. In no event shall Fenimore be liable for any use by any party of, for any decision made or action taken by any party in reliance upon, or for any inaccuracies or errors in, or omissions from, the information contained herein and such information may not be relied upon by you in evaluating the merits of participating in any transaction.

In part, the purpose of this presentation may be to provide investors with an update on financial market conditions. The description of certain aspects of the market herein is a condensed summary only. This summary does not purport to be complete and no obligation to update or otherwise revise such information is being assumed. These materials are provided for informational purposes only and are not otherwise intended as an offer to sell, or the solicitation of an offer to purchase, any security or other financial instrument. This summary is not advice, a recommendation or an offer to enter into any transaction with Fenimore or any of their affiliated funds.

We undertake no duty or obligation to publicly update or revise the information contained in this presentation. In addition, information related to past performance, while helpful as an evaluative tool, is not necessarily indicative of future results, the achievement of which cannot be assured. You should not view the past performance of Fenimore funds, or information about the market, as indicative of future results.

All projections, forecasts and estimates of returns and other “forward-looking” information not purely historical in nature are based on assumptions, which are unlikely to be consistent with, and may differ materially from, actual events or conditions. Such forward-looking information only illustrates hypothetical results under certain assumptions and does not reflect actual investment results and is not a guarantee of future results. Actual results will vary with each use and over time, and the variations may be material. Nothing herein should be construed as an investment recommendation or as legal, tax, investment or accounting advice.

Clients or prospective clients should consider the investment objectives, risks, and charges and expenses carefully before investing. You may obtain a copy of the most recent mutual fund prospectus by calling 800-932-3271 and/or visiting www.fenimoreasset.com.

There is no guarantee that any of the estimates, targets or projections illustrated in this summary will be achieved. Any references herein to any of Fenimore’s past or present investments, portfolio characteristics, or performance, have been provided for illustrative purposes only. It should not be assumed that these investments were or will be profitable or that any future investments will be profitable or will equal the performance of these investments. There can be no guarantee that the investment objectives of Fenimore will be achieved. Any investment entails a risk of loss. An investor could lose all or substantially all of his or her investment. Unless otherwise noted, information included herein is presented as of the date indicated on the cover page and may change at any time without notice.

Fenimore Asset Management Inc. is an SEC registered investment adviser; however, such registration does not imply a certain level of skill or training and no inference to the contrary should be made.


Back

Continue reading

IRA and Retirement Plan Distributions

IRA and Retirement Plan Distributions

IRA and Retirement Plan Distributions

Is it time to cash in on your retirement savings?

Be sure you understand the rules and possible tax consequences of taking IRA and retirement plan distributions.
Whether your retirement is close or still a ways off, you may be ready-or required-to put your savings to use.

With a retirement plan, you must satisfy certain requirements before taking a distribution, but with an IRA, you can withdraw your IRA assets anytime (subject to possible tax and penalty).

Ideally, you will be able to start drawing from your retirement savings around the time you retire, but there may be reasons for accessing the funds sooner. And once you reach a certain age, you may be required to start withdrawing money from these plans. Required minimum distributions (RMDs) are a must for the
following types of accounts.

DOWNLOAD PDF


SHARE ON

IRA and Retirement Plan Distributions PDF


IMPORTANT FENIMORE ASSET MANAGEMENT DISCLOSURES

The views and opinions expressed in this article are those of Ascensus and do not necessarily reflect the views of Fenimore Asset Management or its officers. Fenimore Asset Management or its officers have no editorial control over the content of the article or subject matter, and is independent of Ascensus.

The information herein is subject to change and is not intended to be complete or to constitute all of the information necessary to evaluate adequately the consequences of investing in any securities or other financial instruments or strategies described herein. These materials also include information obtained from other sources believed to be reliable, but Fenimore does not warrant its completeness or accuracy. In no event shall Fenimore be liable for any use by any party of, for any decision made or action taken by any party in reliance upon, or for any inaccuracies or errors in, or omissions from, the information contained herein and such information may not be relied upon by you in evaluating the merits of participating in any transaction.

In part, the purpose of this presentation may be to provide investors with an update on financial market conditions. The description of certain aspects of the market herein is a condensed summary only. This summary does not purport to be complete and no obligation to update or otherwise revise such information is being assumed. These materials are provided for informational purposes only and are not otherwise intended as an offer to sell, or the solicitation of an offer to purchase, any security or other financial instrument. This summary is not advice, a recommendation or an offer to enter into any transaction with Fenimore or any of their affiliated funds.

We undertake no duty or obligation to publicly update or revise the information contained in this presentation. In addition, information related to past performance, while helpful as an evaluative tool, is not necessarily indicative of future results, the achievement of which cannot be assured. You should not view the past performance of Fenimore funds, or information about the market, as indicative of future results.

All projections, forecasts and estimates of returns and other “forward-looking” information not purely historical in nature are based on assumptions, which are unlikely to be consistent with, and may differ materially from, actual events or conditions. Such forward-looking information only illustrates hypothetical results under certain assumptions and does not reflect actual investment results and is not a guarantee of future results. Actual results will vary with each use and over time, and the variations may be material. Nothing herein should be construed as an investment recommendation or as legal, tax, investment or accounting advice.

Clients or prospective clients should consider the investment objectives, risks, and charges and expenses carefully before investing. You may obtain a copy of the most recent mutual fund prospectus by calling 800-932-3271 and/or visiting www.fenimoreasset.com.

There is no guarantee that any of the estimates, targets or projections illustrated in this summary will be achieved. Any references herein to any of Fenimore’s past or present investments, portfolio characteristics, or performance, have been provided for illustrative purposes only. It should not be assumed that these investments were or will be profitable or that any future investments will be profitable or will equal the performance of these investments. There can be no guarantee that the investment objectives of Fenimore will be achieved. Any investment entails a risk of loss. An investor could lose all or substantially all of his or her investment. Unless otherwise noted, information included herein is presented as of the date indicated on the cover page and may change at any time without notice.

Fenimore Asset Management Inc. is an SEC registered investment adviser; however, such registration does not imply a certain level of skill or training and no inference to the contrary should be made.


Back

Continue reading

Transfers Rollovers and Conversions

Transfers, Rollovers and Conversions

Transfers, Rollovers and Conversions

Move your retirement savings without losing tax benefits.

When moving money between your IRAs and retirement plans, be sure you understand the rules.

Your retirement savings accounts are portable.

  • IRA-to-IRA
  • IRA-to-retirement plan
  • Retirement plan-to-IRA
  • Retirement plan-to-retirement plan

There are many reasons for moving your retirement assets to another retirement savings account. Perhaps you’ve left a job, your financial circumstances have changed, or you’re looking for ways to better maximize
your retirement savings. Whatever the reason, there are portability options available. Some preserve the tax-deferred nature of your assets, and some may have tax consequences.

Consider visiting with your competent tax or financial advisor about what’s best for your financial situation before moving your IRA or retirement plan money.


SHARE ON

Transfers, Rollovers and Conversions PDF


IMPORTANT FENIMORE ASSET MANAGEMENT DISCLOSURES

The views and opinions expressed in this article are those of Ascensus and do not necessarily reflect the views of Fenimore Asset Management or its officers. Fenimore Asset Management or its officers have no editorial control over the content of the article or subject matter, and is independent of Ascensus.

The information herein is subject to change and is not intended to be complete or to constitute all of the information necessary to evaluate adequately the consequences of investing in any securities or other financial instruments or strategies described herein. These materials also include information obtained from other sources believed to be reliable, but Fenimore does not warrant its completeness or accuracy. In no event shall Fenimore be liable for any use by any party of, for any decision made or action taken by any party in reliance upon, or for any inaccuracies or errors in, or omissions from, the information contained herein and such information may not be relied upon by you in evaluating the merits of participating in any transaction.

In part, the purpose of this presentation may be to provide investors with an update on financial market conditions. The description of certain aspects of the market herein is a condensed summary only. This summary does not purport to be complete and no obligation to update or otherwise revise such information is being assumed. These materials are provided for informational purposes only and are not otherwise intended as an offer to sell, or the solicitation of an offer to purchase, any security or other financial instrument. This summary is not advice, a recommendation or an offer to enter into any transaction with Fenimore or any of their affiliated funds.

We undertake no duty or obligation to publicly update or revise the information contained in this presentation. In addition, information related to past performance, while helpful as an evaluative tool, is not necessarily indicative of future results, the achievement of which cannot be assured. You should not view the past performance of Fenimore funds, or information about the market, as indicative of future results.

All projections, forecasts and estimates of returns and other “forward-looking” information not purely historical in nature are based on assumptions, which are unlikely to be consistent with, and may differ materially from, actual events or conditions. Such forward-looking information only illustrates hypothetical results under certain assumptions and does not reflect actual investment results and is not a guarantee of future results. Actual results will vary with each use and over time, and the variations may be material. Nothing herein should be construed as an investment recommendation or as legal, tax, investment or accounting advice.

Clients or prospective clients should consider the investment objectives, risks, and charges and expenses carefully before investing. You may obtain a copy of the most recent mutual fund prospectus by calling 800-932-3271 and/or visiting www.fenimoreasset.com.

There is no guarantee that any of the estimates, targets or projections illustrated in this summary will be achieved. Any references herein to any of Fenimore’s past or present investments, portfolio characteristics, or performance, have been provided for illustrative purposes only. It should not be assumed that these investments were or will be profitable or that any future investments will be profitable or will equal the performance of these investments. There can be no guarantee that the investment objectives of Fenimore will be achieved. Any investment entails a risk of loss. An investor could lose all or substantially all of his or her investment. Unless otherwise noted, information included herein is presented as of the date indicated on the cover page and may change at any time without notice.

Fenimore Asset Management Inc. is an SEC registered investment adviser; however, such registration does not imply a certain level of skill or training and no inference to the contrary should be made.


Back

Continue reading

Common Cents Planning

COMMON CENTS
PLANNING

  • SAFETY NET

    In an ideal world, investors should have at least six months, and as much as two years, of living expenses set aside before they invest in stocks. Although you may not be there yet, it is a worthwhile goal. Having a sufficient cash reserve – in good times and bad – should provide flexibility and allow you to make rational, unforced financial decisions. The first step is to create a budget so that you can make saving a habit. The amount of this emergency fund should be based on your circumstances.

    YEAR-END GIFTING

    For 2022, you can make a tax-free gift of up to $16,000 ($32,000 if you and your spouse elect to split gifts on your federal tax return) to an unlimited number of individuals. A gift of an appreciated security is also a great way to transfer wealth while possibly reducing your future tax liability.

  • Senior man with grandaughter gardening in the backyard garden.

HSA: A TRIPLE-TAX ADVANTAGE

A Health Savings Account (HSA) is only offered in conjunction with a High-Deductible Health Plan (HDHP) – the plan type, if available, you elect during your employer’s health insurance open enrollment period. An HSA can offer much more than just an interest-bearing account to help cover out-of-pocket medical costs. It should be considered as a potential long-term vehicle to cover future medical expenses. Automatic payroll deductions present an excellent way of forced savings into an HSA and the HSA offers a triple-tax advantage: 1. Tax deduction 2. Tax-deferred growth 3. Tax-free withdrawal if used for medical expenses There are more advantages to consider. Additionally, it is good to check with the HSA’s trustee to review your investment options.

ESTATE PLANNING REVIEW

It is a sound practice to review your estate planning documents and account beneficiaries regularly to ensure that they reflect the desired distribution of your affairs. These documents include health care proxies, powers of attorney, last will and testament, and trusts. If you have not had these documents prepared or reviewed by an estate planning attorney, we encourage you to do so to ensure that your objectives will be fulfilled.

SHARE ON


Back

Continue reading

Thomas O. Putnam founded Fenimore in 1974 with two passions: conduct in-depth, firsthand, independent investment research and serve investors with excellence and integrity. Today Fenimore Asset Management, manager of the FAM Funds, is nationally recognized, yet locally rooted and independently owned. Decades have passed, but our approach endures.

Securities offered through Fenimore Securities, Inc. Member FINRA/SIPC,
and advisory services offered through Fenimore Asset Management, Inc.

© Fenimore Asset Management. All Rights Reserved.