Dividends are a way for investors to receive cash payments from a company as a reward for holding their stock. They are usually paid on a quarterly basis, and are more commonly found in more established and mature companies who are reinvesting back into their own research, development and growth. Dividends are one of the two ways to make money from holding a stock, the other being stock appreciation, where the stock price goes up.
Depending on your financial goals, dividends can be used as a source of income, especially for retirees who can use the cash payments to live their life. For those in the growth phase, they can also choose to reinvest the dividends back into buying more shares in the stock, which is a way of compounding the investment over time.
It's important to note that not all companies pay dividends, so it's important to check a company's history of paying dividends and their current dividend yield to see if dividends are a potential source of income for you. And for those who want to use dividends as a source of income, it's crucial to plan and diversify the portfolio to ensure a steady income.
In summary, dividends are cash payments from a company to its shareholders as a reward for holding their stock. It's important to review a company's dividend history, yield and payment schedule and consider whether dividends align with your financial goals, whether that is to generate income or for investment growth. It's an important part of investment planning, and can be an important way to generate an income from your portfolio.
Analyzing Your Risk
When it comes to investing, it is important to have a portfolio that matches your risk tolerance. Your risk tolerance refers to the level of volatility and potential loss that you are comfortable with in your investments. It is important to align your portfolio with your risk tolerance in order to ensure that you are comfortable with the potential ups and downs of the market.
Assessing your risk tolerance is an individual endeavor and can involve considering factors such as your age, financial goals, and the amount of time you have until you need to access your invested funds. Oftentimes, people's perceived risk tolerance does not align with the actual risk level of their portfolio. For example, someone in their sixties might consider themselves to be a moderate investor, but their portfolio could be very aggressive with a high percentage of equities. It is important to carefully review your portfolio and ensure that it aligns with your true risk tolerance, rather than just your perception of it.
It is essential to carefully assess and understand your risk tolerance in order to make informed decisions about how to allocate your assets. By aligning your portfolio with your risk tolerance, you can feel more comfortable and confident in your investments, even during market downturns.
What are I-Bonds
An I-Bond is a savings bond that is issued by the United States Treasury Department. It is considered a type of savings account in which an investor buys at a fixed rate for the term of the bond. When the bond reaches maturity, the holder receives both a return of their original investment and interest accrued through the life of the bond. The advantage of I-Bonds over other types of savings accounts is that they offer tax advantages. The interest earned on I-Bonds can earn interest tax free as long as you hold them for the entirety of their term. At any point before then, should you cash in or redeem your investment, you would be taxed on that money at your own individual tax rate.
All I-Bonds have a fixed rate of return that remains constant throughout its term, and are offered in terms as short as six months and as long as 30 years. The further out you purchase your bonds, the higher your rate of return. If you choose to cash them in early, however, you will not only lose all accumulated interest but also forfeit any future interest payments for that period.
What is Estate Planning
Estate planning is the process of organizing your affairs to give yourself and your heirs the best possible outcome. It's an important part of your financial future, whether you're young and just getting started or have a lot of assets and investments that you've worked hard to build. Estate planning is about making sure that your money goes where you want it to when you die, and that your wishes are respected after you pass away.
It's also about creating a sound plan for what happens during your lifetime. There are many ways to accomplish this: wills, trusts, insurance policies and beneficiary designations are all part of estate planning. These tools can ensure that your money goes to exactly who you want it to go to, no matter what happens in the future.
Failing to plan for these things could leave your loved ones without much-needed protection or financial support, or will keep them from receiving gifts that were meant for them. This can be a stressful time for everyone involved; with estate planning, you'll be able to rest easy knowing that everyone is taken care of and that everything has been put into place so they can get back on track with their lives as soon as possible.
What is Tax Loss Harvesting
Tax loss harvesting is the act of selling assets that have lost value to offset gains on assets that have appreciated in value. This has been a popular strategy among large institutional investors for some time, but it has recently become more mainstream and available to individual investors as well.
Tax loss harvesting is done during the year, and it's done when you have capital gains. If you don't have any capital gains, there's no need to tax loss harvest because you'd be selling assets for no reason (you won't have any gains to offset). If your capital gains exceed your capital losses, you're not doing anything out of the ordinary: if you sell an asset for more than you bought it for, you have a taxable gain. When it comes time to file your taxes at the end of the year, though, you can lose some of that profit—to the benefit of your portfolio—if you tax loss harvest.
Tax loss harvesting allows you to take advantage of how tax laws are structured. When two similar securities are purchased within 30 days of each other and sold within 30 days of each other, they're treated as one security. If they're sold at a different price than they were purchased at, a capital gain or loss will be created.
What is a Fiduciary
Fiduciary is a term that refers to someone who has a legal or ethical responsibility to act in the best interest of another. It's most commonly used to describe a financial advisor, who has a legal obligation to act in the best interest of their clients—as opposed to the best interest of the clients' money. It means that if any conflicts of interest arise, they must be disclosed and resolved before doing anything else.
If you're looking for an unbiased opinion on your financial situation, it's worth taking the time to find an advisor who is a fiduciary. Many advisors will claim they're acting in your best interest, but not all are held to that same standard. Just because someone is licensed to sell investment products doesn't mean they're required or even legally able to act in your best interest. That's why it's important to have an appointment with someone who does have that obligation.
So the market is very volatile. It can get emotionally very stressful. I think the most important thing that people don't do is they don't actually take stock of their specific situation. Is investing emotional? Of course it is. You know, especially recently when the market is down. When the market is the way it is, it's pretty volatile. So on a short-term basis, stocks are going to rise and fall more often than people think, I think I saw some of that. There's been like 38 1% move or moves up and down, up or down on the Nasdaq specifically to start the year. So what we try to do is just take a step back with our clients so they understand some of the fundamentals of investing, right. You need a purpose for why you're investing. How it applies to you, or you and your spouse is the most important thing. Consistency, I think, is the next thing that you need. You know, once you have all those goals defined and you know you have a plan to get there, stick with it. Not getting caught up in like, oh, you know, you're getting a push notification on your phone about the market being down 800 points and getting, you know, worried about your portfolio.
"Like, I'll tell clients all the time that are retired. Like, can you just please go back to playing golf and just go back and play golf please? Because you're going to drive yourself crazy."
The third thing I would say is patients really, you know, it kind of ties everything together. If I have a 60-year-old couple that comes in here and they're worried about the short-term market, I want to reinforce to them that if they're healthy, even though the market may be volatile today, keep in mind that the money that they need needs to last for 30 years. Whenever you're planning for something ten, 15 years down the road, you know, 20 years down the road. It takes patience. You need the patience to have the consistency to be able to stick with your purpose. You know, we haven't had a single client who I've said, Hey, you've got to go back to work because the market's down 15%. Right. So if you're not going to have to go back to work when you're retired or you're not going to have to change your retirement date because the market's down 10%, right. Then is it really at the end of the day, having any effect on you on a day-to-day basis?
Not at all. So the only effect it's having on you is how you feel about it. From there, it's how you react to it.
How the Firm was Founded
"So this firm was literally founded over a burrito. We all grew up at the same firm; Kristen, Mike, Joe and I (Bob). And then we all left about five years ago. I walked into Chipotle in Glastonbury, which is Joe's favorite place to eat. Of course, I walked in and Joe was there. I had not seen him in literally ten years. At that exact time, I was looking to leave my former firm and Joe was breaking a wall down in this office to expand that day when we met, at Chipotle. We sat down and I told him I was looking to leave, and he told me he was looking to break a wall down. It just matches. Some people think it's Connecticut Financial Partners, which obviously works, which is great for the state. It's just we came up with CT and the T fit in the C and that was the ballgame, sold."
"It's a play on words. The C is Covill and the T is Tubridy. But everyone thinks it's Connecticut because we were the first two. So I used to when it was just me call it J.T. Covill Investment Advisory, cause it was just me. But then when Bob joined, you know, I didn't think that that would make a lot of sense we did a little name change, and it's been like that ever since. So it's perfect because I've had people call it Connecticut Financial Partners, not knowing it's Covill Tubridy. You know, and the reality is, is that's the way at this point because Kristin is here and Mike is here, you know, et cetera. That's kind of the way I think about it anyways at this point. But that's really the way is the way it started."
The Best Advice You've Ever Received
"What's the best advice I could give somebody? Life is long. Don't make long term decisions on a short term feeling. You know, I think that trying to have a little more consistency in life and not succumbing to our kind of short term feeling and not messing something up in the long term."
"Best advice, that's a tough one. Work hard. I enjoy working, I do. So I don't like to sit around, I don't like my kids sitting around. So I think if you work hard enough, good things happen. Find out what you want to do in life. If you like what you do that's all that matters. If you like what you do, you'll be a happy person."
"I've got a lot of good advice. Don't panic. Don't make long term decisions based on short term circumstance. Stay the course. If you can do those things, you're probably going to be okay."
"There's a few things. From when I was a child, my grandfather was a business owner who would always tell me just be a good guy. Be honest and work hard. Never be satisfied with what you have, and always want more. What's the next thing."
Our First Meeting
As a financial advisor, it's important to understand that when it comes to working with clients, the relationship is just as important as the advice being given. In order to build a successful partnership, it's crucial to find a financial advisor who truly listens to and understands your unique situation and goals.
When preparing for that first meeting with a potential advisor, it's important to think about what you want to accomplish financially. Clearly defined goals will not only help the advisor understand what you're looking for, but also help you stay focused on what you want to achieve. Remember that the advisor's job is to help you figure out the specific details of your financial goals, but having a clear idea of what you want to accomplish will be beneficial for both parties.
Another important consideration is understanding the services that the advisor offers and their client process. It's important to ask about how often they meet with clients and review portfolios, as well as how they charge for their services. Every firm is different, so it's important to find one that aligns with your needs and preferences.
It's also important to establish a connection with your advisor. A good advisor will be someone you trust and have confidence in, and who you enjoy working with. This is important because your financial advisor will be with you through many important life events, and you want to ensure that the partnership will be successful in the long run.
Before meeting with an advisor, it's also a good idea to get a checkup of your own finances and bring as much information as possible to the meeting. This will help the advisor understand where you stand and provide more accurate advice.
In summary, when looking for a financial advisor, it's important to find someone who listens to and understands your unique situation, has clearly defined and aligned services and process, and that you can build a trusty and enjoyable relationship over the long run with.