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Who Thinks About Taxes During the Holiday?

Sunday December 2, 2012
M. Diane McCormick

Political uncertainties in Washington are creating tax uncertainties in American homes. The “fiscal cliff” negotiations will determine tax rates for many Americans, and it’s hard to plan until we know the outcome.

"As much as we have always had the philosophy that you don’t let the tax tail wag the investment dog – you make investment decisions for investment reasons, not for tax reasons – some of the significant changes that appear to be coming have us looking at things with a critical eye from a tax perspective," said Bradley R. Newman, CFP, of Roof Advisory Group, a fee-only investment management firm in Harrisburg...

The biggest question dangling at the fiscal cliff, say tax advisers, is the long-term capital gains rate, now at 15 percent. Without Congressional action, it could rise to 20 percent, with an additional 3.8 percent for households earning more than $250,000, and individuals earning $200,000 or more... Consider "resetting the cost basis," Newman said. That means selling a stock or mutual fund, paying the 15 percent capital gains tax and rebuying it so it remains in your portfolio...

Year end is "a great time to review" with your investment and tax advisers, Newman said. "It's always important to reevaluate your circumstances." For instance, municipal bonds could become more advantageous than corporate bonds as tax rates rise. Just remember that "it's not what you earn," he said. "It's what you keep." Analyze interest rates with your tax bracket and choose investments that net higher amounts...

Central Penn Business Journal
PA Securities Commission Merger

Friday July 27, 2012
Tim Stuhldreher

Officials give just one reason for folding the Pennsylvania Securities Commission into the state Department of Banking: to save money.

Announced earlier this month, the merger will take effect on October 1. The combined entity will be renamed the Department of Banking and Securities.

"From an enforcement standpoint, it will be crucial for the department to maintain the same presence of auditors in the field as it has now", said Jeffrey Roof, president of Harrisburg-based fee-only investment firm Roof Advisory Group, Inc.

Roof Advisory Group was licensed through the Securities Commission early on. It has since grown large enough to be licensed through the U.S. Securities and Exchange Commission. The SEC regulates firms managing more than $100 million in assets; Roof Advisory Group’s portfolio exceeds $250 million.

PA's Debt Downgrade

Tuesday July 17, 2012
Mary Wilson, Capitol Bureau Chief

Pennsylvania's recent debt downgrade means it may cost the state more to borrow money because investors will want to pay less for taking on riskier debt. The effect of the lower score might be more political than financial.

The drop from Aa1 to Aa2 by Moody's Investor Service is likely to have a small effect on typical investors who invest in state bonds, but analysts are taking note of the major reason given for the change: ballooning pension costs are expected to hit the state in increasingly large waves over the next several years.

Jeff Roof, of Roof Advisory Group in Harrisburg, said because the pension problem is clearly understood, the downgrade wasn't out of left field.

"The rating services take a look at items from a bigger picture perspective. So it was not telegraphed that this was going to be occurring beforehand, but was not, quite frankly, a real significant surprise either".

Roof says his clients with general obligation debt in their portfolios haven't yet seen price changes, but the downgrade could affect prices in a sale of more than $363 million dollars in state bonds scheduled for next week.

"Even so, the typical investor in state bonds will likely see a small, incremental difference in price. You would not see anything that was earth-shattering. The big message of this downgrade is that the state's pension problems have reached a critical point. A rating agency saw it appropriate to say, 'Ok Pennsylvania has some things it needs to address in the not-too-distant future," Roof said.

Friday June 22, 2012
Ivey DeJesus

In 2010, stockholders got nothing but bad news as the company posted dismal performances and consecutive quarterly losses. Last year, the New York Stock Exchange threatened to delist the drugstore operator if its stock price did not meet minimum share price requirement.

Its poor performance has driven away investors.

"Frankly, I enjoy shopping there. That's my drug retailer of choice, but from an investment standpoint, it just doesn't meet our criteria at the present time, "said E. Jeffrey Roof, president of Roof Advisory Group, an independent investment adviser in Harrisburg. He has pulled the company from his investment portfolios.

"They're just dealing with significant issues and have had for a while. They're locally headquartered so hopefully they can continue to make progress but we're not making investments with hopes that will make progress. It would take a significant turnaround for them to be on our radar again."

College Education Savings Strategies
Sunday May 13, 2012
M. Diane McCormick

Programs such as state-sponsored 529 college savings plans are excellent tools, but don’t jeopardize your retirement savings, said Bradley R Newman CFP ® of Roof Advisory Group.

Saving for college is a strategic investment that will pay dividends for your children well into the future, but families need to identify ways to incorporate college savings into their set of financial circumstances. "There are no scholarships for retirement," he said.

Be flexible and save money in traditional vehicles to avoid penalties incurred if 529 savings aren't needed for college: your child earns a full scholarship, or decides against college.

Relatives can help pay for qualified college educational expenses – costs such as tuition and housing at an accredited school – without gift tax implications "so long as the payments are made directly to the institution," Newman said.

JOBS Act reform trigger concerns
Friday April 13, 2012
Tim Stuhldreher

..."Investor protections are essential to a well-functioning economy," said Bradley Newman, a certified financial planner for Roof Advisory Group Inc., an independent fee-only investment and financial advisory firm based in Harrisburg.

He instanced the subprime mortgage crisis that sparked the 2008 financial crisis and the Great Recession.

"We’ve just come through a period of time when folks could do things without oversight," he said, "and we’ve seen what the outcome ends up being."

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