How Our Fiduciary Standard Protects You

• Always put your best interests first.
• Act with prudence, providing you with
the skill, diligence and good judgment of a
trust advisor.
• Provide full and fair disclosure of all important facts.
• Ensure all investment advice and analysis is accurate and complete.
• Avoid conflicts of interest and fairly manage, in the clients’ favor, any unavoidable conflicts of interest.


You may have heard media reports about a new fiduciary rule for retirement accounts that President Trump has rescinded. Understandably, you have questions about how this might impact to your accounts. The rule was designed to ensure recommendations made by financial advisors to their clients regarding their retirement accounts are always made in the best interests of the client without any conflicts of interest.
The good news is that doesn’t affect your accounts at all. As a Registered Investment Advisor, we are already under the highest fiduciary standard – so enacting the rule or rescinding it doesn’t change our status. We have had this higher standard in place all along and will continue to do so. It’s always been part of our DNA.
As your financial advisor, we have been serving you as a fiduciary all along
A “fiduciary” who manages an investor’s assets has a legal and ethical obligation to put the investor’s interests first. That means helping the investor make decisions in his or her best interests. This fiduciary standard has always been at the core of our firm’s mission to our clients.
Here’s how we protect you and your investments:
• We always put your needs first. We are committed to the highest professional and personal standards, and this commitment remains as strong as ever. Our sole focus is on your financial needs and goals and how we can best help you pursue them.
• We always act in your best interests. We are committed to putting your needs and goals before those
of our firm. We strive to avoid any conflicts of interest, and if they arise and are unavoidable, we disclose these to you immediately. We provide a high level of transparency around any fees or expenses associated with your accounts, so that you always know what you own and what you’re paying for it, so there are never any surprises.
• We are an independent and objective resource. As an independent firm, we provide you with objective, unbiased advice based solely on your needs and goals. We provide guidance that is truly objective, unencumbered by any potential conflicts of interest. We have no vested interest in promoting a particular product or service. Our only interest is that your financial objectives are met.

In financial services, there have traditionally been two types of standards: the suitability standard and the fiduciary standard.
The suitability standard is defined as determining whether an investment product or strategy is “suitable” for the investor based on his or her financial objectives and risk comfort level. Many advisors operate under the suitability standard where the advisor simply determines whether a recommended product or strategy is suitable for the client.
The fiduciary standard is a higher level of responsibility for the advisor. The fiduciary standard goes beyond suitability and requires that any advice on products and strategies be provided in the best interests of the investor. The fiduciary standard of care requires that the advisor take into consideration whether the fees are reasonable, whether there are any conflicts of interest, and whether the investments are adequately diversified.
As your advisor, we adhere to the fiduciary standard, and we believe this model of disclosure and transparency is in your best interests. In our view, you deserve to have your needs put first and the strategies and investment products we recommend should align according to those needs.
Our fiduciary standard mandates that every single recommendation we make must be based on your best interests, and there is no circumstance when we can place our interests above yours. By adhering to the fiduciary standard, we believe we can provide you with the highest standard of care for all your investment and retirement needs.
When it comes to managing your money, your financial relationships should be built on a foundation of trust, integrity and transparency. Not all firms and advisors adhere to the same legal and regulatory standards.
We remain committed to earning and maintaining your trust through expert advice and effective strategies

Investopedia Q & A


How can a nontraditional college student gain more income to provide for a brighter future?
Well you could try and win the lottery, search for an unknown rich relative, or marry rich. Rule those out and your best alternative is to get that degree… Read More
Are qualified dividend paying stocks a reliable source of passive income for retirement?
Yes…Yes…and Yes!!! Not only are taxes lower on dividends then an IRA withdraw, but think of it this way; if you take regular distributions from a mutual fund within your IRA,… Read More
Does rolling over 401(k) funds to an IRA for charitable contributions satisfy my RMDs?
Regardless of the purpose, you can always roll over a 401(k) plan investment into a rollover IRA without paying taxes. Since the money is not taxed at this point and remains… Read More
How would rolling over my 401(k) to a Traditional IRA affect my contribution limit for 2017?
Rolling over a 401(k) plan account will have no effect on the amount you can otherwise contribute to a regular or a Roth IRA. Congratulations, you have a nice start on… Read More
Should I hold on to a temporarily suspended stock?
Well, if its been suspended, you don’t have much choice! Once the stock begins trading again, you will need to make that decision. My suggestion is to do as much… Read More
What should we do with two mature IRA CDs?
I see some form of this question all the time, and it is confusing. An IRA is not an investment, it is a tax designation that applies to virtually any… Read More
I received a lump sum pension when I retired. Can I roll this lump sum into a 401K or IRA?
You can roll it into an IRA and defer taxes until you make withdrawals. If you already received the money, you have 60 days from the receipt to deposit it… Read More
Are penny stock mutual funds a solid aggressive investment?
You assume that an “aggressive” mutual fund will make you more money than a less aggressive mutual fund. Why? Aggressive means more risk. Risk means there is an increasing possibility… Read More

Why the 1%Will Continue to Broaden the Wealth Gap

I recently came across the graphic below,  it illustrates why the top 1% are where they are. I know Amazon sells everything to everybody, but over $200,000 of sales a minute? Wow. Just consider if every company depicted could monetize each transaction for say, just a penny each? Do the math. Warning: you need to understand exponential numbers as your calculator probably doesn’t handle enough zeroes on its display.

In our hyper-charged world of politics, the top 1% are vilified by many. But the founders of the firms below represent a good part of that list. Many provide services that are free to the user. How do you regulate that? NetFlix provides a service for a fraction of their cable competitors. They are rich, not because of gouging their customers, but because the internet has created a massive market that we could not have imagined 20 years ago.

Volume can work in reverse too. What if Amazon’s margins decreased by a penny a transaction? That is the risk with such high volume companies for the average investor. A tiny hiccup in earnings can cause a massive sell off in stock price. Go back and follow the stock price of a few companies during the tech wreck.

Here is the direct link to The Visual Capitalist with a clearer image.


Q & A at Investopedia

I have recently started working with I will be providing original articles, quotes for other writers and answering Questions submitted by readers. Below are the questions and answers for the past week. Please click the “Read More link to view the entire interest. Please click to Follow me as well and you’ll be notified of my postings as they are posted.investopedia-logo

Which retirement account should we set up for our children?
I would go for an individual stock or two that are “Dividend Aristocrats.” These are companies that have increased the dividends paid to their shareholders for at least 25 years,… Read More
How should I keep my savings with a bigger investment goal in mind?
That’s what banks are for, you trade off low return for low or really no risk. Don’t think you are a dummy for doing so, there is $14.6 trillion dollars… Read More
Can my employer keep the interest earned from my 401(k)?
Definitely not, if what you say is what is happening. First, a 401(k) is an off shoot of a profit sharing plan. Point is that the plan document, which he… Read More
Now that the DJIA has reached 20,000, is it still a good idea to invest in the market?
Great, but loaded question! First, yes the market has gone straight up since 2009. But until 2013, it was only regaining what it lost in the financial crisis. This is… Read More
Is further action required on my end for a miscalculation of my RMD?
The way we handle this is to correct the RMD with draw immediately, which it appears you have done. The IRS actually says that they may impose a penalty of… Read More
Is it worth it for my husband to contribute to his 401(k), despite his age?
The RMD for a 74 year old on $25,000 is just over $1,000. So by contributing $25,000 to a 401(k), you defer taxes on $25,000 of taxable income. According to… Read More
How can I supplement my income until I am able to withdraw from my retirement account?
If your non-qualified savings is over $30,000 ($1,000/month x 30 months), then just keep the money in the bank and make your $1,000 withdraws. If your savings is less, or… Read More
Should I retire at 66 years old and use my IRA for income before taking Social Security?
Definitely “Yes.” There are two advantages to delaying your Social Security payments. First, your annual payments will increase by about 8% per year between now and age 70. You can… Read More
Which investment vehicle will produce the most long term growth for my children?
Comparing a Roth to an index fund is apples vs. oranges. A Roth IRA is a designation for an account with specific rules that allow for tax free earnings. You… Read More
Do I have control over how my employer-sponsored 401K assets are invested? What are my options?
A 401(k) is generally a self directed retirement plan. Your employer chooses a list of fund choices, but you determine which funds to use for your personal portfolio. This can… Read More
Mr. DeShurko is a registered representative of Ceros Financial Services, Inc, (Member FINRA/SIPC). Ceros is not affiliated with 401 Advisor, LLC or Fund Trader Pro. The views expressed are those of Mr. DeShurko and do not necessarily reflect those of Ceros Financial Services, Inc., its employees or affiliates.

Think Twice Before Relying on Target Date Funds

I recently worked with Ellen Chang on an article on Target Date funds that was posted on the-street. Ellen cites poor overall performance, lack of risk management and high fees of many target date funds as a reason to seek out better investment alternatives for your retirement investing.

The entire article can be found here.

Mr. DeShurko is a registered representative of Ceros Financial Services, Inc, (Member FINRA/SIPC). Ceros is not affiliated with 401 Advisor, LLC or Fund Trader Pro. The views expressed are those of Mr. DeShurko and do not necessarily reflect those of Ceros Financial Services, Inc., its employees or affiliates. Past performance does not guarantee future results.


Looking Past the Hype, What’s a Trump Presidency Mean for the Markets?

Now that the Trump crash (albeit when most of us were sleeping) and the Trump rally (albeit a short covering rally) have come and gone let’s get past the hyperbole and look at some factors that will most certainly affect the markets during the next four years.

Regardless of who won the election, demographics will continue to be a major headwind pushing down GDP growth potential. Not only are the boomers aging and moving into their lower consumption years, but the larger millennial demographic have either eschewed completely or delayed the traditional move to the suburbs with a new family in tow. While there is the potential for a new baby boom, bigger than the post WWII boom it’s not a sure thing with a generation more motivated by career growth, potentially extended life expectancies and “experiences” along the way.


The result, as seen below, is that our population (without immigration) is no longer growing. And the U S is not alone. Every industrialized nation plus both China and Russia is facing a shrinking population.


While annual growth rates for the stock market and annual growth rates for GDP do not correlate, over the long run the stock market and GDP must move together. The graph below depicts the annual level of U S GDP with the Dow Jones Industrial Average. You can see that while the stock market can be volatile, it does trend to the same level as GDP. And currently, there isn’t a lot of room for the market to rise relative to current GDP.


Source: Mitchell DeShurko, data from The World Bank and 1stock1

GDP can also increase with higher productivity, but U S Productivity growth seems to have stalled…

U.S. Productivity Quarterly/Annual Change



We’ve also seen that the worker participation rate has been at an all time low. And the trends are projected to continue for the next several years. According to the Bureau of Labor Statistics,

…the labor force participation rate declined by 2.4 percentage points over the 2000–2010

period and is projected to drop by another 2.2  percentage points between 2010 and 2020.

These two declining factors lead to a projected annual growth rate of only 0.7 percent for the

labor force from 2010 to 2020, a 0.1-percent drop from the annual growth rate exhibited in

the 2000–2010 timeframe.

Lower population growth, low productivity, and declining labor participation rates are not an economic head wind, it’s a hurricane!

And if demographics aren’t bad enough…

Let’s look at our dept and the hurricane turns into the perfect storm. Looking at the chart below you can see that about half of all our outstanding debt will come due over the next 10 years.



Mr. Trump has been very critical of Federal Reserve policy that has kept interest rates at historic lows for years. Even though the Fed is supposed to be independent of government policy, his stance has certainly opened the gate to future Fed rate increases.



Total Public Debt Outstanding: $19,805,715,000,000.00

Average interest Rate 10-16 2.216%

Interest Expense $432,650,000,000.00


Assuming just a 1% increase in the Government’s cost to borrow and rounding up to account for Mr. Trump’s projected deficits, adds approximately $50 billion a year to interest costs. Adding 2% and bringing interest rates to more “normal” historic levels adds $100 billion…a year. Looking at the chart below, you can see we are already spending more on interest expense than all but four other budget categories.


More debt and higher interest rates mean higher interest expense as a percentage of our entire budget continues to grow and makes it harder for economic stimulus through deficit spending.

So what’s the good news?

The U S economy generated $17947 billion US dollars in 2015. That means every 1% in marginal GDP growth adds $179 billion dollars to the economy. This more than offsets the drag that will be created by rising interest rates.
While the variables are too many to really try and weigh the pros and cons of interest rates, tax policy, deficit spending, etc. there is reason to hope that at worst GDP growth accelerates at a modest rate. Over the long run, the next 10 to 20 years GDP absolutely has to grow to continue to offset the drag from higher debt, and the increasing costs of government mandatory spending. Tax cuts do stimulate the economy.

The Office of Management and Budget (OMB) estimates revenues at 19.1% of GDP for FY 2017. That’s close to the historical 19% target. Back of the napkin calculations say that if taxes were cut by 5% that would add $1.75 trillion to the economy. If GDP were to increase by just 1% as a result, the annual deficit would not increase. But $1.75 dollars added to the economy can create a lot of jobs.

While both Presidents Bush and Obama have been criticized for their deficit spending, with anemic economic results, an argument can be made that the numbingly tepid growth was just the best the economy could do. So while there are reasons to believe the combination of tax cuts and spending will give a boost to economic growth.

If so, where are the best places to invest?

Below is a heat map of exchange traded funds, showing the one week return after the election. Dark red are losing ETF’s and green those with positive gains.



Clearly international of all regions, fixed income and gold have been the biggest losers. Domestic stock sectors real estate, technology and utilities have taken it on the chin as well. Small Caps are outperforming Large Caps.

Despite the selloff of many dividend paying stocks, I still believe that dividends provide a solid source of return should economic growth not materialize as hoped. But using the heat map above I’ve focused on mid and small cap dividend payers. I also think any technology selloff is overdone. If a tax holiday is passed for foreign cash stocks like Microsoft, Cisco, and Oracle stand to benefit. And they pay a nice dividend while we wait and see what unfolds. Banking should be a long term beneficiary as there will be major revisions to Dodd Frank. But I’m a little leery of healthcare until seeing what the “replace” part of repeal and replace (referring to ObamaCare) actually looks like.

The bottom line is that the future is always uncertain. I really don’t think today is any different than any other day. Crystal balls are always misleading. But there are undeniable trends that need to be watched and accounted for.

Mr. DeShurko is a registered representative of Ceros Financial Services, Inc. (Member FINRA/SIPC).  Ceros is not affiliated with 401 Advisor.  The views expressed are those of Mr. DeShurko and do not necessarily reflect those of Ceros Financial Services, Inc., its employees or affiliates.401 Advisor, LLC currently (12/5/2016) owns shares of Microsoft (MSFT) and Cisco (CSCO) in client accounts.Past performance does not guarantee future results.  There is no guarantee that any investment or strategy will generate a profit or prevent a loss. 

Happy Thanksgiving!

I hope that this Thanksgiving finds everyone in relatively (we’re all getting older, aren’t we!) good health, surrounded by friends, family, food and beverages of your choice. While many of us have lost friends and family members that may have gathered with us in the past, or we may be suffering through our own health problems, or facing other personal or economic difficulties, Thanksgiving is a uniquely American Holiday that is all about giving “Thanks”. So might I suggest that while we say a prayer for those in need, and those we’ve lost, we focus on what we do have and what we can truly be thankful for.

I’ll start by saying a big Thank You, to all of our clients for trusting me with your investments.  Many of us have seen a lot of changes together over the years (going back to 1987), and in terms of change the future doesn’t look to disappoint. While the past never fully prepares one for the future, it does provide guidance. So here is a toast to successfully navigating through our financial futures together. And hope that there will be more opportunities then setbacks in the years ahead.

Enjoy your turkey, enjoy your family and friends and spend a few days relaxing with a smile on your face as we all have so much to be thankful for.

Mr. DeShurko is a registered representative of Ceros Financial Services, Inc. (Member FINRA/SIPC). Ceros is not affiliated with 401 Advisor or Fund Trader Pro. The views expressed are those of Mr. DeShurko and do not necessarily reflect those of Ceros Financial Services, Inc., its employees or affiliates.
Past performance does not guarantee future results. There is no guarantee that any investment or strategy will generate a profit or prevent a loss.

Post Election Investing

Unknown to many investors, we have already had the “Trump Crash”. On election night, once it became likely that Mr. Trump would be our next President, Dow futures (an indication of market direction for the following day) began dropping precipitously. By the time I gave in and headed for bed, around 12:30 A M, the DOW was down over 800 points or pushing a 5% loss. The indication was that between the market close on Tuesday and the market open on Wednesday we would start the day with a 5% loss. Since these things tend to snowball there was every reason to believe that Wednesday would be ugly. I didn’t get a lot of sleep the rest of the night!

However, within minutes of the market open the market indices all turned positive and what followed was a solid three day “Trump Rally”.

So now with both the positive and negative over-reactions in the rear view mirror, what should we expect from here?

I’ll be putting up a longer more detailed post next week, but the short story is this:

The Wednesday night crash that wasn’t, is just typical knee jerk reaction. The worrisome part is really that it did not carry over to Wednesday trading day. The market moves so quickly due to the computer trading, the shear speed can be unsettling. The rally we’ve seen has been a “short covering” rally. In English, those that bet on a negative market can lose a lot of money when the market goes up. To close or exit those bets, the investor must actually buy the security(s) that they have been betting against. This causes a sharp short term rally. Thus the three day post election rally.

The last few days the market has been flat to slightly positive. This is due mostly to a rotation of money out of sectors that are believed to benefit least from Trump’s Presidency into those likely to benefit the most.

The trouble with buying into this rally is again the fast movement of the markets. For example the banking sector has risen over 10% in just a few days. The question is whether there is more room to run in the near term.

At 401 Advisor, LLC we are taking small steps to allocate or re-allocate portfolios. My goal is to be patient and look for values when they appear. Many technology names have been beaten up and may present new buying opportunities if this rotation continues.

Mr. DeShurko is a registered representative of Ceros Financial Services, Inc. (Member FINRA/SIPC). Ceros is not affiliated with 401 Advisor or Fund Trader Pro. The views expressed are those of Mr. DeShurko and do not necessarily reflect those of Ceros Financial Services, Inc., its employees or affiliates.
Past performance does not guarantee future results. There is no guarantee that any investment or strategy will generate a profit or prevent a loss.



Kiplinger Webinar

The webinar I will be doing for (see last post below) is part of a Wealth-Building Web Conference Series. The cost is $29 per conference.

If you are a client of 401 Advisor, LLC or Fund Trader Pro (our online 401(k) management service) just send me an email after viewing the presentation and the $29 will be refunded via a fee reduction during the next billing quarter.

Post Election Investment Update

I will be hosting a webinar for on November 9th, after the election.

More information can be found at

Kiplinger’s Wealth-Building Web Conference Series

Tune In to Macro Trends for Investing Success

Date: November 9, 2016   Presenter: Bill DeShurko, RIA

Fast forward to the day after Election Day. You know who the next President will be. There’s going to be a lot of to-ing and fro-ing and the usual uproar about what the new Administration will do and how the markets will react.

But focusing on the din in Washington isn’t nearly as important as identifying the macro trends that actually will determine how your investments will perform over the long term.

This web conference reveals a number of lucrative investment strategies and opportunities looming on the horizon — if you know where to look for them — including:

  • Companies and stocks that are poised to profit with the rise of “the Internet of things,”
  • How to capitalize on the growing value of data and artificial intelligence in the services field,
  • How increasing freight shipments can predict a stock market rally,
  • Customer demographics that drive reliable performance in a wide range of companies, and how to spot them in an investment you’re considering,
  • And much more.

Date: November 9, 2016   Time: 1:00 pm EST, 45 minutes including audience Q&A
Schedule conflict? The presentation will be recorded and viewable on demand whenever and as often as you wish.

General Information

What: 6 can’t-miss wealth-building web conferences.
When: Between today and January 31, 2017.
Why: To help guarantee your richly rewarding future.
Where: View the presentations on your computer wherever you have Internet access.

All web conferences will be recorded. Have a schedule conflict on a live event date? No worries, view the recorded program on demand whenever you like.

Get one web conference FREE when you sign up for all six. $29 per conference — all six for just $145.

Mr. DeShurko is a registered representative of Ceros Financial Services, Inc, (Member FINRA/SIPC). Ceros is not affiliated with 401 Advisor, LLC or Fund Trader Pro. The views expressed are those of Mr. DeShurko and do not necessarily reflect those of Ceros Financial Services, Inc., its employees or affiliates. • 937.434.1790

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Charles H. Dow Award Winner 2008. The papers honored with this award have represented the richness and depth of technical analysis.