Pankauski’s Perspective : A Florida Trustee’s Take Away for April 5, 2014
John Pankauski is a West Palm Beach, FL probate litigator and founder of the Pankauski Law Firm PLLC and author of the upcoming book Pankauski’s Trustee Book, An Individual’s Guide to Money, Misfits, Marriages and Mismanagement. He practices estate & trust law on the intracoastal in downtown West Palm Beach, Florida.
Finance & Investing: April 5, 2014
- Re-consider real estate investment trusts (REITS) particularly apartment REITS. If you believe the real estate market is coming back, consider adding a small % of real estate to your Florida trust investment portfolio. But you don’t have to purchase bricks & mortar or raw land. You can look at publicy traded REITS which were “under performers” in 2013 compared to the broader US stock market. If you buy into the notion that we are coming back from the Great Recession with a baby step recovery, what are you doing based on that belief? Many believe that our economy will be healthy and strong over the next 5-10 years with real estate being an important component of that comeback. Consider how you can diversify your Palm Beach trust. Baron Funds, http://www.baronfunds.com, also has an interesting real estate fund that is worth a look. http://www.baronfunds.com/mutual-funds/baron-real-estate-fund/brefx/
- Re-consider emerging markets. They got hammered in 2013 but bounced back nicely from February lows and are up since January 1. Some endowments have publicly stated that they are looking at emerging markets. If you have a contrarian bent or simply know not to wait until the run up happens, consider jumping into a low cost index fund. VEMAX is a low cost index fund from Vanguard. www.vanguard.com
- Biotech & Tech: did the big selloff on Friday provide a buying opportunity for tech stocks, highlfyers, momentum stocks and biotech? Or is it a taste of more to come? If you play momentum, you are probably jittery. If you are looking for interesting plays for our future, you are taking a closer look at FaceBook and Twitter. But also consider looking at older or more established stocks that did not get crushed this week and that have rallyed recently: Intel, Oracle & HPQ.
- Banks: US domestic banks have seen their prices surge after February lows and most passed the stress test, suggesting that increased dividends are coming. But banks will announce earnings later this month. While many performed very well in 2013, and many see continued growth as the US economy moves forward, Citi has suffered losses since it failed its stress test. It has not been the darling suggested by Barron’s. JP Morgan, Wells Fargo, and Bank of America are the bigger banks that move slowly, but they’ve been moving up. BB&T, Bank of New York Mellon are others to watch as well.
Remember, as a Florida trustee , perfection is not required when you invest trust assets. But you need a plan. You should have at least some understanding of the markets and how to :
- diversify trust assets
- invest for income
- plan for growth
Consider hiring a professional bank or trust company as co-trustee for the Palm Beach trust, or delegate your investment authority to them as an “investment agent” under the Florida trust code. You will still be in charge and calling the shots, but let them do the lifting. Oh yes, if you choose & monitor them properly, you can limit your liability if beneficiaries come after you when the markets dip.