The Larry Kudlow Show Asks Lee Munson About Market Threats

Last week I was asked to be on The Larry Kudlow Show to talk markets with the man himself. As Chief Investment Officer of Portfolio Wealth Advisors, I’m in charge of communicating our investment strategy. Not to mention coming up with said strategy and executing it.

Here is the link:


arry Kudlow started having me on as a guest years ago when he had his top ranked CNBC show the Kudlow Report. Ever since then he has been supportive of my views. Well, most of the time. This half-hour interview covers basic questions like, will markets see a big correction or light selloff? How will profits play into this rally?

One of the things Larry talks about that most in the financial media ignore is the effect of currency on stock and bond returns. Since this is radio, we have a lot more time to talk about important issues beyond the sound bites. For that reason, radio has always been a favorite medium of mine.

If you want to meet with me personally about how I help people live off their portfolios, call 505-884-3445.


Fox Business Invites Portfolio Wealth Advisors CIO Lee Munson to Discuss Markets

August 7, 2017


This week I was in NYC meeting with client’s and having a blast with my daughter, Zoë. In between the trip to American Girl, MOMA, and American Natural History Museum, we got in a few media appearances.


Here is the link:

[use the pic of me below as the link picture]


And the You tube link [the main link I want people to use – so order it that way, and have the actual Fox link more off to the side – again, always promote the YouTube first since no ads and edited just to my part.

American Girl Café with Zoë and Chloë]

American Girl Café with Zoë and Chloë]

Sitting down with Gerri to talk markets]

Sitting down with Gerri to talk markets]

Gerri Willis was hosting Making Money on Fox Business. We sat down and discussed if investors should be concerned about the current market environment. Gerri is an experienced host that knows this can all be boiled down to a few things. 

HOLD ON people, we don’t have an inverted yield curve yet…

HOLD ON people, we don’t have an inverted yield curve yet…

First, we have no inverted yield curve. Lucky for viewers, Gerri stopped me in order to explain what that means. When short term interest rates are higher than long term rates, it’s called an inverted yield curve. What does that mean? Pretty much anytime you see it a recession is close by. We aren’t even close to those conditions. 

Pullback! I want a pullback! Explaining to Gerri why a mild pullback could be all we get, despite the negative investor sentimen

Pullback! I want a pullback! Explaining to Gerri why a mild pullback could be all we get, despite the negative investor sentimen

As long as we continue to have positive growth in profits and easy money from the Fed, don’t expect anything but market volatility. It’s a big recession we worry about, and that isn’t on the horizon for the near future. 

Gerri Willis – a first class act

Gerri Willis – a first class act

If you want more information on how I help client’s live off their stock and bond portfolio, call me at 505-884-3445.

Markets Group Private Wealth Rocky Mountain Forum Asks Lee Munson To Speak: Part I

I was asked to be a speaker for Markets Group Private Wealth Forum up in Denver this month. It’s a great opportunity to hand out with great thinkers and you always end up meeting some interesting characters. I like that I am enough of an in-demand speaker that they pay my way and feed me. Plus, I can sneak out at night and hit some of my favorite Denver dinning spots like City O’ City.

These events are planned months in advance and we never quite know if the topic we agree on will be what we talk about. So, I don’t do much work on the talk until a week before – then I go into full speaker mode.

In three parts, I will share with you my speaker notes. Below you will get a feel for what I’m thinking, and how we manage our assets. The three main categories are volatility (or lack of), how to handle rising interest rates, and what we are doing differently this year. Let me know if you have any comments or feedback at [email protected].


Part 1: Volatility - Where Did It Go?

Background: This is a professional crowd and I just got asked about the very low level of volatility since January. We have been discussing the historical lows on the VIX, an index that tracks stock volatility, and the audience wants to know what I think.

“Look up the statistics and notice one big thing – the lowest levels on record are from an early back test! Meaning, we are currently experiencing the lowest levels since the VIX was actually tradable, not just a back tested formula. We are very far from a 30-40 VIX, for real people. What is the VIX, really? The willingness to pay for insurance. Pros buy puts on markets. Pros are all out to lunch until the tax cuts in the fall.  Nobody thinks insurance is worth the price, so the price drops.

Early this year some trader they call ‘50 Cent’ for his strategy of buying 80million in VIX puts priced at 50 cents a contract. They ALL expired worthless. Don't go against a low volatility market. Or, just don't do much. [here is a link, the trader was unmasked recently]

Focus on making money right here right now and buy every rip in volatility until it’s solidly in the 20s. Like S&P 500 at 2180, no question, invest cash if you have it, and rebalance at anything resembling DJIA 19,999. Because we still go higher and see 2500 S&P 500 by year-end, that's the place it's headed. But know ahead of time the places you want then be open to 'feeling your level of confidence.'

You can always add to SPY [S&P 500 tracking ETF], but why? There's a whole world of garbage out there - I love those nether-regions." [I’m being facetious and the audience gets it. But the joke is about how everyone these days just buys the S&P 500 and it’s an issue everyone is aware of]

Where there's a will, there's a way

A Will is a legal document that declares to the world how you intend for your assets to be distributed upon your death.  Die without one, and the state decides who gets what, with no regard to your wishes or your heirs' needs.  A Will can also mandate whom you wish to become guardian for any minor children.

Whether you are young or old you have the ability to plan in advance for different needs and while every situation is unique, here a few planning ideas that are available to consider:

  • Create a durable power of attorney: This grants your spouse or other party the power to make financial or legal decisions on your behalf if you become incapacitated
  • Make a transfer over time: Instead of waiting until death, you can transfer assets or property gradually to reduce the estate tax liability.
  • Pay educational or medical costs: In addition to gifting up to $14,000 ($28,000 if you're married) in cash or property without tax implications, you can also distribute assets by paying the tuition (not room and board) or healthcare costs of someone.
  • Buy life insurance to ensure a tax free inheritance: Life insurers are obligated to pay the beneficiaries named in the policy regardless of how a Will distributes other assets in your estate. But, if none of the named beneficiaries are alive when the policyholder dies, then the proceeds are typically paid to the policyholder's estate. 


Though there are a myriad of options available when planning, that does not mean that estate planning is reserved for large estates. For many, a simple will is an effective tool to make sure that your personal and financial interests are in order.

Avoiding the Pain of Capital Gains

Tax planning is an integral part of what a Wealth Advisor does every day.  Recently I saw an article in ThinkAdvisor that covered the downside of something most investors like: a bull market. Anyone looking to sell appreciated stock is unfortunately going to trigger a tax on capital gains.

The article referenced the math: a long term capital gains tax at potentially up to 20% and a possible additional 3.8% surtax on net investment income for certain investors can lead to an unwelcome tax bite, removing the " appreciation" that an average investor should normally have for an appreciated asset.

The solution to lessen that tax bite: a donor advised fund.

Provided the shares have been held longer than a year, shares can be directly deposited into a donor advised fund, with the donor enjoying a tax deduction based on the full market value of the stock.

This transaction allows the donor to save what they would have paid in taxes and instead use the value of the shares for charitable giving through their donor advised fund.


Donor advised funds are good for many reasons and saving on taxes is a big one.  But also consider the cost of educating your children on the value of money.  One of the most effective ways children grow and learn about the value of money is when they are tasked with the job of having to give it away.  By setting up a fund that has your family name on it and systematically transferring a few highly appreciated shares over time, you will find that as it grows in value you can task your children with the job of finding deserving charities that could use a donation. They start to feel like they can make a difference in the world with every donation and as important, they start to think about what they are doing with the money in their own pocket.

Financial Times Interview: Behavioral Apathy

Murray Coleman recently interviewed Lee Munson on his views regarding behavioral coaching.

Everyone can use a coach

Everyone can use a coach

“Behavioral coaching is almost a lost art — too many advisors see it as crossing a line between acting like an amateur psychologist and serving as a trusted financial pro,” says Lee Munson, chief investment officer at Portfolio Wealth Advisors in Albuquerque, N.M., which manages $250 million.

Clearly, the industry sees behavior as the biggest threat to an investment plan, but why do many advisors ignore or fear this essential element? Lee Munson has a theory that most advisors were simply stockbrokers that are RIAs (Registered Investment Advisors) in name only. Most want to continue to pick high priced mutual funds and ignore the very reason people seek a world-class financial advisor. But, does holistic planning cross the line of an advisor’s skill set?

You don't have to be a doctor to be a great coach.

You don't have to be a doctor to be a great coach.

“You don’t have to be trained as a psychologist to become a good coach,” says advisor Munson, who considers himself a student of behavioral finance. “You just need a real desire to find out what people truly want to do with their money and how they see it affecting their lives.”


Finding Value

It's a question as old as, well, as old as the profession.  What is the value of a financial advisor?  

First, it’s important to understand what a financial advisor is. A true financial advisor takes a comprehensive, holistic view of your entire financial portrait, including investments, tax planning, debt, cash flow, insurance, college planning, estate planning, and more. 

These elements are essential to your financial life and should work together. You may have a great investment strategy, but if you’re not saving any money it won't matter. Or, mistakes in designating beneficiaries on your IRA or 401K accounts could materially increase taxes for your children.  Focusing only on investments is not taking a holistic view of your situation.

Many people think a financial advisor is a stock picker or someone who sells investment products that may or may not be in the best interests of the client. True financial advisors perform a more transparent, holistic and client-centered role.

The vast majority of people want and need advice but don't want to pay for it.  So, at what point does not spending money actually end up costing you money?  


A true financial advisor can help you:

  • Stick to an investment plan
  • Track contributions and withdrawals from accounts, compare them with your goals and help you reach or exceed those targets.
  • Adjust your investment strategy accounting for life changes such as buying a house or starting a new job.
  • Determine when and how to claim Social Security benefits.
  • Maximize financial or tax aid when your children go to college.
  • Determine how much life insurance you should have.
  • Use tax planning to determine which accounts to save in during your working years and withdraw from during retirement.
  • Allocate assets across all your accounts and rebalance your portfolio regularly.
  • Minimize taxes after your death by assisting with the proper beneficiaries titled on your retirement accounts.
  • Review all accounts regularly to optimize your financial situation.


When your values are clear to you, making decisions becomes much easier.   



When the Golden Years are Interrupted with Death

It happens to us all eventually.  Death.  But how do you cope and make the transition to widowhood without financially jeopardizing your lifestyle?  It may be unpleasant and even uncomfortable but couples who make time to discuss contingencies before their partners death, make this transition easier for the surviving spouse.  Here are a few things to consider: 

The probate process: 

Because all assets transfer upon death, knowing and deciding how these assets are titled is crucial in making sure they are properly designated to avoid probate.  Probate is an expense that can easily be avoided with a few simple planning steps.


Assess your cash flow:

It is common to want to make a large purchase, like a long vacation or give generously to children or grandchildren but before you do, take the time to look at your finances.  Its vital to consider the impact this could have on your future finances.  


Your own network:

Your family will no doubt be there for emotional support but you will need to consider who will be there for your financial support.  This network should include an estate planning attorney as well as a financial advisor.  Both will be essential with helping to objectively navigate your future with their expertise. 


Updating accounts:

Beneficiary and ownership information will need to be amended.   This is something oftentimes overlooked but there could be significant repercussions if the desired changes are not made.


The death of a spouse is easily one of the most devastating events a person will experience and particularly stressful for the surviving spouse who may not have played an active role in the household finances. An open dialogue and a plan can lessen that burden.  Be proactive! 

Raiding Your Retirement Fund

It can happen to anyone.  You have an unexpected expense, you find “the deal of a life time” or you might even lose your job.   The bottom line is you need cash and you need it now.   Where do you turn?   Should you consider exhausting your long-term goals with your short term needs?  The simple answer is no and here’s why.  

Although you may be able to take “hardship” withdraws from your retirement plan with certain IRS-approved hardship situations, such as medical bills, they come at a high cost.   You’ll owe income tax on any pretax money you withdraw in addition to federal penalties and possibly state penalties if you are under 59 1/2.

Some plans may even allow you to borrow money and although it may be at a lower interest rate than a credit card, it could also trigger fees and you may be required to pay back the full amount if you left your job. 

The solution is to plan in advance and ensure you have an emergency fund for these situations. The best options are to have a savings account that contains 3 to 6 months of living expenses or if you own a home set up access to a Home Equity Line of Credit. If you haven’t planned in advance for those two options, a zero balance credit card you keep on hand that has a $3,000 to $5,000 limit is good to use for emergencies. With this, you may pay interest but you won’t need to consider tapping your retirement fund and paying the tax and penalties.  Best yet, you avoid the pitfall of spending your future prematurely.

If you haven’t planned in advance, it still makes sense to borrow money from friends or family to cover your emergency.  You can let them know you have retirement funds should your emergency make it impossible to make payments in a timely manner.  The important thing is make raiding the retirement fund the last option you consider and you will be glad you did in the years to come.


What should I make sure is included in our rent to own deed?


Tomorrow, I'm signing the contract for our rent to own home. We are paying $4,000 down and $470 a month for 72 months. What should I make sure is included in the contract to confirm that when I'm done paying down the rent, the home is ours?


The best rule of thumb is to read the contract thoroughly and make sure it says this clearly to you.  If it does not say it in language you understand, then ask the person creating the contract to add a paragraph of your own that clearly states the objective in words you do understand.  They should have no problem adding a paragraph written by you stating the ultimate objective if the contract already makes the same confirmation in other language.