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Business Continuity Plans: Prepare now to better protect your business

By | Advice, News

As a business owner, you’ve worked hard for your success. The long hours, the difficult decisions, and the sacrifices you have made have led to where you are today. The last thing you want is to suffer a disruption to your business. However, in the event that you do experience an unavoidable mishap­, it may be smart to have a Business Continuity Plan (BCP) in place.

What is a Business Continuity Plan (BCP)? A BCP is a document that maps out a business’ system of prevention and recovery from potential threats or disruptions. A sound BCP ensures that personnel and assets are protected and empowered to take quick action in the event of a disaster. It is important to remember that a BCP should be conceived in advance and may involve input from key stakeholders and personnel.1

What is considered a “business disruption”? In general, a “disruption” is anything that causes a business to suffer a loss due to unforeseen events, such as damage to one’s facility, the breakdown of essential machinery, a supplier failing to deliver essential goods, or a technology-related malfunction.2

What are the components of a BCP? A BCP should be unique to your business, but there are some common factors consistent among all continuity plans. Creating a business continuity plan includes four steps:

  1. Conduct a business impact analysis to identify time-sensitive or critical business functions. Be sure you have the resources to support those tasks.
  2. Identify, document, and implement processes that are essential to the recovery of your business.
  3. Create a continuity team and compile a step-by-step plan that they can enact during a business disruption.
  4. Make certain your team is trained and ready. This may take the form of testing or other exercises to evaluate the strength and viability of your recovery strategy.3

Be prepared. A BCP is only helpful if it’s put in place early and updated regularly. Some time, care, and training now may help your business weather a storm down the road. Don’t delay; start putting your business continuity plan together soon.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
Investment advice offered through American Wealth Management (“AWM”), a SEC-registered investment adviser. Certain personnel of AWM may also be registered representatives of M.S. Howells & Co. (“MSH”), Member FINRA/SIPC, a registered broker-dealer, and therefore, may offer securities through MSH. AWM and MSH are not affiliated entities.
Citations.
1 – Ready.gov, 2020
2 – Investopedia.com, 2019
3 – Ready.gov, 2020

Key Provisions of the CARES Act

By | Advice, News

Recently, the $2 trillion “Coronavirus Aid, Relief, and Economic Security” (“CARES”) Act was signed into law. The CARES Act is designed to help those most impacted by the COVID-19 pandemic, while also providing key provisions that may benefit retirees.1

To put this monumental legislation in perspective, Congress earmarked $800 billion for the Economic Stimulus Act of 2008 during the financial crisis.1

The CARES Act has far-reaching implications for many. Here are the most important provisions to keep in mind:

Stimulus Check Details. Americans can expect a one-time direct payment of up to $1,200 for individuals (or $2,400 for married couples) with an additional $500 per child under age 17. These payments are based on the 2019 tax returns for those who have filed them and 2018 information if they have not. The amount is reduced if an individual makes more than $75,000 or a couple makes more than $150,000. Those who make more than $99,000 as an individual (or $198,000 as a couple) will not receive a payment.1

Business Owner Relief. The act also allocates $500 billion for loans, loan guarantees, or investments to businesses, states, and municipalities.1

Your Inherited 401(k)s. People who have inherited 401(k)s or Individual Retirement Accounts can suspend distributions in 2020. Required distributions don’t apply to people with Roth IRAs; although, they do apply to investors who inherit Roth accounts.2

RMDs Suspended. The CARES Act suspends the minimum required distributions most people must take from 401(k)s and IRAs in 2020. In 2009, Congress passed a similar rule, which gave retirees some flexibility when considering distributions.2,3

Withdrawal Penalties. Account owners can take a distribution of up to $100,000 from their retirement plan or IRA in 2020, without the 10-percent early withdrawal penalty that normally applies to money taken out before age 59½. But remember, you still owe the tax.4

Many businesses and individuals are struggling with the realities that COVID-19 has brought to our communities. The CARES Act, however, may provide some much-needed relief. Contact your financial professional today to see if these special 2020 distribution rules are appropriate for your situation.


This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Under the CARES act, an accountholder who already took a 2020 distribution has up to 60 days to return the distribution without owing taxes on it. This material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. Under the SECURE Act, your required minimum distribution (RMD) must be distributed by the end of the 10th calendar year following the year of the Individual Retirement Account (IRA) owner’s death. Penalties may occur for missed RMDs. Any RMDs due for the original owner must be taken by their deadlines to avoid penalties. A surviving spouse of the IRA owner, disabled or chronically ill individuals, individuals who are not more than 10 years younger than the IRA owner, and children of the IRA owner who have not reached the age of majority may have other minimum distribution requirements.

Under the CARES act, an accountholder who already took a 2020 distribution has up to 60 days to return the distribution without owing taxes on it. This material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. Under the SECURE Act, in most circumstances, once you reach age 72, you must begin taking required minimum distributions from a Traditional Individual Retirement Account (IRA). Withdrawals from Traditional IRAs are taxed as ordinary income, and if taken before age 59½, may be subject to a 10% federal income tax penalty. You may continue to contribute to a Traditional IRA past age 70½ under the SECURE Act, as long as you meet the earned-income requirement.

Accountholders can always withdraw more. But if they take less than the minimum required, they could be subject to a 50% penalty on the amount they should have withdrawn – except for 2020.

Investment advice offered through American Wealth Management (“AWM”), a SEC-registered investment adviser. Certain personnel of AWM may also be registered representatives of M.S. Howells & Co. (“MSH”), Member FINRA/SIPC, a registered broker-dealer, and therefore, may offer securities through MSH. AWM and MSH are not affiliated entities.

Citations.
1 – CNBC.com, March 25, 2020.
2 – The Wall Street Journal, March 25, 2020.
3 – The Wall Street Journal, March 25, 2020.
4 – The Wall Street Journal, March 25, 2020.

COVID-19 Resources for Reno and Sparks Residents

By | Advice, News

In households, communities, and cities across the U.S., it feels like we’re not only building a car while driving down the highway, we’re also learning to drive.

Luckily, we’re all having the same experience. We’re in this together! Thank you to those who are working hard to make sure we all make it through these challenging times. 

While many people are helping on the frontlines, a lot of us are at home searching for ways to keep ourselves and our families fed, healthy, and safe. To help with that, we have compiled a list of resources to help local clients navigate life in Reno during the COVID-19 pandemic.

Reno Grocery Stores Offering Delivery or Online Ordering for Pickup

First up, let’s look at Reno grocery options. Many of the grocery stores have bolstered their delivery and pick-up options, making it both easier and safer to order food and supplies online.

Restaurant Delivery Options in Reno

It’s more important now than ever to support local restaurants. There are plenty of options in the Reno area that offer delivery through third-party delivery services like Door Dash and Grub Hub. You can explore all the options and order directly from the website or app using the links below.

If ordering delivery isn’t your thing, many local Reno restaurants have drive-thru options or have adapted their services to provide curbside pickup. You can find an up-to-date listing of those restaurants in the Reno Gazette-Journal article below.

Current COVID-19 Health Information

Do you have questions about current CDC guidelines, how Nevada is handling the pandemic, how to stay healthy, when and where to go for care, or statewide COVID-19 statistics? You can find those answers and more on the websites below.

Online Educational Resources

If you’re a parent, you may be feeling a little lost as to how to keep your kids entertained and learning while they are home. No matter what age your children are, there are plenty of free, or temporarily free, options available to help you establish a routine and keep their hands busy and their minds engaged and stimulated. 

Resources to Help with Stress, Anxiety, & Sleep

Even if you don’t need medical care due to direct exposure to COVID-19, we’re all feeling some level of stress and anxiety. Making time to address your mental health is just as important as staying vigilant in your avoidance of social gatherings and handwashing—especially if you aren’t sleeping well. From meditation and exercise apps to sleep sounds and read-alongs, the article below has a great list of resources that can help you reduce stress, sleep more, and improve your mental health. 

We hope some of these resources will help as you try to navigate this new national reality.

We have clients all over the U.S. and want to serve each of you the best we can. If you do not live in the Reno area and are looking for local resources, email dee@financialhealth.com to reach our Director of Customer Experience.

We are eager to help!

Investment advice offered through American Wealth Management (“AWM”), a SEC-registered investment adviser. Certain personnel of AWM may also be registered representatives of M.S. Howells & Co. (“MSH”), Member FINRA/SIPC, a registered broker-dealer, and therefore, may offer securities through MSH. AWM and MSH are not affiliated entities.

Your Financial Co-Pilot

By | Advice, News, Published Articles

If anything happens to you, your family has someone to consult.

If you weren’t around, what would happen to your investments? In many families, one person handles investment decisions, and spouses or children have little comprehension of what happens each week, month, or year with a portfolio.

In an emergency, this lack of knowledge can become financially paralyzing. Just as small business owners risk problems by “keeping it all in their heads,” families risk problems when only one person understands investments.

A trusted relationship with a financial professional can be so vital. If the primary individual handling investment and portfolio management responsibilities in a family passes away, the family has a professional to consult – not a stranger they have to explain their priorities to at length, but someone who has built a bond with mom or dad and perhaps their adult children.   

You want a professional who can play a fiduciary role. Look for a financial professional who upholds a fiduciary standard. Professionals who build their businesses on a fiduciary standard tend to work on a fee basis or entirely for fees. Other financial services industry professionals earn much of their compensation from commissions linked to trades or product sales.1

Commission-based financial professionals don’t necessarily have to abide by a fiduciary standard. Sometimes, only a suitability standard must be met. The difference may seem minor, but it really isn’t. The suitability standard, which hails back to the days of cold-calling stock brokers, dictates that you should recommend investments that are “suitable” to a client. Think about the leeway that can potentially provide to a commission-based professional. In contrast, a financial professional working by a fiduciary standard always has an ethical requirement to act in a client’s best interest and to recommend investments or products that clearly correspond to that best interest. The client comes first.1

You want a professional who looks out for you. The best financial professionals earn trust through their character, ability, and candor. In handling portfolios for myriad clients, they have learned to watch for certain concerns and to be aware of certain issues that may get in the way of wealth building or wealth retention. 

Many investors have built impressive and varied portfolios, but lack long-term wealth management strategies. Money has been made, but little attention has been given to tax efficiency or risk exposure.

As you near retirement age, playing defense becomes more and more important. A trusted financial professional could help you determine a risk and tax management approach with the potential to preserve your portfolio assets and your estate.

Your family will want nothing less. With a skilled financial professional around to act as a “co-pilot” for your portfolio, your loved ones will have someone to contact should the unexpected happen. When you have a professional who can step up and play a fiduciary role for you, today and tomorrow, you have a financial professional whose service and guidance can potentially add value to your financial life.  If you’re the family member in charge of investments and crucial financial matters, don’t let that knowledge disappear at your passing. A will or a trust can transfer assets, but not the acumen by which they have been accumulated. A relationship with a trusted financial professional may help to convey it to others.


American Wealth Management may be reached at 775.332.7000 or info@financialhealth.com.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Investment advice offered through American Wealth Management (“AWM”), a SEC-registered investment adviser. Certain personnel of AWM may also be registered representatives of M.S. Howells & Co. (“MSH”), Member FINRA/SIPC, a registered broker-dealer, and therefore, may offer securities through MSH. AWM and MSH are not affiliated entities.

Strategic vs. Tactical Investing: How do these investment approaches differ?

By | Advice, News, Published Articles

Provided by American Wealth Management

Ever heard the term “strategic investing”? How about “tactical investing”? At a glance, you might assume that both these phrases describe the same investment approach.

While both approaches involve the periodic adjustment of a portfolio and holding portfolio assets in varied investment classes, they differ in one key respect. Strategic investing is fundamentally passive; tactical investing is fundamentally active. An old saying expresses the opinion that strategic investing is about time in the market, while tactical investing is about timing the market. There is some truth to that.1

Strategic investing focuses on an investor’s long-range goals. This philosophy is sometimes characterized as “set it and forget it,” but that is inaccurate. The idea is to maintain the way the invested assets are held over time, so that through the years, they are assigned to investment classes in approximately the percentages established when the portfolio is created.1

Picture a hypothetical investor. Assume that she starts investing and saving for retirement with 60% of her invested assets held in equities and 40% in fixed-income vehicles. Now, assume that soon after she starts investing, a long bull market begins. The value of the equity investments within her portfolio increases. Years pass, and she checks up on the portfolio and learns that much more than 60% of the value of her portfolio is now held in equities. A greater percentage of her portfolio is now subject to the ups and downs of Wall Street.

As she is investing strategically, this is undesirable. Rebalancing is in order. By the tenets of strategic investing, the assets in the portfolio need to be shifted, so that they are held in that 60/40 mix again. If the assets are not rebalanced, her portfolio could expose her to more risk than she wants – and the older she gets, the less risk she may want to assume.1

Tactical investing responds to market conditions. It looks at the present and the near future. A tactical investor attempts to shift the composition of a portfolio to reduce risk exposure or to take advantage of hot sectors or new opportunities. This requires something of an educated guess – two guesses, actually. The challenge is to appropriately decide when to adjust the portfolio in light of change and when to readjust it back to the target investment mix. This is, necessarily, a hands-on style of investing.1

Is it better to buy and hold, or simply, to respond? This question has no easy answer, but it points out the divergence between strategic and tactical investing. A strategic investor may be inclined to “buy and hold” and ride out episodes of Wall Street turbulence. The danger is in holding too long – that is, not recognizing the onset of a prolonged downturn that could bring losses without much hope for a quick recovery. On the other hand, the tactical investor risks buying high and selling low, for figuring out just when to increase or decrease a portfolio position can be difficult.

Investors have debated which strategy is better for decades. One approach may be better suited than another at a particular point in time. Adherents of strategic investing point to the failure of active asset management to beat the equity benchmarks. A 2018 Dow Jones Indices SPIVA Report noted that across the five years ending June 30, 2018, more than 76% of U.S. large-cap funds failed to return better than the S&P 500. A proponent of tactical investing might counter that by arguing that this percentage might be much lower within a shorter timeframe. Ultimately, an investor has to consider their risk tolerance, objectives, and investing outlook in evaluating both approaches.2

American Wealth Management may be reached at 775.332.7000 or info@financialhealth.com.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Investment advice offered through American Wealth Management (“AWM”), a SEC-registered investment adviser. Certain personnel of AWM may also be registered representatives of M.S. Howells & Co. (“MSH”), Member FINRA/SIPC, a registered broker-dealer, and therefore, may offer securities through MSH. AWM and MSH are not affiliated entities.

Citations.

1 – money.usnews.com/investing/investing-101/articles/2018-07-25/whats-the-difference-between-strategic-and-tactical-asset-allocation [7/25/18]
2 – us.spindices.com/spiva/#/reports [2/5/19]

Staying Out of Debt Once You Get Out of Debt

By | Advice, News, Published Articles

Provided by American Wealth Management

Paying off a major debt produces a sense of relief. You can celebrate a financial milestone; you can “pay yourself first” to greater degree and direct more money toward your dreams and your financial future rather than your creditors.

Once you get out of excessive consumer debt, the last thing you want to do is fall right back in. What steps can you take to reduce that possibility, and what missteps should you avoid making?

Step 1: Save money

So often, an unexpected event can put you in debt: an auto breakdown, a job loss, a trip to the emergency room or a hospital stay. If you earmark $50 or $100 a month (or even $20 a month) for an emergency fund, you can create a pool of money that may help you deal with the financial impact of such crises. Every dollar you save for these events is a dollar you do not have to borrow through a credit card or a personal loan at burdensome interest rates.

Step 2: Budget

Think about a 50/30/20 household budget: you assign half of your income for essentials like housing payments and food, 30% to discretionary purchases like shopping, eating out, and entertainment, and 20% to savings and/or paying down whatever minor debts you must incur from month to month.

Step 3: Buy things with an eye on value

Do you really need a new car that will require financing, one that will rapidly depreciate as soon as you drive it off the lot? A late-model used car might be a much better purchase. Similarly, could you save money by eating in more often or bringing a lunch to work? You could find some very nice goods at very cheap prices by shopping at thrift stores or online used marketplaces. These are all smart consumer steps, net positives for your financial picture.

You should also be aware of some potential missteps that could lead you right back into significant debt, or negatively impact your credit rating. Some of them may be taken consciously, others unconsciously.

Misstep 1: Spending freely once you are free of debt

If you get rid of consumer debt, but retain the spending mentality that drove you into it, your financial progress may be short-lived. If the experience of getting into (and getting out of) debt does not change that mindset, then you risk racking up serious debt again.

Misstep 2: Living without adequate health, auto, or disability insurance

Sometimes people are forced to assume large debts as a direct consequence of being uninsured. Hopefully, you have not been one of them. If you must pay for your own insurance and the premiums seem high, remember that they will likely be lower than the bills you could be forced to pay out of pocket without such coverage.

Misstep 3: Getting rid of the credit cards you used to go into debt

You may think this is a great way to quickly improve your credit rating. It may not be. Closing out credit cards reduces the amount of credit you can potentially draw on per month, which hurts your credit utilization ratio. Having more accounts open (rather than less) improves that ratio.1

The key is how you use the accounts in the future. When you use about 10% of your available credit each month, that is a positive for your credit score. When you use more than 30%, you potentially harm your score. For the record, the length of your credit history accounts for about 15% of your FICO score, so if a card has more good payment history than bad, getting rid of it could be a slight negative.

Instead of closing these accounts, keep them open, and use the cards once a month or less. Should a card charge you an annual fee, see if you can downgrade to a card from the same issuer that does not.

If you can keep debt reined in, you will have an opportunity to make financial strides. Not everyone has such a chance due to the weight of their liabilities. Earlier this year, total U.S. credit card debt alone surpassed $815 billion.2

American Wealth Management may be reached at 775.332.7000 or info@financialhealth.com.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Investment advice offered through American Wealth Management (“AWM”), a SEC-registered investment adviser. Certain personnel of AWM may also be registered representatives of M.S. Howells & Co. (“MSH”), Member FINRA/SIPC, a registered broker-dealer, and therefore, may offer securities through MSH. AWM and MSH are not affiliated entities.

Citations.

1 – cnbc.com/2018/01/19/why-you-should-keep-old-credit-card-accounts-open.html [1/19/18]

2 – usatoday.com/story/money/personalfinance/2018/08/15/simple-things-anyone-can-do-stay-out-debt/989168002/ [8/15/18]

AWM Advisor Nationally Recognized for Philanthropic Excellence

By | News | No Comments

Interfaith Spiritual Center

Patricia Meidell, American Wealth Management’s chairman of the board, received Honorable Mention for philanthropic excellence in the twelfth annual Invest in Others Awards.

In addition to being one of the founders of American Wealth Management, Pat is a member of the Renown Health Foundation’s (RHF) board of directors and is President of the Nevada Interfaith Association (NIA), both based in Reno, Nev.

These service roles recently combined to set in motion a project that created a place of spiritual refuge where many face physical, mental, and emotional hardship. Renown Regional Medical Center opened the Interfaith Spiritual Center’s doors to the public March 18, 2018.

Pat has served on the RHF board for seven years and was instrumental in the vision, development, and completion of the hospital’s new Spiritual Center. This project focused on refurbishing the hospital’s old chapel, making it a thoughtfully-designed space that feels inviting to people of all faiths.

“The project has created a cultural shift in the hospital, which is more focused on meeting the spiritual needs of the patients as well as the staff working there,” Pat said. “When people are physically broken, they are more often than not spiritually broken. The hospital is a logical place to facilitate the healing needed.”

“Pat was relentless in her efforts to raise funds over a multi-year period in the face of multiple setbacks, increasing costs, and changing leadership,” said Nancy Bussani, Vice President of Development for the Renown Health Foundation.

In addition to raising funds, Pat personally donated to the project. She is passionate about her work with RHF and NIA, and enjoys organizing interfaith events all year round, including Nevada Prayer Breakfasts, the annual interfaith Thanksgiving program, and interfaith luncheons.

The Invest in Others Charitable Foundation established its awards program to recognize the charitable work of financial advisors and financial services firms in communities across the country and around the world.

Financial advisors are nominated by their peers for actively giving back to non-profits to improve their communities and make a difference in the lives of others. Hundreds of inspirational nominations for the Invest in Others Awards were received this year and reviewed by a diverse panel of leaders in the financial services industry. Those earning Honorable Mention were selected based on their leadership, dedication, contribution, inspiration, and impact on a non-profit and the community it serves.

The twelfth annual Invest in Others Awards Gala, a premier event attended by more than 700 financial advisors and financial services executives, is September 27, 2018 in Boston. Awards will be presented in the following categories: Catalyst, Community Service, Global Community Impact, Volunteer of the Year, Lifetime Achievement, and Corporate Philanthropy.

About the Invest in Others Charitable Foundation

The inspiration for the Invest in Others Charitable Foundation came directly from the financial advisors who invest in others by giving back to their communities with overwhelming generosity and dedication. Since its founding in 2006, Invest in Others has amplified these efforts by providing a platform for advisors to increase awareness, visibility, and funding to their favorite non-profits. For more information, visit www.investinothers.org.

RGJ: Local Wealth Manager Debuts ETF

By | News | No Comments

By Jason Hidalgo, jhidalgo@rgj.com

When it comes to picking an investment instrument, Laif Meidell hopes that more folks do the MATH.

That would be the Meidell Tactical Advantage ETF, which debuts publicly on the New York Stock Exchange Thursday under the ticker MATH.

The fund is an ETF, or exchange-traded fund, that invests in other ETFs, said Meidell, president of Reno-based American Wealth Management.

Unlike typical ETFs that are pegged to a certain index, such as the Standard & Poor’s 500, MATH is actively managed and invests in all sorts of funds from ETFs based on stocks to ETFs based on bonds.

“ETFs make a great investment vehicle because they’re so liquid, the internal costs are low, and there’s so much transparency,” Meidell said. “But there are periods of time when, say, owning Real Estate Investment Trust ETF isn’t a good idea and becomes a money-losing experience.”

By making MATH actively managed, the fund gets added flexibility to adapt to market conditions while retaining many of the advantages that make ETFs so attractive, Meidell said. Although MATH isn’t the first ETF to invest in other ETFs, it’s just one of a few that use a tactical approach to investing, Meidell said.

Unlike a strategic approach that places a set percentage of a fund’s allocations to certain types of funds or investments, tactical funds allow for more changes in a portfolio’s allocation — also known as a tactical shift — from one investment to another. This means that, theoretically, the fund could invest itself 100 percent in stocks or 100 percent in bonds if it chooses.

Although such scenarios are unlikely, it shows the amount of flexibility built into MATH. The flexibility is especially important when dealing with downturns that require a reallocation of funds, Meidell said.

“The portfolio is dynamic and able to migrate into other areas,” Meidell said. “It invests in very basic indices — the S&P 500, foreign markets and emerging markets. So these are basic simple areas, but research has shown that you can do well over the years by just being in the right indices and shifting away from those that are underperforming.”

Meidell stressed that the fund is not for people who want to capture a market rebound’s initial upswing or make money during downturns by shorting stock.

The basic philosophy that governs the formula used to determine MATH’s allocation is to keep as much of the gains made while the market is up by minimizing the losses during down cycles. The approach leads to less risk while still generating healthy returns over the long run.

“This fund can really fit an older person who wants to use it as a core holding while attempting to limit some downside risk,” Meidell said. “But it can also work for a younger person who wants a more aggressive portion of their portfolio to stay invested during the market’s more protracted moves up while also decreasing their stock exposure when the market is in long-term decline.”