the staff of Modera Wealth Management

Memorial Day Weekend marks the unofficial beginning of summer so I thought for this next posting, it would be fun to share a few books that are on my own summer reading list this year.

The economy performed solidly in the first quarter and early quarterly earnings results have been better-than-expected. Even in more optimistic times such as these, however, it's critical to make sure that your portfolio has a clear investment strategy and is adequately diversified. Individual investors may also want to take a closer look at alternative assets to protect the downside during times of extreme volatility.

It's undeniable that the events unfolding in Japan in the aftermath of the recent earthquake and tsunami are a tragedy affecting millions of people. It is less clear what economic impact will be. Some think rebuilding efforts could start a long-awaited expansion of the Japanese economy. In the meantime, individual investors should check their international stock and bond holdings to better understand their exposure to Japan.

Many financial advisory firms promote "client based" services, a misleading term that attempts to appeal to investors, when in reality the firms are acting in the clients' best interests one minute and in their own the next. That's why it's so important for the SEC to use its authority to place broker-dealers who provide investment advice under a fiduciary standard of care.

As the New Year approaches, it's more important than ever to monitor the debate over federal tax policy, be proactive in developing tax and investment strategies that are suited for today's changing tax environment, and work with professional advisors to ensure you don't pay more taxes than you should.

The question on every investor's mind: Is gold expensive or is it cheap? In other words, will gold prices move up from here, or is the run in gold over? Before we get to a possible answer, it's important to first understand what an investment in gold really is.

Over the last 18 months, investors turned to bond mutual funds to net higher yields -- pumping nearly $400 billion into bond funds in 2009 and another $112 million through May 5, 2010. The question is, how long will this bond-friendly, low-interest-rate environment last?

New "hybrid" long-term care insurance policies offer the benefits normally associated with an annuity or life insurance, plus protection against long-term care expenses. Even better: Funds distributed from these policies are now tax-free.

The S&P 500 posted its first negative "named" decade ever from 2000 to 2009. That means, if you invested $1 in the S&P 500 at the beginning of '00, you would have had 91 cents at the end of '09. So, were the 2000s the "lost decade" for investors? Not for all -- investors who maintained diversified portfolios actually fared much better.

After the stock market's strong end to 2009, and its initial gains earlier this year, fear and uncertainty is gripping investors once again. As usual, many are turning to financial experts for insight on when the carnage might end. But as Tom shows, these forecasts often turn out to be dead wrong.

During FCIC testimony, Goldman Sachs CEO Lloyd Blankfein, responding to questions of whether betting against securities it was selling to investors was a conflict of interest, said that Goldman had no legal obligation to disclose its bets. "We are not a fiduciary," he said.

GICs, like CDs, pay a fixed interest rate over a certain period of time, however, you live and die with the solvency of the insurance company. If it goes belly up, your investment goes with it.

If there can be one financial lesson drawn from 2009, it is to maintain a well-diversified portfolio with different asset classes with low correlations to one another. This ensures you are not dependent on any single asset class to achieve your investment goals.

My advice to investors is to think holistically about your portfolio. In other words, you don't own stocks in a vacuum. You own them in the context of your overall portfolio. Take a look at your collection of stocks and/or mutual funds and examine how they interact. If they all move in the same direction, your portfolio is not as diversified as it should be. That is true for all of your asset classes, not just stocks.

The larger and more complicated the estate, the greater the challenge in developing an encompassing plan to maximize the transfer of wealth to heirs. So, over the next few months, keep an eye on what Congress is doing with regard to federal estate tax law.

With the fall season well underway and the end of the year fast approaching, it is a good time for investors to take a comprehensive review of their wealth and examine strategies to maximize it in 2010.

Though the IRS instituted income limits that prevented wealthy earners from making Roth contributions and converting existing IRAs to Roths, changes in 2010 allow any taxpayer to convert exiting tax-deffered accounts into Roth IRAs, regardless of income.

Now that you've gotten a handle the financial viability of your portfolio, it's time to undertake a broad strategic review in order to take stock of what has occurred over the past year.

Once you've implemented and rebalanced your portfolio, understanding how to measure its financial health and viability is key to long-term money-management success.

Even after setting a target portfolio mix, it's easy to veer off course. Over time, market moves alter your actual mix and if left unchecked, can have negative impacts on your returns. For example, poor rebalancing practices between 1995 and 2002 could have shaved 10% off of your portfolio's value.

Now that we've covered the elements of portfolio design, we'll move onto implementation, which is done in three phases: 1) custodian selection, 2) product selection, and 3) selection of asset location.

Today, we’ll focus on design and discuss a strategy many wealth management firms use to achieve a client’s targeted rate-of-return while avoiding unnecessary risks, taxes, and expenses along the way.

In the case of property and casualty insurance, consumers have some element of control over costs. Here are some suggestions for making appropriate coverage choices.

Anyone who is gainfully employed, particularly those in prime earning years, AND who relies on their employment income to support themselves and their family, needs disability insurance.

How much life insurance you need is a function of many factors including your liability (not just debt but also protecting loved ones), your earnings, your other assets, and your time horizon.

Stricter regulation and better due diligence now make some alternative investments safer, less costly, less risky, more profitable, and therefore, more desirable.

It's important to understand that portfolio management involves a comprehensive overview of how investment portfolios should be designed, implemented, and actively managed on a regular basis.

When it comes to long-term financial success, what is more important? Security selection, market timing, both, or neither?

Over the next several weeks, we will drill down on the difference components of wealth management. Let’s start with financial planning.

Wealth management integrates comprehensive financial planning with customized portfolio management in an all-encompassing service to accomplish the long-term financial goals of high net worth individuals and their families, charitable foundations, and trusts.