A New Way to Rebalance Your Asset Allocation

Millions of Americans have simplified their Investments by choosing an asset allocation model based on age, risk tolerance, etc, with low cost passive index funds used for each asset class.  No matter which asset allocation you use, or the number of asset classes, most professionals recommend periodic rebalancing of the portfolio back to the desired asset allocation percentages.  Equities have seen a huge run-up in the last couple of years, so in most cases rebalancing requires the sale of some equity holdings and most likely the purchase of some fixed income funds. At a time when equities are flying high and interest rates are at near zero, selling equities to buy bonds is difficult for many investors. Of course, one of the keys to successful investing is the ability to put aside your emotions and strictly follow the rules of rebalancing periodically.  


Rebalance by Donating Gains

If you hold Equity Funds in a taxable account, let me suggest an alternative to selling:  Donate part of your appreciated equities to a Donor-advised fund (DAF). Donor advised funds are the fastest-growing vehicle for charitable contributions; and there’s good reason.  When you transfer equities to the fund, you’ll get an immediate charitable deduction for the full value of the equities donated. But more importantly, you’ll escape paying taxes on the capital gains.  If you’ve been holding stocks or ETFs in a taxable account for a few years, chances are a good percentage of the market value is unrealised capital gains. Uncle Sam can’t wait for you to sell those securities so he can cash in on your good fortune. So it’s important that you donate (transfer) the stock or  fund shares rather than sell them and donate the cash.   More about that later.


What is a Donor-Advised Fund?

A Donor advised fund is registered as a 501c3 charity, so contributions to it are tax-deductible as a charitable contribution.  The difference is that the contributions you make to the fund are held in a fund account until you determine when and where  a grant should be made to a specific charity. You can request that the charitable fund make a grant to your favorite museum, church, or any 501c3 organization. Assuming that the fund agrees that  the charity is legitimate, they will issue a check along with a nice cover letter to your charity. Of course, you will not get an additional charitable contribution deduction because you got a deduction when the equities went into the fund.  We use the Schwab Charitable donor advised fund, but similar funds are available at Fidelity, Vanguard and elsewhere.  Schwab lets you name your account to include your family name.  So when they make a grant to a charity, it’s sent on a nice “Feil Family Charitable Fund” letterhead, which is a nice little ego boost. I feel like one of those rich guys you see listed in the credits of a PBS series.


Making the Donation

Transferring equities to a Donor advised fund is much easier than you might think. Like most clients, my Schwab account consists of several sub-accounts; i.e. IRAs for myself and my wife, and a taxable account. The Schwab charitable account is added as an additional sub-account. You can simply transfer shares of an appreciated equity from your taxable account to the charitable account.   If I have 500 shares of Vanguard Total stock market (VTI), I can transfer 50 of those shares to the charitable fund.  If I log into my account a couple of days later. I’ll see that Schwab has accurately recalculated the cost basis for my remaining 450 shares, and I will see my donation appear in the charitable account.  Here’s the interesting part…  You can even manage the investments in the charitable account. Schwab has several pre-allocated investment pool funds, i.e. “Conservative”, “Growth”, etc., as well as a number of single asset class investment pools (both active and passive), i.e., “Total Market Equity”, “Income Index Fund”, “International Equity” and “Money Fund”.  When you request that the fund issue a grant, you can identify which investment is sold.  If you have a sizable charitable fund account with its own asset allocation, you may need to rebalance periodically. I would do this by requesting grants be made using the asset classes which have appreciated the most. Do you see a pattern here?

Donor advised funds are also a useful in tax planning strategy.  if your taxable income varies from year to year, you can lump your contributions to get the largest tax benefit. Contribute to the fund in a year when your tax bracket is high. Then you can continue to request grants to charities when your tax bracket is low.  Of course if the whole point is helping people through charitable contributions, it doesn’t make sense to have assets sitting idle in a charitable account year after year.


Here are some items you may want to consider when choosing a DAF.

  • What are the minimum contribution amounts?
  • What are the minimum grant amounts?
  • What kind of Investments pool  are available for the account assets?
  • Is it easy to transfer a select number of shares from your taxable account to  the charitable account?
  • Does the fund let you Name the account? i.e., “The Harvey and Wilma Schmidt Wildlife Fund”.
  • If you have a specific favorite charity in mind, it would be important to make sure that the fund recognizes the charity as legitimate.  Most funds have databases with thousands of recognized charities, but if you want to grant to a small charity or a local church, you may want to do a little research. Keep in mind that contributions you make to the fund are irrevocable. Even though you can manage the money and invest in different asset classes, you will never get that money back.

So what are you waiting for?  Rebalance your portfolio, get a tax deduction,  and help a charity… all at the same time.  It’s a WIN-WIN-WIN !


Chicago River North Happy Hours

Living in downtown Chicago can be expensive.  But if you’re willing to dine a little early, you’ll find some of the best Chicago food and wine at great prices!  These are all a short walk from our place.  If there are any you think should be added to the list, let me know!

Beacon Tavern
405 N Wabash Ave (Between Trump and Wrigley),  M-F 3-6
$8 Wine and Cocktails,  $3-$9 Nibbles

663 N State St Mon-Fri  4:00-6:00
1/2 OFF All Beer and Wine, 1/2 OFF Non-premium Liqueur, 1/2 OFF All Appetizers
The house wine isn’t bad, and at half-price it’s only $3.50 per glass!   One nice thing about Bijan’s is you can enjoy the happy hour in the restaurant or even outside.  You don’t have to sit by the bar.  Bijan’s is open 10AM-4AM 365 Days a year!    The steak salad (on the dinner menu) is fantastic!  Say hello to Rolf.

Cantina Laredo
508 N State St, Mon-Fri, 3:30-6:30pm Upstairs
Half-off casaritas, house wine, draft and bottled beer

*NEW* – Chicago Chop House
60 W Ontario, 4-6 Every Day (even Sat & Sun)
Half price wines by the glass and cocktails (up to $20 reg price)
Half price appetizers including Crab Cakes, Lollipop Lamb Chops, Ahi Tuna.  Definitely high end food, not scaled back “happy hour” versions.
The new owners have started a $1 Million renovation.

Doc B’s Fresh Kitchen River North
55 E Grand,  4-6 Every Day  (Updated Happy Hour 11/17)
$4 Beer, $6 Wines  New Kitchen Items ($6-$9):   Burgers, Chicken Sandwiches, Fried Chicken, Wok Bowels, Brussels Sprout Salad and more.   The fried chicken is amazing.  So is the brussels sprout salad.   I like the Thai Veggie Wok Bowl, but usually ask them to kick up the spice level.   And,  $5 burger night every Sunday at River North Doc B’s.

Spicy Crispy Chicken Sandwich – $6 at Doc B’s

Eddie V’s
521 N Rush, Every Day 4-6
$8 premium wines, $7-$19 appetizers

Emerald Loop Weeknight Specials
216 N Wabash $5 Draft Beers
Monday $10  Turkey Salad
Tuesday  $8 burger or $10 Quinoa Bowl
Wed $12 Rosemary Chicken
Thurs  $10 Tacos, $12 Grilled Chicken Salad
Fri  $17 Blackened Tilapia,   $13 Lobster Wrap

25 E Ohio, Every Day 5-7
$9-12 wine and cocktails, $9-$14 appetizers, $10 burger
George is the managing partner, and he runs a great place.   You’ll usually find Lonnie behind the bar making sure happy hour runs smoothly.   Julia and the other servers will make sure you have a great experience.

  Calamari at Fleming

15 W Illinois, Weeknights 5-8
Wednesday Wine Bottles $30, $15 Taco Trays
Thursday Rose and Oysters $20 All you can eat

The Hampton Social
353 W Hubbard, Weekdays 3-6
Half-price wood fired pizzas, Half-price specialty cocktails & rose

Harry Carey’s
33 W Kinzie, Mon-Fri 4-6 (at bar only)
$7 Wine, $5 Half order calamari or meatball, $6 Margaritas $8 Martinis

Highline Lounge
169 W Kinzie, Wed 7-10 $20 bottle of wine and flatbread
Sunday $25 Brunch Buffet

Joy District
112 W Hubbard, Mon-Fri 3-6
$4 Sliders (assorted)

Kinzie Chop House 
Tue & Thurs 4-6 at the Bar & Patio
Buy One-Get One Free Bar Menu Appetizers (here’s the Menu)

The Kitchen
316 N Clark on the river, Weekdays 3-6,
Pulled Pork Sliders

Mama’s Boy
445 N Dearborn, Every Day 3-6
Well, unfortunately Mama’s Boy revised their happy hour.  Gone are the Chicken Parmesan,  Eggplant Parmesan, Meatball Pizza.  New items include $5 sliders… chicken and waffle, philly cheese steak and burger.  The chicken slider is a piece of chicken on what appears to be an eggo toaster waffle.   The new items aren’t bad, but they don’t represent Rosebud like the previous more traditional Italian items.  fortunately they still have the meatball and sausage w/peppers.  There’s a selection of wines ($7-$10) and cocktails.  
 Calamari and Meatball at Mama’s Boy

McCormick & Schmick’s Wacker Drive
1 E Wacker Dr, Mon-Fri 4-6:30
This chain claims the best happy hour in the country.  Here’s the menu.
Kamilla and Diego are both great servers.

108 W Kinzie
Tuesday 5-7 Tacos 2/$6.50

65 E Wacker Place, Mon-Fri 4-7
$8 wine, $8-9 bar bites



Tenderloin Sliders at Pinstripes – $7
435 E Illinois, Mon-Fri 3:00-6:30
$4 Beer, $4 Wine, $5 Well Drinks, Appetizer Specials including Sliders, Flatbreads and Pizza.  Pinstripes is especially nice in the summer when you can dine outside.

River Roast
Saturdays and Sundays – Blues Brunch

$15 Happy Hour Charcuterie  @ River Roast

315 N LaSalle, Mon-Fri  3-5
$35 – Bottle of Rose and 12 Oysters
$3-$7 Bites, $10 Burgers, $10 Cob Salad
$5 Beers, $7 Cocktails
River Roast has a great location on the north side of the Chicago River at LaSalle.   Be sure to arrive early for Happy Hour to get a great riverside seat.

Roka Akor
456 N Clark, Mon-Fri 5-6 in the lounge
$5 and $6 appetizers , $5 wines and sake

Rock Bottom
1 W Grand Ave, Mon-Thurs 3:30-6:30
$5-$7 Appetizers, $3 Beer, $5 House wines

720 N State, Weekdays 4-7
$7 wine and cocktails, $7 appetizers

Ruth’s Chris

Steak Sandwich at Ruth’s Chris Happy Hour
431 N Dearborn, Mon-Fri 4:00-6:30
$8 Prime Burger, Tenderloin Salad, Crab BLT, Steak Sandwich, Ahi Tuna, Spicy Shrimp.  Limited wine selection.  You can sit at the bar, but if you’re early you can ask for a booth along the window if available.


110 W Illinois, Mon-Fri 3:30-6:30
Dim Sum Happy Hour $4-$10, $7 Wine

Union Sushi + Barbeque
230 W Erie, Every Day 5-6:30
$1 Oysters, $2.50 beef filet skewers, $4 shrimp rolls, $5 Moscow mules

Weber Grill
539 N State, Mon-Fri 3-6
$6 Wine,  $4 Pulled Pork Pretzel Bowls, $5 Smoked Brisket Sliders

159 W Erie Mon-Fri 3-6
$4-$7 food specials (Half price appetizer menu)

Easter 2017 – The Moody Church

Kenny Damara – Selections From Romans 8

Orchestra – Prelude

Music – “I am Saved”

Anthem – Choir and Orchestra

Scripture Reading & Hymn, “Christ the Lord is Risen Today”

Christmas 2016 – The Moody Church

City of Chicago Signs 70 Year Lease, Turning 873 Bus Shelters into Stuckey’s Locations.

The City of Chicago will receive a lump sum payment of 19 Million dollars in return for allowing Stuckey’s corporation to operate 873 of the city’s busiest bus shelters for the next 70 years.  “Now, in addition to being able to sit briefly for a modest fee, weary travelers will be able to purchase a wide variety of snacks, including the ever-popular Stuckey’s Pecan Log”, according to Lance Stuckey, great grandson of Ethyl Stuckey, founder and creator of the heavenly Pecan Log.   “We think this partnership will give our aging roadstop empire a shot-in-the-arm;  You’ll be able to use your Ventra card to load up on saltwater taffy!”  Complete financial details of the agreement weren’t available, but it is rumored that the city has already spent the $19 Million.  

Inventor of Smiley-Face Firework Sued for Copyright Infringement

The Acme Button Manufacturing Company, makers of the popular smiley face buttons, has filed a $20 Million  lawsuit against a Melrose Park fireworks company, alleging theft of their popular button design.  “Those bastards at the button company have made billions selling those damn yellow buttons”, said Tony Lomazzo, Chief Pyrotechnic Design Specialist  and inventor of the face shaped fireworks.  “How can you copyright happiness?  We’re going to counter sue. Those pricks won’t be smiling when I’m done with them.”   Pending outcome of the suit, the fireworks company has agreed to temporarily replace the smile with a round mouth hole.

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