Cash on the Sidelines Myth and Tax-Efficient ETF Conversions

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Long Story Short

Burney Wealth Management

21 episodes

1 week ago

Long Story Short is a weekly financial planning and investing podcast from Burney Wealth Management. Each week, your hosts Andy Pratt, CFA, CAIA and Adam Newman, CFA, CFP®, discuss the biggest questions they’re hearing from clients. They’ll occasionally bring in team members and interesting guests to discuss specialized topics like estate planning, business succession, and retirement income strategies. Founded in 1974, The Burney Company is a fee-only investment advisory firm that manages $3 billion in assets. Learn more about comprehensive financial planning at burneywealth.com.

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Cash on the Sidelines Myth and Tax-Efficient ETF Conversions

Long Story Short

40 minutes 48 seconds

1 month ago

Cash on the Sidelines Myth and Tax-Efficient ETF Conversions

Halloween decorations are acceptable, but $7 trillion in "cash on the sidelines"? Andy explains why this bullish talking point might be overblown when you examine the actual numbers relative to market size.

Plus, Andy & Adam discuss the complex world of 351 conversions - a 100+ year old tax code provision that's suddenly relevant for modern ETF launches. From charitable remainder trust optimization to why your Halloween costume might be more strategic than your investment allocation.

We cover:

Why $7 trillion in cash sounds scary until you do the math per person
The real story behind "cash on the sidelines" market predictions
Fed rate cuts already dropping money market yields in real time
351 conversions: turning individual stock portfolios into tax-efficient ETFs
How ETF structures avoid capital gains through creative rebalancing
Charitable remainder trust investing: why asset location matters more than allocation
The distribution hierarchy that determines your tax bill
Golden Girls Halloween costume coordination (non-financial advice)

⏱️ Timestamps:

(00:34) Halloween decoration timing and market forecast season
(03:05) $7 trillion cash myth: sounds big until you see the context
(04:44) Why cash builds during downturns and what it really signals
(05:49) Price makers vs. price takers in market dynamics
(06:54) Cash as percentage of market cap tells the real story
(10:00) Fed cuts already dropping money market rates
(12:20) Why staying invested beat chasing 5% cash in 2022
(15:55) 351 conversions: 100-year-old tax law meets modern ETFs
(19:20) ETF tax efficiency: swapping Apple for Exxon without capital gains
(28:40) CRT listener feedback: why two trusts performed so differently
(29:25) Asset location vs. asset allocation in tax planning
(37:50) Halloween Golden Girls costume reveal
(39:00) Podcast disclosures

Resources:

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#cash #etfs #charitabletrust #taxplanning #assetallocation #moneymarketrates

The Burney Company is an SEC-registered investment adviser. Burney Wealth Management is a division of the Burney Company. Registration with the SEC or any state securities authority does not imply that Burney Company or any of its principals or employees possesses a particular level of skill or training in the investment advisory business or any other business. This content is for informational and educational purposes only. It is not intended as personalized investment advice or a recommendation.