Medical scientists have identified a disorder, known as Traumatic 1042 Election Distress, that can afflict business owners who pursue Section 1042 sales of their company stock to an ESOP. The researchers(1) recently concluded their clinical study, based on observations of hundreds patients over the past 30 years. Their newly published findings identify common stress patterns observed among business owner patients. The disorder is curable if diagnosed early.
- 1042 Exchange: Navigating Between A Rock And A Hard Place
- Academic Research Insight: The Strategic Timing Of Earnings News
- Research Portal: 1042 ESOP Rollovers For Business Owners
Learn to recognize these symptoms:
Vanguard’s move into PE may change the landscape forever
Private equity has been growing in popularity in recent years as more and more big-name funds and institutional investors dive in. Now even indexing giant Vanguard is out to take a piece of the PE pie. During a panel at the Morningstar Investment Conference this year, Fran Kinniry of Vanguard, John Rekenthaler of Morningstar and Read More
The Six Stages of Traumatic 1042 Election Distress
- Overwhelmed: “There is so much complexity in forming an ESOP. I need to focus on one thing at a time. After all, I have 12 months to figure out my 1042 rollover options;”
- Denial: “QRP seems simple enough. I should be able to recognize a ‘domestic operating company’ when I see one. Nothing to worry about.”
- Anger: “Floating rate notes are the recommended option?(2) I have to buy them and then borrow against them to get at my money? You’ve got to be kidding me!”
- Fear and Worry: “What if I wake up one day and realize the bonds are never going up in value? What if the issuer goes bust or else redeems the bonds before I am gone? What if I get a margin call?
- Hope: “Maybe if I follow my stock broker’s advice and monetize these bonds, he can reinvest the money, beat the market and earn back what I left on the table!”
- Stress and Anxiety: “How much money am I leaving on the table? There must be a better way—Call 9-1-1!!
- Depression: “Still, I suppose it’s better than recognizing capital gains. I hope I don’t outlive my bond’s maturity date! Why doesn’t this sit well with me?”
If you or someone you know is suffering symptoms such as these, then get a second opinion. Alpha Architect has a track record of treating business owners who suffer from traumatic 1042 election distress, typically resulting in full patient recoveries. We have pioneered a low-cost, passive equity index alternative to floating rate notes that is designed to optimize the after-tax, after-fee returns that can be achieved through a 1042 rollover. Contact a trained professional today (ask for Doug). We believe that for all the good that you are doing for your employees and communities, you should also do well for yourself.
Here is a simple outline of our 1042 solution.
Surgeon General Warning: Any 1042 QRP rollover strategy that is contingent on the investor suffering an early demise in order to achieve his estate planning goals can be hazardous to your health, your wealth or both.
Note: This site provides NO information on our value investing ETFs or our momentum investing ETFs. Please refer to this site.
Join thousands of other readers and subscribe to our blog.
Please remember that past performance is not an indicator of future results. Please read our full disclosures. The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Alpha Architect, its affiliates or its employees. This material has been provided to you solely for information and educational purposes and does not constitute an offer or solicitation of an offer or any advice or recommendation to purchase any securities or other financial instruments and may not be construed as such. The factual information set forth herein has been obtained or derived from sources believed by the author and Alpha Architect to be reliable but it is not necessarily all-inclusive and is not guaranteed as to its accuracy and is not to be regarded as a representation or warranty, express or implied, as to the information’s accuracy or completeness, nor should the attached information serve as the basis of any investment decision. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission from Alpha Architect.
Definitions of common statistics used in our analysis are available here (towards the bottom)
|1.||?||We are Alpha Architect, an independent financial advisor (i.e., fiduciary) to several ultra-high-net-worth family offices, and investment manager of five publicly traded ETFs.|
|2.||?||The National Center for Employee Ownership (NCEO), perhaps the nation’s most widely respected source for unbiased information and research on ESOPs, recently published an article titled Red Flags in ESOP Transactions, in which the authors call attention to the ‘Inappropriate Use of Floating Rate Notes’|
Article by Doug Pugliese, Alpha Architect