portfolio management

The Best of Both Worlds: Learning from the Past, Building for the Future 
By Greg Leibman, Billy Garver, and Caitie Leibman

This time of year often invites some reflection. We’ve said goodbye to 2024 and are welcoming 2025. We’re thinking about beginnings, endings, and transitions.

In Roman mythology, Janus is the god of these things. He had two faces, one looking forward and another looking back. His purview included doors, archways, and gates.

It feels natural at this time to take stock of where we’ve been—and think about the best way forward. That’s what we’re doing at 228 Main.

When Mark founded this enterprise decades ago, it was just him at a kitchen table. In 2000, he moved the business to the digs at 228 Main Street in beautiful downtown Louisville. He knew that he was on to something, that he could keep building something special on a simple but powerful foundation: if he took care of his clients, their business would take care of him.

And the work kept growing. In those intermediate years, he hired staff to help him manage. Among their ranks were family and friends who provided administrative and service support.

Since 2020, the staff has continued to transform. Today, the team is both more specialized and more interwoven. The three of us “next-gen” advisors are co-owners with Mark, with three portions of 24.9% of the shares to his 25.3% portion.

Now we’re in transition, preparing for the decades ahead. There are six of us total on the LFS team, each one still growing and learning. But it takes all of us to make sure our three key activities can happen: 1) We talk with you to sort out what you are trying to do in life. 2) We research investment opportunities. 3) We manage your portfolios.

As we do these things, we’re planning a structure for the enterprise that is collaborative and collegial, where every generation and every teammate puts their gifts on the table for the benefit of all: the wisdom of experience, the energy of youth, and all the diversity of talents and interests we bring.

Many of you know from company lore—and your friendships with Mark—that he intends to work to age 92. (It’s a whole thing for him, a vision that he gleaned from some important mentors early in life. Ask him sometime.) We can’t know the future. And some of us may actually have more years ahead of us in this line of work than there are behind us.

But it’s fair to say that we are all indeed in this for the long haul. So how do we make this thing more sustainable?

We’re all committed to some important things: continuing to build on our strengths and what’s working and staying open to the future and all the opportunities ahead. We learn and grow from both perspectives.

Like the Roman god Janus, we’re looking back and we’re looking forward. Working with the foundation of our history and the road ahead—that’s the superpower of this team.

Want to talk about this or anything else? Call or write, anytime.

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Best of Both Worlds – 228Main.com Presents: The Best of Leibman Financial Services

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RMD at Age 73: What’s Up with That?
By Mark Leibman, President

We have noticed that the rules about IRA account withdrawals can cause some confusion, particularly among those who are getting close to the “Required Minimum Distribution” age.

Here, we’d like to cover what the basics might mean for most people, though it is not intended to be advice or a recommendation for your specific situation.

For traditional or rollover IRA account owners, withdrawals after age 59½ are free of penalty, but income taxes must be paid on the amounts withdrawn. One may withdraw money or not, in accordance with their needs and plans.

But beginning at age 73, the rules change.

For each year beginning with the year you turn 73, a “Required Minimum Distribution” (RMD) must be withdrawn:

  • “Required” means there is no option about it—it must be done.
  • “Minimum” means that you must withdraw at least the calculated amount, though you may withdraw more if you choose.
  • “Distribution” is simply the word the IRS uses for withdrawals.

The way the numbers work, the RMD starts out at a little under 4% of the account balance at age 73. Then, the RMD rises gradually each year. The RMD gets to a little over 5% at age 80 and closer to 10% by age 92. The withdrawals will be taxable—that is the whole object of the exercise, from the IRS’s perspective.

Even with those requirements, IRA accounts may still have significant balances until advanced ages.

Here are just a few fine points:

  • The calculation begins with the prior year-end balance.
  • The factor used comes from an IRS table, and we can do the arithmetic for you.
  • The withdrawal may be made any time in the calendar year.
  • If you have multiple IRA accounts, it can get confusing. Some people consolidate and simplify their finances at this point.

For more information, the IRS explains more details about RMDs online, available here. Please also keep in mind that different rules apply to inherited IRAs, Roth IRAs, and certain other situations, so do seek specific advice for your situation as necessary.

As for our role, our object for each client is to help have your money do what you need it to do.

So the question of how you should manage your accounts and your withdrawal strategy is best answered in a one-on-one discussion. If you would like our help talking through your situation, please call or email us. Happy to help.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

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Persisting through the Seasons

And just like that, the heat of summer is gone. The cycles of nature are such a useful way to think about the cycles in the economy and the markets.

No guarantees… but we seek to persist through the seasons. More in this week’s video.

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We Choose the Orchard!

We believe in saving for the future, but the present is where we live. Your retirement flow might go toward any mix of spending: cash for bills, a stash for unexpected events, or maybe it’s for that adventure in the Florida Keys! None of it takes a pile of money: instead, we tend the orchard for the fruit crop.

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“Is It Investable?”
by Caitie Leibman, Director of Communications

Clients, we love hearing from you about what you’re seeing. Life changes at such a clip, it’s helpful to hear about the patterns and evolutions that pop up in our everyday lives.

When someone pitches us an idea, we don’t start with the obvious question. The obvious question would be, “So, is this investable?”

The real question is, “What’s this mean?”

This happens to us in our own research process. We don’t start with the hottest investment headlines. Instead, maybe we read something about a new technology, then dive in and realize it’s a true innovation in its field.

Then the real question whispers, “Hmm… What does this mean?”

We follow that thread and wonder, “How could people use this in the future?” or “What would the world look like if this were normal?” or “What should companies be doing now to get ready for this?”

Little clues about the future might sprout from these questions. Dorie Clark talks about this idea in her book The Long Game. We don’t have to limit ourselves to one topic with laser focus. We don’t need perfect clarity.

Sometimes, we’ve got enough signals to work with. “Interesting” can be a good enough guide. “Interesting” can lead us to meaningful.

The research process is not a mission: it’s an experiment. Flexible, not rigid. Curious. Open.

We optimize for interesting.

We do the research, put the evidence in context, and go from there. Maybe it would be nice to be able to boil it down more than that, but then… if it were any simpler, everyone would be doing it, right?

It’s fun to be us, and it’s fun to be in it with you.

Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss.

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The Organizing Question: Mark’s Role, New Clients, and More 
By Mark Leibman, President

What a journey thus far!

I started at the kitchen table. Bought the office building at 228 Main when I could neither afford it nor afford to pass it up. Struggled and juggled for years. Fit a snowbird lifestyle into the middle of it. Survived personal tragedy, a cruel disease that slowly took the life of my high school sweetheart.

And through it all, we grew. More and more people entrusted more and more wealth to our care. More and more teammates helped me hold up my end of the deal.

They say it is not the strongest or the smartest who survive and thrive, but those who adapt and adjust to change.

But then there are the things that are not changing.

I recently heard second-hand the misperception that “Mark Leibman is not taking new clients.” But from a business sense, Mark Leibman became Leibman Financial Services, Inc. (LFS), a long time ago. And LFS is definitely working with anyone who contacts us with an interest in what we’re doing in here. Everyone gets access to the same set of services. One story, one philosophy, one book of business.

And still, anyone with an internet connection can know what I, Mark, am thinking. Every client gets the impact of my ongoing obsession with the markets. And they get a lot more brainpower working for them than I personally possess.

I have always asked myself, and you, and my teammates, and our mentors this question: “What could we be doing differently or better?” The underlying object has always been to try to grow the buckets—and help people connect their money to their lives. Some of you tell us we have done it differently and better.

In an industry seemingly focused on getting new clients and finding new money, we aim all of our intentional efforts entirely at you, our clients. Don’t have time to chase “new money.” Not me, not my teammates.

Eliminating sales activity enables us to put investment research, portfolio management, and communicating with you at the center of our work. Many other investment advisors outsource all of that into model portfolios managed by others and buy canned communications, all so that they can go look for new customers.

Paradoxically (or not), when we stopped pursuing prospects, we began attracting more clients. People tend to like it a lot when their buckets grow.

These distinctions empowered our evolution into a different and better organization. We have many teammates, and ownership and management is now a four-person collaboration. But we still have one story, one philosophy, and one book of business. Many “financial advisor” shops, however, are like a collection of sole proprietors, each on the prowl for new business all the time.

We believe we are organized differently—and better.

At the beginning, Colonel Sanders cooked all the chicken. At the beginning, I did everything, too. The business has grown into something that no single person could operate on their own—not me, not Sanders, not any one of my three partners. It takes all of us.

All three of my partners have the credentials and experience to consult with clients, to take the lead when they are the best fit. Each of us brings the same philosophy, the same investment offerings based on the same research, to every client. Any client can call any one of us. I am still here to talk—and so are my partners.

And the whole enterprise rests on the same values and principles, the same herbs and spices that we started with.

Wondering what any of this means for you? Call me, or any one of them, any time.

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The Organizing Principle – 228Main.com Presents: The Best of Leibman Financial Services

This text is available at https://www.228Main.com/.

What’s the Cake For?
They say you can’t have your cake and eat it, too… but what if your cake had the potential to grow over time? Who says you can’t snack when you’re hungry and still save some for later?

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Sorting the Buckets and Cleaning the Kitchen 
A bowl of fruit on a counter.

We’re not ones for putting on airs, but we came across an idea lately that has us thinking about fine dining.

In French, it’s mise en place. (To get kind of close, you can say it like “mee zon ploss.”) For those who aren’t in the know, mise en place is French for “sort the buckets.”

Just kidding.

It’s a culinary term for “gathering” or “putting in place.” It’s the practice of preparing the kitchen workspace before service begins. You organize the ingredients. You put together what you’ll need at arm’s reach, and you tidy away what you won’t need for a while.

It can refer to the time you put into the process, and it can refer to the state of mind you get into.

Sound familiar? When we work on your financial plans and planning, we have called this process “sorting the buckets.” (Now, say it again with a French accent!) We take stock of our resources and arrange by time horizon. What do I need now? What will I need later?

What am I low on? What could use some tidying up? Sometimes even a quick review and a few small moves can make a world of difference. More things become possible with a little organization—and a little space to work.

There’s a certain calm afforded us when we know how we’re going to pay the bills, where we would go in an emergency, and what we can turn toward for the future.

That’s “sorting the buckets.” That’s mise en place.

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Sorting the Buckets and Cleaning the Kitchen – 228Main.com Presents: The Best of Leibman Financial Services

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Something Wonderful is “Afoot”
by Mark Leibman, President

Each of our feet has 19 muscles, 26 bones, and 33 joints, but we usually do not think about a single one of them when we take a step. Coordination and balance are elements that happen beneath our consciousness. We are free to enjoy our walk, to daydream or reminisce or plan.

Can you imagine trying to think about what each of 19 muscles should do with each step?

Meanwhile, each of our portfolios has between twenty and forty holdings. We make adjustments every few months to pare some back and add to others, to buy new opportunities and sell out of others. We’re reading SEC filings, quarterly reports, economic news, and investment research to inform our efforts.

You—the best clients in the world—do not have to think about any of that while you are living life. Whether you are investing for the day you can live on your capital or already “living on the fruit crop” after a career tending the orchard, we are busy coordinating and balancing the elements to help build your wealth.

I like to walk; my feet are rather important in that process. But I appreciate not having to think about the flexor digitorum brevis muscle… or any of them! I’m free to think about anything else while I’m out on the trail or walking around the lakes or on the riverbank.

In case you do want to learn more about what is going on behind the scenes, our blog posts and videos and podcasts are a good way to learn about our philosophy and strategies and tactics. And you can always call or email us when you want a one-on-one conversation—we are here for it.

In the meantime, just like your feet, we’ll be working to get you where you want to go.

Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss.

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Something Wonderful Is “Afoot” – 228Main.com Presents: The Best of Leibman Financial Services

This text is available at https://www.228Main.com/.

What Happens on the Research Team… Goes in Portfolios!

Clients, this week we’ve got a little behind the scenes tour: what happens in our in-house research process?

Here are some of the things we like to think about (so that you don’t have to!).

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