Shareholder activism has a history of creating positive change within companies.  S&P IQ’s research from 2013 and 2014 illustrate investing alongside Activist’s delivers returns that are significantly higher than the market’s returns.  However, there are still a number of risks—even when a high quality activist is at the helm—and results can vary greatly.

Captive insurance companies, self-insurers for businesses, provide owners with substantial tax advantages, the most attractive of which is an annual deduction of up to $2.2 million based on an actuarial assessment of your business.[1]  This effectively shifts business income from the top marginal tax rate of 39.6%, towards a more preferred dividend tax rate of 20%.  These cumulative savings can further benefit from the dividends-received deduction, which allows the captive to deduct 70% of the dividends that it receives from its stock portfolio investments.

We estimate less than 1% of the general population knows what to ask before considering investing in a company. MarketWatch paraphrased Warren Buffett, “Put your money in index funds and move on… Seriously, you’ll do better. That’s what I plan to do with my own money once I am gone.” In short, buy index funds. Ample evidence proves the vast majority of investors would be considerably better off following this advice. Without unique knowledge, active investing is simply a guessing game.

Oscar Wilde is famously credited for the phrase, “A cynic is a man who knows the price of everything but the value of nothing.”  While the-ultra-wealthy are generally clear on both price and value, money cannot buy everything—particularly if it’s squandered by heirs who have no idea what it means to keep it. 

The capital markets are reasonably efficient and more often than not the market values assets accurately. Something must change for the price of an asset to depreciate or appreciate. When it’s the latter, the investor must be able to predict change. Shareholder Activism has a history of creating positive change. This paper explores how changes initiated by Activist investors create value far in excess of general market returns. The statistics show activists do this with significantly less risk than other forms of investment. In this paper, we will define the risks inherent in each stage of the Shareholder Activism process and how investors might profit from each.

An instant is all it takes to destroy a person’s ability to make important decisions. A lifetime of hard work, financial planning and dedication can be eradicated. Illness, a chance accident or cognitive decline over time may impair decision-making—or limit it entirely. One stroke could curtail a person’s ability to communicate, move and live independently.

Whether a global conglomerate, or a successful local operation, distinct challenges face growing businesses—yet for business owners wishing to preserve multi-generational control within their family, they face a particularly unique set of circumstances.  Succession planning can be particularly challenging for any founder, yet multi-generational family businesses must overcome differences of opinion about management and/or succession of power, and disagreements over assets and favoritism.

We estimate less than 1% of the general population knows what to ask before considering investing in a company. Mitch Tuchman paraphrased Warren Buffett for MarketWatch: “Put your money in index funds and move on… Seriously, you’ll do better. That’s what I plan to do with my money once I am gone.” In short, buy index funds.

When it comes to the family fortune, silence is not golden. History has repeated this lesson for centuries as nine out of 10 affluent families have consistently seen their financial legacy destroyed, and family unity right along with it, within three generations. The culprit is rarely bad investment advice, a risk-prone portfolio or economic turbulence.

Roy Williams and Vic Priesser collected data from 3,250 families who had lost their wealth. Less than 3% reported that poor planning and investments were to blame for their reversal of fortune.

Wealth management usually comes in two parts: financial planning to increase and manage your wealth, and estate planning to protect and pass the wealth along to heirs with as few taxes as possible. Unfortunately, 70% of family wealth is destroyed by the second generation, and family unity is destroyed right along with the wealth. After three generations, the loss of wealth exceeds 90%.