Oil prices inched up Wednesday after Iran cut ties with the UN’s nuclear watchdog, amplifying Bogart Wealth’ planning strategies with energy-sector clients. Advisor Patrick Marcinko says the Virginia-based RIA is encouraging clients from companies like ExxonMobil and Chevron to sell into strength, diversify away from career risk, and consider charitable giving with their appreciated company stock.
“We've seen some of the major oil companies' stock prices have climbed with the current climate in the Middle East. From a financial planning lens, we look at selling into strength and diversifying without trying to inflate your lifestyle,” Marcinko told InvestmentNews. “Now we haven't really seen crude prices jump up, but in times where you have major run ups in energy, it's inherent for most folks to want to in tandem increase lifestyle, and we try and have lots of conversations about that.”
Iran’s suspension with the UN’s International Atomic Energy Agency on Wednesday saw the price of Brent crude go up 2.98% to close at $69.11 a barrel, while U.S. West Texas Intermediate crude rose $2, or 3.06%, to settle at $67.45 a barrel. This minor price fluctuation follows Bloomberg’s report on June 23 that said Goldman Sachs analysts anticipate a potential decline in Iran’s oil supply would lead to Brent prices to spike as high as $90 to $110 a barrel.
Bogart Wealth manages roughly $2.7 billion in client assets, and its website has pages dedicated to its retirement planning services for employees from ExxonMobil, Shell, and Chevron.
“For a lot of our clients, if your income is affected potentially by the rises and falls with oil prices, we want to consider diversifying your portfolio away from your career risk,” said Marcinko. “For a lot of the folks that I work with, it's a good reminder that price shocks to oil are usually temporary, and we want to use these points of price dislocation to build financial resilience by selling into strength.”
The “selling into strength” concept is when investors sell an asset while its price is still rising, instead of waiting for a potential peak. Restricted stock units are commonly part of compensation packages for oil company executives and employees, Marcinko said.
“If you have stock options that are vesting soon, and I feel that the price is appreciated given the current events, it might not be a bad time to sell the vested shares,” Marcinko says. “For folks that when tensions were really high, we saw their employer’s stock go up, that's a conversation to be had about charitable giving. Let's donate some of your highest appreciated shares to a donor-advised fund, or use those funds to make a qualified charitable distribution out of an IRA.”
Marcinko, 26, was a finalist for The Osaic Award for NextGen Advisor of the Year at this June’s InvestmentNews Awards. Constellation Wealth Capital acquired a minority stake in Bogart Wealth in January, and a month later Jeffrey Fuhrman joined as president of Bogart Wealth. Founder James Bogart previously served as president and remains CEO of the RIA.
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