When the Tax Cuts And Jobs Act (TCJA) was signed into law on December 22, 2017, it was the most sweeping rewrite of U.S. tax law since the Tax Reform Act of 1986. Now, it’s about to be undone.
Federal Reserve policymakers voted to keep lending rates unchanged but suggested one more rate hike might be implemented before the end of 2023.
Grandparenting is more important than ever. It’s also much harder to do than a generation ago. This is the second in a series on grandparenting.
Medicare is not driving the nation off a fiscal cliff, according to an analysis by The New York Times (NYT). Contrary to projections by the Congressional Budget Office (CBO), the nation’s nonpartisan budget research agency, The Times says the huge threat to the U.S. budget posed by Medicare spending has receded.
The Federal debt is projected to increase to 110% of the size of the economy in 2032 — higher than it’s ever been. In the following two decades through 2052, growing deficits are projected to push the federal debt much higher still, to nearly twice the size of gross domestic product. Based on these projections from the nonpartisan Congressional Budget Office, it’s fair to say the interest owed on the federal debt skyrockets and becomes unsustainable by 2052.
Year-end tax planning in 2023 can make a big financial difference in retirement funding and how much you leave your heirs. Here are some tips, situations, and useful ideas written by a real human with decades of experience in year-end tax planning maneuvers.
The law of the hammer is a cognitive bias to treat every problem as if it’s a nail. People do it with money. As financial professionals, however, we want to be clear that money won’t buy you a fulfilling retirement.
Clients come to us for technical financial and tax advice. Surprisingly, helping them define and achieve NON-financial goals is what often makes their lives more fulfilling.
Crypto investors have an unusually good opportunity to harvest their tax losses by the end of 2023.
The five questions below are a challenge and an effort to allow you to assess your knowledge of current financial economic conditions. If you have been following our news stream, this quiz draws on familiar ground. The answers are below, along with additional resources and documentation related to the answers.
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A Long-Term Perspective Amid The Bear Market Of 2022
Published Wednesday, July 27, 2022 at: 10:25 AM EDT
Volatility in the stock market has increased. Recently we actually hit some down days of -3.6% and -4% in the stock market. That shakes people up. But remember why you bought stocks.
The basic axiom of investing in the stock market is that you deliberately looked for an asset class that was volatile. After all, if you don't own an asset class that's going to be volatile, why are you entitled to 10% long-term total return in the stock market? You're not.
The equity risk premium, a concept in modern financial theory illustrated here, quantifies the premium stocks annually averaged in the 20 years ended June 30, 2022. Stocks, as measured by the Standard & Poor’s 500, averaged a +9.1% annual return in the 20 years -- nearly seven times the +1.2% annual return on the risk-free 90-day U.S Treasury Bill.
Backed by the full faith and credit of the U.S. Government, T-Bills are considered a riskless investment. In contrast, the value of the S&P 500 index is subject to ups and downs, and, in theory, if all 500 of blue-chip companies in the S&P 500 index go bust, your entire investment could be lost.
Subtracting the return on T- Bills from the return on stocks, the resulting +7.9% is the premium paid for taking the risk of owning U.S. stocks over the 20years.
To be clear, investing in America’s 500 largest publicly-held companies earned an average of +7.9% more annually than a risk-free investment in the past 20 years.
This 20-year period encompassed four frightening bear markets -- the tech crash of 2002, the financial crisis of 2008, the Covid downturn of early 2020 and the current bear market.
Past performance is no guarantee of your future results and that, paradoxically, is precisely why investors are paid a premium for owning stocks. Yes, stocks are risky and past performance is no guarantee of your future results! Be glad for it!
It is precisely why stocks have returned 7.9% more annually than U.S. Government-guaranteed investments through four bear markets and financial crises of the past 20 years.
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