April 4, 2022

Climb That Wall

Markets are known to climb a “wall of worry” or go higher even though headlines and investor sentiment are logically negative.  The current bull market that we have been enjoying has been exceptional at climbing that wall.  From divisive political turmoil, including two impeachments, to a world-wide pandemic, the bull continued to scale the wall.  Now sadly comes Ukraine, and while stocks are lower for the year, and there is plenty of trepidation out there, the market continues to hang in there.  There is a man whose name begins with a P, who has put fear into stocks, and that is Fed Chairman Powell.  Higher interest rates could ultimately be worse for equites than other world events, at least we can hope for that in a way.  As for Russia, it is important to remember that they have fallen to become the 11th largest world economy and Russian stock exposure is very limited in most investments, excluding commodities like oil.  We profoundly hope that cooler heads prevail and that our main concern is designing portfolios to withstand and benefit from higher rates and/or higher inflation.
April 4, 2022

It’s that Time of Year Again

The 2021 tax deadline is Monday, April 18th, thanks to the Good Friday holiday.  While tax planning is a year-long exercise, many of us fall into the procrastinator camp.  The key is to plan around the things that you can control, think retirement plan contributions, keeping good records, tax-loss harvesting,  and being informed.  It is hard sometimes, but paying a big tax is better than not paying a big tax bill…Now here are our top five favorite tax scofflaws…5) Wesley Snipes, from Blade to the Big House on about $23 million in unpaid taxes. 4) Willie Nelson,  crooned his way to a $16.7 million dollar tax bill.  3) Mike Tyson, $23 million in tax debt after earning over $300 million in his career. 2) Mike Sorrentino, “The Situation” on Jersey Shore got himself into a jam on about $9 million in back taxes.  And 1) Al Capone, the notorious Chicago gangster was finally sent to prison after declaring “they can’t collect legal taxes from illegal money”.  But yes they can.  Honorable mention…Leona Helmsley, Pete Rose, and Heidi Fleiss.
December 29, 2021

Happy New Calendar Year

It is time to flip the calendar on another year and also to reflect on what has been a very impressive market in 2021.  Speaking of markets and calendars, the total return on the S&P 500 (the 500 largest US companies) has been quite impressive for the past 95 years, or dating back to 1926.  Think about this, over this period we have seen countless historical events…wars, depressions, recessions, embargos, financial crisis’s, and throw in a pandemic, yet the market has still had a 10.3% average annual return.  Remarkable.  Even more remarkable, over these 95 years we have only seen seven calendar years where the market is down by 14% or more, just seven.  On the flip side we have seen 48 years (more than half) up 14% or more. We cannot predict the future but we can use the odds to our advantage.  Here’s to a healthy and happy 2022!  (research source Ibbotson Associates)
December 13, 2021

Christmas Harvest Season

According to a recent Wall Street Journal article, the value of tax-loss harvesting is quite impressive.  Tax loss harvesting is basically managing long and short term gains to the investors advantage.  Using someone in the 25% income tax bracket, their studies show that in a strong market, managing taxable gains and losses can add 1.1 to 1.42% to annual returns.  Even more impressive, during significant downturns when the S&P is negative, this harvesting can add about 3.21% to yearly performance.  So whether the market has been naughty or nice, tax management can be a gift to returns.
December 5, 2021

In the words of the Cuomo boys while lifting weights in their basement today, “what happened in 2021”?   Here we are, the first week of December, where did the year go?  Time may be the single most important contributor to investment success and seems to come and go so fast.  The best time to invest was yesterday and the second best is today.  Set it and forget it and see where you are in December of 2022.