DEAR TRUST OFFICER: How about that stock market? Can it last? — HAPPY INVESTOR DEAR HAPPY INVESTOR: Higher stock prices are driven by two factors: increasing earnings and increasing investor speculation. The good news for investors is that the stock market records set in August were grounded upon increased earnings and a strongly growing economy. […]
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Prohibited Transactions
Usually an IRA is invested in stocks, bonds, mutual funds, and perhaps certificates of deposit. Sometimes a retiree may see this nest egg as a resource for a more unconventional investment. In that case, one needs to beware of the rules against self-dealing. Some transactions are prohibited under the tax code and may lead to […]
Read MoreImpact Investing
DEAR TRUST OFFICER: What is this “impact” investing I’ve been hearing about? Can trust assets be invested for social impact? — SEEKING SOCIAL JUSTICE DEAR SEEKING SOCIAL JUSTICE: There is no simple definition of “impact” investing. One writer called it “a movement that aims to force social change by minimizing or eliminating investors’ exposure to […]
Read MoreMarket Volatility Makes a Comeback
For investors, 2017 was an unusually calm year. The S&P 500 stock index never changed by 2% in a single day, either up or down. There were only eight 1% days all year. 2018 is shaping up to be a very different story. CNNMoneyInvest reports that, in the first quarter, we’ve already had six 2% […]
Read MoreGood News on Dividends
There has been quite a bit of publicity about companies sharing with workers the benefits of the corporate tax cut enacted last December, in the form of bonuses and additional retirement plan contributions. As it turns out, many are sharing the newfound wealth with shareholders also. More than a fifth of the companies in the […]
Read MoreStock market volatility
Dear Trust Officer: What’s up with the stock market? Market indices went into correction territory in February, but have since recovered somewhat. Are we out of the woods now? —Nervous investor Dear Nervous Investor: The February stock price volatility was fed in part by a record level of margin debt. Some investors borrow against the […]
Read MoreRoth Conversions
Dear Trust Officer: Last year I converted my traditional IRA to a Roth IRA. However, now that I see the income tax that will be due, I’m not so sure it was a great idea. Can I change my mind? —Second Thoughts Dear Second Thoughts: You have until October 15, 2018, to re-characterize your 2017 […]
Read MoreBunching Charitable Gifts
With the dramatic increase in the standard deduction in 2018, to $24,000 for married couples, many charities are worried that the tax incentive for donations will disappear, leading to lower gifts. Because the state and local tax deduction is now capped at $10,000, married taxpayers will need to have at least $14,001 in additional deductions […]
Read MorePaying for investment advice
Investment advisors may be compensated in several ways. In some cases, they charge clients a fee for their advice. Sometimes they earn commissions from the investment products their clients buy based upon that advice. Life insurance is sold on commission, for example. Sometimes the advisor may earn both fees and commissions. Trust departments and trust […]
Read MoreEmotional Investing
We like to think that since the advent of modern portfolio management practices, investing in stocks and bonds has become a cerebral, analytical process with no room for emotion. The truth is that most investors, even institutional investors, are buffeted by emotional turbulence from time to time, and that truth is reflected in the volatility […]
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