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 MoreUpdates
Expectations (continued)
Last week, we wrote about analysts’ expectations for the economy for the next twelve to eighteen months. Inflation is expected to hold at 2.0% to 2.5% for the full year. The Federal Reserve’s well-advertised plan for short-term interest rates is to raise the Fed Fund rate (the rate at which financial institutions lend to one […]
Read MorePaycheck Checkup
In January the Internal Revenue Service (IRS) released new withholding tables, based upon the changes for 2018 from the Tax Cuts and Jobs Act (TCJA). On February 28th the IRS released an online tool for calculating proper withholding after TCJA. The tool may be found at https://www.irs.gov/individuals/irs-withholding-calculator. The IRS called using this tool a “paycheck […]
Read MoreExpectations for Inflation, Interest Rates and Stocks
In aggregate, buyers were more anxious than sellers last week. Fears of rapid acceleration in the rate of inflation temporarily faded. This likely reduced the fear of an immediate large increase in interest rates. With renewed expectations that the 10-Year Treasury yield will remain well under the 4% to 5% range, stocks again seemed 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 MoreFiltering the Noise
There are few sources of enduring investment truths as dependable as Warren Buffett. Last week’s update pointed out the necessity of identifying the different risks associated with the varying time horizons a portfolio might have. The main point was, in a long term portfolio, the risk of the compounding loss of purchasing power as a […]
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 MoreAre Bonds Risky?
Why are there bonds in my portfolio? Over the weekend, Berkshire Hathaway released its 2017 annual report along with Warren Buffett’s annual letter to shareholders. One section of Mr. Buffett’s letter addressed the risk in owning bonds and has folks questioning diversification. Investing is an activity in which consumption today is foregone in an attempt […]
Read MoreIRA Assessment
The earlier that you make your IRA contributions, the longer they will grow. So, under that theory, you should have made your IRA contributions for tax year 2017 some 12 months ago! But if you didn’t, it’s still not too late. The IRA was born in 1974, in the Employee Retirement Income Security Act (ERISA). […]
Read MoreEarnings Growth and Moderate Inflation
As of Friday, 80% of companies in the S&P 500 have reported fourth quarter 2017 results. The blended earnings growth rate for the quarter has been 15.2% year-over-year and is the highest reported since 2011. FactSet reports 2018 earnings per share growth estimates have increased by 7%. In addition, from Dec. 31 through Feb. 15, […]
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