Unless you’ve been living under a rock the past few weeks, you’ve probably heard that volatility has returned to the financial markets. This should come as no surprise after we saw positive returns every month in 2017.
But based on the way the news media talks about this volatility, we’d expect to see streets littered with corporate carnage and gutters overflowing with bankruptcies. This could not be further from the truth. In fact, the economy is doing quite well and corporations are benefitting.
Many in the charitable community worry that recent reforms will eliminate tax deductions for charitable giving, thinking this will crimp donations.
This concern arises from the fact that new federal tax laws doubles the standardized deduction to $12,000 for single filers and $24,000 for joint filers. As such, the number of people who itemize tax deductions will certainly drop. Furthermore, the increase in the estate tax exemption to $11 million per person means fewer people will be motivated to make gifts to avoid estate taxes.
There is no denying these items will reduce tax deductibility for charitable contributions. However, rarely have I met a person who only contributes to charity to get a deduction.
Much has been said about the new tax package. Some comments are hugely positive while others are entirely negative. It should be no surprise that many of these judgments are made by politicians. From this, I offer two pieces of advice.
First, whenever someone determines that absolutely everything is horrible or fantastic, the truth is usually somewhere in between. Rarely are there absolutes in our society. This is especially true when it comes to a 1,000-page tax reform package.
Secondly, we have never known politicians to be incredibly astute when it comes to understanding taxes or the complexities of the tax code. As such, don't take tax advice from politicians.
Perceptions about aging and retirement have changed dramatically over the past several decades. Not only are we living longer, but we are more active in retirement. This often brings excitement, as well as anxiety.
Fifty years ago, most expected to retire at 65 and live 10 years in retirement. Now, we routinely see clients live into their 90’s. This trend will continue as modern medicine extends the average life span. Additionally, the safety blanket of a pension is gone for most of us, and social security struggles to keep up with inflation.
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October has an ominous place in investors’ minds for a variety of reasons. Most notably, October 19th marks the 30th anniversary of the 1987 stock market “crash.” On that one day, the Dow Jones Industrials fell 508 points. That 22% drop remains the largest single day percentage drop in U.S. stock market history.
Now that Hurricane Harvey has passed, it’s time for the cleanup and recovery to begin. Picking up the pieces after a natural disaster of this size can be overwhelming. But if you take the proper steps, you can alleviate a lot of unnecessary stress. Here are a few points to consider:
Risk is an odd word. It is by far one of the most popular financial topics to discuss with clients. Society uses it as if we have a perfect understanding of its meaning and the news media repeats it with great power and authority.
The general public, and experts alike, refer to “risk” as a universal term. However, that is a gross oversimplification. There is no such thing as “universal risk.” When we discuss this with clients, they tend to give us a confused look. Depending upon how you think about the matter, there are at least ten commonly identified types of risk. As such, the word “risk” should always be preceded with an adjective describing the type of risk we are addressing.
Every July for the last 11 years, CNBC has ranked all 50 states on 60-plus criteria across 10 categories to determine the best state for business. In the first 10 years, Texas has ranked first or second each year earning the Lone Star State the designation of “The Best Business State of the Decade.”
This year marked my 10th trip to Omaha for the Berkshire Hathaway annual meeting. Dubbed the “Woodstock of Capitalism,” it is an event-filled weekend with many opportunities for learning. Although Warren Buffett’s name is synonymous with Berkshire, those outside the cult-like group often fail to recognize the immense contributions from Charlie Munger, Berkshire’s Vice Chairman.