As soon as Treasury Secretary Mnuchin revealed the Trump Administration’s plan for tax reform, my phone rang. It was my older brother, Steve, wanting to know my thoughts on the proposal to lower the corporate tax rate to 15% from as high as 39%.
He remembered that in the past, I had written an article that discussed how the U.S. had the highest corporate tax rate in the developed world. However, Steve had read that U.S. corporations have a much lower average tax rate than 39%. As such, he wanted to know why the rate should be lowered if the average corporation already pays a much lower effective rate.
Recently, Tesla, the electric car company, set another record. However, instead of a speed record it was a financial one as investors bid Tesla’s stock above $310 per share. In the process, this valued the entire company at $51 billion—more than either GM or Ford. At a minimum, the growth of its stock price has been impressive—especially for a company that did not exist 15 years ago.
Rarely a day goes by without someone endorsing the wisdom of investing in index funds. And the more this mantra is repeated, the more we see misapplication and frustration from investors attempting to follow this advice. Although index funds are easy to understand conceptually, successfully building portfolios with them can be complex. And while they can be an efficient tool, index funds are no cure for cancer.
This week, I broke the half-century mark. Professionally, the last 25 years have been spent neck-deep in the financial industry. Hopefully, I learned a few things along the way.
Once, I thought 50 was really old. However, some of the people I respect and admire most were very productive well into their 80s, if not their 90s. They opened my eyes as to what can be accomplished north of 50. If you stay active, there is much truth in the adage that “age is a frame of mind.”
Topics: Strategic Planning
Learn how others do it. Download our guide to growth.
The last 10 days have seen the stock market march consecutively higher. Since the presidential election, the Dow Jones Industrial Average is up more than 13%. As investors analyze their statements, they often encounter a nervousness as they appreciate the increase in values, but recognize that stocks cannot go up, unimpeded, forever.
A key repetitive promise from then-candidate Donald Trump was that he would bring back jobs—especially manufacturing jobs.
Although I wish him well, I have my concerns.
As most of us enjoy the holidays, the City of Dallas and their pension fund for police and firefighters balances on the precipice of bankruptcy.
This is not Detroit. This is Dallas—the city with the fastest economic growth out of the nation’s top 13 largest cities. Despite this growth, Big D is requesting a $1 billion bailout.
Recently, hundreds of thousands of investors have been faced with an unexpected, if not awkward, conversation with their financial advisor. If you haven’t had it, be prepared.
It generally starts with the advisor saying they are converting the clients’ IRA or 401k to a new type of account. If the investor is even a little bit inquisitive, they'll want to know the reason for the change.
With the Presidential election this week, there has been a non-stop droning of hollow promises. One promise from both candidates declares that interest rates will go back up, as if it is simply a dial you crank a few notches. Although this would be welcome news to traditional savers and conservative investors, not everyone would be as happy. Furthermore, this promise is well beyond the control of any politician.
Low rates punish savers. However, they allow highly-leveraged, junkier companies to stay alive longer than they should under normal conditions. Consider companies competing in energy, steel, airlines, autos or a variety of commodity-driven industries. These are tough businesses to begin with, typically requiring large debt loads. If rates remain low, it reduces bankruptcies and keeps people employed longer. Higher employment helps to pay bills and circulate dollars throughout a sluggish economy.
At age 12, Amy Simmons’ life took an unusual turn. Her mother suggested she read the 1,100-page novel, Atlas Shrugged. Although Amy went on to obtain degrees in Psychology and Biology, the lessons on capitalism in Atlas Shrugged made their mark on a budding entrepreneur.
Over the last 30-plus years Simmons has developed and expanded the Amy’s Ice Cream operation to 15 stores in Austin, San Antonio and Houston with the motto, “Life is uncertain, eat dessert first.” Recently she added Phil’s Ice House and Honey’s Pizza to the family. Simmons is a tireless champion of community businesses, employee education and charity. Oh, and she is a mother of three. I am convinced she never sleeps!
Recently, my Texas Lutheran University students were fortunate to have Simmons on campus to speak about life and business.
Topics: Business Best Practices