Is The Trump Rally a Myth?


All too often investors make the mistake of projecting onto the stock market their hopes and fears relating to current events. It’s almost as if they view the market as a reflection of the national zeitgeist: if we are feeling good about current events, we buy stocks and markets go up, while they drop when we are feeling worried or depressed about the daily news. This phenomenon has manifested itself of late in talk of a “Trump Rally” in U.S. stocks. According to this theory, stocks have been gaining in value since Trump’s election because investors are happy to have a business-friendly, regulation-hating president who has vowed to cut taxes and spend big on infrastructure. Investors are buying stocks in anticipation of economic growth that will follow from the new administration’s initiatives, the argument goes. This is not consistent with how the markets actually operate. It has long been known that political...

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Spring Cleaning For Your Retirement


It’s the time of the year where we all go through our stuff to clean out the things we no longer need.  We organize our closets and garages but often neglect to organize our financial lives.  Your personal finances are incredibly important because the amount of stress money troubles can put on a person is enormous.  As you approach retirement it becomes even more important to get things cleaned up.  Here are four tips to help with your retirement spring cleaning: Get Organized Knowledge is power so if you don’t know what your big picture financial situation looks like then it’s time to get organized.  Use a spreadsheet or one of several popular software services like to pull together all of your information.  Once you know where everything is, what the totals are and where your money is flowing, you will have the information you need to take the next step. Consolidate...

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Will You Owe Taxes When You Sell Your House?


For married couples selling their primary home and filing jointly, you may exclude up to $500,000 of your capital gain from tax ($250,000 for singles.) To claim the whole exemption, you must have owned and lived in your home, as your principal residence, an aggregate of at least two of the five years before the sale. How do you calculate the capital gain on your sale? Your home’s selling price Minus Deductible Closing Costs (Points, Prepaid Interest and your share of prorated property taxes) Minus your Selling Costs (Real Estate Broker’s Commission, Title Insurance, Legal Fees, Advertising Costs, Escrow Fees and Inspection Fees) Minus your Tax Basis in Property (Purchase Price + Purchase Expenses + Capital Improvements minus Any depreciation, minus any casualty losses or insurance payments) If you don’t meet the requirement, because you haven’t lived in your home a total of two out of the last five years, you may still be eligible for a partial tax break in...

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The Retirement Savings Crisis

Source:U.S. Census Bureau

Financial advisors routinely advise American workers to save as much money as they can for retirement, preferably in a tax-deferred savings plan. Social Security will only fund about one-third of the average worker’s retirement income needs, and few workers these days are covered by old-fashioned pension plans. Just 10% of workers over age 22 have traditional pensions, found a recent Pew Charitable Trusts analysis. Unfortunately, a new study by the U.S. Census Bureau says that only about one-third of workers are contributing to an employer-sponsored 401k plan or other tax-deferred savings plan. Even worse, the research indicates only about 14% of employers offer any type of savings plan. Although large companies tend to offer plans, the many employees working for employers with 100 or fewer employees may have no plan available to them, the research found. When it comes to employers that offer tax-deferred plans, only 41% of workers are taking advantage of...

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Investors Have a World of Choices for Their Portfolios


It’s understandable that U.S. investors focus so closely on the domestic investment market; after all, it is the largest and one of the oldest in the world. But to do so in this day and age is to miss the wealth of opportunities for excess profits and risk reduction available by investing in international stock and bond markets. It’s easy to argue that those who invest everything solely in the United States are getting only about half of the world’s potential investment returns. Consider the chart above, which shows the size of each country’s stock market, based on its percentage of the world’s stock market capitalization. As of the end of 2016 stocks listed in the United States added up to 54% of the world’s stock market wealth. Domestic-only investors missed out on opportunities in the other 46% of the world stock market. Japan was the second largest stock market, with 8% of...

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What you need to know after the death of a loved one


After a loved one passes there can be many tasks thrown your way all at once. If this is your first time experiencing the death of a close family member, the overall estate process can be foreign and very confusing. There are three paths in which your loved one’s assets will take to be delivered to their respective heirs: Through Probate This is when property of the loved one is either left to a specific individual through their will or the loved one died without a will (intestate) and the assets must be divided by the state. The probate process includes identifying all the deceased person’s assets and distributing them to creditors and heirs. This process begins by petitioning the probate court in one of two ways depending on whether the decedent passed with or without a will. With a will (testate): the executor named in the will presents the will for probate...

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I received a large sum of money: So now What?


So you received a big bonus, inherited money, or won a large court settlement. Great! You likely feel excited, but maybe a bit overwhelmed too. You feel pressure to make a good decision on what to do with your newfound money because you want to make the most of it. Where do you start? Emergency Fund First you want to make sure you have an adequate emergency fund. Emergency funds should be anywhere between six months and a year’s worth of living expenses. This rule is purposely flexible; if you work in a field where jobs are scarce, you may want to have an even larger emergency fund. Or, if you have a particularly large expense on the horizon, add that figure to your goal emergency fund. Emergency funds may not be exciting, but remember, life is full of unexpected expenses. Most insurance policies have deductibles -- including medical, auto, and home...

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If you or your spouse are at least age 70-and-a-half, have an IRA, and donate money to charity, then you should consider the advantages of a qualified charitable distribution (QCD).  A QCD lowers your adjusted gross income (AGI), which in turn may: lower the amount of your Social Security benefit subject to tax reduce your Medicare premiums keep your itemized deductions from being phased out lower the threshold for deducting medical expenses and miscellaneous itemized deductions What is a QCD, you ask? A QCD occurs when an IRA owner has money distributed from their IRA directly to a public charity.  This is different from having money go from your IRA, into your own pocket, and then gifting it to a charity, in which case you would deduct the amount on Schedule A and potentially lose the benefits listed earlier.  Some other rules of a QCD are: Must be at least age 70.5 on the day the...

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