The year is ending, and so is the opportunity to make final tax moves for 2015. Before you do, beware of subtleties in the tax rules that bring both opportunities and pitfalls, says Laura Saunders writing for the Wall Street Journal.
Today we do a round-up of late year tax moves in both segments 2 and 3. In segment 2, Steve and Sinclair review 6 tax moves that can have a significant impact on your 2015 taxes according to two tax attorneys , and the "gottcha's" that could nullify the deduction.
CPA Nick Stefaniak joins the A Team to tie a bow on last minute tax planning, depreciation, and the perils of the Alternative Minimum Tax.
In the past 12 months, companies in the Standard & Poor’s 500 have doled out nearly $1 trillion to shareholders in the form of both dividends and stock buybacks, the highest level since 2007. For years, hedge fund managers have been big proponents of share buybacks.
Hedge fund managers are suddenly changing their tunes.
They know that the economy will begin to affect the stock market more and more as the effect of buybacks gets watered down. When the only objective is higher stock price, money management suffers at major corporations.
U.S. corporations have taken on record levels of debt for all the wrong reasons--they borrow the money at two or three percent, then turn around and buy back shares to shrink the supply. Even though the demand for a stock may stay flat, the lower supply can raise the stock price. Corporations are no longer using the money to expand or create jobs, which is bad for long term trends. Steve and Sinclair review a timely article by Sarah Max of Barrons on the subject.
In the Q & A, Steve answers some hard questions on annuities and income planning, clearing up some important aspects of when annuities may or may not be appropriate.
The Masters of the Universe don’t all live on Wall Street anymore. In fact you could say that the masters have become minions. The big banks and big fixed income bond traders ruled the markets in the old days. Bonds have become almost a dead issue and layoffs in bond departments at Morgan Stanley and others are rampant.
Steve and Sinclair review a Wall Street Journal report on the shift in fortunes for Wall Street’s bond traders.
In the Q & A segment, estate planning attorney Richard Dwornik joins the A-Team to dissect when a trust should and should not be used as the beneficiary of the IRA.
In the final segment, Steve recalls the true story of how the Waldorf Astoria hotel in New York got its first manager. Very interesting!
Oh, And, Merry Christmas!!
American homeowners are finally digging out of the hole created by the housing crisis says the Wall Street Journal, but their housing wealth is playing a much smaller role in the overall economy than it did before the downturn.
Home equity has roughly doubled to $12.1 trillion since house prices hit bottom in 2011, according to the Federal Reserve. As a result, a key gauge of housing wealth—homeowners’ equity as a share of real-estate values—is nearing the point seen a decade ago, before the downturn.
That would have resulted in a double-barreled boost to the economy by providing owners with more money to tap and making them feel more flush and likely to spend. But today, that new-found wealth has had little effect on behavior. There seems to be a reluctance to take out home equity loans. Lines of credit and cash-out refinances are higher than last year, but are still depressed, according to bankers. Steve and Sinclair review the trends in multiple areas.
In the Q & A Segment, CFP®, CIMA® Murray Titterington with IQ Wealth brings up to date on final changes in Social Security and tax saving opportunities that have been extended for 2015 and 2016.
If you want to win a Nobel Prize in the arts or sciences, it’s important to be original, says Charles Sizemore of Sizemore Capital writing for Forbes. But if you want to make money in the stock market, originality is vastly overrated, especially this year.
As Sizemore says, there are many research services dedicated to following the trading moves of high-profile investors like Warren Buffett, William Ackman or Carl Icahn in the hopes of copying them. Where do they get the info?
The SEC requires that large, influential money managers report their trading moves by filing Form 13F within 45 days of each quarter end, which has created an entire cottage industry of 13F mining services that turn these reports into actionable advice.
There are even multiple ETFs dedicated to guru following, such as the Global X Guru Index ETF, the AlphaClone Alternative Alpha ETF and the Direxion i-Billionaire Index ETF.
Steve and Sinclair review these ETFs and insights from Barron's.
In the Q & A segment, Steve interviews famous Certified Financial Planning Practitioner™ and professional engineer, Jim Otar, who has published two books on the mathematical realities of retirement and what the safe withdrawal rate really is.
Steve and Ken bring us up to date on the news and gold expert Nick Grovich unveils the do's and don'ts of buying or selling gold and collectible coins.
It's Christmas and we will all be spending a little more. According to a study of 4,500 Dutch consumers in the Journal of Economic Psychology, unhappy people save less, spend more and have a higher propensity to consume. Americans are spending just as fast as Europeans, says the University of Utah. Researchers are finding that we are all spending money--often more than what's coming in--for a new set of reasons.
Many retiring professionals continue to spend $80,000 to $120,000 annually after retirement and have no intention of slowing down or cutting back. If a couple spends $100,000 a year, they will need $3,000,000 to come from somewhere--that's without LTC or inflation.
What drives us—the majority of people in fact-- to spend too much even when we seem to make all the right moves? Steve and Sinclair review an intriguing report from the Wall Street Journal. Then, in the Q & A segment, Steve reviews his method for addressing all of a client's liabilities, and the step by step process involved in building a durable retirement income plan, while also growing capital.
Ever since the global financial crisis, economists have groped for reasons to explain why growth in the U.S. and abroad has repeatedly disappointed, citing everything from fiscal austerity to the euro meltdown. They are now coming to realize that one of the stiffest headwinds is also one of the hardest to overcome: demographics.
Next year, writes Greg Ip, with the wall Street Journal, the world’s advanced economies will reach a critical milestone. For the first time since 1950, their combined working-age population will decline, according to United Nations projections, and by 2050 it will shrink 5%. The ranks of workers will also fall in key emerging markets, such as China and Russia. At the same time the share of these countries’ population over 65 will skyrocket.
The reality: People are living longer, especially in high-income countries. Worldwide, fewer people will be working and more people will be living on passive income. This will continue to slow down the world economies.
As an investor in retirement, your financial plan should take this into account. Where will the massive demand come from to maintain demand for your entire stock portfolio over long periods of time? Steve and Sinclair review this important topic.
In the Q & A session, estate planning attorney Richard Dwornik joins the A-Team to discuss spendthrift strategies on trusts.
…Call it “the year of mimicking dangerously.”, says Jason Zweig, Wall Street Journal columnist and author of the Intelligent investor.
A handful of mutual funds and exchange-traded funds seek to emulate such leading investors as hedge-fund manager William Ackman of Pershing Square Capital Management. Zweig points out that most of these funds are down 5% or more for 2015, and some have lost at least 10% over the past three months as the embattled drug company Valeant Pharmaceuticals International, and other holdings of top investors have tumbled.
AlphaClone Alternative Alpha, for example, is a $143 million ETF that selects at least 20 hedge funds it believes to be especially skillful and builds a portfolio of about 75 stocks from among their top holdings.
Unfortunately, Valeant had grown to be the fund’s largest holding, at 7% of assets. At the end of September the fund’s hedging formula kicked in — right before the S&P 500 shot straight up the following month. October was the worst of both worlds for the fund as it captured Valeant’s 47.4% decline but missed out on the stock market’s 8.4% gain.
Steve and Sinclair review "clone" hedge funds in Segment 2. In the Q & A Segment, CFP Murray Titterington with IQ Wealth shares views on income planning from well known financial writer and professor, Michael Finke.
It's tax time if you are looking for year-end tax planning ideas and strategies. Since 1969, many, many families have used charitable remainder trusts (CRTs) to increase their incomes, save taxes and benefit charities.
What does a CRT do?
A CRT lets you convert a highly appreciated asset like stock or real estate into lifetime income. It reduces your income taxes now and estate taxes, if any when you die. You pay no capital gains tax when the asset is sold to your trust. And it lets you help one or more charities that have special meaning to you, besides paying you and your family what can be a lifetime income of at least five percent annually for life. You also can receive the right to take a substantial tax deduction on your tax return. There are two types of CRTs--the Unitrust and the Annuity Trust. Steve and Sinclair break it down and explore.
In the Q & A Segment, Enrolled Agent and Master Instructor with H & R Block, Doris Milton answers key tax questions to make 2015 a little less painful.