Tax-Planning

A strong economy will help U.S. consumers meet their financial resolutions in the new year, while residents of France and Australia have bigger worries.

The U.S. economy split sharply in 2019—manufacturing activity lagged services, corporate profits lagged stock performance—while investor sentiment surged. How long will these divergences continue in 2020?

Among the biggest contributors to the bitcoin rally is the hope that 2020 could finally see institutional investors move into the digital field en masse, prompted by growing client demand and more attractive ways to get exposure.

Emerging markets ended 2019 on a high note, but can the momentum continue? Our emerging markets equity team weighs in, highlighting the market news and events it has an eye on.

A brief monthly update on what's happening in the municipal bond market.

As the worries mount, it’s worth addressing whether these concerns are truly warranted, or overblown to an extent. Let’s dive right in and tackle this, as well as look at how much of a handbrake such a high level of debt may have on Chinese growth.

Every year, the markets provide us with lessons on prudent investment strategies. Many times, markets offer investors remedial courses, covering lessons it had taught in previous years. That’s why one of my favorite sayings is that there’s nothing new in investing, only investment history you don’t yet know.

Central bank easing and the cooling China-U.S. trade war have set the scene for a global economic rebound in 2020. Our forecast pushes the risk of recession into late 2021, giving equity markets modest upside potential for 2020.

As Mark Twain once said, history never repeats itself, but it does often rhyme. The House vote to impeach President Trump coming in mid-December of 2019 certainly feels like a couplet with the Clinton impeachment, which occurred in mid-December 21 years ago. Indeed, there are similarities, but also key distinctions.

The many gloomy predictions for 2019 did not come to pass, but can we be more optimistic for 2020? Franklin Templeton Fixed Income CIO Sonal Desai draws the key lessons from last year and outlines what we should expect for the year ahead and her main concerns, with political uncertainty top of the list.

One of our favorite financial writers is Bloomberg’s John Authers. He recently wrote a tongue-in-cheek article about an investment company by the name of Hindsight Capital. In hindsight, or in the company’s case, Hindsight Capital, he talked about what the firm did and what you should have done over the last ten years to produce outstanding returns.

We've updated this series to include the December release of the Consumer Price Index as the deflator and the December monthly employment update. The latest hypothetical real (inflation-adjusted) annual earnings are at $39,848, down 11.4% from 45-plus years ago.

The substantial economic calendar features inflation reports and housing, but also includes Michigan sentiment, the Fed’s Beige Book, and NFIB sentiment survey. We will also get the first earnings reports for the Q4 season.

The headline number for December came in at 102.7, down 2.0 from the previous month. The index is at the 85th percentile in this series.

Let’s talk about a few large “surprise” Medicare-related expenses that your clients may not know about.

Awareness has become widespread that incomes before taxes of the bottom half – or more – of the American population have stagnated in the last 40 years, while incomes at the top rungs have soared. A new book shows that the divide is even greater after taxes.

For nearly three years we’ve been tactically recommending overweighting large caps (S&P 500) and underweighting small caps (Russell 2000)—time for an update.

With simmering trade tensions, sputtering growth worldwide and a historically long, but slow, U.S. economic expansion, investors will have to brace themselves for a challenging investment environment in 2020. Change, adaptability and diversification are the key words. Here are steps you can take early in 2020 to position your investment program well for the rest of the year.

The US economy is not in an economic boom, but growth has been consistently faster than during the Plow Horse phase from mid-2009 through the end of 2016. Real GDP has grown at a 2.6% annual rate since the start of 2017 versus 2.2% beforehand.

This is the year-end letter I sent to our clients. Feel free to adapt it for your own use.

In Part 1 of this forecast I described my relatively benign outlook for the next 12 months. The calm may last into 2021 and even beyond. But beneath the surface, pressure will still be increasing. It will grow slowly, almost imperceptibly, but eventually explode.

On Tuesday of this week, the U.S. dollar experienced a “death cross,” a bearish signal that takes places when an asset’s 50-day moving average crosses below its 200-day moving average. We haven’t seen this from the greenback since May 2017.

Will 2020 be more of the same? Our teams are encouraged by differences they see in the new year; but they remain alert for unexpected downturns.

The best environment would be moderate U.S. growth, a sideways U.S. market and a weaker U.S. dollar.

Tensions between Iran and the United States brings a stressful start to 2020.

2019 was a triumphant year for the US large cap equity market, with the S&P500 index up 31% on a total return basis. The resolution of two major concerns in the year, namely the US Fed being too aggressive on rate hikes, and the US/China trade relationship hanging in a total impasse, drove the market higher, particularly in 1st and 4th quarter.

A few months ago, we published a paper called Institutional investor best practice by 2025. In this paper, we addressed how investors will need to fundamentally change how they approach capturing opportunities, mitigating risks and managing costs within their investment portfolios to set themselves up for success in 2025 and beyond.

Trump's decision to take out the Islamic Republic's most celebrated military leader, Qassem Soleimani, was a timely reminder that we face many problems. An armed conflict between the US and Iran is clearly one of them but far from the only one. Here is a list of the ones we worry mostly about, going into 2020.

The Ten Surprises of 2019 worked out plenty well. While we don't go through this process with the objective of getting a high score, knowing that you have been able to anticipate some of the generally unexpected events that are going to influence the financial markets during the coming year is gratifying.

It has been a great year for equity investors. The S&P 500 index posted a 31% annual return, the Dow 25%, and the NASDAQ a spectacular 39%. More than $6T of equity paper wealth was created for domestic investors this year alone.

The outlook for the global economy has improved over the past three months, but there may be less capacity to combat a recession when it comes. We discuss seven key macroeconomic themes we expect in 2020 and implications for investors.

Continued modest global growth in 2020 may be the best we can hope for.

Progress on the trade front lifted the markets in Q4 but now comes the hard part.

Seven things to know about the new U.S. retirement legislation.

The longest economic recovery on record continues, with January being the 128th consecutive month of growth. The first seven years, from mid-2009 through 2016 saw average real GDP growth of 2.2%. Since the start of 2017, US real GDP growth accelerated, to an average annual growth rate of 2.6%, while the unemployment rate now stands at the lowest level in 50 years (and is likely headed lower).

Following another year of strong returns, Emerging Markets (EM) fixed income has outperformed developed bond markets by a significant margin over the past four years. The outperformance is likely to continue in 2020, because EM fixed income remains attractively priced both in absolute terms and relative to bonds in developed markets as well as under-owned and well-supported by an improving fundamental backdrop.

The scientific evidence increasingly indicates that the world may soon reach a point of no return regarding climate change. So, rather than worrying almost exclusively about economic and political inequality, rich-country citizens need to start thinking about how to deal with global energy inequality before it’s too late.

Welcome to the 2020s. Some weren’t sure we would make it this far, but we did. Now we face a new decade and new challenges. How we handle them will determine what kind of conversation we have in 2030.

Investor optimism remained strong in the first day of trading 2020, but news that the US. Military had assassinated an Iranian general sent share prices lower. The price of oil rose and bond yields fell in response to heightened uncertainty.

Valid until the market close on January 31, 2019.

The S&P 500 closed December with a monthly gain of 2.86% after a gain of 3.40% in November. All three S&P 500 MAs are signaling "invested" and all five Ivy Portfolio ETFs — Vanguard Total Stock Market ETF (VTI), Vanguard REIT Index ETF (VNQ), Vanguard FTSE All-World ETF (VEU), iShares Barclay 7-10 Year Treasury (IEF), and PowerShares DB Commodity Index (DBC) — are signaling "invested".

A sweeping piece of legislation affecting how individuals save and invest for their retirement, known as the “SECURE Act,” has recently been signed into law. Our investment professionals talk about the implications of the Act, and how it can enhance the retirement security of millions of Americans. And, they outline some changes in the legislation that also affect college savings plans.

Quarterly commentary giving an overview of the markets and the importance of having and implementing a strategy when investing in the markets.

The current expansion won't last forever. But we don't see it ending anytime soon.

The Grinch who stole Christmas is alive and well this year – in the U.S. Congress. Our representatives and senators passed a bill that negatively affects the middle and working class by changing the rules of passing an IRA to one’s heirs.

One of the striking things about bull markets is that they often end in confident exuberance, while simultaneously deteriorating from the inside. We’ve certainly observed this sort of selectivity during the past year. The market advance in 2019 fully recovered the market losses of late-2018, fueled by a wholesale reversal of Fed policy, hopes for a “phase one” trade deal, and as noted below, a bit of confusion about what actually constitutes “quantitative easing.”

Great articles don’t always get the readership they deserve. We’ve already posted the 10 most-widely read articles for the past year. Below are another 10 that you might have missed, but I believe merit reading…

As the year winds to a close, take a look back with us at our top ten favorite blog posts of the year—the thought leadership pieces that sparked the highest levels of engagement among our readers.

It became abruptly apparent in September, when overnight repo rates surged to near 10%, that liquidity in the banking system had suddenly become insufficient. While a confluence of factors (corporate tax payments, settlement of Treasury auctions, etc.) ultimately tipped the secured funding market into imbalance, it was policy choices—monetary and regulatory—that unwittingly pushed this market to the brink of illiquidity.

Like many financial planners, I hope for the day when we are accorded the same professional stature as lawyers and accountants. But the CFP Board should not be put at the helm of that future profession. That would harm consumers and erode the public trust we have worked so hard to engender.

Our senior investment leaders have a cautiously optimistic outlook for 2020. They still do not see a global recession looming and believe there are plenty of reasons to remain invested.

Sustainable investing has come a long way. In its early days, investment managers, like Saturna Capital, created faith-based investment processes, focused on excluding companies or industries that conflicted with the tenets of an investor’s faith. This led to proactive investing, often referred to as advocacy investing, a process that encourages companies, sectors, and regions to engage in better business practices.

As we wave goodbye to the bull market of the 2010s, here are the rules for investing in whatever comes in the next decade.

Naturally, this is the time when market-watchers issue their forecasts for what may lie ahead, and my team is no exception. Simply put, we expect continued monetary policy accommodation with little fiscal stimulus. Therefore, we are more optimistic about capital markets than we are about the overall economy, and we favor risk assets over non-risk assets for 2020.

Here’s my “wish list” for reforms in 2020, acknowledging that some of these actions may take years, or even decades, to accomplish.

A brainstorming session hosted by the CFP Board on December 13 offered a look at how the planning profession will evolve over the next 10 years. Here’s a view of the landscape in 2030 and what it will take to get there.

Municipal bonds can continue to provide a number of potential benefits for tax-sensitive investors as we move into 2020, according to Shelia Amoroso, director of Franklin Templeton Fixed Income Group’s Municipal Bond Department. However, following the strong results in 2019, she and the team expect total return potential to be muted in 2020, with likely increased volatility.

Despite Central Bank’s best efforts globally to stoke economic growth by pushing asset prices higher, the effect has been entirely consumed by those with actual savings, and discretionary income, available to invest.

Can Tesla become as successful as Apple, and can Tesla cars turn into an iPhone-like franchise, taking EV market share from nothing to 10% to 30% of the ICE car market?

While some cook with a dash of this and a dash of that, the best chefs follow a recipe to a T. Without abiding by a set of instructions, you’re at risk of inconsistent results or worse, omitting steps altogether. Sugarless baked goods rank right up there with eating cardboard. And too much of even basic spices can ruin any dish. Overcooked foods can be dry or burnt. Undercooked foods can cause illness. Clearly, following a recipe precisely is essential.

Rates were unpredictable, central banks were active, trade was volatile but consumers were undaunted. We reflect on the major economic trends of 2019.

There is almost no willingness to face our top problems, specifically our rising debt. The economic challenges we face can’t continue, which is why I expect the Great Reset, a kind of worldwide do-over. It’s not the best choice but we are slowly ruling out all others.

Stock market participants remained optimistic, despite impeachment. The economic data were mixed, but consistent with moderate growth in the overall economy.

With the release of this morning's report on November Personal Incomes and Outlays, we can now take a closer look at "Real" Disposable Personal Income Per Capita. At two decimal places, the nominal 0.48% month-over-month change in disposable income was reduced to 0.32% when we adjust for inflation. This is up from last month's -0.02% nominal and down from the -0.26% real increase last month. The year-over-year metrics are 4.01% nominal and 2.50% real.

Personal Income (excluding Transfer Receipts) in November rose 0.63% and is up 4.3% year-over-year. However, when adjusted for inflation using the BEA's PCE Price Index, Real Personal Income (excluding Transfer Receipts) MoM was up 0.47%. The real number is up 2.8% year-over-year.

Argentina and Brazil have an opportunity to reverse a long string of underperformance. The challenges are considerable, but we believe signs of progress in either economy could lead to a significant rerating of their markets.

Not only did the tariffs get delayed, but on Friday, it was reported that China and the U.S. reached “Phase One” of the trade deal, which included “some” tariff relief and agricultural purchases.

Muni issuers are increasingly refinancing tax-exempt munis in the taxable market, but both areas offer potential benefits.

While US-China trade issues still haven’t been resolved, there are reasons to be optimistic about the prospects for emerging markets in the coming year.

Global growth is decelerating. Policy-makers in developed economies are gearing up for yet more fiscal spending. While fiscal spending may support growth for a short time, and for longer if very carefully applied, it will not change the growth outlook fundamentally.

Once upon a time—of all the good days in the year, on Christmas Eve—old Ebenezer Scrooge sat busy in his counting-house. Rise from your bed, O Investor and hear first from our very own Ghosts of Investing Past, Present and Yet to Come.

While US-China trade tensions and other concerns prompt a cautionary stance when it comes to risk assets, Franklin Templeton Multi-Asset Solutions’ Ed Perks and Gene Podkaminer nonetheless remain positive about the US equity market in the year ahead, citing a number of long-term growth drivers that still remain in place.

Next year is set to start on a high note, with consumers and the Fed keeping the economy and market afloat; but risks remain elevated, including trade and elections.

Investors could be in for a bumpy year ahead, according to Franklin Templeton Fixed Income CIO Sonal Desai. She emphasizes the importance of separating the facts from the headlines, but also thinks it’s a good time to look to “de-risk” portfolios to some extent, while still remaining invested.

If beta is a racehorse, many investors often assume it takes care of itself in the race toward investment objectives. But doesn't the skill of the jockey matter as well?

In a recent appearance on CNBC, we were asked about what we do with stocks we own which have run-up recently. They asked us how we plan to handle Disney (DIS), JPMorgan (JPM) and Target (TGT) after those stocks enjoyed strong price increases this year.