Tax Planning

The journey to a full recovery will be a long one, but at least we’ve taken some initial steps.

With inefficiency comes opportunity, according to Franklin Templeton Fixed Income’s Nicholas Hardingham and Robert Nelson. They consider the emerging market debt landscape, and what the remainder of the year could bring for the asset class.

Half of Americans aren’t looking forward to going back to a bar, and more than one-third aren’t excited about heading out to a sports game, movie or live event

The COVID-19 pandemic continues to impact economies across the globe as they emerge from lockdowns, including emerging markets.

We believe the risk that preferred-stock dividends will be suspended is low despite the recent announcement by the Federal Reserve that it is requiring banks to cap their common stock dividends.

The pandemic has delivered a global growth shock, but in doing so, it has accelerated the timeline for several mega trends that we have been actively investing in, such as productivity enhancement (robotics, automation, and software), e-commerce, electronic payments, and health care.

This is the second in a series of posts focusing on the formula of advisor value. In this post, we tackle the behavioral mistakes that investors typically make. Addressing the investment behavior of your clients may be the greatest value you provide.

The economic calendar is modest, and many market participants will probably extend their long weekends. The ISM Non-Manufacturing Index and jobless claims data will be the most important.

It’s all about the pandemic. Rising cases in a number of states fueled fears of a second wave of infections and a more protracted economic recovery.

Pricing dislocations and adjustments between companies, industries, regions and asset classes due to the impact of COVID-19 offer opportunities for select hedged strategies, according to K2 Advisors.

If you missed Part-1 of our series on the “Theory Of MMT Falls Flat When Faced With Reality,” start there. In Part-2, we complete our analysis of the theory and the potential ramifications. The premise of our discussion was this recent explanation of “Modern Monetary Theory” by Stephanie Kelton. As discussed previously, economic theory always sounds much better than how it works out in reality.

Employees have fewer options than those who are self-employed.

The coronavirus pandemic is hurting Brazilian banks in the near term, but is the outlook entirely grim? Franklin Templeton Emerging Markets Equity’s Gustavo Stenzel explains why certain banks could emerge from the outbreak stronger relative to a new pack of financial technology competitors.v

American ingenuity is something to take pride in this weekend as we (safely) celebrate the Fourth of July.

As you read this, the Financial Planning Association is engaged in one of the most consequential initiatives in its history, and for some reason this important program is getting zero publicity.

The sharp decline in interest rates this year has created the opportunity to realize tax savings on appreciated fixed income positions even when clients are in a high tax bracket.

Much was written about a strategic “opportunity” to do a Roth conversion when the coronavirus caused the stock market to decline by more than 30%. The tactic was based on a tremendous tax savings that you would receive. But this is not always the case.

Those who have been methodically and faithfully contributing as much as they can to traditional IRAs, 401Ks, and other tax-favored plans, can find themselves in a higher tax bracket in retirement once their RMDs kick in.

As you may have already heard, the European Union (EU) just released its list of 15 countries that are permitted to visit the 27-country bloc starting today, and the U.S. was not among them.

The case for considering tactical and long-term allocations to small cap stocks.

After years of losing both clients and clout in financial markets, signs are emerging that hedge funds are back in favor in the U.S.

Valid until the market close on July 31, 2020.

The S&P 500 closed June with a monthly gain of 1.84% after a gain of 4.53% in May. All three S&P 500 MAs are signaling "invested" and three of five Ivy Portfolio ETFs — Vanguard FTSE All-World ex-US ETF (VEU), Vanguard REIT Index ETF (VNQ), and Invesco DB Commodity Index Tracking (DBC) — are signaling "cash".

We have heard from five prospects that our site looks “dated.”

In the municipal bond market, the issuance of green bonds has provided an attractive solution for investors interested in socially responsible investments while also receiving the tax-exempt income benefit municipal bonds offer. Franklin Templeton’s Municipal Bond team provides an overview of green bonds, including potential benefits and risk considerations.

After years working with those age 65-plus in their transition to the Medicare system, I’ll share some ideas and tips that will lead to some great conversations between you and your clients – and, likely some added revenue for your practice.

COVID-19 headlines dominated equity market action last week, with the S&P 500 suffering a near-3% decline; although all is not grim. The number of virus cases has been spiking in states that opened earliest—including my new home state of Florida, which went from a mid-60s average age for confirmed cases to the current mid-30s average age.

Here are the six key investment-platform considerations for brokers moving to an RIA.

Incredible as it may sound to nearly all observers – once they learn what MMT says – its basic economic tenets are agreed to by most knowledgeable economists. The dispute is not really over its core economic model; it is over fears of its perceived political implications.

If you haven’t heard of Modern Monetary Theory, or “MMT,” you will soon. If you recently lost your job due to the economic shut down, and received a stimulus check, you are already a beneficiary. As we will discuss in Part-1 of this two-part series, MMT’s theory falls flat when faced with reality.

A “perfect storm” of surging government debt levels, plunging real bond yields, rising coronavirus cases and deteriorating economic forecasts pushed the price of gold to an eight-year high this week, and some analysts now project the metal to top its all-time high within the next 12 months.

Personal Income (excluding Transfer Receipts) in May rose 1.56% and is down 5.5% year-over-year. However, when adjusted for inflation using the BEA's PCE Price Index, Real Personal Income (excluding Transfer Receipts) MoM was up 1.46%. The real number is down 6.0% year-over-year.

With the release of this morning's report on May Personal Incomes and Outlays, we can now take a closer look at "Real" Disposable Personal Income Per Capita. At two decimal places, the nominal -4.91% month-over-month change in disposable income was at -5.00% when we adjust for inflation. This is a decrease from last month's 13.07% nominal and 13.59% real decreases last month. The year-over-year metrics are 8.28% nominal and 7.69% real.

For most US governors, June typically brings political fireworks when state legislatures hammer out final budgets for the next fiscal year.

We like to go a bit further with our definition and add that luxury goods are those for which demand has tended to grow faster than potential buyers’ disposable incomes. This contrasts with “necessities,” for which demand growth has been more in line with income growth over time.

Even after the partial rebound from COVID-related losses, we think high-quality companies in certain developed and emerging markets remain compelling investments. High-quality companies outside the U.S. look especially attractive to us.

Let me help you learn from my mistakes. I’m a tech nerd. I go all-in when I find new tools that can improve my business.

The text book rules about where to invest following a recession may not apply in a post-pandemic world; more than bricks and mortar, stimulus efforts are green and digital now.

Investors should consider these various investments—cautiously. Given the challenging economic outlook and high level of uncertainty, we believe bouts of volatility are possible, albeit not to the level witnessed in February and March.

Dislocations resulting from the pandemic shine a light on environmental, social and governance (ESG) issues, which can be used as an additional tool to identify leading companies from the laggards, according to Franklin Templeton’s Global Head of ESG, Julie Moret.

Can you reignite the growth of your business in the the second half of 2020? We think so. Here’s why we believe the next six months may hold a once-in-a-lifetime opportunity.

The recent poor performance of value funds has led some investors to illogically shift to products with less exposure to the value factor. The evidence that the value factor has worked over long periods of time means you want more exposure to it, not less.

Turning off the global economic light-switch, and then turning it partially back on, has sent shockwaves through economic data that, while anticipated, have been jaw-dropping in both directions.

President Trump, like many others along the political spectrum, has derided the persistent U.S. trade deficit – particularly with China – as a waste of capital leaving our country. The view that the U.S. would benefit by correcting this imbalance is taken up in a new book, with a message that should concern all financial market participants.

As the economy reopens from COVID-19 restrictions, a question looms: What will colleges and universities look like come fall? Will students return to a more normal on-campus learning experience, some form of online experience, a combination of both … or will they simply not return?

In her recent book, “The Deficit Myth,” Stephanie Kelton, a professor at Stony Brook University, writes about many of the common misperceptions surrounding government debt and deficits.

In this latest survey, 68 leading bond and currency managers considered valuations, expectations and outlooks for the coming months.

Coronavirus cases and hospitalizations are spiking again in several countries, including the U.S. California had its biggest one-day jump in infections. Arizona, Florida and Texas are also turning into new hotspots.

Today I’ll defy the proverb, consider what we know and don’t know, and try to tell you where I think we’re going. In the long run (after The Great Reset in the late 2020s), I still foresee a wonderful new world. But we have to get there first.

Municipal bonds—especially higher-quality issues—bounced back after a rough March. But not all munis have rallied. We see potential among overlooked mid-grade issues.

Deficits are rising across the developed world as governments aggressively loosen their purse strings in response to the COVID-19 pandemic. But what are the ramifications of all this debt?

Returns for most fixed income asset classes are positive so far this year, but the numbers mask the rocky road markets have traveled since January.

Looking to generate income from your nest egg? Make sure you don’t get it all from just one basket. Karen explains two funds designed to provide income that aren’t over reliant on any one source.

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

As emerging markets cope with the COVID-19 epidemic, Franklin Templeton’s Emerging Markets Equity team considers three new realities they see in the emerging markets today. This second post in a three-part series examines how emerging markets have diversified their economies.

Over the course of history, during world wars, pandemics, financial crises, and deep recessions, municipal bond defaults have been an extremely rare occurrence. There have been less than 700 rated municipal bond defaults in the over 100 years of public finance existence. As a point of comparison, we saw over 117 corporate defaults in 2019 alone.

Read Harold Evensky's latest NewsLetter.

I want to begin today by sharing with you the latest question I am getting over and over from colleagues and friends. That question is: How have the stock markets rallied to record or near-record highs in light of the terrible economic news due to the coronavirus crisis?

Prime Coalition, based in Cambridge, Mass., has raised $76 million and counting for early-stage climate startups.

There’s a bipartisan push from Senators Jeanne Shaheen, a New Hampshire Democrat, and James Lankford, an Oklahoma Republican, to make charitable deductions permanently available to all taxpayers.

Investors often think of municipal bonds, which are sold by local and state governments to fund public projects like building new schools and repairing city sewer systems, as being totally tax-free—but that’s not always the case.

Having trouble helping your clients appreciate a balanced portfolio? These charts may help.

Franklin Templeton’s 2020 US Retirement Income Strategies and Expectations survey revealed the importance of having a plan to help reduce financial-related stress—particularly relevant amid today’s uncertainties. Our Felix Touchard discusses some findings of the survey, and how respondents feel about their financial future.

On June 4, 2020, eBay (EBAY) released a business update to make investors aware that the quarantine circumstances have caused their business to perform “significantly better than expectations,” compared to their earnings report on April 29, 2020.

The one key takeaway from last week's Fed meeting is that monetary policymakers are set to keep short-term interest rates near zero for as far as the eye can see. Not forever, but at least until 2023. Keep this in mind in the week ahead, as we get more reports confirming the economic recovery started back in May.

In 1832 Martin Van Buren helped Andrew Jackson decide precisely when he would end the charter for the Second Bank of the United States – the only American central bank of issue before the establishment of the Federal Reserve.

The way to get people to think about death is to imagine that by doing so they will never die. Recognizing this universal character trait will lead to more productive planning outcomes.

I’m doing some wild things to stir up my Zoom calls. These ideas may be too radical for you. But humor me, read on and let me know what you think.

He explains why even someone like himself — who has spent a lot of time around hyper-rational people who respected him, knew where he went to school and how much money he made — shares the feeling of being demoralized.

• Robust Recovery Is The General ‘School Of Thought’
• Investors Hope A Second Wave Is ‘The Road Not Taken’
• Valuations Require Investors To ‘Put Their Thinking Caps On’

The returns of the 2009-2020 bull market were nothing short of extraordinary. From the 2009 low in the S&P 500 to the 2020 high, stocks gained a massive 488%, or nearly 18% on an annualized basis.

In their effort to improve things/prevent pain, Fed officials past and present financialized the economy. That, along with more unintended consequences from government debt and regulatory interventions (all well-intentioned, you understand) brought us to where we are today. We can’t walk it back without a great deal of pain no one wants to take, including your humble analyst.

Why did unemployment fall? Why is Brexit proceeding? And why did so much food go to waste?

Rob Amodeo, Head of Municipals at Western Asset Management, digs into the state of the muni-bond market, his outlook moving forward and what investors have to look for to find winners in the sector.

Why did stocks rise over the past month despite grim economic news? The Federal Reserve’s massive liquidity injection is one reason.

Puerto Rico’s debt attracted investors throughout the U.S. for its higher yields and because the securities are tax exempt in all 50 states. Bondholders now wonder if they will ever get repaid.