Tax Planning

Judy Shelton, whom President Trump has nominated to serve as a Federal Reserve governor, has written about the virtues of the 19th century gold standard and expressed her eagerness to join the central bank in managing the nation’s money supply. That would have been an unacceptable position for anyone supporting the Constitution’s specie standard for money in the 1830s.

We’ve all gritted our teeth whenever one of the trade magazines comes out with a list of the “top” wealth management firms, ranked from “top” to “bottom” based on the absolute least meaningful way to measure the quality of an advisory business: their AUM. The goal of such lists should be to identify those firms that are best at serving their clients and are managed in a healthy and sustainable way. Here’s a way to rank firms that achieves that goal.

Advisors Asset Management (AAM) is a leading provider of income-generating investment solutions. It entered the ETF market in 2017 and offers investors an innovative high dividend value strategy across domestic, emerging and international developed markets. These ETFs focus on income and value, seeking to help investors meet their current cash flow and future capital appreciation goals.

So far in 2020, the yield on the 10-year Treasury has averaged 0.01 percent when adjusted for inflation. Since the end of January, it’s actually dipped below 0 percent, trading as low as negative 0.14 percent on January 31.

Today we’ll extend the GDP discussion, looking at where these numbers originate, what they miss, and what the Fed in particular does with them. As you’ll see, we need better data… but it’s not at all clear Fed officials would use such data correctly, even if they had it.

Although stocks rebounded after a sharp drop in January, the market’s reaction to the coronavirus outbreak highlighted stock vulnerabilities.

We've updated this series to include the January release of the Consumer Price Index as the deflator and the January monthly employment update. The latest hypothetical real (inflation-adjusted) annual earnings are at $40,102, down 11.0% from 45-plus years ago.

A review of last month’s market-moving events across countries and asset classes.

Here’s how the SECURE Act may impact your clients. Plan now for these conversations.

Late in 2019, Chile, Colombia and Peru saw an uptick in political turmoil that was unusual, given that they’re perceived as politically stable countries with “market-friendly” policies. With several key elections on tap in 2020, we’re watching closely for potential risk flare-ups.

Like the three little pigs building their houses, financial advisors have many choices of how they will build their books of business. Many of the most successful advisors embrace fee-only wealth management. In this blog post, we put some numbers to these theories.

Divorces in a couples’ later years can be financially devastating, especially for women where the husband has earned most of the money and made most of the financial decisions. Let’s look at some of the most valuable ways advisors can help.

The U.S. economy has been resilient in the face of uncertainty, but risks are growing.

Learn more about the remarkable lives and contributions of three leading African American economists.

The headline number for January came in at 104.3, up 1.6 from the previous month. The index is at the 91st percentile in this series.

If lawmakers in several states and cities have their way, the traditional security deposit for housing rentals may become a relic of the past.

Founded in 1999, Tiger 21 is a peer-to-peer network of wealthy individuals who meet on a regular basis to discuss the issues that matter most to them. Many of those discussions are focused on investing.

Annuities can reduce the risk of running out of money in retirement, but they protect against this risk in different ways. I’ll compare retirement outcomes of SPIAs to GLWBs to understand the key product differences.

In the President’s “State of the Union Address” on Tuesday, he used the podium to talk up the achievements in the economy and the markets. While it certainly is a laundry list of items he can claim credit for, it is the claim of record-high stock prices that undermines the rest of the story. Let me explain.

The January Employment Report remained consistent with the broader range of labor market indicators. Job conditions are tight. Wage growth has picked up relative to a few years ago, but is not particularly high by historical standards. Thus, the Fed is widely expected to keep short-term interest rates steady in the near term.

CLSA predicts that the price of gold will beat the S&P 500 in 2020. The Hong Kong investment firm has an impressive track record when it comes to making market predictions—last year it had a 70 percent hit rate—so it may be prudent to take this one seriously.

Today I want to look at some aspects of GDP we rarely consider, thinking about how they affect our analysis and choices. But first, let’s talk about where GDP is now and where it may go in the near future.

A deep dive into the factors that brought inflation down and are keeping it low.

Read Harold Evensky's latest newsletter.

The third and final set of year-end updates to the Crestmont Research.

Pricing dislocations in Europe, performance dispersion across the credit spectrum and shifts in the political landscape should likely provide abundant opportunities for select hedge strategies in the year ahead, according to K2 Advisors. The team shares some macro themes and questions its focused on, and shares its outlook for various hedge strategies.

It is probably hard to remember after a week or so of coronavirus fears, but during Q4 2019, “risk” assets once again outperformed “haven” assets. This was after two quarters of “haven” asset outperformance.

What makes an investment philosophy or product ESG-friendly? The answers may surprise you.

Although European equities performed well in 2019, there’s still a significant value and performance gap compared to US stocks, according to Franklin Mutual Series Portfolio Manager Katrina Dudley. Here, she gives reasons why she’s optimistic about the backdrop for European value stocks and discusses some potential market-moving events she’s monitoring.

Unlike the weather, where predicting over the long term has much more error than predicting for tomorrow, we have a better idea of probable outcomes for how markets will perform in the 2020s than how they will do in 2020.

Domestic stocks had a strong start to the year but soon ran into headwinds related to geopolitical risks in Iran and the Wuhan coronavirus.

The coronavirus outbreak that started in China could certainly be considered an unexpected market shock, one which looks to remain a concern for a while longer.

The past decade has been one for the record books. There has been unprecedented change in almost every aspect of life including technology, transportation, politics, etc.

The U.S. Census is a vital research tool; the coronavirus is a vital risk.

The independence of the Federal Reserve Bank is not a new issue. The role of the central bank in regulating credit and the money supply goes back at least 200 years, to the administration of Andrew Jackson.

With U.S. growth anticipated to be moderate this year, little was expected in the way of fiscal policy (taxes, government spending) and monetary policy (short-term interest rates), but life comes at you fast.

These are the investment guidelines our firm uses. We invite you to adapt it and share it with your clients.

Financial hardship often drive people to adopt views that were previously unthinkable. It is a very powerful behavioural pattern and has significant implications for financial markets. In this month’s Absolute Return Letter, we take a closer look at what it really means.

Two topics seemed to dominate at this year’s Inside ETFs conference: the rise of ESG investing, and the emergence of so-called “nontransparent” ETFs. Both promise some big changes to financial markets.

Valid until the market close on February 28, 2019.

The S&P 500 closed January with a monthly loss of 0.16% after a gain of 2.86% in December. 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".

With the release of this morning's report on December Personal Incomes and Outlays, we can now take a closer look at "Real" Disposable Personal Income Per Capita. At two decimal places, the nominal 0.15% month-over-month change in disposable income was reduced to -0.12% when we adjust for inflation. This is down from last month's 0.38% nominal and 0.28% real increase last month. The year-over-year metrics are 3.12% nominal and 1.49% real.

With Brexit day finally here, the focus turns to trade negotiations between the UK and the EU.

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 down fractionally at 0.01%. The real number is up 1.7% year-over-year.

It’s been 3-1/2 years since the United Kingdom voted to leave the European Union, and the process known as Brexit has been far from smooth. Now that the deadline to leave has passed, what’s next for the United Kingdom, and for Europe?

As the Fed winds down its T-bill and repo programs, we don’t anticipate market volatility to emerge – at least not as a result of the Fed’s actions.

Equities saw strong 2019 performances across the globe, so the big question for investors is whether the bullish momentum can continue. Templeton Global Equity Group’s Alan Bartlett and Tony Docal provide a look at what drove the positive performances around the globe in late 2019, and how they are poised to take advantage of any potential dislocations in the year ahead.

As much as we all crave it, asking for another year of continued economic growth and positive equity returns in 2020 may be too much.

The outlook for the muni market is favorable for 2020, but investors should be prepared for twists and turns. Staying flexible can help keep investors on track.

What can advisors learn from institutional investors? Try these four key moves.

Trade policy uncertainty, slower global growth, a decrease in energy exploration, and problems at Boeing had a negative impact on business fixed investment in 2019. So what’s different in 2020?

As we head into 2020, municipal bonds will likely remain attractive for many tax-sensitive investors, but their performance potential could prove to be relatively muted compared to 2019, according to Sheila Amoroso, director of our Municipal Bond Department.

In the decades that I have been listening to politicians clumsily trying to explain the economy there has never been a period, with the possible exception of the early Reagan years, in which major party leaders were able to present a solid grasp of economic principles.

Every instance of financial speculation today is termed a “bubble”, but true financial bubbles are rarer than most investors believe and they go beyond the financial markets and pervade society.

The Federal Reserve is set to make its first policy statement of the year on Wednesday, so this is as good a time as any to reiterate our view that the Fed is likely to keep short-term interest rates steady through 2020 and, while pressures will build, the Fed seems content to hold them steady next year, as well.

J.P. Morgan annually publishes long-term capital market assumptions. Using its 2020 edition, here are a selection of optimal portfolios that can be used by investors of different risk affinities.

The problem isn’t that market timing never works. The problem is that it works just enough to give you hope, but not enough to improve performance over the long-term.

The trouble currently is that global short-term interest rates are still close to, or below zero, and cannot be cut much more, which has deprived central banks of their main lever if a recession strikes.

The Templeton Global Macro team takes a look at the implications of the coronavirus in China, and positioning for potential market shocks.

Conventional wisdom has long held that value stocks and growth stocks work in different ways, and therefore wouldn’t be found in the same mutual fund. In recent years it has become increasingly difficult to tell the difference between a value and growth manager’s portfolio.

Ten charts illustrate the macroeconomic trends most likely to shape Fed policy and investment performance in 2020 and beyond.

Phase One: A limited deal is better than none.
Inequality: We can’t manage what we can’t measure.
Canada: Taking the lead with fiscal policy.

Because it’s the first of the 12 zodiacs, the Year of the Rat is seen as a time of beginnings and renewals. That brings us hope, especially paired with the recent positive development in the U.S.-China trade war.

Chief Economist Scott Brown discusses the latest market data.

The idea that interest rates directly affect stock prices is a commonly held belief among many investors. There are some that even go as far as to say that the only reason the stock market is up is because interest rates have been artificially kept low by the Fed.

Emerging markets are expected to grow more and grow faster than developed markets in 2020, and fundamentals appear attractive for both equities and debt. Trade tensions and global growth prospects are, as ever, the issues to watch in the new year.

The US Federal Reserve (Fed) has gone back to expanding its balance sheet. Some claim that quantitative easing (QE) is back; the Fed denies it. What we call it isn’t the point, says Sonal Desai, Franklin Templeton Fixed Income CIO—what matters are the implications of this “permanently loose” policy stance for asset prices, investment strategy and market volatility.

Has passive investing helped drive the outperformance of mega-cap stocks?

The US municipal market registered strong performance in 2019, driven by record demand from individuals and constrained supply of tax-exempt issuance. Both factors grew out of changes legislated in the 2017 Tax Act. As we enter 2020, valuations appear tight versus Treasurys and fair versus corporates and risk assets generally.

Advisors can provide tax-planning services to grow their client base and provide more value to the people who trust them with their hard-earned money.

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.

Although easing US-China trade tensions have renewed investor optimism about global economic growth, Franklin Templeton Multi-Asset Solutions’ Ed Perks and Gene Podkaminer still see some potential geopolitical headwinds on the horizon.

Maybe you don’t have a goals-based tracking and reporting system, but you want to have illustrations to show whether a client is on track (or not) to meet their goals.

Ultimately, investors will awaken to the rising tide of defaults and downgrades.

Back in mid-November, the highly respected GDP forecasting model from the Atlanta Federal Reserve Bank (also known as "GDP Now"), estimated that real GDP would only grow at a 0.3% annual rate in the fourth quarter, which, if accurate, would have been the slowest growth for any quarter since 2015. At the time, we were forecasting economic growth at a 3.0% rate.

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.