Since the Omicron variant was cited last Friday by the World Health Organization as a "virus of concern," stock prices for the last three stock-trading days have gyrated.
Population trends of the United States versus other countries rarely make headlines in the financial press, but a population bust has been in the news this week.
Since 1957, a 64-year span of modern history, 21 financial crises are shown here. Charting them against the performance of the Standard & Poor's 500 index, the key benchmark of the strength of the United States, puts current investment conditions in perspective.
Earnings drive stock prices. Lately, however, earnings have been driving stock prices to record-breaking prices and, with the fourth quarter economic growth rate about to more than double, stock prices could be lifted higher still.
Supply chain problems, often cited in the media as the main cause of inflation, are expected to diminish greatly by the end of the year. The high inflation rate on goods is expected to revert to the normal 2% rate experienced for the decade preceding the pandemic by the end of 2022, and prices on some goods may even be rolled back to pre-pandemic levels. For example, lumber prices at Home Depot soared in the Spring of 2021 but reverted to pre-pandemic levels by early Fall.
Is the man on the ladder going up or down? The answer depends on your perspective.
The growth of the economy drives investment returns, and plain and simple, corporate profits—that is, earnings—drive stock prices. Without an understanding of what drives stock prices, investors are often fearful when stock prices plunge or, ironically, when they are breaking record highs. Here’s some help.
There are many reasons why professional advice may be best for managing your financial situation. Here's the No. 7 reason.
Modern Portfolio Theory, or MPT, is a framework for investing. It provides part of the intellectual underpinning of our firm's approach to managing investments. So, it is important to explain it periodically.
The Standard & Poor's stock index dropped 2% yesterday and U.S. Secretary of the Treasury Janet Yellen, testifying before the Senate Banking Committee, warned of "catastrophic" consequences if Congress failed to come to an agreement on the debt ceiling by October 18. Meanwhile, a showdown is looming in Congress over raising the United States government's debt limit and how much to spend to improve the nation's infrastructure, as well as the size of the budget for the approaching fiscal year ending September 30, 2022.
- Read More
Making A Life-Changing Financial Difference To A Spouse And Needy Loved Ones
Published Thursday, August 26, 2021 at: 6:18 AM EDT
Tax law and estate planning might bore you to death, but this brief tip could make a life-changing financial difference to your surviving spouse, and other loved ones, including disabled and chronically ill family or friends, as well any minor children in your life.
These individuals are among the five exceptions to the usual distribution rules on the inheritance of assets in IRA, 401(k), or other federally qualified retirement plans.
New rules, that went into effect on January 1st, 2020 with the enactment of The Secure Act, require the beneficiary of inherited IRA or 401(k) accounts to deplete the money in those accounts within 10 years. It was a technical change that many overlooked in the rush of tax law changes that occurred in 2020 during the pandemic. But it made a big difference in tax planning.
To be clear, until 2020, beneficiaries of an inherited IRA or 401(k) were not required to liquidate an inherited account within 10 years, as is now required, which had left open a major tax break: They had the option to stretch out distributions over their actuarial life expectancy, thus, leaving the assets to compound tax-free for a much longer period. The 10-year mandatory distribution rules carved out some key exceptions for certain individuals that now require attention, if you intend to pass on your retirement plan, IRA or other qualified plan assets to a spouse, chronically ill or disabled individual or minor child.
For a disabled individual, who inherits federally qualified retirement assets, for instance, stretching out distributions over decades could transform the inheritance into an income stream for life. The same is true for a widower, chronically ill individual, or minor child that inherits your retirement account.
In addition, a fifth exception to the usual distribution rules applies to a beneficiary that is less than 11 years younger than the retirement account owner. A sibling or friend who is 10 years or less your junior, who inherits qualified retirement account assets, also may use their life expectancy -- instead of taking required distributions over 10 years.
If you own a sizable IRA, 401(k) or other qualified account, and your beneficiary is your spouse, a friend or sibling 10 years or less younger, an individual with a disability, chronic illness, or a minor child, the five exceptions to the 10-year rule pose complicated tax planning as well as legal and investment issues requiring personal advice from a professional that is beyond the scope of this article.
Nothing contained herein is to be considered a solicitation, research material, an investment recommendation, or advice of any kind, and it is subject to change without notice. Any investments or strategies referenced herein do not take into account the investment objectives, financial situation or particular needs of any specific person. Product suitability must be independently determined for each individual investor. Tax advice always depends on your particular personal situation and preferences. You should consult the appropriate financial professional regarding your specific circumstances. The material represents an assessment of financial, economic and tax law at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions. This article was written by a professional financial journalist for Advisor Products and is not intended as legal or investment advice.
©2021 Advisor Products Inc. All Rights Reserved.