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Slick TV ads often make financial planning and wealth management sound simple, but it’s usually not. Managing wealth requires knowing a lot about highly technical topics, like taxes, government regulations, and finance as well as history, psychology and how to communicate with loved ones about sensitive issues. This article highlights some of the knowledge needed to manage wealth and why it’s often so daunting without the help of an independent personal financial advisor who is familiar with your situation.
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Fed Governor Kugler Details Inflation And Economic Outlook
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Why Rates May Not Be Cut Until June
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Practical Suggestions For Achieving Your 2024 Resolutions
New Year’s resolutions usually fail because they‘re often too hard to achieve. After six months, only 10% of people who make resolutions achieve them or remain committed to them, , according to a study by Dr. Mark Griffiths, a Chartered Psychologist and Distinguished Professor of Behavioral Addiction at the Nottingham Trent University. What can you do to make financial, medical, or other personal resolutions more likely to be achieved?
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A Sign Of Progress In Solving U.S. Economic Problems
The Federal Reserve appears to be pulling off a feat most experts did not believe it could: ending its aggressive inflation-fighting campaign of 11 interest rate hikes without tipping the U.S. economy into a recession.
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Fed Keeps Rates Unchanged; Expects Easing In 2024
To promote transparency and free markets, the Federal Reserve System began publishing the opinions of the 19 U.S. central bankers that decide interest rate policy.
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Have You Logged Into Your Social Security Account?
Have you logged in to your Social Security account? Creating an online account at SSA.gov is an important first step in understanding your retirement income situation. However, only about 60 million of the 160 million individuals in the U.S. labor force who have Social Security accounts have created a way to access the Social Security Administration’s website.
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The Great Fake Out Of 2023 Is Poised To Extend Into 2024
All year long, the economy and stock prices have fooled experts and consumers, outperforming expectations month after month.
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Test Your Financial Planning IQ
The five questions below are a challenge meant to allow you to assess your knowledge of investing, tax and financial planning. If you have been following our news stream, this quiz draws on familiar ground. The answers are below.
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Planning Briefs
Is A Market Melt-Up Under Way?
Published Tuesday, November 9, 2021 at: 7:51 PM EST
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.
Fourth quarter earnings are likely to surge again, which has economist Ed Yardeni talking about a market melt up.
This is a chart from Dr. Ed Yardeni, one of Wall Street’s most widely-followed economists since the early 1980s. Dr. Yardeni calls the four lines “earnings squiggles.” Each squiggle represents the change in earnings projections made by Wall Street analysts for each quarter of 2021, starting in April 2020 through early November 2021. Each squiggle represents the history of earnings forecasts for each of the four quarters of 2021.
The green squiggle shows the surge in earnings expected on the S&P 500 for the third quarter of 2021. When third- quarter earnings reports came in better-than-expected consistently, Wall Street analysts revised their expectations sharply higher. The surge erupted in recent weeks, as companies in the Standard & Poor’s 500 reported their third- quarter earnings to shareholders. Now, more than 80% of the S&P 500 companies have reported their third-quarter earnings, and fourth-quarter earnings will start to be reported shortly. Fourth- quarter earnings are likely to surge again as much or more than in the third quarter, which could ignite a market melt up.
There are two main rules of stock market investing: Rule number one is that earnings growth drives stock prices, and rule number two is that economic growth drives earnings. The rules seemed stacked in favor of rising stock prices.
The economy is expected to grow by 4.8% in the fourth quarter. That’s the consensus forecast of the most recent poll by The Wall Street Journal of 60 of the nation’s leading economists. As a result, it’s reasonable to expect earnings growth to surge again in the fourth quarter, when the economy is expected to grow twice as much as in the third quarter, which was hobbled by the Delta-Variant.
Further brightening an already upbeat outlook, the new $1.2 trillion infrastructure law will further boost economic growth in 2022. As the post-pandemic expansion strengthens and the pandemic effects fade, stock prices could surge beyond recent record highs.
This is not a prediction. It is a warning that financial economic facts make a market melt-up a real possibility.
Positioning yourself to benefit from a market melt-up requires knowing your personal financial and tax situation, which enables the kind of comprehensive financial planning advice we can provide to clients.
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