This year, however, the movie is a real thriller and no one knows how it’s going to end on December 31. No one knows if tax laws are going to change, much less how they will change, but a lot is at stake. For example, a proposal that has received bipartisan support would treat an IRA left to your children differently. Under current rules, non-spousal heirs who inherit an IRA can take distributions over the course of their own lifetimes, allowing children to delay withdrawals for decades in many cases, and their balances can grow tax-deferred or even tax-free for many years.
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The Federal Reserve’s August beige book forecasted broad-based, steady growth that is neither too hot nor too cold, a “Goldilocks economy.” It’s an ideal environment because it suggests the Fed will not feel compelled to hit the monetary brakes any time soon, particularly with inflation slowing down. The Institute of Supply Management’s survey of corporate purchasing managers index came in this week at a very strong 58.8% for August. This indicator historically has slumped below 50% just before the economy fell into recession, although it has slipped below 50% even in a period of expansion. The new orders component of
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The financial press consistently is reporting inaccurately about real consumer income – which accounts for 70% of economic activity. Even the best outlets for news are making the same mistake. The false and gloomy narrative, which is being repeated across all of the major media outlets we checked, showed up in The New York Times today. “The bad news is that wages and incomes are rising more slowly than what has been normal in recent decades,” says Neil Irwin, whose economic analysis is otherwise accurate. Mr. Irwin’s column is reliably valuable, but today it left out important facts about consumer income in
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“Are small-cap stocks signaling a bear market?,” said a headline on CBS MoneyWatch this past week. “A bear market could hit U.S. stocks any time now,” Mark Hulbert, a columnist at MarketWatch wrote 10 days ago. “After a long drought, bear market funds attract buyers,” read the headline on an August 11 story published by Reuters. Despite some frightful headlines, the bottom line on the entire array of forward-looking economic data is that continued economic growth is ahead. For example, the best forward-looking index of economic activity, the U.S. Index of Leading Economic Indicators, is tracked monthly by The Conference
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Despite political upheaval in Washington, D.C. and a decline in stock prices for the second week in a row, the economy showed strength last week. The Standard & Poor’s 500 stock index, a barometer of America’s promise, suffered its second consecutive weekly decline, closing at 2425.55. But the decline for the week was less than 1% and Friday’s close was only about 2.5% off the all-time high close of 2480.91, reached on August 7, and it came as economic data continued to suggest the 96-month old expansion and bull market was continuing to gain strength. Americans opened their wallets in
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We’ve watched the post-Trump Election Rally with both pleasure and amazement over the past 6 weeks. Pleasure, because we have generally been overweight cash and equivalents as a defensive measure in our fixed income allocations, overweight stocks, and underweight bonds.  We generally avoided much of the bond market carnage in November which saw, globally, over 1 Trillion Dollars in fixed income market value disappear. We saw equity holdings appreciate as P/E’s expanded in the wake of the resounding Republican victory. Amazed because we continue to believe that while this “might” be a secular change, it is more likely the “8th
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