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Year-End Reminders
As we close in on the last few weeks of 2018, now is the time to revisit your investments and take care of some housekeeping. Reviewing these areas before year-end will set you up for an even brighter 2019.
Tax Planning
Realized capital gains taxes can be a significant and unpleasant expense. Even though having a realized gain means, by definition, a profitable investment, no one likes to pay taxes! We continually look for ways to manage our accounts so as to minimize the tax burden. We will be reaching out to clients in the coming days to discuss harvesting potential losses, to help offset capital gains. In addition, we continue to emphasize the benefit of gifting highly appreciated securities, as your donation, to charitable organizations. Generally, if you make an in-kind transfer of securities, you will receive a tax deduction for the full market value and avoid paying any capital gains taxes. We can help you identify potential securities in your portfolio that would be appropriate to gift.
Required Minimum Distributions
If you are age 70½ or older, you must take Required Minimum Distributions from tax-deferred retirement accounts, such as IRAs and 401(k)s. For IRAs, you must take your first RMD by April 1 of the year after the year you turn 70½. For each following year, you must take an RMD by December 31. (Required beginning dates for RMDs from an employer plan vary depending on plan rules.) There is a sneaky RMD as well. If you have an inherited IRA (a rollover to you of an IRA after the owner has passed away) you must take a RMD each year-regardless of your age.
If you need help calculating your Required Minimum Distribution or if you're unsure about when you need to take your distribution, give us a call. If you don't take your RMD on time, or if you take out too little, you could face penalties of 50% of the amount not distributed.
Document Review
Now is a good time to make sure beneficiary information is up to date on your retirement accounts and life insurance policies. It's also a good idea to make sure your other estate planning documents are current, especially if you've had changes in your life. We understand that December is probably too busy a month to meet with the professional helping you with your estate planning, but it's not too busy to make an appointment for January!
Finally, consider checking your credit report. With the seemingly constant news about data breaches and hacked computer systems, it's a good practice to review your credit report at least once a year. Federal law allows you to get a free copy of your credit report from the three credit reporting companies every year.
Looking Ahead
We look forward to meeting with clients at the start of the new year. Along with reviewing your individual investments, we'll review and refresh your long term goals, asset allocation and your tolerance for market losses. To prepare for this, ask yourself the following questions: in the last year did you experience (or do you anticipate) any life events or family changes (such as a job change, change in marital status, move or illness) that could have an impact on your financial situation? Do you expect to fund any major purchases next year? Shifts in your lifestyle or goals may require adjustments to your overall financial plan. If the answer is yes to any of the above questions, give us a call today and we'll schedule a meeting.
We all have a lot on our plates this time of year, but taking a moment now to address some of these financial "to-dos" can set you up for a more prosperous New Year.
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Large cap equities soared last week - their best week since December of 2011 - after the Federal Reserve softened its policy stance and there were indications that US-China trade tensions would be eased at the G20 Summit. Large caps and tech stocks rallied back into positive territory on the year and investor sentiment received an additional boost from strong Black Friday sales reports.
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> Trade War Truce?
The US and China agreed over the weekend to hold off on any additional tariffs on each other's goods on January 1, in order to allow trade talks to continue. As a result, the S&P 500 soared over 1% on Monday. But just one day later, stocks retreated and the index fell over 3% as Wall Street's enthusiasm for the trade truce evaporated.
The volatility has been reflected in the CBOE VIX Index which finished Tuesday's trading day up 26% higher than Monday.
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| Source: Markets Insider / Commodities |
> Negative Returns:
If it feels like there has been nowhere to hide this year, you are right. 90% of the 70 asset classes tracked by Deutsche Bank are posting negative total returns (in dollar terms) for the year through mid-November. The previous high was in 1920, when 84% of 37 asset classes were negative. Last year, just 1% of asset classes delivered negative returns. What a difference a year makes.
> Banks & Yield Curves:
As the yield curve flattens, investors are dumping bank stocks on the belief that it will hurt their lending margins. On Tuesday, as the yield on the benchmark 2-year Treasury note hovered at 2.821 percent, while the yield on the 5-year note was at 2.811 percent, eight national banks fell more than 4% in one day.
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Remembering a Lifelong Career of Service
Upon graduation from high school,
former President George H.W. Bush, joined the US Navy becoming the United States' youngest Navy pilot, serving in the Pacific theater throughout World War II. Bush survived
intense combat, including an incident in which he was nearly shot down by Japanese anti-aircraft guns. Overall, he flew 58 combat missions, achieved the rank of lieutenant,
and was awarded
three Air Medals and the Distinguished Flying Cross.
Then, after a successful career as an oil executive, Bush
served as a congressman, United Nations ambassador, chairman of the Republican National Committee, chief liaison to the People's Republic of China and CIA director before becoming Vice President of the United States in 1981. In 1988, he was elected president where he presided over the end of the Cold War, the liberation of Kuwait and is remembered for his "thousand points of light" speech.
President Bush said,
"Points of Light are the soul of America. They are ordinary people who reach beyond themselves to touch the lives of those in need, bringing hope and opportunity, care and friendship. By giving so generously of themselves, these remarkable individuals show us not only what is best in our heritage but what all of us are called to become."
On this National Day of Mourning, our hearts are filled with gratitude as we remember his lifetime of service to our country.
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New Market Wealth Management offers modern investment solutions backed by extensive research and experience serving the needs of wealthy families. Through our strategic partnership with
Cliffwater LLC
, we have access to institutional-quality research, investment due diligence and asset allocation tools. We believe this level of experience and unique access to in-depth, sophisticated research are essential for success in today's complex world markets.
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