Charitable giving is a great way to support the causes you care about while also getting a tax break. In 2020, Congress passed the Coronavirus Aid Relief and Economic Security (CARES) Act, which incentivized charitable giving by offering new rules for charitable deductions. As we move into the new year, now is the time to make sure you’re making your 2020 deductions properly and planning for your 2021 charitable giving. Here’s what you need to know: 2020 Tax Moves The CARES Act temporarily changed some of the rules around tax deductions for charitable giving in 2020 to encourage people…
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Equities register more new highs, until they don’t
New highs are getting so common that investors are disappointed when markets fail to achieve them at least weekly. That should tell you something about the future direction of stocks, at least in the short term. As investors piled into stocks again this week in anticipation of unending spending by the federal government, it might be time to take a few profits. Don’t take that statement the wrong way. I am not calling for an end to this run-up in stocks. I think we could kiss the 4,000 level on the S&P 500 Index before we face a really big…
The Reflation Trade
Over the past six months, an increasing number of investors have come to believe that a rise in the inflation rate is inevitable. That appears to be a sound bet from where I sit, even though the present data doesn’t support that wager. The argument for increased inflation centers around money. The world is awash in the stuff. Central banks have been printing money for years to stimulate their economies. Last year’s pandemic only opened the monetary flood gates even further. And the trend is not over. During the next few months, here in the U.S., the Biden Administration is…
Take my money, please
Good morning class. Today, in Microeconomics 901, we are going to learn about “Veblen goods.” As you all know, microeconomics consists of two groups — businesses and people. Microeconomics is the study of decisions made by firms regarding the allocation of resources. It is also the study of the prices people are willing to pay in trade for goods as resources. The rational expectation is that as the price of a good goes up, demand declines. Conversely, as prices drop, it is a rational expectation that people will buy more of that same good. Is the adjective “rational” subjective? According…
Stocks and the new relief plan
Investors marked time throughout the week waiting for President-elect Joe Biden’s $1.9 trillion economic relief package to be announced on Thursday night. They were not disappointed. The size of the proposed bill was within the expectations of most market participants. As such, it was a classic ‘sell on the news” event Friday morning. The debate going forward will be how much of the new administration’s proposal will ultimately become law. That remains to be seen, since Federal funding for states and local governments and the $15/hour minimum wage will unlikely receive Republican approval. Investors aren’t really taking that on board…
Solar sector is not all green
There is one thing investors agree upon, solar stocks have skyrocketed in value over the last 12 months. The ESG (environment, social and corporate governance) crowd are ecstatic. They point to the gains as a clear example of how investors can all contribute to the greater good and still make money. But that thesis has some holes in it. So far in 2021, the frenzy to buy solar, electric, and water stocks has only increased. the incoming Biden Administration has already made clear its focus on increasing investments in renewable energy. As such, most investors expect a boatload of government…
4 Smart Money Moves for 2021
With the new year in full swing, it’s a great time to take stock of your personal finances. From building a budget and saving for retirement to getting a jump on this year’s taxes, here are some of the smart money moves to consider to help brighten your financial life in the new year. 1. Build a budget Creating a monthly budget can help you better understand your spending and identify how much money you can put toward your financial goals. First, take your monthly salary or wages after taxes are taken out. Next, tally your necessary expenses for each…
We ain’t normal
After watching the catastrophe at the U.S. Capitol building last week, it’s clear to me that we ain’t normal. But that’s not the only way to measure our lack of normalness. According to the CNN Business “Back-to-Normal” index, we ain’t normal. The Back-to-Normal index represents how close the U.S. economy is to returning to its pre-pandemic level. As I write this column, the index tells us that the economy is operating at 75 percent of where it was in early March 2020. The index was hovering around 83 percent for most of October 2020. Since then, it has been trending downward….
Democrat’s twin win in Georgia propels stocks higher
If you thought stocks couldn’t go much higher, you haven’t looked at the averages this week. January has started off with a bang in more ways than one. Can it continue? Some traders are crediting the action in financial markets this week to the Democrat’s twin win in Georgia’s Senatorial elections. Small cap stocks led the charge, as did industrial, materials, energy, financials, and other cyclical plays. The outliers that interest me also gained ground. Marijuana, clean energy stocks as well as bitcoin saw higher highs as investors bought equities that stand to benefit from policies favored by all three…
The 2021 stock market
Most Wall Street pundits are predicting another good year in 2021. That consensus view, however, differs on what areas will do the best, and what won’t. Here is my take on the new year. As a contrarian, it bothers me that so many investors are bullish. Too many sailors on one side of the rowboat tend to make the boat tip over. That said, I never simply do what others are not, unless there is a good reason to do so. Right now, I will go with the flow. Over the last decade, large cap stocks, led by the technology…