According to a recent E-Trade survey, millionaire investors believe the U.S. stock market is in a bubble (or at least near one). The survey results from investors with at least $1 million of investable assets were: 16 percent say the stock market is “fully in a bubble” 46 percent say it is “somewhat of a bubble” 29 percent say the market is “approaching” a bubble 9 percent say it is “nowhere near” a bubble More than half of the millionaire-class believe the U.S. stock market is at least in “somewhat of a bubble.” They may be right, just accidentally, but are they…
Insights & Advice
A Few Dollars More
Tax Tips for Charitable Donations
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…
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…
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…
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…
What, Me Worry?
Dalton — I grew up (if you want to call it that) with Mad Magazine. Alfred E. Neuman was the fictitious cover boy of Mad. Interestingly, Alfred’s image was created before Mad, appearing in early 20th-century advertisements for painless dentistry. It was in the dentistry advertisements that we first learned of Alfred’s motto, “What? Me worry?” A Mad cartoonist named Harvey Kurtzman spotted the ad and pitched using it as the magazine’s mascot, saying that “it was a face that didn’t have a care in the world.” I, Allen Harris, hereby nominate Alfred E. Neuman to be the face of the…
Creating a Successful Business Succession Plan
An exit strategy helps business owners ensure the long-term success of their company A good succession plan creates a blueprint for ownership transfer as you exit your business. It helps you prepare for your retirement, ensuring you have the income you need. And setting a well-conceived plan into motion protects the people around you, including your heirs, employees, and customers by laying the groundwork for a smooth transition. Yet, despite these important benefits, many privately owned businesses don’t have a succession plan, leaving the business vulnerable to unforeseen circumstances. For instance, if the business owner dies or becomes incapacitated, there…
Understanding Your Retirement Income Plan
Manage cash flow in retirement with multiple income streams When you retire, you get to bid farewell to the working world. That’s the good news. The bad news? You’ll no longer have a paycheck coming in from your employer. To address that, you’ll need to piece together a steady stream of income from different retirement sources, such as Social Security, retirement accounts, and annuities. Each of these sources of income has its own benefits and tax treatments. Here’s what you need to know about how they might fit into your retirement plan. Social Security Benefits Monthly Social Security benefits provide…
Stimulus bill vaults stocks to new highs
A much-needed fiscal stimulus bill is expected to pass at the eleventh hour by lawmakers in Washington. Investors greeted that news by taking all three major averages skyward this week, with more gains in the offing. As I wrote last week, politicians are waiting until the very last day before passing a $903 billion stimulus bill. Thursday was supposed to be the deadline, and then Friday; talks may well stretch through the weekend at this point. In the meantime, another important piece of legislation, an extension of the government budget, had to be signed by Friday, December 18th to keep…
The same old stimulus song
Investors should know better by now. Stimulus talks have been going on since July 2020, but politicians in the capital appear to be stuck on the same old issues. Unfortunately, the deadline for a 2020 compromise bill is less than three weeks away. It is anyone’s guess whether the nation’s economic and pandemic plight will win over partisan politics. It hasn’t so far. The financial markets are not taking kindly to failure at this point. The all-time highs we have been enjoying for the last two weeks have been built on investors’ near certainty that at least $900 billion in…
Markets ignore China sanctions
During the past few weeks of this presidency, both the Trump administration and Congress have levied additional sanctions against the People’s Republic of China. Financial markets and U.S. corporations have largely ignored those efforts; here’s why: Investors have learned over the past four years that tough talk on trade tariffs, blacklisting and other threats were largely ineffectual in curtailing the world’s second largest economy. The facts are that U.S. tariffs on Chinese goods have been a failure. Our trade deficit with China is higher now than it was before the trade wars. China’s trade gap with the U.S. was 43%…
Investing to advance the world
Dalton, Mass. — Over the decades, I’ve gravitated toward investments that are classified as leaders in changing the world for the better in the realms of environmental, social and governance (ESG) concerns. While socially responsible investing fits my personality, the gravitation toward those investments hasn’t been conscious. I’ve merely been trying to find investments that best strike a balance between potential risks and rewards. For example, the five largest positions of my company, Berkshire Money Management, are (by symbol) VIG, SPY, IWF, DIA and QQQ. Each of these has a Morgan Stanley Capital International ESG (Environmental, Social and Governance) Fund…
Markets bet on stimulus sweepstakes
The first week of December saw all three major averages climb to minor new highs. The trigger was more good news on the delivery timetable of the coronavirus vaccines. The expected speedy distribution of the first batch of wonder drugs encouraged investors, even while the number of COVID-19 deaths and cases nationwide continued to skyrocket. In addition, a new dose of hope-ium has infected investors on the stimulus front. The Democrats $2.2 trillion proposal has gone nowhere since July, thanks to the Republican-controlled Senate. The Democrats then reduced their price tag in an effort to forge a compromise before the…