In talking with clients about the benefits their employer provides during the open enrollment season, one often overlooked benefit if clients have dependents is the Dependent Care Flexible Spending Account (FSA).
Health Savings Accounts (HSAs) are not only a savvy investment option but also offer numerous benefits, especially for high-net-worth families. An HSA is a tax-advantaged savings account designed for individuals with high-deductible health plans (HDHPs) to help cover out-of-pocket medical expenses. While the utility of HSAs is universal, they hold advantages for high-net-worth families and have steadily grown in popularity since their inception.
Earlier this year, I explained two principles you can follow to obtain the most happiness from your spending https://www.highlandplanning.com/learning-center-1/how-money-can-buy-happiness-part-1. In today’s article, I will cover three more concepts that can help bring more joy in your life with your spending. Below are the five principles outlined in the book Happy Money.
In a previous article titled “The Estate Planning Essentials”, I identified the documents needed for a comprehensive estate plan. Although this can be a morbid topic most want to avoid thinking about, reviewing the documents not only ensures your financial legacy is passed in accordance with your wishes as smoothly as possible but guides your agent to ensure your medical and financial wishes are addressed. So, how often should you review your estate planning documents?
Some investors have asked if stocks make sense in a world where short-term US Treasuries yield north of 5.5%. 1 While a notable relationship exists between high short-term interest rates and stock market returns, it's important to understand that correlation does not imply causation. Here's a breakdown of the dynamics:
Financial markets are complex and unpredictable. Valuation metrics, such as price-to-earnings (P/E) ratios, enterprise value-to-EBITDA, and the price-to-book (P/B) ratio, have traditionally been seen as indicators of a stock's intrinsic worth and, by some, predictors of future returns. However, the belief that valuations can reliably forecast future markets deserves a deeper investigation into why they may not serve as a crystal ball for investors.
The S&P 500 index rose 16.9% on a total return basis over the first half of of 2023. If you factor in July, the index is up over 20%. After a challenging year for investors in 2022, when the index lost almost 20%, it’s hard to complain about this year’s progress. With the S&P nearly doubling the long-term average annual return in 2023, it’s easy to say the market is healthy and all companies are doing well, right?
One of the most fundamental principles of investing is diversification. Diversification does not overload your portfolio into any investment but instead spreads the risk across different areas. Ideally, your portfolio is invested in several diverse types of investments, but as you'll see below, there is more to diversification than buying stocks, bonds, or funds.
According to the Department of Energy's SETO (Solar Energy Technologies Office), provisions included in the Inflation Reduction Act of 2022 will reduce the cost of installing rooftop solar by an average of $7,500, with taxpayers expected to realize an additional average savings of $9,000 on their electricity bills over the system's life.
Revelations around the collapse and government takeover of Silicon Valley Bank (SVB) dominated the news over the weekend. Except for the distractions provided by March Madness brackets and the Oscars, the word of failing financial institutions brought back bad feelings for everyone. Ironically, the film Everything Everywhere All at Once not only swept the Oscars but aptly describes the swiftness in which SVB collapsed.
The first investment speculative bubble was the tulip bubble of the mid-1600s. The details are debatable, but from 1634 to 1637, a speculative bubble developed on future contracts for new tulip varieties in Holland. Prices snowballed, reaching ten times the annual salary of a typical tradesman of the day. By February 1637, the market had collapsed. The tulip mania of the 1600s resulted from a mass hysteria for new varieties of tulips developed in Holland after the flower had been introduced to Europe only a few decades before.
Inflation is all everyone has been talking about for two years. Inflation reaching 40-year highs has wreaked havoc on consumers' wallets and caused market uncertainty.
The inflation story in 2021 was propelled forward by supply chain disruptions following the shutdown of the economy due to the COVID stay-at-home orders. This broad statement of supply chain disruptions expands to the physical transportation of products and a shortage of workers and materials
Would you believe it if someone told you that you could improve sleep, reduce stress and anxiety, and boost your mental well-being by reducing social media and news intake? About four months ago, I decided to conduct a self-experiment where I reduced the time spent on social media apps and watching news channels.
“Optimism sounds like a sales pitch. Pessimism sounds like someone trying to help you.” -The Psychology of Money, Morgan House.
I was having dinner with friends in December of 2018, and at the time, the markets were in the middle of a 20% drawdown. While we were out, one of my friends met an acquaintance of his who happened to be a Sales Representative for one of the large Wall Street brokers. I was happy to listen to his perspectives on the markets.
Shakespeare wrote ten dramas, each with a different story and cast of characters. However, his tragedies follow the same five-act formula: Exposition, Rising Action, Climax, Falling Action, and Resolution. Every play, movie, and television shows from Shakespeare's time to today follows the same five-act sequence. Our culture's art and entertainment reflect our innate expectations of the hero's rise, fall, and resolution. Likewise, our expectations for the economy and financial markets are no different.
Our brain constantly monitors for signs of threats and triggers emotional responses to avoid them. The most primitive part of our brain controls the instinct to prevent hazards. This basic survival instinct attaches a high probability to any piece of data forecasting anything. Like the weather forecast, human beings expect predictability regarding the economy and the stock market. However, forecasting should not be considered a prediction.
The first half of 2022 has been a disappointing year for every investor. At the close of Q2 2022, a 60/40 hypothetical portfolio comprised of the S&P 500 Index and Barclays US Aggregate Bond Index was down over 12%. What's been the driving force behind these investment returns, and what can we expect moving forward?
As of Friday, the 29th of July, except for the NASDAQ market, the US equity markets recovered somewhat from the bear market correction. A bear market is a loss of 20% from the previous high. In the first six months of 2022, the equity market had lost over 80% of what it gained in 2021 and entered a bear market correction.
Two weeks ago, the latest Consumer Price Index data (the index that measures inflation) had risen 1.3% in June, bringing headline inflation up to 9.1% and core inflation (excludes energy and food) up to 5.9% over the last 12 months. With increases this large, it’s not surprising to know this has been the most significant 12-month increase since November of 1981. With inflation on the rise, the war in Ukraine, and the stock market in bear territory (when stocks fall at least 20% off their highs), are we doomed for a recession?
With the first half of 2022 closing just a few days ago, the S&P 500 is down almost 20% year-to-date. That would rank as the worst first half of the year in over 50 years! While many tend to avoid looking at their investment account statements during times like this, market downturns present unique opportunities for investors
