Lorie, Author at Fidelis Wealth Advisors

By: Jeff Bullock

Winston Churchill is quoted as saying, “We make a living by what we get, but we make a life by what we give.”

The holiday season is marked with fun events, festive traditions, and a greater emphasis on kindness and giving. Many studies show that over 30% of annual giving occurs in December. If you find yourself giving to any causes this year, take a minute to make sure you are doing it in a way that helps both your charity and yourself.

Three ideas to make charitable giving more flexible and efficient:

Donor Advised Fund: Using a Donor Advised Fund (DAF) can give you flexibility and convenience. With a DAF you can contribute now, but donate later, which may make sense for your tax situation. Also, a DAF provides ultimate convenience if you give to multiple causes because all of your donation documents are recorded and consolidated in one spot. Flexible and convenient.
Low-Cost Securities: Forget cash, donate investment securities that have embedded gains to your charitable causes. As long as you’ve held the position for over a year, you can receive the full tax benefit of donating plus you never take a realized gain on the position. If you liked the security you donated, simply buy it again and you’ve reset your cost basis with no tax consequence.
Required Minimum Distributions: If you are currently being forced to take Required Minimum Distributions (RMDs) from your IRA, but don’t need the money, earmark this money for your charitable causes and avoid the tax hit. Even if you don’t itemize your deductions, this may help bypass the distribution counting as income.

There are good ways to donate to your causes and passions and there are great ways. Before you pull out your checkbook or donate online via your checking account, take a minute to see if there is a better way. Be efficient; maintain flexibility. Don’t pay unnecessary taxes if there is a better way.

Happy Holidays!

This is not tax advice. Please consult with your tax advisor before implementing any of these strategies. Every situation is different and not all strategies work for every situation. While we believe this information is correct, we cannot guarantee its accuracy. This blog is general communication being provided for informational purposes only. This information is in no way a solicitation or offer to sell securities or investment advisory services. It is educational in nature and not to be taken as advice or a recommendation for any specific investment product or investment strategy. This does not contain sufficient information to support an investment decision. Any investment or investment strategy mentioned may not be suitable for all investors or in their best interest. Statistical information, quotes, charts, references to articles or any other quoted statement or statements regarding market or other financial information is obtained from sources which we believe reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. All rights are reserved. No part of this blog including text, graphics, et al, may be reproduced or copied in any format, electronic, print, et al, without written consent from Fidelis Wealth Advisors, LLC. Fidelis Wealth Advisors does not provide legal or tax advice. Please be advised to consult with your investment advisor, attorney or tax professional before making any investment decisions.

Created by: Sam Tenney

The Federal Reserve “financial stability” biannual report for 2021 outlines markets as likely overvalued compared to cash flows, and notes a huge increase in housing prices since earlier in the year however does not see any excessive leverage in the housing sector. The market remains vulnerable to significant declines if investor sentiment deteriorates, the Fed has noted.
The 10-year breakeven rate, the rate of 10-year inflation protected bonds minus the 10-year constant treasury bond, has risen to a decade high, with the spread between these two assets reaching 2.73%. This signals intense predictions by the market for the rate of inflation over the next decade.
JP Morgan believes the disconnect between the Fed beginning to taper, and the continued surge in Core Product Inflation (CPI), shows that not all inflation we are seeing may be transitory. This is compared to the Federal Reserve’s stance that current inflation is being caused by the continued reopening of world economies after Covid, and not necessarily due to the large amounts of stimulus injected into the economy.

SOURCES

Please note by using any of the links provided for your convenience, you will be leaving Fidelis Wealth Advisors website. The hyperlinks are to websites and servers maintained by third parties. We do not control, evaluate, endorse, or guarantee content found in those sites. Your use of such sites is at your own risk.

This blog is general communication being provided for informational purposes only. This information is in no way a solicitation or offer to sell securities or investment advisory services. It is educational in nature and not to be taken as advice or a recommendation for any specific investment product or investment strategy. This does not contain sufficient information to support an investment decision. Any investment or investment strategy mentioned may not be suitable for all investors or in their best interest. Statistical information, quotes, charts, references to articles or any other quoted statement or statements regarding market or other financial information is obtained from sources which we believe reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. All rights are reserved. No part of this blog including text, graphics, et al, may be reproduced or copied in any format, electronic, print, et al, without written consent from Fidelis Wealth Advisors, LLC. Fidelis Wealth Advisors does not provide legal or tax advice. Please be advised to consult with your investment advisor, attorney or tax professional before making any investment decisions.

Created by: Sam Tenney

The third largest real estate developer in China, Kaisa, has missed a payment on its 2022 bonds, which are currently trading at around 50% of par. The firm has listed $13 Billion worth of Shenzhen city real estate in a “fire sale”, citing immediate liquidity needs.
Job hiring’s for non-traditional work hours, the “night shift” hours of 12am – 8am, have increased 1400% since the start of the year according to data from popular online job sites. These positions now make up 15% of all available hiring. This is likely due to many companies, notably major retailers like Walmart, increasing hours of operation to meet the ongoing surge in demand from consumers.
Hourly wage earnings for US workers are up 4.9% year over year as of October, according to JP Morgan, a significant increase in wages given low wage growth for the preceding decade. This has been largely driven by hiring in the hospitality and leisure sectors.

SOURCES

By: Jeff Bullock

Have you ever gone to a go-kart track to race against family or friends? If you’re like me, as you wait in line, you are watching intently to find the fastest go-kart. In theory, all of them should go the same speed, but we all know that some are faster than others. If you choose unwisely, it doesn’t matter how hard you try, or how firmly you push down on the pedal, you are destined to lose against a faster machine. Perhaps you have a few tricks up your sleeve that can stave off a speedier kart for a short amount of time, but ultimately, you need a bigger engine if you want to compete. The outcome of a scenario like this is inevitable before the race even begins.

This same outcome occurs every day when the cash in your bank account tries to keep up with inflation. Cash is destined to lose every time in our current environment. The engine in your checking account will not keep up with the engine of inflation. The outcome of the cash vs. inflation scenario is known before the race even starts.

It’s important to remember that price and value can be different. Price simply refers to the amount something costs in terms of a given currency. Value refers to the worth, usefulness, or utility you get out of it. Price and value don’t always line up perfectly.

Think of it this way, would you rather have something that fluctuates in price, and has the potential to appreciate in value, or something that is stable in price but will slowly lose its value over time? Cash may feel safe because the price is stable, but in our current environment, it is no different than an ice cube sitting on your deck on a warm spring day – its value is continuously melting away.

How do we change the outcome?

There are many ways to try and beat inflation and, at minimum, maintain your value, but all require the willingness to accept price fluctuations along the way. One thing we know with high probability is the engine on the cash go-kart is losing every minute to the engine on the inflation go-kart

Created by: Sam Tenney

Chinese third quarter economic growth has slowed by a large amount, with this quarters gross domestic product numbers coming in at just 4.7% growth, compared to 18.1% growth in the first quarter of the year. This is likely due to serious issues with supply chains originating from China as well as a serious energy crisis for Chinese producers.
The change in core product inflation (CPI) has hit a 25-year high, reaching 4% inflation growth readings annually for the first time since the mid 90’s. This is in part due to large increases in shipping costs over the past year.
The US Treasury has frozen access to Afghani government dollar reserves held offshores, putting a fiscal embargo on the Taliban. This has had dramatic consequences for the country, with the poverty rate expected to reach 98% by 2022. The poverty rate in Afghanistan at the start of 2020 was 48%.

SOURCES

Created by: Sam Tenney

All countries in the organization for economic cooperation and development have finally agreed to the proposed global tax agreement for multinational corporations. This new agreement is expected to generate $150 Billion in global income. OECD has not laid out a timeline for the rollback of regional laws.
Chinese manufacturing centers of the country are facing large power shortages as the price of coal has gone up nearly 300% in the region. Currently analysts are predicting a 15% decrease in industrial output as the Chinese rust belt faces these coal shortages.
Crude oil has hit a 7-year high, recently crossing above $80 a barrel. The last time oil was this high was 2014, and just a year and a half ago oil was trading as low as negative prices.

SOURCES

Retirement!

What do you think of when you hear this word: Retirement

Let’s play another game – take a minute and fill in these blanks:

Retirement is ________________________________
When I retire, I see myself ______________________
When I retire, I will feel ________________________

In a 1995 study out of the University of Montana, Stephen Phillips and Betsy Bach studied metaphors that people use when describing retirement. Their research found that 52% of respondents used metaphors of transition or emotion to describe retirement. For example, one participant described retirement as a transition into a different world or starting a second life. Digging deeper into these initial responses, they found a common theme in this group that centered around uncertainty. In other words, for over half of the people studied, retirement is a transition that involves uncertainty.

On the opposite side, their research found that 29% of respondents used a metaphor of freedom to describe retirement. For this group, the common theme centered around lack of pressure and freedom of time. In other words, one-third of people in this study said retirement is freedom from pressure and time.

How does this study compare to your answers above? Perhaps to some degree a combination of both uncertainty and freedom describe how you feel about retirement.

Creating a retirement plan and multi-year roadmap is a great way to quell the uncertainty that surrounds retirement. What does your current financial and retirement plan look like? Has it been updated recently? Similar to getting a physical from your doctor every few years, frequently updating your retirement plan is a best practice to make sure you’re on the right road to meet your goals. If you don’t have a plan, I invite you to get one. If your roadmap has accumulated a little dust, come in for a check-up.

Retirement is great. When I retire, I see myself continuing to work on my passion projects. When I retire, I will feel the freedom to use my time as I please.

Let’s get a plan in place to make this happen.

Created by: Sam Tenney

Treasury funding is set to run out this Friday, October 1st, requiring lawmakers to pass a suspension of the debt ceiling by the end of this week or else face a non-essential government services shutdown.
Seasonally adjusted job openings continue to remain at all time highs, with well over a million job openings currently and higher demand expected to continue into the holiday seasons. This could pose unique challenges for US retailers during this period.
Berlin, Germany, has passed a vote to allow the city government to expropriate housing units owned by real-estate companies. Companies with more than 3,000 units in the city will be subject to having their excess holdings expropriated by the local government to control housing costs in the city. While this bill will likely be challenged long before enactment, Germany does have a historic constitutionality for socializing business assets, often private land is socialized to build roadways in the country.

SOURCES

https://www.wsj.com/articles/congress-heads-into-tumultuous-week-pressured-by-converging-deadlines-11632657601

https://www.ft.com/content/76e557d5-e792-4b73-8bb0-7e1f647e39fa

https://www.reuters.com/world/europe/berliners-vote-expropriate-large-landlords-non-binding-referendum-2021-09-27/

Created by: Sam Tenney

US monthly retail sales beat expectations, coming in at 0.7% growth for August compared to a consensus -0.8% decline that was projected. Retail sales consumption accounts for around 70% of US economic output.
The Chinese real estate firm Evergrande has sparked worry about potential financial contagion in China, as the firm’s $300 billion dollar bond default has caused liquidity issues with regional Chinese banks. This has made global news due to the widespread reach of the company’s securities within the world economy.
JPMorgan predicts long term bond rates have bottomed out already, with their analysts expecting inflation and tapering pressures to continue pressuring rates up through November.

SOURCES

https://www.ft.com/content/79d42fab-5d8d-4ba8-b8a7-f3bbb5ca262b

https://www.forbes.com/sites/russellflannery/2021/09/20/hong-kong-stock-index-plunges-39-as-evergrande-contagion-spreads-beyond-real-estate-into-banks/?sh=7e148c3e4b42

https://am.jpmorgan.com/us/en/asset-management/adv/insights/market-insights/market-updates/weekly-market-recap/

Created by: Sam Tenney

House democrats have finalized language in their new bill that would look to raise taxes; this tax bill is meant to help fund the new 3.5 trillion-dollar spending bill that is still in the works. The new corporate tax rate would rise to 26.5%, up from 21%, and the new long term capital gains rate would be at 25% up from 20%. If passed this could lead to volatility in the markets.
Supplemental unemployment assistance provided for the Covid-19 pandemic has ended in all 50 states, as of the week of September 4^th. However, preliminary JOLTS numbers show that hiring has not picked up as sharply as expected, likely due to increased savings through the pandemic.
Consumer Inflation expectations have hit a decade high, with consumers reporting a predicted 4% year over year expected inflation. This could have a large effect on consumer purchasing habits.