The Current Financial Environment

July 16, 2021

Are you wondering what to do in the current financial environment as markets hover near record high levels? For fixed income, buy high quality and keep maturities short. For equities, look for securities with high quality and value. Buy some of the well-known names that are strong long term holds. These names have probably lagged the broader market in recent years. It is time to look for quality investments to protect any downside risk you may have. For more specific analysis or help creating a plan to implement these strategies, we are here to help!

Carol Dixon, CFP® & Kevin DeRosa, CRPC®

The Next Space Race

July 13, 2021

Over the weekend, billionaire and founder of Virgin Galactic, Richard Branson, made history by becoming the first man to recreationally fly into space aboard his own company’s spacecraft. He narrowly edged out fellow billionaire and founder of Amazon, Jeff Bezos, who also announced he is planning to travel to space in a similar fashion. As the stock market continues to incrementally set new record highs, less than a year and a half since the start of the global pandemic, many have begun to question how much higher can it go? Could recreational space travel be a new frontier that continues to propel the markets higher? While space travel will certainly be a luxury that only select few can afford, the demand appears to be high, as one individual bid millions of dollars for the chance to join Jeff Bezos on his voyage. Space travel is just one potential frontier that could grow exponentially in the next few years and with the pandemic recovery seemingly behind us, it may be just what is needed to spur more economic growth. To discuss the stock markets, potential growth sectors, or any of your other financial needs, reach out to us today!

Carol Dixon, CFP® & Kevin DeRosa, CRPC®

Potential Inheritance Tax Changes

June 18, 2021

President Biden’s proposed tax changes have been widely discussed since they were announced earlier this year. While most of the proposals are aimed at the wealthiest individuals and families, there is one in particular that could prove costly to middle class Americans as well. It is the plan to tax inherited assets at the original cost basis rather than the stepped-up basis.

For example: A family-owned business started in 2001 and had a $0 basis. Today, that business is worth $500,000. If the estate law is changed and the owner dies today, the new owner would now be on the hook for $500,000 in capital gains. Versus no estate law change where the new owner would now have a basis of $500,000 when inherited.

Those who inherit successful businesses with the intention to sell, this change to the tax code could cause a huge increase in the federal tax. Selling inherited assets and controlling your taxable gain is tricky and a well-developed plan should always be made in advance. If you are considering selling inherited assets or believe you may be receiving an inheritance soon, reach out to us today to begin putting a plan in place to control your tax liability!

Carol Dixon, CFP® & Kevin DeRosa, CRPC®

Child Tax Credit

June 9, 2021

Did you know you may be eligible for a proactive receipt of the Child Tax Credit? The American REscue Plan implemented in March 2021 has made some important changes regarding the credit. As long as you fall within certain income limitations, you are eligible to receive half of the annual credit in the form of advance monthly payments from the IRS. The maximum annual credit is $3,000 per child aged 6 to 17, and $3,600 per child under the age of 6. Typically, these payments have only been applied as a credit when filing your end of year taxes, so it is a significant change for the IRS to proactively send payments to those eligible. These payments will begin to be distributed in July 2021 and will be sent out monthly until the end of the year. Keep an eye out for a letter from the IRS regarding your eligibility and steps you need to take if you do not want to receive the advance payments. To learn more about the Child Tax Credit and other important law changes this year that might affect you, contact us today!

Carol Dixon, CFP® & Kevin DeRosa, CRPC®

‘Meme’ Stocks

June 8, 2021

Over the past year, we have experienced many changes that effect our daily lives. The global pandemic has forced us all to adapt to new trends in our ever-changing world. One of the most profound and unique trends we have seen is the incredible rise of ‘Meme’ stocks and social investing. Investors have banded together through internet forums to not only sustain, but dramatically raise the stock price of individual companies that otherwise, would likely go bankrupt. GameStop and AMC have been two of the companies that have benefitted the most from these social investors, while some large corporate investor have lost billions of dollars as a result. Last week, AMC’s price per share almost doubled without any ground-breaking updates or news from the company. It is unclear the reason behind social investors propping up these companies. Dogecoin, a fairly new form of cryptocurrency based on a meme of a Shiba Inu dog, has also benefitted from this trend. Within the past three months, the price has gone from around 1 cent per share, to a peak of almost 75 cents per share, while the billionaire, Tesla CEO Elon Musk continues to tweet that it will go even higher. With all the information available to us through the internet and the ability to connect with others virtually, it is easier than ever for the social investors to partake in this activity. However, the main question becomes, will it continue? Also last week shares of Bed Bath & Beyond rose 62% in one day as they released new brands ahead of schedule, and retail investors responded in force. It seems as if companies may begin to try and capitalize on this trend and become the next target for social and ‘Meme’ investors. Be wary, however, as we have yet to see what happens if most investors who have boosted these companies up, suddenly decide there is a new trend to move on to. Whether you believe that this type of investing will continue or not, it is important to choose the companies wisely. It can be attractive and potentially lucrative to follow the volatile investing trends, but you must ask yourself; if things go south, am I willing to lose my entire investment? Reach out to us today to get our opinion on the state of the stock market and our picks for the top stock choices moving forward.

Carol Dixon, CFP® & Kevin DeRosa, CRPC®

Real Estate Market

May 24, 2021

One of the side effects of the COVID-19 pandemic has been an increased demand for real estate, particularly in the suburbs of major cities. Due to the increasing number of individuals who strictly work from home, we have experienced an extremely low interest rate environment. Interest rates have not been this low since after the 2008 “Recession” and as we posted previously, the Federal Reserve has stated that they will not increase interest rates until at least the end of 2022. While mortgage rates are not exactly the same as the federal interest rate, mortgage rates have not been this low in almost 10 years. Many home buyers have been frustrated by increased demand, resulting in many cash offers and bids thousands of dollars over asking price, but for current homeowners, low mortgage rates present a unique opportunity. For certain homeowners, now may be the time to consider refinancing at a lower rate. If this is something you have thought about, it may be an opportunity to capture a lower rate and reduce your monthly mortgage payment. As demand for real estate continues to increase, these low rates will not last forever, so act now! To learn more and discuss if refinancing may be an option for you, reach out to us today!

Carol Dixon, CFP® & Kevin DeRosa, CRPC®

Effect of Government Spending

May 12, 2021

It is an exciting time as it has finally begun to feel like COVID-19 is in our rearview mirror. More and more individuals continue to get vaccinated each day and eligibility for vaccinations has now reached children aged 12 to 15. The stock market made new record highs last week and it seems as if individuals are eager to get out and spend their most recent round of stimulus checks. Many businesses have also begun to consider allowing workers to return to the office on a more permanent basis, some requiring vaccines, and others not. While many aspects of life seem to be trending in a positive direction, there is one looming question as we get closer to the end of the pandemic: How will the massive U.S. government spending, affect the economy post-pandemic? President Biden has recently introduced his infrastructure plan which many have clamored to include a fourth round of stimulus checks. Not to mention, there has been the ongoing topic of eliminating a portion of student debt for millions of current and former students. While this money has helped many families in need, what will be the long-term effects of this spending? One potential answer is increased inflation. The Federal Reserve has repeatedly stated that they will not be raising interest rates until at least the end of 2022. However, the number one goal of the Federal Reserve has been to keep inflation around 2% annually. The main tools they use to achieve this are adjusting the interest rate and increasing or decreasing the money supply. The money supply in circulation has increased in the past year and without an increase in the interest rate to offset this change, a higher inflationary period may ensue. Time will tell if this occurs or not, but if we learned anything from the late 1970’s, it would be that controlling inflation is extremely important. To learn more about how inflation may affect you and your financial goals, contact us today!

Carol Dixon, CFP® & Kevin DeRosa, CRPC®

Saving for Education

May 5, 2021

Do you have children or grandchildren that aspire to attend college one day? Do you want to open a college fund, but do not know how or think it is too late to start saving? You are not alone. A recent survey found that only 35% of Americans are aware 529 plans exist, and only 25% know they are used for educational savings. These are staggering numbers considering how beneficial 529 plans can be when deciding how to save for a child or grandchild. Some of the benefits include tax free earnings growth when used for qualified education expenses, flexible gifting and savings options, ability to use funds for college or certain K-12 expenses, and the option to easily transfer an account between family members. While most financial advisors do not discuss 529’s and educational savings with clients, we do! Reach out today to learn more about 529’s and how they may benefit you and your family!

Carol Dixon, CFP® & Kevin DeRosa, CRPC®

Biden’s Tax Proposal

April 26, 2021

The tax increase on capital gains proposed by President Biden last week caused some investors to panic. While a 43.4% tax rate seems alarmingly high, does the average investor have an actual cause to be concerned? The answer is no. This rate would only apply to those with gross income (or assuming AGI until we get more guidance) greater than 1 million dollars per year, which amounts to only about 0.5% of Americans. However, for those that could be affected, there may be no better time to utilize the proven effective buy and hold method of investing, especially within taxable accounts. To speak with an expert about your portfolio, reach out to us today!

Carol Dixon, CFP® & Kevin DeRosa, CRPC®

Tax Season

March 29, 2021

Tax season is upon us! This time of year may be stressful for some when reviewing their tax bill, while others are excited to receive an unexpected refund. Whether you fall into one of these two categories, tax season almost always raises an important question in our minds: Is there a way I could reduce my tax liability? In many cases, the answer is yes! Depending on income level, how much is saved, and where those savings are invested, it can make a substantial difference in your tax liability now, as well as in the future. Are you interested in paying less in taxes each year, but aren’t sure how? Reach out to us today to learn more!

Carol Dixon, CFP® & Kevin DeRosa, CRPC®