Fitch downgraded the U.S. long-term rating to AA+ from AAA
The rating downgrade of the United States reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance relative to 'AA' and 'AAA' rated peers over the last two decades that has manifested in repeated debt limit standoffs and last-minute resolutions.
The Federal Reserve announced today a pause in their historic rate hike campaign. The Fed has increased interest rates at the last ten consecutive meetings in an effort to curb inflation. The inflation rate, as measured by the US Consumer Price Index, pushed above 9.0% late last summer and recently dropped to a more palatable 4.0%. While inflation is still well above the Fed’s long-term target (2.0%), there is a lag associated with inflation falling in response to rate hikes, suggesting the downward trend for inflation should continue even after this pause.
More than a year ago, the 2021 Washington State Legislature passed RCW 82.87 which creates a 7% tax on the sale or exchange of long-term capital assets such as stocks, bonds, business interests, or other investments and tangible assets. The tax took effect on January 1, 2022, and the first payments are due on or before April 18th, 2023. Revenue collected from this tax is earmarked to cover educational costs in the state of Washington.
We know that many of you are following the news regarding Silicon Valley Bank (or “SVB”) and Signature Bank. For those that haven’t heard, regulators shuttered both banks and seized deposits after growing concerns of their financial situation. Over the last couple years, those firms were flush with cash and their deposits flourished. However, following the Fed’s aggressive rate increases over the past year, those deposits shrunk at an exponential pace, forcing the banks to liquidate at a significant realized loss.
The SECURE 2.0 Act of 2022 (“SECURE 2.0”) is chock-full of provisions – 92, in fact – aimed at improving Americans’ preparedness for retirement. Like SECURE Act 1.0 (passed December 2019), this latest round of legislation provides workers with greater access to retirement plans and further encourages retirement savings. Here are some highlights from the newly passed bill:
Since World War II began, there have been 20 Midterm Elections (MTE) years in the United States. In every time period from the MTE to June 30th of the subsequent year, the market has been higher. A perfect 20/20. The bulk (13) have generated double digit results. So, what does that tell us?
Recessions have been at the epicenter of the biggest crashes in history so it’s understandable that investors are anxiously anticipating its arrival. Honestly, we could be in a recession right now with little statistical evidence to properly formalize its existence. For starters, the definition of a recession itself is difficult to pin down. Some market pundits claim it to be two consecutive negative GDP prints. Though incorrect, it is widely used as a placeholder.
More than six months after President Biden outlined key tax policy proposals, taxpayers are still waiting for clarity on tax legislation. As of this writing, the administration’s Build Back Better Act (BBBA) remains on hold, as disagreements between the Democratic Party’s Centrists and Progressives stalled progress on both the tax legislation and the infrastructure bill (Infrastructure Investment and Jobs Act) which has already passed the Senate. Tax negotiations could take quite a few twists and turns over the coming weeks, although taxpayers can ponder several strategies despite current legislative uncertainty.
In 2017, investors around the world were captivated by the rise of Bitcoin, a digital currency decentralized from government intervention. At the time, Bitcoin was largely relegated as an asset for day traders (and apparently the laundry room of my wife's cousin). Fast forward to today, and interest from other investing parties has grown, predicating many questions. This research paper seeks to address Bitcoin’s merits and risks as an institutional-quality investment. Below, we seek to address Bitcoin’s merits and risks as an institutional-quality investment.
As a presidential candidate, Joe Biden laid out more than $3 trillion of tax increases to pay for an agenda ranging from expanding health care to fighting climate change. Now that the Democrats will control both houses of Congress and the White House, it’s time to focus on tax law changes they might propose. Although President-elect Joe Biden and other Democrats have proposed many changes to individual income and payroll taxes, business income taxes and individual transfer taxes, we’ll limit this commentary to those changes that would be most likely to affect our clients and are attributable to President-elect Biden.
Okay, this message has nothing to do with the markets or the C word. I assume that, like me, you’d like a short break from hearing about the Dow, social distancing, rates of infection and sheltering in place. So I thought we’d try to give ourselves some relief by turning to my favorite non-economic subject: music.
We’re all familiar with the quote from President Franklin D. Roosevelt, made at his first inaugural speech in the depths of the Great Depression. But at this time, it feels right to give the whole quote: “let me assert my firm belief that the only thing we have to fear is...fear itself — nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.”
After we wrote our first piece regarding the coronavirus-induced market selloff last week, the news has continued to be gloomy.
The Coronavirus (or COVID-19, as the disease is known) is becoming a huge concern all over the world.
The worst December for stocks since the Great Depression. A decline in the Nasdaq of more than 20% since its high in August, dropping it into Bear territory. A loss of $1.2 trillion in value from Facebook, Amazon, Apple, Alphabet, Netflix and Microsoft.
In today's toxic environment, how can an investor trust an advisor’s recommendation to accept some volatility in exchange for longer-term gain? How can the investor know that her advisor is looking after the investor’s best interests, when even the U.S. Court of Appeals says that the advisor doesn’t have to?
The big drops in the stock and bond markets on February 2 - 5 gave many investors scary flashbacks. But the truth is that drops like that are to be expected, not feared.
It’s time once again for eggnog, office parties, family gatherings, hotly-contested college football playoffs and financial predictions from investment advisors. Not wanting to follow the crowd, Riverview Trust Company wants to share its own insights for 2018.
We’re looking at the effect of the Fed’s actions on the stock and bond markets. In the first installment, we looked at how the Fed promotes economic growth and price stability. In the second, we examined the way stocks and bonds are valued, and how economic factors (including those triggered by the Fed) move those values. In this final segment, we’re going to see how the Fed’s actions actually have affected the markets over the past year.
The IRS announced its 2017 "Dirty Dozen" list of tax scams today. Take a look at the enclosed links to stay up-to-date on what to watch out for when filing your own taxes this month!
There’s so much going on these days. The stock market is rising, bond prices are dropping (sort of), emerging markets are all over the place. Portfolio-watching is becoming as big a spectator sport as football. Maybe bigger, given football’s recent television ratings. But watching your portfolio can be bad for your financial health. The more often people look at their investments, the less likely they are to take on risk.
There is a lot written lately about the "fiduciary standard" in investing, largely because the Department of Labor is set to impose that standard on advisors who manage retirement accounts. Essentially, it means putting the interests of another ahead of your own. This seems like it should be the undisputed goal of every investment advisor: we should always be putting our clients' interests ahead of our own. So why is the brokerage industry fighting it?
The Dow has increased by about 3% since the first of the month. It went up dramatically when it became clear that Clinton was going to win. It went up about the same amount when it became clear that Trump actually won. So much for predicting market moves. So what lessons can we learn from politics and the market?
In this election season, all decisions seem to be fear-based. Each side stirs up voter fear about the other. Fear of terrorism, crime, international tension, permanent job loss. Fear of some other group (government bureaucrats, religious fanatics, illegal immigrants) taking something from us. Republicans are hunkering down against Democrats, and vice versa.