Today a client sent me a link to Don't Need Your Social Security? 1 Reason You Should Claim It Early Anway, by Dan Caplinger of Motley Fool. In the article, Caplinger suggests that "successful investors" who don't need their Social Security to live on should consider claiming it early at 62 and investing it instead.
A client asked me yesterday if investment management fees are tax deductible (advisory fees for portfolio management). The short answer is a qualified “yes,” subject to certain limitations. First, some background....
Prior to November 8, most experts predicted a Trump election would initially knock stocks off their perch while bonds (and gold) would likely hold their own. In fact, we've seen the exact opposite thus far. So it's understandable that folks with more “conservative” portfolios are wondering what in the world happened to their bond funds. Interest rates took the elevator to the 2nd or 3rd floor last week and a move like that always causes a corresponding reaction in bond prices. Here’s my chicken-scratch illustration of the Bond Teeter-Totter.
Naiveté runs deep in the notion that investing in stocks from current extremely overpriced levels will somehow reduce risk. Yet that's how the Oregon voter's pamphlet summarizes Measure 95: "This measure allows investments in equities by public universities to reduce financial risk and increase investments to benefit students. Additional investment income could benefit students by minimizing tuition increases and enhancing student programs." If you voted "yes" on Oregon Measure 95, in concept that's a good call on your part. Oregon universities need to have the opportunity to broadly diversify their investment portfolio (and it was a surprise to me they didn't already have it).
Forget worries about the election, this graph perfectly illustrates what ought to be keeping the typical buy-and-hold investor up at night. Central bank monetary policy on steroids has again goosed asset prices to the land of unicorns and rainbows. This is precisely why I continue to take a defensive (tactical) approach to managing client portfolios. Reasonable investment returns can be sought when assets can once again be bought at more reasonable levels. In the current environment, most investors (and the financial industry) are just picking up nickels in front of a steam roller.