2021 What A Year So Far

Wow… year-end 2021 is fast approaching. As if 2020 was the year we all wanted to turn the page… it is deja vu all over again in 2021. BUT a positive spin can still be put on year-to-date 2021, especially with respect to market returns.

It may be too early to say that stock market gains, to date, have been better than decent in 2021. From the US small-cap index up 12%, to large-cap S&P 500 up 22%, to Nasdaq up 19%, to the Dow Jones up 13%, these are all solid year-to-date returns.

Take the time before year-end to evaluate portfolio gains and asset allocation.

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Year-End Tax Planning Tips 2021

Tax planning is important stuff. Perhaps not as exciting as the markets but saving money on taxes can still be exciting! Mid-November begins the countdown to year-end. The following is a handy Tax Planning Checklist.*  Some of these items, if done now, could make a big difference to the 2021 tax year AND add to savings.

1. How close are you to maxing out your 401k? The max is $19,500 for those under age 50 and an extra $6,500 for those age 50 and above. The deadline is December 31st and lots of 401k and 403b plans allow contributions of as much as 25-30% or even 100% of pay. Contribution rates can be lowered again in the new year.

There is still time remaining in 2021 to accomplish tax-deductions and/or create new savings vehicles!

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Investing in the Next Facebook?

How many people caught the news last week that Facebook officially changed its corporate name to… Meta? And changed its stock ticker symbol to MVRS? Presumably, MVRS is short for “metaverse.” What is the metaverse and is it the next “hot” investment? (In other news, Facebook is looking to distance itself far, far away from discoveries that the company knew full well for over a decade the damage its central social media platform would inflict and has inflicted on people of all ages, especially children. But that is not the topic of today’s TGIF 2 Minutes.)

Regarding Meta, CEO Mark Zuckerberg says succinctly, “the metaverse will be the successor to the mobile internet.” Gaming and alternate reality seem to be at the forefront of the concept with bitcoin and cryptocurrency central as well. The whole thing sounds huge.

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Champagne & William Shatner

Last week William Shatner – at 90, who knew?! – became the oldest person to achieve space flight. Completion of a 10-minute journey on the reusable New Shephard rocket, including four minutes of weightlessness, was cause for major celebration immediately afterwards.

But notable was that upon disembarking from the space capsule Shatner politely turned down taking part in the champagne shower amongst the crew, Blue Origin promotional people and members of the press.

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Is NOW a Good Time to Invest?

The original title of this edition of TGIF 2 Minutes was “Remember Brexit?” The reason that seemed appropriate is because recently and often during client reviews, conversations with potential new clients and from friends I am hearing the question, “Is NOW a good time to invest?” The slew of events that occurred in late 2020 and so far in 2021 have led both new and experienced investors to question the timing of investing new monies today.

Looking at the chart below*, there are events since 1970 and as recent as Brexit in 2016 that posed immense uncertainty and likely the same question. In fact, the chart illustrates the TEN YEARS from 2000-2010 dubbed “the lost decade”.

*Please ask for a copy of the PDF to view or zoom in.

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Risk Off & Risk On

NERD ALERT: This edition of TGIF 2 Minutes will get a big “wonky” but still worth the read. A good number of people reading are familiar with the terms, “risk off” and “risk on,” terms that are used frequently in financial media and by financial industry traders and risk managers.

Even for a business owner or anyone familiar with risk, the term “risk on” or “risk off” may make sense. But for those still wanting clarification on how these terms relate to personal savings and investments – specifically the stock and bond markets – here are a few details.

First, the reason it made sense to highlight this topic is that just this week the US Fed said,“[The US] economy has made progress toward its goals, teeing up bond taper.” *

Think of “risk ON” as increasing risk and being comfortable with taking on more risk; whereas “risk OFF” would be decreasing risk due to factors that make risk uncomfortable.

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Portfolios & Back Pain

Have you ever had back trouble? Boy can it be a pain in the ### (pun intended). Recovery is usually possible by seeking – and taking – proper advice and treatment. Believe it or not, there is a way to relate the recovery process from back pain to the recovery and durability of investment portfolios. Stay with me here!

I will credit my excellent physical therapist, who knows very well my profession as a CFP®, for coming up with the concept. He said to me, “like your advice about my 401k allocation, the physical strength work a person does for years can make recovery from back trouble much swifter and even easier.” Hooray! While the recovery process for a person’s back can take several weeks to several months, the recovery process for properly positioned investment portfolios has been actively taking place for over 12 months and could continue over the life of a portfolio.

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Investment Talk at the Weekend BBQ

With Memorial Day fast approaching…and summer BBQs possibly starting soon… here’s a good one from the Archives of TGIF 2 Minutes….

May 2020:

A popular topic that inevitably comes up over holiday weekends and even at socially distant BBQs is “the latest hot investment” or the brilliant neighbor who made a killing in “Fund A” or “Investment B.” But did you ever notice that rarely does the conversation highlight the losing investments?

The person who starts talking about Asset Allocation and patient investing over the long-haul is the lonely person at the cocktail party or BBQ.

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Quick 401k Tax Tip Video

From the January 2021 archives of TGIF 2 Minutes – a relevant 401k tax tip video. Remember, the 2020 tax filing deadline was delayed until MAY 17TH, 2021. Considering this extra time, it is never too late to plan for the rest of 2021 and beyond. Enjoy this quick video.

Click the PLAY button above.

Thank you for watching, stay safe and TGIF!

The 401k Trap: Contact me for a copy at kdebbs@msfsolutions.com

Last Year’s Paycheck

Believe it or not, lots of people do not know how much they get paid. That is, in terms of total compensation. Of course, there are that handful of people who know exactly what they make – and most people know precisely their “net pay” that gets deposited into their bank account periodically. But in my years of discussing total compensation with my clients (who typically make a fair amount of money) a great deal of the time they do not know accurately enough how much they made in a given year.

Believe it or not, lots of people do not know how much they get paid.

January is an ideal time to take a closer look at a print-out of last year’s year-end pay stub to learn valuable details and information. Why is this important?

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