The benefits of diversifying your portfolio may be better understood by highlighting its practical application. A client of mine wanted to withdraw a decent amount of money from her account for home repairs. The client needed the cash immediately, which was not fortuitous given the drop in the stock market. Instead of selling stock mutual funds while the market was down, and locking in the recent losses, the client tapped into her bond mutual funds that have held up nicely.
I recently attended the annual Schwab conference for financial advisors. The top-notch speakers included former Federal Reserve Chair Janet Yellen and historian Niall Ferguson as well as a variety of investment and industry experts. The summary below highlights some of the more interesting ideas presented. Please read to the end to find out which topic was not mentioned, even though it was the darling of last year's event.
While the stock market is poised to start the day on a positive note, the last couple of weeks have been a bracing reminder that stocks do not rise in a linear fashion. They can go down.
The ability to receive a tax break from charitable giving has been significantly impinged upon by the new tax law that became effective this year. The good news, though, is that tactics exist which will allow you to preserve your charitable tax deductions in certain situations. I've provided a non-technical overview below and am happy to discuss it with you in greater detail at your convenience.
The new tax law has increased a taxpayer's standard deduction and, in turn, lowered a number of itemized deductions. Fewer than 10% of individuals are expected to have itemized deductions in 2018 that exceed the standard deduction. When itemized deductions are unavailable, the tax benefit of charitable giving is lost.
When I would drive back to school in Ann Arbor each September, I was able to cram all of my stuff into my green AMC Matador. (Sweet ride.) My two, oversized stereo speakers took up most of the back seat. As I wandered off to college, neither my parents nor I considered the need to address possible legal issues involving potential health care treatment. It was a simpler time.
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