By: sistoadmin | October 4, 2022
The third quarter started with a solid rebound in stocks and bonds that was driven by resilient corporate earnings, signs of a possible peak in inflation, and hints from the Federal Reserve that the end of the rate hiking cycle may come sooner than markets initially expected.
The impact of being out of the market for a short time can be profound, as shown by this hypothetical investment in the stocks that make up the Russell 3000 Index.
The S&P 500 continued to decline in the second quarter, hitting the lowest level since December 2020 as still-high inflation, sharp increases in interest rates, rising recession risks, and ongoing geopolitical unrest pressured stocks and other assets.
Recessions are always identified with a lag. By the time one is called, the worst of its impact on markets has usually passed.
The stock market tends to reward investors who can weather annual ups and downs and stay committed to a long-term plan. Annual stock market returns are unpredictable, but “up” years have occurred much more frequently than “down” years in the US. That may be reassuring to investors, especially if they find market downturns unsettling. The … Continue reading The Rewarding Distribution of US Stock Market Returns
After a historically calm 2021, volatility returned in the first quarter of 2022, as inflation surged to 40-year highs, the Federal Reserve promised to raise interest rates faster than previously thought, and Russia surprised the world with a full-scale military invasion of Ukraine, marking the first major military conflict in Europe in decades. Those factors … Continue reading Inflation, Geopolitics and Rising Rates Weigh on Markets in the First Quarter
California just enacted Senate Bill 113 (SB 113), which made California’s new passthrough entity elective tax much more attractive for certain owners of S corporations, partnerships, and LLCs taxed as a partnership or S corporation. Many of the limitations and drawbacks to paying this tax were just recently removed by SB 113. Now, this passthrough … Continue reading California SB 113 Simplifies Tax Write Off to Pass-through Entities
Stocks overcame numerous headwinds during the past three months, including a resurgence in COVID cases, the Federal Reserve moving aggressively to end the current QE program, and a lack of additional stimulus from Washington, to hit new all-time highs in the fourth quarter and produce very strong returns for 2021.
The IRS’s backlog since the start of the COVID-19 pandemic has been extraordinarily difficult for tax professionals to work with. To add some context, according to the IRS’s Taxpayer Advocate, as of May 2021, the IRS: Still had over 30 million returns requiring manual processing, which represents roughly 20% of all returns filed to that … Continue reading IRS Account For Individuals (1040 Filers Only)
The S&P 500 hit new all-time highs again in the third quarter as investors looked past a resurgence of COVID-19 cases in the U.S. and instead focused on the positive combination of a resilient economic recovery, ongoing historic support from the Federal Reserve, and strong corporate earnings.