Hi <<First Name>>,
To respect your time, I will keep this update short and hopefully sweet. The quick summary:
- Interest rate market
- Tax Forecasts
1. Interest Rate Markets
Today US long dated treasury bonds are blasting through a prior "floor" level. What does this mean? It means if traders get the bonds to keep falling (by shorting them) then long rates, which affect mortgages will rise - possibly strongly.
if this keeps up, it could be like the 1970s when as Fidelity Fund Manager Peter Lynch said, "no one liked their house but everyone loved their mortgage" because people had mortgages in the 6s and 7s and rates went above 14% by 1982. This would not be good for the mortgage purchase market and may make your home harder to sell if that is indeed, a shorter term goal.
A recession might bring rates back down, or some other force. But that is getting ahead of ourselves. Today, bonds are falling and rates are rising (See attached image for a chart). I'm sure you're wondering how this affects your stocks? Of course as with everything else, this is bullish for US stocks (yes sarcasm! hey they just don't seem to go down:).
Suggested Action Plan: 1. review the chart 2. Talk to your real estate advisors if you have any property plans over the horizon.
I put up a video on how to reduce stock exposure without actually selling a lot and incurring big gains. The video was inspired by a conversation with a client. Find that video linked here:
3. We are beginning our work on Tax Forecasts for Clients
The purpose of a tax forecast is not only to prevent surprises if we can and plan proper withholding, but to take advantage of tax opportunities that might be present in one year but not another.
FYI: Some of you have basic tax forecasts and some of you have more involved tax forecasts. Basic forecasts are done with spreadsheets and analyzing last year's tax return (if I have a copy). Advanced tax forecasts involve the CPA team and their advanced software.
We will be gathering pay-stubs, information (such as unusual expenses) and prior year tax returns if we don't have them already.
Suggested Action item: if you'd like to be proactive, please upload last year's tax return and a September month end pay stub if you'd like a timely tax forecast and let me know. thanks!
I will have a monthly update out soon too so (Suggested Action item) subscribe to the Youtube channel so you don't miss it!
If you have any questions, please reach out. I will be reaching out to many of you for the tax forecast this month.
Note - I sent this to clients directly in email so if you get this 2xs, sorry!
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