Perspective Financial Services

Election Year Market Volatility

As we approach year-end, it is natural to consider what is on the horizon for 2020. One of the events taking place next year is the presidential election. Based on historical data, we know to expect some election year market volatility. This may lead you to ask, “How will the coming election impact my investments?”

Research assembled by Dimensional Fund Advisors (DFA) shows it’s hard to anticipate how markets will react based upon an election outcome. Nevertheless, patient long-term investors have benefited from staying the course regardless of which political party has governed the White House. (See chart below.)

“Investing during an election year can be tough on your nerves, but it’s mostly noise and the markets carry on,” says veteran Capital Group Portfolio Manager Greg Johnson. “Long‑term equity returns are determined by the value of individual companies over time. So, it’s better to stay invested than sit on the sidelines.”

Stay the Course

Uncertainty about relations with China, talk of potential recession, and the coming presidential election will make for an interesting 2020. Don’t let the inevitable corrections that take place in the market – over which we have no control – unnerve you. Being patient and staying invested through market ups and downs is key to meeting your long-term financial planning goals. Do your best to tune out the noise and focus on the things in life you can control.

Election Year Volatility

By |2019-12-09T15:11:10-07:00January 13th, 2020|Current Affairs, Investing|

Password Protection Tips

password protection tipsThere’s a lot of advice offered on what to do to create strong passwords. Knowing what not to do is just as important. In a recent article for FINRA.org, Kaitlyn Kieran offers password protection tips on what to avoid. Here’s a summary of three critical things to avoid.

  1. Steer clear of passwords containing easily-found information. A strong password does not contain elements found in your social media accounts. “If you constantly post about your dog, Fluffy, don’t make your password Fluffy_Lv3r,” Kiernan stresses. Also consider context. While H@rRy*P0tt3r is generally a strong password (because it includes a good mix of upper- and lower-case letters, characters and numbers), it’s a terrible password if you’re a member of a Harry Potter fan club or post quizzes to your page like, “What Hogwarts house would you be sorted into?”
  2. Avoid using the same password for multiple accounts. “You might think a security breach at, say, LinkedIn doesn’t matter – they have your resume, so what?” Kieran writes. “But if you use the same password, or even a similar one, for LinkedIn as you do for your bank account or Facebook or any number of other applications, a hacker can soon find a way to wreak havoc in your financial and personal life.”
  3. Pass on the option to link accounts. When you are new to a website and it says you can create a new account or log in using your Facebook, Google or email account, create the new account instead. While linking accounts is quick and easy, that convenience comes at cost. Linked accounts often share private data (whether you realize it or not), which can make identity theft easier. And, allowing one account to have access  to others means that if the least secure account is hacked, the rest could also be compromised.

 

By |2019-12-09T15:18:48-07:00December 30th, 2019|Current Affairs|

Make Positive Life Changes

Many people dream about suddenly getting a large sum of money. You win the lottery. Perhaps you receive a significant inheritance. But few think about how they will handle the responsibility of their newfound wealth. Lupe Camargo recalls a young woman who came to her for help. The woman had not handled money well in the past and feared she would make poor choices with a recent inheritance. They discussed small steps she could take to make positive life changes that would have lasting impact on her finances and her family’s well-being.

In this moving, five-minute video, Lupe shares the impact this experience had in her own life and career, as well.

By |2019-08-14T13:59:43-07:00December 9th, 2019|Advisors, Financial Planning, Video Blog|

Price of Free Trial Subscriptions

There is a price of free trial subscriptions.

Subscription services are everywhere – from streaming on our electronics to groceries at our doorsteps. They’re convenient. They give us stuff we want, usually with a free trial. Who doesn’t like free? Of course, there is a price of free trial subscriptions. Because a credit or debit card is required to sign up, Americans lose a surprising amount of money to free trials. That’s the hook.

“[It’s] convenient if you actually enjoy the service and plan on using it again in the future,” said Courtney Moore in a recent report for Fox Business. “But a number of Americans get trapped and lose money to auto-renewing subscriptions when these trials expire.”

About 46 percent of us subscribe to at least one online streaming-media service (i.e. Netflix, Hulu, Sling), according to consulting firm McKinsey & Company. About 15 percent of online shoppers subscribed to an e-commerce service in the past year, mainly subscription boxes (i.e. Ipsy, Dollar Shave Club, BarkBox); 35 percent have three or more. The monthly fee for popular subscription services is about $10 or less, which seems reasonable (by design). But that adds up over time and with multiple services. People get busy and often forget to cancel the subscriptions they no longer use. When they do remember, the process for cancellation can be cumbersome or even deceptive.

The Federal Trade Commission (FTC) warns: Some dishonest businesses make it tough to cancel, hiding the terms and conditions of their offers in teensy type, using pre-checked sign-up boxes as the default setting, and putting conditions on returns/cancellations that are so strict it could be next to impossible to stop deliveries and billing.

A recent Bankrate report found that nearly 60 percent of consumers had been charged against their wishes for a subscription service. If you’ve been wrongly charged, or if a provider refuses to cancel your subscription, report it to the FTC and file a complaint with the Better Business Bureau.

 

By |2019-12-03T13:36:20-07:00December 2nd, 2019|Current Affairs, Financial Planning|

Secondary Education Tax Credits

In the past, I’ve written about Arizona tax credits that support local schools and nonprofits. Such credits enable you to make charitable donations using money you would otherwise pay in Arizona income taxes. But did you know there are also a number of federal income tax credits that benefit you directly with a dollar-for-dollar reduction in your tax bill? That means a tax credit valued at $1,000 actually lowers your tax bill by $1,000. Here are details about two secondary education tax credits that are especially advantageous.

American Opportunity Credit

This allows you to claim the first $2,000 you spend on undergraduate expenses for tuition, books, equipment and fees. It also lets you claim 25 percent of the next $2,000 of expenses (for a total of $2,500). Parents can claim the credit if they paid for the student’s education expenses and that student is listed as a dependent on their tax return. Otherwise, the student can claim it. Full or reduced credit is given if your modified adjusted gross income (MAGI) was less than $80,000 or $90,000, respectively ($160,000 and $180,000 for joint filers).

This credit is especially valuable for students because it’s refundable. That means you can still receive 40 percent of its value (up to $1,000) and receive a tax refund even if you earned no income in 2019 and owe no income taxes. Because this credit is available for a maximum of four years, the largest benefit will be years when there are $2,000-to-$4,000 of expenses.

Lifetime Learning Credit

This is ideal for graduate students or anyone taking classes to develop new skills, even if you already claimed the American Opportunity Credit in the past. It’s available to undergraduate, graduate and non-degree or vocational students; and there’s no limit on the number of years it can be claimed.

Students can claim 20 percent of money paid toward tuition, fees, books and supplies needed for coursework, up to $2,000. The credit has a lower MAGI threshold ($67,000 for individuals, $134,000 if filing jointly) and is not refundable.

Read www.irs.gov/credits-deductions-for-individuals to learn more, or talk with your tax advisor about whether you qualify for these or other beneficial tax credits.

By |2019-11-20T08:34:42-07:00November 25th, 2019|Financial Planning, Taxes|