Financial Floyd Blogspot

Good Afternoon, Wow, it has been over a month since I have been able to post. The headlines have been dominated by the Democratic Presidential Campaign, Brexit, Tesla, and the Coronavirus. During this time I've been traveling across the country discussing the markets and creating intellectual content for my employer. Over the past couple of weeks, it has become apparent that I can no longer blog in my normal cadence (SEC Regs, time commitments, etc). For those that have followed me, commented, retweeted, or shared a post, I whole-heatedly thank you for your engagement.

Good Morning, The new year is in full swing, and it is already a doozy. The US and Iran issues escalated into military actions on both sides, which resulted in innocent people being harmed. The stock markets have been volatile but have continued their 2019 trends by moving to all-time highs. There are tons of short term uncertainties baked within expectations, so maybe we should keep our eyes on the prize. Last week, PBS published an article by Vikram Manshamari about 20 investment themes to think about over the next 5 years. Since investing is more about a long term perspective, this article was timely. The points that I found interesting were: Passive Investing Bubble Bust (#4) The emergence of a hypersonic weapon (#6) Global supply chains shift dramatically (#7) Medical insurance companies and educators begin to jointly lobby against teenage use of social media (#17) Throughout this article, Vikram focuses on deglobalization, the shifting dynamics of global leaders...

Good Afternoon, This week marked the start of the New Year, and along with that comes 2020 predictions on how the market will do. Some people try to hammer in a certain number while others try to assess the risk within the markets to develop a range of expectations of what could happen. Both approaches require some combination of art and science, and everyone has an opinion on which way is right. MarketWatch recently published an article about expectations for next year based on previous years when the various US stock market indices posted 20% returns in the previous years. The key takeaway from the article was that most of the time (more than 75%) the major US indices posted positive double-digit returns. While this article leaves any reader feeling optimistic, the context behind the returns matters most along with how volatile the market was throughout the year. There are a host of things going on within the world today which could have either a negative or positive impact on ou...

Good Morning, This year has been a crazy one that seemed more like a soap opera than real life. One of the topics that I have blogged about in the past was the F.I.R.E. (Financial Independence, Retire Early) methodology. When I first learned about this topic earlier this year ( January 2019 post ), I was a little skeptical based on my view that some of its underlying future assumptions are flawed. Last week a proponent of the F.I.R.E. methodology wrote an article for CNBC about why the lifestyle turned out to be unsustainable for his family. The CNBC article highlighted a couple of key points; Income needs were overestimated based on an assumption of higher bond interest Children increase cash-flow needs Healthcare costs were underestimated Location and cost of living were significant factors in the cost of living The overall concept of F.I.R.E. is attractive, but sustainability was always one of my biggest complaints. I am a fan of the concept and the philosophy, bu...

Good Morning, The word "sustainable" is being constantly thrown around today because of our desire to live better/healthier lifestyles. This has come in the form of paper straws, plant-based burgers, more exercise, and more aware of climate change. But, did you know that there is also a way to do sustainable investing? Today, CNBC published an educational article about ESG (Environmental, Social, and Governance) Investing. This article is lengthy but informative. A couple of key points I picked up from the article were; 1. Investors are becoming more aware of this style of investing and moving money into various funds 2. This type of investing can be done using ETFs (primarily passive product) or Mutual Funds (primarily active products) 3. There is no common definition of ESG, so firms utilize their view of what it truly means I have seen this type of investment philosophy in many forms, but it is starting to become more prominent. From my experience, the one take -aw...

Good Afternoon, Finally, the Holiday Season is upon us! People have been shopping (hence strong Black Friday and Cyber Monday numbers), but the IRS can be a post-holiday Grinch. This week, the NY Times published an article about making last-second tax preparations before the end of the year. It has been some time since I've talked about taxes, but this article is worth reading. This article was very informative and had a few key points worth mentioning which are below: Tax Payers are still able to change their withholding rate  The number of refunds given was only down .3%, but for those making between 100k-250k the amount of the refund dropped about 11% (the average refund amount for all taxpayers declined 1.3%) It is advantageous to bunch itemized deductions There is an incentive to maximize contributions to tax deduction accounts (401Ks, IRAs, 529 College Savings Plan) If there is one thing that most of us taxpayers haven't considered is that we now need to...