Our Thoughts

FJY News to Know #50

Before Pouring Out More Eggnog, Consider Your Upcoming Taxes

As the end of the year approaches, most people are thinking of vacation, gift shopping, and Christmas parties.  However, there are several ways to reduce your tax obligations before it’s time to file.  One way is to make more contributions to your 401(k) plan.  You can tally as much as $19K; If you’re 50 or older — you can add an extra $6K.  Another tactic is making a charitable contribution:  If you choose a donor-advised fund, you can receive an immediate tax break.  For five more ways to cut down your tax bill, this article should help.

The White House and Beijing Agree on Phase One of a Trade Deal 

President Trump signed off on a deal recently that checked some tariffs planned to commence on December 15th.  This would be phase one of a potential deal to increase trade between the two countries — which has been affecting the global economy.  The deal will include nine sections, including topics like technology transfer, food and agricultural products, and finance.  The interim deal might be a political victory for the president, in lieu of President Trump’s impeachment.  The president was quoted as saying that his office plans on hashing out phase two immediately — rather than wait for the 2020 reelection.  To read about China’s response to the reprieve, click here.

The U.S. Federal Reserve Are Confident They’ve Found Their Sweet Spot

Despite the ongoing tensions with trade and impeachment, the Fed seems relaxed at the end of the year.  The central bank cut the interest rate three times over the past year, mainly in response to the economic strife between the U.S. and China.  However, with unemployment reaching a historic low, coupled with moderate but steady economic growth — the Fed claims it won’t bother with the interest rate any time soon.  As predicted, the Dow and the S&P responded modestly with some gains.  For more perspective on the Fed’s outlook for 2020, go here.

Despite a Bull Run for the Dow, Investors Are Hedging for Bonds and Money Market Funds

Ted Darling, a 56-year-old investor from Cape Elizabeth, Maine has ignored the bullish indices this year.  “I forewent a lot of opportunities, but I’m being really cautious.”  Darling is referring to the Dow’s bull run.  Coincidentally, the S&P 500 is having its best year in six years.  However, like Darling, many investors have pulled a total of $135.5B from stocks and ETFs this year.  Instead, they are counting on bonds and money-market funds — confident that these vehicles are a safe harbor.  These investors are tentative for several factors, including the trade war, inflation, and the outside chance for a recession.  For more details on this years’ transactions, visit this page.

Most Employers Are Concerned About Their Employees’ Finances

About 80% of employers offering retirement plans believe their workers are struggling financially — and it would appear the numbers spell it out.  Following a recent survey by MassMutual, employees were found to be grappling with a variety of financial challenges.  The top three issues not being addressed enough were the cost of living, debt, and not being able to save.  According to the Bank of America, 53% of companies are now offering financial wellness classes and training, with the number of employers doing so doubling over the past year.  However, most experts say there’s a way to go in order to tackle the ongoing issues facing workers today.  To learn more about this issue, click here.