FINANCIaL
FIELd NOTES
How to Protect Against Stagflation – Lessons from History
Recent concerns about a new era of stagflation in the U.S. have emerged due to escalating tariff wars. If the tariff war expands and companies are left paying higher prices for parts, it could create an environment where growth slows as consumers are less willing to buy at higher prices, while inflation remains as input costs all continue to rise.
While it’s too early to sound the alarm, looking back at the painful period of stagflation from 1973 to 1982 provides critical insights about how investors can protect themselves if it gets worse. ..
Some Thoughts on the Recent Market Volatility
Last Tuesday, March 11th, the S&P 500 hit the official “correction” level midday - 10% off the all-time highs set just 20 days earlier on February 19th. It was the 5th fastest 10% decline in the past 75 years, driven primarily by tariff uncertainty.
Below are a few thoughts I’ve been thinking about for the past few weeks. As always, I’ve done my best to be as apolitical as possible…
Corrected 1099s - Why You Should Wait to File
A 1099 form reports income from sources such as dividends, interest, and capital gains. Brokerage firms provide these documents based on the information they receive from mutual funds, ETFs, and other investment vehicles.
As tax season approaches, many investors receive their 1099 forms early in the year and feel the urge to file as soon as possible. However, financial institutions often issue corrected versions. If you receive one of these corrected 1099s and have already filed, an amendment to your tax return may be needed…
The Variable Driving Stock Market Growth
If you’ve been paying attention to the stock market lately, you might have noticed some serious gains. One of the biggest drivers for this growth has been the capital expenditures (“capex”) of big technology companies including Alphabet, Amazon (AWS), META, Microsoft, and others.
Capex refers to the money companies spend on long-term assets like buildings, equipment, or technology. For these companies, this often means pouring billions into data centers, technology chips, and other infrastructure…
Revocable Trust as Beneficiary vs. Retitling Accounts
Adding a revocable trust to your estate plan is a common move that can simplify the management of assets during your lifetime and the distribution of assets after your death. However, when you put a trust in place, one of the most time-consuming actions is retitling assets into the name of the trust. This step often requires paperwork at banks and county offices for any real estate deed retitling. But it’s necessary because having a trust does nothing if you don’t put assets into the trust.
I’ve had several clients over the years ask if they can simply make the trust beneficiary of an account instead of going through the trouble of retitling the asset…
Will Stock Returns Be Lower Over the Next Decade?
Recently, Goldman Sachs forecasted modest 3% annualized returns for the stock market over the next decade. Among the many reasons cited, a few include -
Higher starting valuations – the overall index is more expensive than historical norms.
Market concentration – A few individual companies have carried the index higher. If they falter, the market falters.
Interest rates – Rising rates make it more expensive for companies to borrow and invest, which leads to slower growth.