Wealth advisor Matt Regan, with the first in a weekly series, One Minute Tax Tips, discussing Roth IRA conversions.
In today’s low (and possibly temporary) current income tax environment, considering paying some tax *this year*, in 2020, to do a partial Roth conversion and gain the benefit of having sheltered additional money in a tax free Roth IRA may make sense.
Watch Matt’s 60 second video to better understand what this strategy entails, and email us at firstname.lastname@example.org to discuss if this strategy may make sense for you.
Assuming Republicans hold the Senate, the likelihood of significant increases in both regulations and income taxes is significantly decreased.
Interest rate and inflation expectations have recently dropped:
Additionally, as the Chart of the Week towards the bottom of this newsletter indicates, gridlock has historically been good for the equity markets. And while ballots are still being tallied, and Arizona, Georgia, Nevada, and Pennsylvania remaining in focus, it does appear that Joe Biden is on the brink of victory, and that we are much closer to having a clear winner, possibly by tomorrow or Sunday. The betting markets on the Presidency sure seem to agree:
There are many reasons for us here at Towerpoint Wealth to be paying close attention to events out of our control, but no reason to be reactionary to any of them. In addition to the recent interest rate and inflation-expectation adjustments, some of the other post-election, split-Congress items bearing scrutiny include:
Renewed weakness in the financial sector
Growth stocks outperforming value stocks
Industrial and materials sector stocks lagging
The volatility of the U.S. dollar
Strengthening emerging market stocks
Continued strengthening of technology sector stocks
Potential weakness in tax-free municipal bond prices
Weakness in healthcare sector stocks
Weakness in renewable energy stocks
All of these moving parts and variables can make it tempting to consider second-guessing your investment strategy and philosophy. The constant struggle between the desire for growth and protection is natural, and the goal of managing a well-diversified portfolio is to be prepared for any market environment or political change.
Ultimately, when we put aside all of those “uncontrollables,” we keep the following graph in focus (hopefully the trend is an obvious one):
While on their adventure, they also helped our newest family member and wealth advisor, Matt Regan, celebrate his birthday!
TPW Service Highlight – Morningstar Portfolio “Instant X-Ray”
Often enough, clients ask us what stocks they have exposure to within the various mutual funds and exchange traded funds (ETFs) that comprise their portfolio. We now have a sophisticated tool available to us that not only does a deep-dive in evaluating your specific asset allocation and sector weightings, but also the actual individual underlying holdings you have exposure to.
Think you are properly diversified? There is only one way to find out for sure – ask us to run a Morningstar portfolio Instant X-Ray report, and we will dissect your portfolio to uncover concentrated positions, areas of unexpected overlap, and provide detailed insights into your portfolio’s diversification, illuminating what is truly driving your portfolio’s risk and performance.
As always, we sincerely value our relationships and partnerships with each of you, as well as your trust and confidence in us here at Towerpoint Wealth. We encourage you to reach out to us at any time (916-405-9140, email@example.com) with any questions, concerns, or needs you may have. The world continues to be an extremely complicated place, and we are here to help you properly plan for and make sense of it.