Tax Loss Harvesting

Tax loss harvesting is an investment strategy to lower your tax liability. The process involves selling investments at a loss and deducting these losses against capital gains. If there are losses leftover, they are deducted from ordinary income. The losses offset your gains you made that year which results in a lower tax liability. These losses can also be carried forward for up to $3,000 per year.

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Market Volatility

Seeing the Dow shed more than 1000 points and the S&P more than 100 reminds us that markets; like trees, don’t grow to the sky. A normal market is one of two steps forward and one step back. We’ve been experiencing a “bizarro market” for over a year now and maybe we’re returning to more normal market conditions? Keep in mind that just about every positive record has recently been set:

  • The longest consecutive streak of monthly gains at 15 months (including reinvested dividends). The average for any given year is 8 positive months and 4 negative months.
  • The longest streak (415 trading days) that the market hasn’t had at least a 5% correction.
  • 2017 posted 80 new record highs.
  • The VIX, which measures volatility, has had an average daily closing price of 11.10 in 2017. This is the lowest price since the index was started in 1986. By comparison the average yearly price is over 20.

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2017 Market Review

At the beginning of 2017, a common view among money managers and analysts was that the financial markets would not repeat their strong returns from 2016. Many cited the uncertain global economy, political turmoil in the US, implementation of Brexit, conflicts in the Middle East, North Korea’s weapons buildup, and other factors. The global equity markets defied their predictions, with major equity indices in the US, developed ex-US, and emerging markets posting strong returns for the year.

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Spring client newsletter

Greetings and Welcome to the 2nd Quarter and Spring of 2017

We wanted to provide you with some relevant information that you may find interesting regarding Mortgage Rates at historically low levels, an update on the economy as it relates to your financial investments, and the upcoming tax filing deadline of April 18th.

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In 2016, Plan for Success

Everyone has financial dreams—like being debt-free, retiring on our own terms, owning a beach house or paying for our kids' education without breaking the bank.

To turn those dreams into reality, financial planning is indispensable. Simply having a plan can instill confidence and erase uncertainties. In a recent survey from polling firm Harris Interactive, 88% of those with comprehensive financial plans reported feeling that they have a clear financial direction. That number is almost 50% higher than those without a professional financial plan.

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Balancing Risk and Reward in the Market

Many investors look at investing as a kind of horse race: To "win," the logic goes, you must beat the market.

While measuring performance against a market index such as the S&P 500 may be a simple way to gauge success, in the long run it may be harmful to your investing results. To understand why, let's look at the concept of risk-adjusted return.

Risk-adjusted return can be defined as the measure of how much risk an investor has taken on to achieve their earnings. Let's say two mutual funds post identical 10% returns. The less aggressive, less risky of these funds would be said to have the better risk-adjusted return.

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Social Security Change: What You Should Know

Maximizing your Social Security benefits: It's been an increasingly popular topic with those approaching retirement.

With "advanced" claiming strategies, couples have found a number of ways to increase their benefits, all while complying with Social Security rules. But one of these strategies will soon be no more.

Early this month, the "file and suspend" strategy was eliminated, as part of the newly passed budget. If you're not familiar with file and suspend, here are the basics: The strategy allows couples—typically where there is a higher-earning spouse and a lower-earning spouse—to squeeze the greatest benefit amount from the program.

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The Value of Risk-Adjusted Returns

Many investors, amateur and professionals alike, treat investing as if it's a contest.

In this approach, the winner is the investor who is beating the market. The rest are losers. But if you're a long-term investor, focusing on the market as a benchmark to beat is a mistake.

That's because successful investors aren't focused on the horse race. Just as important to them as returns is avoiding big losses. It's those big losses, after all, that can shrink your capital base and put your long-term goals out of reach.

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The Biggest Risk to Your Portfolio

There's a big risk to your portfolio right now—but it's not the stock market's volatility. It's your behavior.

During periods of market turbulence like the present one, investors are at special risk of making emotion-based decisions. Spooked by a big drop in the stock-market indexes, they sell to protect their remaining capital. Later, seeing a big rebound unfolding, they jump back in to avoid missing the gravy train.

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Understanding the Rate Hike

For months, there’s been talk of the Federal Reserve raising interest rates, and some market commentators have been stirring up fears about how that may impact investors.

At Acorn Wealth Advisors, we believe long-term investors have little to fear from rising rates. Let’s take a step back and look at why, starting with why the Federal Reserve wants to raise rates.

A fundamental part of the Fed’s job is to help the economy to grow and create jobs. (The other principal duty of the Fed is keeping inflation under control.)

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