Jeffrey may mean he reduced his reasonable salary under an S Corp and will take more funds (hopefully) as a return on investment.
At least, that’s how the legal racket often works.
Some of us don't mind making more money in 2021 even with higher taxes. Or can't defer/choose the year of when that income hits. (But yes, if I could choose and an impact was possible, might make some adjustments in that regard.) Seems like Biden only wants to increase cap gains rate for those with incomes >$1M/year. Yes, if I was in that category, the prospect of a 39.6% rate instead of the current 20% rate might make me do some step ups...Seems like the other key threshold in the Biden tax plans are $400k/income per family (for increases/changing deductions). He also wants to make 401k contributions a credit (like 12% for everyone) as opposed to a deduction where higher income people get more benefit from it. So, that could theoretically make high income individuals less likely to contribute to 401k plans. I'm holding steady for 2021 at least...The above are just proposals as who knows where they'll actually end up and when they'll take effect.
Jeffrey may mean he reduced his reasonable salary under an S Corp and will take more funds (hopefully) as a return on investment.
At least, that’s how the legal racket often works.
No clue.
I'd guess short-term market increase (today - ) with likely more volatility and greater risk for downside. Many are rotating out of the tech and growth stocks and into value now. But no one knows.
Except Jeffrey. I have confidence in Jeffrey. He's so money!
Last edited by richardjackson199; 01-20-2021 at 07:25 PM.
VTWV - Vanguard's Russell 2000 Value ETF is up 39% since the end of October. And while a third of that gain has come since January 4th, November and December were similarly robust. Over many other time frames it still lags the large caps substantially, but it has had a nice run as of late.
There are really two arguments: 1) value has lagged growth for a couple years so some view a catch up in value as inevitable, 2) many of the value stocks are in sectors that should benefit from a "reopening " of the economy; i.e. faster economic growth. Pre-pandemic, while many viewed the economy as strong due to low unemployment, headline GDP growth was about 2.3% for the entire year of 2019. A decline from the year prior and after significant stimulus in substantially lower corporate income tax rates that went in to effect in 2018. What Jeffrey alluded to, higher Federal taxes passed via reconciliation at the end of this year, might signal to some a short lived trade into value. This is why my comment that the move, as signaled by small cap value being the most economically sensitive, started a couple months ago. I should have noted the S&P 500 was up 17% during the same time period that small cap value was up 39%.
Personally, I came to that trade late (right around Thanksgiving, the day after Turkey day to be exact) but have done nicely with it. This was offset by my much smaller but disastrous short of some Tesla shares.
Last edited by YmoBeThere; 01-21-2021 at 04:07 AM.
Another thing to keep an eye on is whether the perennial bluster on infrastructure spending finally gets translated into legislative action.
https://www.cnn.com/2021/01/20/econo...lus/index.html.
Gurus:
1. If you had $30k that you needed in 3 years, where would you park it? The yields for bonds and CDs are pitiful. Is there a safe alternative to equities that will at least provide some return?
2. Does anyone think there will be a market correction over the next year? So many P/E's seems ridiculously high.
Thanks,
Slim
IMO, you would not want to make that decision in isolation. All of your assets and liabilities should be analyzed in aggregate. Your overall portfolio risk and personal risk tolerance are critical factors in providing an informed recommendation. Marital status, age, household income and expenses, etc. are also appropriate considerations.
Said differently, where I would invest the $30k may be a very different place than where you should.
Sorry, stable net asset value product.
https://www.investopedia.com/terms/s...value-fund.asp
Thanks. I feel foolish for asking, but the Investopedia link makes me wonder ... how is this different than cash?
"Stable value funds remain just that: stable. They don't grow over time, but they don't lose value either." (Is it merely a hedge against inflation?)
If you can recommend a stable NAV fund from Fidelity, I am all ears... Thanks.
^"High yield" savings account (the term is relative these days...) or I-bonds if it's 5 years. The most recent I-bond issuance had a fixed rate of 0%, but an inflation rate of 0.84%. At least, your money won't LOSE purchasing power with I-bonds...If you cash in an I-bond before five years, you lose three months interest, which isn't the worst.
https://www.treasurydirect.gov/indiv...esandterms.htm
Stable value funds are really only in 401ks...But yea, money markets have a "stable NAV" but are paying peanuts.
No good place for short-term money with no risk. That's why people have no choice but to plow into equities if they want growth (but that requires much more risk).