1099 Tax Statements
Please watch for your tax forms to arrive in the next few weeks. Most of our clients have opted to receive tax statements by mail and Schwab has indicated their initial mailing will be early February. They anticipate a second 1099 mailing mid to late February with updated/revised figures. Please don’t file your taxes until you’re confident that your 1099 forms are complete. If you have any doubt as to the completeness of your 1099 please don’t hesitate to contact our office, we’re here to help.
Also, many of our clients have us work directly with their tax advisor or CPA. If you’d like us to work closely with other professionals on your team please put us in touch and we’ll coordinate with them on your behalf.
Small picnic pests have big potential. ChatGPT is the nonhuman making headlines for passing medical licensing exams, but it’s ants that might someday be up for jobs at your hospital. The insects have such an acute sense of smell that scientists are now trying to train them to sniff out cancer—and a study published this week shows ants can be trained relatively quickly to do just that (though they’ve only scented human cancer cells grafted to mice so far). Ant diagnosticians would be cheaper and quicker than current diagnostic tools, like blood tests and biopsies, and the researcher leading the study insists that the critters would never need to crawl directly on you to help doctors determine your health status.
Earth’s core plays the “Reverse” card. The solid iron core at the center of the Earth has stopped spinning and is reversing the direction in which it rotates, a new study analyzing seismic waves from earthquakes claims. While that sounds like…seismic news, scientists believe it’s happened before, and the only impact we surface dwellers are likely to notice (or not) is that it could shorten the day by less than one millisecond over time. It’s also worth noting that there’s no scientific consensus on what exactly is going on, since we lack direct access to what’s happening deep inside our planet.
Your friends are good for you. Since the days of Freud, we’ve known that talking helps you feel better, but new research shows that even a single conversation with a friend per day is enough to boost your happiness and lower stress. While the conversation needs to be “quality” to improve your day, that can mean anything from deep discussions to just catching up or joking around. And if you need some motivation to leave the house: The study determined in-person interactions were better for well-being than yakking it up in the TikTok comments.
Weekly Focus – Think About It
“Everyone talks about building a relationship with your customer. I think you build one with your employees first.”
—Angela Ahrendts, businessperson
This time may be different…or it may not be.
There has been a lot of speculation about how the Federal Reserve’s policies will affect the United States economy. Economists have differing opinions about whether the country is headed for:
- A recession, which occurs when the economy stops growing and begins to contract; or
- A soft landing, which occurs when economic growth slows but does not decline.
It’s an important question because recessions often are accompanied by layoffs, rising unemployment rates, dwindling investor confidence, lower consumer spending, and stock market downturns.
Recently, a new theory bubbled up.
The United States may be experiencing rolling recessions, reported Rich Miller of Bloomberg. “Now there’s a new economic meme making the rounds. It’s called a rolling recession, and it’s a bit of a hybrid. One industry suffers a contraction, then another, but the economy as a whole never swoons, and the job market largely holds up…That framework doesn’t explain everything that’s going on with this puzzling post-pandemic economy, but it’s as good a description as any of what the U.S. has been going through since the Federal Reserve began lifting interest rates from zero in March of last year.”
Uncertainty around current economic conditions has a lot to do with the pandemic, according to Schwab’s chief investment strategist Liz Ann Sonders whose talk at the January National Retail Federation (NRF) conference was reported on by Fiona Soltes for the National Retail Federation. When lockdowns ended, demand for goods lifted prices and helped push inflation higher. When services became available again, demand shifted and we saw “pockets of weakness in many categories on the goods side, certainly in housing, that are definitely in recession territory.”
If rolling recessions don’t meld into a national recession, we could see continued economic expansion as inflation moves lower. It’s also possible we could see economic growth heat up and inflation remain at higher levels than we’ve become accustomed to having. It’s just too early to tell.
Major U.S. stock indices moved lower last week, reported Teresa Rivas of Barron’s. Treasury yields rose across maturities last week as economic data and Fed officials suggested that further rate hikes may be ahead.
|Data as of 2/10/23||1-Week||YTD||1-Year||3-Year||5-Year||10-Year|
|Standard & Poor’s 500 (Domestic Stocks)||-1.1%||6.5%||-9.2%||6.9%||9.0%||10.4%|
|Dow Jones Global ex-U.S.||-1.7||6.7||-12.5||0.4||0.1||2.0|
|10-year Treasury Note (Yield Only)||3.7||NA||2.0||1.6||2.9||2.0|
|Gold (per ounce)||-0.8||2.6||1.3||5.7||7.1||1.2|
|Bloomberg Commodity Index||1.5||-3.7||-0.7||13.6||4.7||-2.5|
Asset or Liability. When companies total up assets and liabilities for accounting purposes, employees aren’t counted as assets. It’s a peculiarity that has significant repercussions and the potential to negatively affect both employees and shareholders, suggested Wharton professor Peter Cappelli in the Harvard Business Review.
“Many common practices for managing employees are hard to explain,” he wrote. “Why do companies obsess over cost per hire but spend so little time trying to see if they make good hires? Why do they provide so little training when we know it improves performance and many candidates say they’d take a pay cut to get it? Why do firms delay filling vacancies and let work go undone? Why do they spend so much money leasing personnel from vendors rather than hiring their own?”
Cappelli contends the problem is rooted in the standards set by the Financial Standards Accounting Board (FSAB) in the United States. While many companies assert that employees are their most significant competitive advantage, that belief is not reflected in generally accepted accounting principles for publicly traded companies. FSAB-established standards don’t count spending on employees – such as wages, salaries, training and development, and benefits – as investments. Instead, those expenditures are treated as expenses and liabilities.
“…accounting rules say that items with value are assets — but only if they’re owned by the company. On that basis, employees are not considered assets — even though the tenure of a valuable employee is often far longer than the life of any piece of capital equipment. Even when a company buys other businesses to get access to their skilled employees, the acquisition of talent cannot be treated as an investment.”
Under current accounting standards, layoffs are one way for employers to rapidly lower costs and make balance sheets look more attractive. The loss of knowledge, skills, and abilities that accompanies layoffs doesn’t factor into financial accounting, even though it may negatively affect company productivity.
While accounting standards have yet to change, companies’ thinking may be. In a Bloomberg opinion titled, ‘U.S. Companies Aren’t Firing People As They Usually Do’, Kathryn A. Edwards wrote, “…the trade-off between short-term cost-cutting and human capital appears to [be] changing as qualified workers become harder to find and hire.”
John Klevens, CFP®
P.S. Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this email with their email address and we will ask for their permission to be added.
Securities offered through Securities America, Inc., Member FINRA/SIPC. Financial Advice & Investment Advisory Services offered through PFG Advisors LLC, a Registered Investment Advisor (RIA). Klevens Capital Management, PFG Advisors LLC, and Securities America, Inc. are separate entities.
. Portions of this newsletter have been prepared by Peak Advisor
* These views are those of Carson Coaching, and not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.
* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.