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.
Gary McKee crossed his 36th finish line of the year to a cheering crowd and fireworks on December 31, completing a challenge to run a full marathon every single day of 2022. Starting on Jan. 1, the northwest England resident ran 26.2 miles each morning, before going to work at the Sellafield nuclear site. The father of three raised over $1.2 million, which will be split between a cancer support center and a hospice-care organization. Over the course of the year, McKee went through 20 pairs of running shoes over some 9,500 miles.
Good week for Hawaiians, who once again lead the national life-expectancy rankings, according to a new study. The average Hawaiian can expect to live 80.7 years – 8.8 years longer than the average person in Mississippi, which ranked last.
Close encounters of the green kind: A green comet will return to our neighborhood for its first visit since Neanderthal times—and likely won’t come back for millions of years. It could be visible to the naked eye this week in the Northern Hemisphere, though binoculars will certainly help.
Weekly Focus – Think About It
“There is no cure for birth and death save to enjoy the interval.”
—George Santayana, philosopher
The vicious cycle of inflation.
Last week, we learned that pay increases at central banks in many parts of the world won’t keep pace with inflation. As a result, their employees may not be able to maintain the standards of living they had before inflation began rising. For example, at the United States Federal Reserve (Fed) the maximum pay increase was 5.1% for 2022. That’s significantly below inflation which averaged 8% last year, reported Jana Randow and Enda Curran of Bloomberg.
It’s a similar story elsewhere in the world. Inflation in the Eurozone averaged 10.6% in 2022, yet the average salary increase at the European Central Bank (ECB) and Bank of France was 4.0%. Germany’s Bundesbank offered a 1.8% raise. In the United Kingdom, where inflation was 9.1% on average last year the Bank of England offered a 4.5% annual pay increase.
Central banks have a reason for not raising pay enough to cover price increases. It’s called the wage-price spiral. The Richmond Federal Reserve explained it like this:
“In a wage-price spiral, inflation is fed by a vicious cycle where, as the cost of living rises, workers demand higher wages to pay their bills, leading firms to increase prices even further to cover labor costs.”
Since central banks are trying to reduce inflation, they want to avoid a wage-price spiral. Consequently, giving employees raises that don’t keep pace with inflation means that central banks are practicing what they preach.
Understandably, central bank employees are not happy about it. In January, a spokesperson for the ECB’s trade union told Bloomberg’s Alexander Weber, “‘With inflation in Germany and the euro area likely around 8.5% this year, it means a substantial loss in purchasing power.’”
Last week, data suggested that central banks’ efforts to push inflation lower are working. The Bureau of Economic Analysis reported the Personal Consumption Expenditures Index, which is one of the Fed’s preferred measures for inflation, dropped from 5.5% in November 2022 to 5.0% in December. The core PCE index, which excludes food and energy prices, fell from 4.7% year-over-year to 4.4% over the same period.
Investors were enthusiastic about the progress on inflation and major U.S. stock indices finished the week higher. The yield on the one-year U.S. Treasury ended the week at 4.68%.
|Data as of 1/27/23||1-Week||YTD||1-Year||3-Year||5-Year||10-Year|
|Standard & Poor’s 500 (Domestic Stocks)||2.5%||6.0%||-5.9%||7.9%||7.0%||10.5%|
|Dow Jones Global ex-U.S.||1.4||8.6||-6.8||1.0||-1.2||2.1|
|10-year Treasury Note (Yield Only)||3.5||NA||1.8||1.6||2.7||2.0|
|Gold (per ounce)||-0.1||6.1||6.4||6.8||7.6||1.5|
|Bloomberg Commodity Index||-0.5||-1.1||5.1||13.6||4.8||-2.3|
Oh, To Be 18 Forever. You’re likely to live a lot longer than your great grandparents did. In 1900, average life expectancy at birth in the U.S. was about 47 years. It rose to 68 by 1950 and, in 2021, average life expectancy was about 76 years, reported Harvard Health.
Science is working to extend life expectancy further by looking for ways to reduce biological aging. Dr. Morgan Levine develops tools to measure biological aging, reported Zoë Corbyn of The Guardian.
“Most people’s biological age will be within plus or minus five years of their chronological age, but you can have outliers of up to 10 or more years. The wonderful thing, compared with chronological age, is that biological age is modifiable. We don’t yet know exactly how to modify it to the greatest extent, but the clock can be made to tick slower, or even possibly go backwards, in response to our behaviors (though it can also speed up),” reported Levine.
Bryan Johnson, a 45-year-old software entrepreneur, has his sights set on achieving a biological age of 18, reported Ashlee Vance of Bloomberg Businessweek. To that end, Johnson has enlisted a team of 30 doctors who are “committed to help reverse the aging process in every one of Johnson’s organs…” The endeavor is expected to cost Johnson about $2 million this year.
Regaining lost youth is a full-time job, according to the doctor who leads the team. In addition to following a specific diet, exercise, and sleep plan, Johnson, “endures dozens of medical procedures, some quite extreme and painful, then measures their results with additional blood tests, MRIs, ultrasounds and colonoscopies.” His medical team reports that, so far, he has reduced his biological age by at least five years.
We all have goals for the future. No matter what you want to accomplish, it’s important to have a financial plan that will support your progress. If you would like to talk about your plans for the future, get in touch.
John Klevens, CFP®
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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.