Insights

Economic and Investment Outlook for 2018

2018 Outlook Summary

• Economic Growth: Real GDP growth should remain favorable around the world for most developed and emerging market economies. Monetary and/or fiscal stimulus around the world should benefit consumers, workers, and corporate earnings. There is small risk of a U.S. or global recession for at least the next 12-18 months. Higher U.S. inflation in 12-24 months could undermine the long-lived U.S. economic expansion.
• U.S. Equities: Despite stretched valuations in the U.S., a strong economy, still low interest rates, tax reform cost savings, and the likelihood of increased domestic infrastructure and capital spending should benefit U.S. stocks and real estate.
• Foreign Markets: Economic conditions in larger foreign developed and emerging market countries are expected to continue to improve on average, especially in Europe, Japan, and in some of the commodity-producing emerging market countries. Valuations in non-U.S. stock markets are modestly more attractive than in the U.S.  Therefore we continue to have a modest overweight to these markets—partly currency-hedged to lower risk.
• Fixed Income: U.S. interest rates are expected to rise if inflation accelerates. Therefore, our fixed income allocation is more heavily weighted to adjustable rate securities and bonds in higher yielding sectors and countries. Corporate default rates are expected to remain below average, thus a modest exposure to high yield and bank loans is still warranted despite lower yields.

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The New U.S. Tax Bill: Actions to Take Before Year-End

Within a few days, we expect the new U.S. tax law to pass with most provisions effective next year. Given the widespread loss of allowable deductions on Schedule A and the near doubling of the standard deduction next year, in many cases, it is best to accelerate deductions into this year. (more…)

The Pending New Tax Bill and Actions to Consider

Section I: Proposed Changes

While there remain differences between the House and Senate-approved bills, below are some of the biggest changes proposed by both bills that could affect you. (more…)

How to “Freeze” Your Credit

What is a security freeze (also called a “credit freeze” or just “freeze”) of your information at a credit bureau?  A security freeze requires that the bureau does not divulge your credit information to any one other than those required by law.  In effect, if you freeze your data at each of the credit bureaus,  new credit (e.g. loans and credit cards)  are highly unlikely to be established in your name because potential lenders cannot determine your credit quality when the bureaus will not release your information. (more…)

Introduction to 529 Plans

State-administered College Savings Plans (often called 529 plans) are attractive vehicles for accumulating savings to pay for post-secondary educational expenses. Any individual donor, regardless of income level, can fund an account for any individual beneficiary – while still retaining control over the account.  By funding a plan, the donor’s contribution is (in most cases) removed from his/her own estate.  The plan’s beneficiary can be changed to any of a wide array of relatives (of the beneficiary) as often as needed. (more…)