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Tax Reform: Process, Policy and Personalities

In late September, the White House and Republican congressional leaders published their guiding principles for reforming the U.S. tax code. This “Unified Framework” provides general direction but is silent on many details. The debate over how to re-size and re-divide the national tax pie has begun.

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Charitable Giving Made Easy with Donor-Advised Funds

Americans have a history of charitable giving, it’s a part of the fabric of our culture.  Many public institutions such as schools, hospitals, museums, and parks owe their existence to charitable donors.  Charitable giving keeps climbing.  According to The Giving Institute, Americans gave $373B to charities in 2015.  And it goes up almost every year.  See Figure 1.

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Happy Birthday Economic Expansion

As June came to a close, the current economic recovery and expansion turned eight years old. That is the third-longest expansion on record since the end of WWII. That’s according to data compiled by the National Bureau of Economic Research (NBER), which marked the end of the Great Recession in June 2009. The NBER is the arbiter of recessions and expansions for the U.S. economy. It bases its calls on data that includes employment, sales, income, and industrial production.

Birthdays are a time for celebration. But when economic expansions start getting older most don’t want to party. Investors usually start fretting over how long it will last.

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Score One for the Investor!

The Fiduciary Rule, a new Department of Labor (DOL) regulation, became effective on June 9, 2017. This rule obligates financial advisors to place retirement plan clients' interests ahead of their own. The fate of this new consumer protection had been unclear due to hostility from various sources. Even so, the DOL determined that it lacked legal grounds to delay the effective date of the rule.

RSWA Supports a Fiduciary Standard

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International Economies are on the Mend

The recent economic backdrop in the U.S. has been positive and solid. In the media, U.S. markets and politics have been getting the lion’s share of the attention. But the rest of the world economies are slowly mending themselves and are on surer footing than they have been in a long while.

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An Independent Point of View

Fritz Meyer is well respected independent economist and market strategist. He recently spoke to RSWA clients and friends in Portland and Portsmouth. This article summarizes some of the highlights from his presentations. We want to share the most important highlights with clients and friends who were unable to hear him in person. In such politically turbulent times, we believe that it is critical to stay grounded in economic and market fundamentals. In this context, we especially value the independent point of view that Fritz provides.

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Trade Wars

What happens when a country declares war on imports, and vows to “make things" again and bring back manufacturing? It may sound like U.S. politicians today, but this happened in Argentina. It is a cautionary tale of what can go wrong when trade policy is restrictive.

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Why the Yield Curve is so Important

Economists study so-called leading economic indicators for evidence of coming recessions. One of the best predictors of U.S. recessions has been an “inverted yield curve”.  In fact, an inverted yield curve has preceded the last seven U.S. recessions.  

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Presidents, Politics and Financial Markets

History teaches us that it is wise to avoid basing our investment strategy on presidential politics. Take the example of a die-hard conservative, who exited the stock market at the beginning of the Obama presidency. They missed out on an 182% gain in stocks. Likewise, equity markets have performed well since the election of now President Trump to the surprise of many.

Why can’t we trust our political instincts when it comes to financial markets?

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You May Pay Less Tax in 2017

Like many politicians, President-elect Trump ran a campaign based on promises.  And politicians who win want to hit the ground running and enact campaign promises as soon as possible.  The first few months provide a newly elected official a honeymoon period to make changes.  The inauguration is quickly approaching on Friday, January 20th.  We are now left wondering and contemplating how those promises may turn into law and affect us in our lives, work and investments. 

Tax policy proposals are of particular interest.  Governments utilize taxes not only to pay for social programs and national defense but also to encourage and discourage behaviors.  So let’s highlight some tax changes that have been proposed and their possible effect.

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