China Trade Deal; Deficit Debate, Charitable Gifts, Cell Phone, Habits and (and More!)

Posted in , By David Robinson

While trade negotiations with China hog the headlines, there is more to explore, including an emerging national debate over the significance of the U.S. deficit. We also encourage our readers to plan any charitable giving earlier in the year in order to maximize potential tax benefits.

  • China Trade Deal Close? Numerous sources report that a trade agreement with China is close to done. The agreement will reduce tariffs imposed by both countries, enabling the U.S. to export more goods to China. Whether it will ultimately lead to meaningful structural reform on China’s part will take time to evaluate. The New York Times and Goldman Sachs provide detailed assessments. Meanwhile, the U.S. trade deficit has dramatically increased, and data mounts that the trade wars are hurting the U.S. economy.
  • Does the Deficit Matter? Washington (i.e., Congress and the Executive Branch) has essentially ignored the massive and growing U.S. deficit the last couple of years. Now some are arguing that the deficit may be less of a problem than previously thought. Read "How America Learned to Stop Worrying and Love Deficits and Debt" for a good primer on less conventional points of view. Fed Chair Jerome Powell isn’t buying “deficit denial” and levels a broadside attack on Modern Monetary Theory, which essentially says that deficits don’t matter that much.
  • Bunching Charitable Contributions: Schwab explains how to "bunch" charitable contributions in order to maximize itemized deductions in some tax years. Those subject to IRA Required Minimum Distributions should consider charitable giving from their IRAs, as we have advised before. Please understand that the old practice of deferring charitable gift planning until late in the year can be costly in terms of missed tax benefits.
  • Recession Forecasting: Fears of a recession in 2019 have receded significantly. Ray Dalio, the legendary hedge fund investor, feels more positive due to the Fed’s new found dovish stance. One economic survey gives high odds on a recession by 2021. Keep in mind that the statistical validity of economic forecasting takes a dive beyond a two year period.
  • Tethered to Your Cell Phone? Is it unthinkable to not have a smartphone these days? This fellow ditched his in an effort to reclaim his brain. There are options for those concerned that their smartphone is taking up too much mental shelf space. Still in development, a phone like the Light Phone 2, might interest those who want basic communication features but don’t want their phone to be an entertainment device.
  • Tiny Habits: A well-known quote, sometimes attributed to Aristotle and sometimes to Will Durant, claims that “We are what we repeatedly do. Excellence, then, is not an act, but a habit.” BJ Fogg, a Stanford professor, is the go-to thinker when it comes to habits. Fogg has designed a simple but effective online program called Tiny Habits to enable almost anyone to work on habit creation and change. It is deceptively powerful and free for now.
  • The Border: Don Winslow is the author of a fiction thriller trilogy about the war on drugs that concludes with The Border. The New York Times calls it "stunning". I agree.

Feel free to send us feedback on any topic or make a request or to forward the notes on to anyone who might be interested.

david-robinson

About the Author David Robinson

A wealth advisor with more than 25 years of experience in the financial field, Dave serves as Robinson Smith Wealth Advisors’ Co-Chief Investment Officer and is a Co-Managing Member of the firm. As a Certified Financial Planner® and non-practicing attorney, he provides clients with deep expertise in areas including investment management and retirement planning.
Disclaimer and Disclosures: Past performance is no guarantee of future results. The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. Our opinions are subject to change without notice as market and economic conditions shift.