Tax Refunds, Grit, China Trade Conflict (and More!)

Posted in , , , , By David Robinson

With both stocks and bonds doing well for now and the China trade negotiations seemingly making progress, we will begin with several non-investment or economic notes and then circle back to the markets and economy toward the end. Tax refunds are a hot topic for starters.

  • Taxpayers Surprised: The initial returns (pun intended) are in on the new tax law changes, and many taxpayers have been unpleasantly surprised with the average tax refund down 8.4%. What some of  these taxpayers may have overlooked is that they may have already benefited from lower withholding throughout 2018.
  • Rubbing SALT in the Wound: Of course, some taxpayers just won’t make out as well under the new rules. Higher income taxpayers, who live in high tax states, like Maine, may be hurt by the $10,000 deduction cap for the state and local taxes (so called “SALT”). Here's one explanation.
  • Tax Return Questions: This article provides a concise and well drafted summary of common return questions. You may still owe more tax, but at least you can dazzle your CPA and financial advisor with your questions and general tax expertise.
  • The Importance of Grit: It has become fashionable to talk about the importance of grit or perseverance. Is success only about talent? Apparently, determination and consistency play a major role. James Clear, a terrific writer in the field of habits and personal effectiveness, tackled this topic in a recent blog and provides a road map for increasing mental toughness. Clear posits that mental toughness is like a muscle that we build through daily habits, particularly those with a physical component.
  • Push-Ups Predict Heart Health: Apparently the number of push-ups you can do is a great predictor of the likelihood of experiencing heart disease. If can you do 40 or more, you have much less to worry about. But is the relationship of doing push-ups to heart health one of causation or correlation? Are people who do a lot of push-ups likely to be in better condition and eat better?
  • Art as an Investment? As most know, art can appreciate and be sold to realize its value although the market is much less liquid. But should it be viewed as part of an investment portfolio? We enjoyed and recommend this article on collecting fine art. Unless you are an expert in a certain market, our advice is to buy art you love and to never count on realizing appreciation. Or at least be prepared to be patient.
  • Credit Cards for Travelers: Travel is often a significant discretionary expense for our clients. If you do travel quite a bit, it is worth investing time in figuring how to get the best deals. This article on the best credit card for travelers caught our eye.
  • Fed Releases January Meeting Notes: Investors are trying to digest the just released minutes from the Fed’s January meeting. Stocks are up slightly, as we write this, but the Fed’s language notes the downside economic risks attributable to "the possibilities of a sharper-than-expected slowdown in global economic growth, particularly in China and Europe, a rapid waning of fiscal policy stimulus, or a further tightening of financial market conditions."
  • Auspicious Start to 2019: A strong January and February has historically been a good sign of positive returns for the entire year. Like everyone else, we are pleased with the excellent start year to date, but caution against complacency. We seem to live in such strange, volatile times although I guess everyone must feel that way about their era.

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.