Reminders (2017.04)

Some big deadlines approaching!  In an effort to lighten up these quarterly reminder emails, I have decided to include the funniest event I witnessed in the past three months.   Sadly, I’m finding that these stories are usually at my expense. I was picking up Lillian at day care last week and I thought I was having a good day thus far.  She was outside and there is a small gate separating the big kids from the toddlers.  A football was thrown over the barrier on accident and I went to pick it up and throw it back.   It was of course a weak throw and you would think that the 8 or 10 year old kid I was returning it to would make fun of me for that.  Instead he caught the ball and looked at me for a second.  Then he mockingly said ‘nice hair’, laughed, and ran back to his friends.   The closest items due in the list below are: 1)  April 18, 2017 – Federal 2016 income tax payment deadline, regardless if filing for an extension.   2)  April 18, 2017 – Federal 2016 income tax filing deadline for individuals if not filing for an extension.   3)  April 18, 2017 – the estimated payment deadline for Q1 2017 income.   4)  April 18, 2017 – traditional and Roth IRA contribution and correction deadline for 2016   5)  April 18, 2017 – HSA contribution deadline for 2016.   6)  April 18, 2017 – 401(k) excess deferral correction deadline for 2016.   7)  May 31, 2017 – In most Texas counties, you must protest your property taxes...

2016 – Q3 Revew and Election Reaction

Thank you for your interest in our Q3 Review.  Please be on the lookout for the hard copy of my firm update coming in January.  There will be two big pieces of news within that update involving some new opportunities in 2017.   What follows is an overview of the third quarter of 2016 and a requisite review of the events happening since.  The unpredictable results of this election cycle have had quite an effect on the markets.  At the highest level, domestic equities have taken off since November 8, while nearly every other asset class (foreign equities and all types of bonds) have been hurt.   I’ll get into a bit more detail of these events first before moving on to a discussion of Q3 and the expectations for remainder of Q4. Election Reaction I read many articles on “What Trump Means for Our Nation’s Economy” or “How the Election Will Impact the Market”.  Most of these predictions were premature, and many were just flat out wrong.  The rush to get these articles out whether right or wrong to get clicks actually mirrors the overreactions of the market.  These first three weeks since November 8 are a predicable reaction to an unpredictable occurrence.  Any time a surprise happens in investing, or in life for that matter, our first impulse is to react to an extreme.   A successful investor remains reasoned and constructs a portfolio to get him where he or she needs to go, without taking unnecessary risks. The market has viewed President-elect Trump with great hope for our domestic businesses. Domestic large cap equities in total were up...

Reminders (2016.11)

In an effort to lighten up these quarterly reminder emails, I have decided to include the funniest thing that happened to me in the past three months: A few months ago I was waiting in line to check into a hotel in San Antonio and there was a woman in front of me who was nearly finished checking in.  The man behind the desk gave her a cookie and some waters and the woman said, “Oh perfect, this will be a nice evening as I sit down to watch the Bachelorette and eat this cookie.”  The man behind the desk said, “You’re welcome”, and the woman left.  I walked up to start the check-in process.  At the end the guy asked if I wanted a cookie.  I joked “No, just the Bachelorette for me thank you.”  Without hesitation the man quipped, “Yes I figured you for a no-cookie, Bachelorette kind of girl.”  I stared at him, then frowned, put my head down and retreated to my room. The closest items due in the list below are: 1)  December 31, 2016 – this is the spending deadline for your Flexible Spending Account (FSA) unless your employer allows the optional grace period which extends the deadline to March 31, 2017.  Please check with your employer to see if the option exists. 2)  December 31, 2016 – the deadline to convert your Traditional IRA, SEP IRA, and SIMPLE IRA funds to Roth status.  This is the deadline for the ‘Backdoor Roth’ strategy.  Please be careful if converting a portion of your total Traditional IRA, SEP IRA, and SIMPLE IRA funds, as you will have...

2016 – Q1 Review

You don’t have to say it, I know you missed your quarterly update!  Better late than never – here is my admittedly belated Q1 review.  The story of these first 3 months?  Bonds, bonds, and more bonds.  And to be more specific, foreign bonds.  Stocks were down big to begin the year then rebounded quite nicely to end the quarter relatively flat.  Domestic bonds performed a better domestic stocks as the market corrected from an overestimated rise in rates.  The market usually overestimates the steepness and timing of the rise in interest rates, and this time was no different.  This initially hurts bonds, but as markets come back to reality, bond returns improve.  This happened as the market prepared for the Fed’s first rate increase in December 2015.  The market overreacted and bond prices suffered leading up to the rate hike more than they should have.  Now the market has come back to reality and wow!  Bonds have been the best performing assets year to date.  Foreign bonds fared even better as bond investors looked abroad for even better returns.  Bonds continue to be a valuable part of your diversified portfolio even when rates are at historic lows.   Domestic Equities     As discussed in the intro, there was nothing to write home about domestic stocks in the first quarter.  Dropping nearly 11.0% over the first 40 days, blue chips then rallied to end the quarter up 1.2%.  Mid-size and smaller companies performed worse than their larger brothers.  The unemployment figures are now hovering around 5.0%, not improving but still at a relatively healthy figure (1).   Home prices...

Reminders (2016.04)

In an effort to lighten up these quarterly reminder emails, I have decided to include the funniest thing that happened to me in the past three months. Back in February, my parents, sister, and I were sitting outside at their house and talking.  My dad brought up how much better their backyard was than mine.  When Christina and I moved into our house, the backyard was basically just grass, and I have been planting trees and trying to get it built up for the past two years.   Unfortunately, probably 1/3 to 1/2 of the stuff I have planted has died.   The rest of the trees remaining vary in height from 4 – 12 feet tall.  My dad said, “Don’t worry Matt, your backyard will grow and be nice one day, but too bad you probably won’t live to see it.”  My sister quipped, “Neither will his trees!”  Then they all made a family trip to Germany together and left me here to write this reminder email.   The closest items due in the list below are: 1)  Individual income tax filings are due (without extension) by April 18, 2016.  Why not April 15 this year?  Emancipation Day (celebrating the day Lincoln signed the Compensated Emancipation Act in 1862, freeing over 3,000 slaves in the District of Columbia) is usually celebrated on the 16th.   The 16th happens to fall on a Saturday this year, so they pushed up the federal holiday to Friday, which in turn pushed the income tax due date to Monday. Please note that even if you extend your filing date, your actual income taxes are still...