BOARD CERTIFICATION EXAM STUDY GUIDES Lower Extremity Trauma
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Posted on January 14, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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The December CPI report showed 59% of its components “are now in deflation,” Fundstrat’s Tom Lee said in a Friday note. That’s good news for the stock market, as a drop in inflation will help ease financial conditions. “This is setting up 2023 to be the opposite of 2022, where inflation expectations fall faster than EPS risk,” Lee said.
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Stocks Higher as Q4 Earnings Season Begins U.S. equities ended the day and week higher, as the markets reacted to a host of results from the banking sector to kick off Q4 earnings season. Bank of America, Wells Fargo, and Dow member JPMorgan Chase all bested estimates, but each posted significant increases in provisions for loan losses, while Citigroup fell short of forecasts.
Meanwhile, Dow component UnitedHealth Group beat forecasts and reaffirmed its guidance. News on the economic front was mixed, as a read on import prices surprisingly increased, detracting some from yesterday’s tamer read on consumer prices, while consumer sentiment rose far more than what was projected.
Treasury yields were higher, and the U.S. dollar dipped, while crude oil and gold prices traded to the upside.
Asian and European stocks finished mostly higher, as investors digested inflation reports from the U.S. and abroad.
Posted on January 13, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Madison, Wisconsin-based Exact Sciences has become the top holding of Cathie Wood-led Ark Invest’s flagship exchange-traded fund. Ark Innovation ETF (NYSE: ARKK) now holds just under 10 million shares of Exact Sciences with a market value of $600.06 million. The stock currently accounts for 9.37% of the ETF. Exact Sciences has unseated Zoom Video Communications, Inc. (NASDAQ: ZM) as ARKK’s top holding, with the latter now having a weighting of 9.30%. Tesla, Inc. (NASDAQ: TSLA) and Roku, Inc. (NASDAQ: ROKU) are ARKK’s third and fourth-biggest holdings, respectively, with weightings of 6.78% and 6.72%. She just added Coinbase, too!
U.S. equities finished higher in the wake of a consumer prices report that showed inflation cooled last month. However, the gains were tempered, as the core rate, which strips out food and energy costs, rose on a monthly basis.
Treasury yields were noticeably lower, along with the U.S. dollar, while crude oil prices rose, and gold rallied to extend a recent run. Employment figures were also in focus, with jobless claims dipping slightly and coming in better than expected.
News on the equity front surrounded some ancillary corporate results ahead of the start to Q4 earnings season tomorrow, as American Airlines boosted its Q4 guidance, but KB Home missed quarterly expectations.
Asian stocks finished mostly higher, and markets in Europe continued its strong start to 2023 with the U.S. inflation data in focus.
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NEWS FLASH: The Securities and Exchange Commission (SEC) announced it just charged Genesis GlobalCapital and Gemini Trust Company “for the unregistered offer and sale of securities to retail investors through the Gemini Earn crypto asset lending program.”
Posted on January 12, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Coach: Dr. David Edward Marcinko MBA
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PHYSICIANS AND ADVISORS
TIPS TO PREPARE FOR A VIDEO INTERVIEW
Practice with someone to become comfortable with the process.
Background/Staging:
• Pay attention to the background, what will be seen around and behind you. Get rid of clutter – it affects “your presentation.” Make sure there is nothing in the background you don’t want anyone to see including personal pictures, etc.
• Conduct the test in the same location you plan to conduct the video interview. • Adjust lighting to highlight your face. Do not let light wash out your facial features.
• Have back-up equipment nearby (extra laptop, phones, cables). Clothing
• Dress in professional, conservative, non-fussy clothing as though you were going to be with the committee in person. Wear a jacket.
• Wear a solid/bold color. Stay away from dark colors.
• Stay away from prints (e.g. herringbone) which, depending upon the design, lighting and camera pixels, can make your outfit “vibrate” on screen.
• Dress knowing that the committee will see you “closer up” than you will see them. Eye Contact/Body Language/Clear Communications
• Be sure to look at the camera not at the image of the committee on the screen; otherwise you do not appear to be “looking them in the eye” or will appear nervous.
• It is hard to read committee body language without typical in-person conversation cues, so watch the time and limit each answer to 3-4 minutes. Be attuned to a timer.
• Be attentive to your body language — leaning back in your chair is a no-no; lean forward to convey interest in the position and the committee. Don’t rock back and forth.
• Place support things out of camera range (glass of water, a timer, notes, notepad, pen, list of committee members) so your eyes go to the side and not up/down to these items.
• Don’t be afraid to ask to have questions repeated, either because the question was long and complex or because of audio problems. Jot notes on complex questions.
• Microphones magnify noises and can be distracting to the committee. Avoid ruffling papers and jangling jewelry. In the same vein, speak up clearly and enunciate your words.
• Place a “do not disturb/do not enter” sign on the door of your space. Turn off running programs (like your email) to eliminate beeps when new emails arrive.
• Silence all other technology EXCEPT if there should be technical issues, turn your phone back on to receive a call from your Greenwood/Asher consultant for troubleshooting.
• Ask family and colleagues to be quiet during the interview. If a family member or colleague is your resident IT expert, have that person close-at-hand but out-of-sight during the call.
• Be prepared to switch to a landline or cell speaker phone for the audio portion since audio with Skype/Zoom is not always great. If you do use this option, mute your computer microphone to eliminate conflicting noise.
Posted on January 12, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
NASDAQ Winning Streak
By Staff Reporters
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Carta Inc., a financial software company valued at $7.4 billion in August 2021, told employees on Wednesday it was cutting about 10% of the workforce. The job cuts, earlier reported by TechCrunch, are more evidence of the chill that has set in for even the best-funded tech startups. Carta raised $500 million in equity last year, bringing its total fundraising haul to more than $1 billion. Carta makes software to manage equity stakes in private companies, and has been backed by firms including Andreessen Horowitz, Lightspeed Venture Partners and Silver Lake. Prominent venture capitalist Marc Andreessen sits on the company’s board.
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U.S. equities finished higher to add to gains seen this year, with the NASDAQ on a four-day winning streak. However, caution was prevalent, as the markets awaited tomorrow’s December consumer price inflation report, and as Q4 earnings season will kick off on Friday with results from some prominent names from the Financials sector.
Treasury yields were lower and the U.S. dollar was little changed, while crude oil prices and gold were higher.
The economic calendar was relatively light today, but mortgage applications snapped a two-week losing streak. The airline industry was in focus after the FAA temporarily suspended all flights across the U.S. after a computer system failure, and Wells Fargo & Company announced that it will reduce the size of its mortgage lending business.
Asia finished mixed, and Europe saw widespread gains, as the global markets awaited this week’s inflation and earnings data out of the U.S.
Posted on January 11, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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A stock split occurs when a company breaks up its existing shares to create a higher number of lower-value shares. Stock splits have the effect of reducing the trading price of a stock, which makes it more liquid and more affordable for investors.
Companies that engage in stock splits often have a nominally high share price, which is typically achieved by executing and innovating on the operating front. Companies within this list have high potential for a stock split, given their nominally high stock price.
Last year, well over 200 companies announced and implemented stock splits. However, the type of split that excites investors most is a forward stock split. This is where the share price of a company is reduced and its outstanding share count increases by the same magnitude, Thus, there’s no change in market cap. Companies that enact forward stock splits are usually firing on all cylinders and out-innovating their competition.
As we go boldly forward into a new year, two stock-split stocks stand out as amazing values that can confidently be bought hand over fist. Alphabet and Amazon? Meanwhile, another widely owned stock-split stock looks to be worth avoiding in 2023. Tesla?
Posted on January 10, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Meta will pay real money to settle data privacy claims
The company has agreed to pay Facebook users in the US $725 million to resolve a lawsuit stemming from that time it gave political consulting firm Cambridge Analytica access to data from ~87 million users during the 2016 election.
The settlement, which the plaintiffs say may be the largest deal in a US privacy class action ever, still needs a judge’s approval before anyone gets cash, though.
Posted on January 9, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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By the numbers:
The unemployment rate dropped to 3.5%, the lowest it’s been in 50 years.
The US added 223,000 non-farm jobs in December. Though job growth slowed from the previous month, the labor market is still going strong.
In 2022, 4.5 million total jobs were added, compared with 6.7 million in 2021.
But the number that really got people talking was the lower-than-expected month over month wage growth, which slowed to .3% in December and 4.6% annually.
While that might not sound like welcome news to anyone who doesn’t live off a fortune inherited from their robber baron granddad, the folks at the Federal Reserve are most certainly pleased. Rapidly growing paychecks are seen as one of the key drivers of inflation, which the Fed has been trying to tame with aggressive interest rate hikes since early last year.
Economists have dubbed the jobs data a “Goldilocks” situation—not too hot, and not too cold. Since both the labor shortage and the strident wage growth it drove seem to be abating, the hope is that inflation will continue to decline. At the same time, a strong labor market (fingers crossed) might just allow the economy to avoid a recession caused by the interest rate increases.
Meanwhile, according to Sam Klebanov of MorningBrew, experts expect slowing wage growth to signal to the Fed that it’s time to chill with the aggressive rate hikes. And it’s not just speculation: Here at the Federal Reserve Bank of Atlanta, President Raphael Bostic said that he’d lean toward just a 25 basis point increase for the next interest rate hike (as opposed to 50 basis points) if the labor market continues to cool.
Finally,Wall Street Legend Burton Malkiel says returns over the next decade will likely be 5 to 6 percent.
Most of the thousands of buy and sell orders executed on a typical day on the NYSE are in 100 share or multi-100 share lots. These are called round lots. Some of the inactive stocks traded at post 30, the non-horseshoe shaped post in the northwest corner of the exchange, are traded in 70 share round lots due to their inactivity. So, while a round lot is normally 700 shares, there are cases where it could be 10 shares. Any trade for less than a round lot is known as an odd lot. The execution of odd lot orders is somewhat different than round lots and needs explanation.
When a stock broker receives an odd lot order from one of his doctor customers, the order is processed in the same manner as any other order. However, when it gets to the floor, the commission broker knows that this is an order that will not be part of the regular auction market. He takes the order to the specialist in that stock and leaves the order with the specialist. One of the clerks assisting the specialist records the order and waits for the next auction to occur in that particular stock. As soon as a round lot trade occurs in that particular stock as a result of an auction at the post, which may occur seconds later, minutes later, or maybe not until the next day, the clerk makes a record of the trade price.
Every odd lot order that has been received since the last round lot trade, whether an order to buy or sell, is then executed at the just noted round lot price, the price at which the next round lot traded after receipt of the customer’s odd lot order, plus or minus the specialist’s “cut “. Just like everything else he does, the specialist doesn’t work for nothing. Generally, he will add 1/8 of a point to the price per share of every odd lot buy order and reduce the proceeds of each odd lot sale order by 1/8 per share. This is the compensation he earns for the effort of breaking round lots into odd lots. Remember, odd lots are never auctioned but, there can be no odd lot trade unless a round lot trades after receipt of the odd lot order.
Posted on January 8, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Practical applications in financial services
Among practical applications provided by the Metaverse, its ability to create virtual environments for people to connect may severely impact the financial industry. The employment of VR and AR during COVID-19 and remote work conditions enabled greater collaboration in teleconferencing where professionals used annotating, chatting and screen-sharing features, allowing them to work efficiently while not in the same physical space.
VR and AR can also be used by financiers in individual capacities, particularly with data visualization, aiding them in analyzing financial risks, providing more precise services to customers. This raises the bar on their expectations, stimulating competition and innovation in the market.
Moreover, virtual environments can be used in consumer-oriented manners. The creation of digital shopping environments in the Metaverse acts as a hub for companies to reach a wider range of consumers without geographical constraints, allowing for greater exposure. Such virtual shopping hubs can employ digital payment means so that transactions take place entirely within the realm of the Metaverse.
Through digital means, financial advisors can provision for greater convenience, signifying a shift in the industry, and broadening the scope of the services clients can be provided with, such as AR being used to simulate different financial scenarios so that customers can visualize them with ease. With the progression of the Metaverse in finance and banking, the next developments could see the creation of fully-digital bank branches, diminishing or perhaps eliminating the need for physical ones. Such client centric developments can either build upon existing consumer experiences or create entirely new ones.
A main attractive feature of using VR or AR is the ability to superimpose a wider range of information digitally, which mobile devices or computer screens would not accommodate. Thereby, complementing existing mobile banking apparatus, such as apps that showcase customers’ account balances or direct them to the nearest bank branches using AR.
Some people are concerned about whether there is anything for banks to benefit from entering the metaverse. There are a host of new opportunities for banks in the metaverse. So, tet’s look at the most important ones
Firstly, they are working with the idea that being the early adopters by entering the field before others will give them an advantage over latecomers in the future. That is why they are investing in potentially strategic locations in the metaverse.
Secondly, some digital banks imagine that the metaverse has the potential for the banking industry to reinvent transactions for a three-dimensional (3D) world. That is why they are experimenting with it. The primary objective has been to learn new ways of meeting the needs of their customers who are crazy about trending technologies. With metaverse, it could be possible to enable customers to pay bills, check balances, and transfer money using VR or AR channels.
Thirdly, as the younger generations are becoming more attracted to crypto-friendly banks, NFT marketplaces, and other blockchain-based platforms, digital banks are looking for unconventional ways to improve theirbrand image. So, a smart marketing strategy is to create the presence of their brands in the metaverse and win the hearts of their customers through their show of modernity.
Fourthly, the metaverse can offer new ways for banks to engage with their customers. A customer could stay at home and interact with an avatar concerning any business they have with their bank. This technology can be used to deliver personalized financial advice, product recommendations, and even financial planning.
Finally, entering the metaverse is a way for digital banks to poolhighly talented employees. It makes them attractive to professionals such as data scientists, developers, and other IT experts who have been working in this developing field and are looking for job opportunities that can bring out the best in them. For example, the metaverse has the potential for use in on-boarding remote workers and training employees on safety and other aspects of their jobs using simulated environments.
Posted on January 7, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Stocks recorded their first significant rally of 2023 on Friday, as the release of jobs data triggered a relief rally that saw the major U.S. equity averages all rise more than 2%. This marked the biggest one-day percentage gain for the S&P 500 since Nov. 30. The Dow (DJI) ended +2.1%, the S&P 500 (SP500) closed +2.3%, and the NASDAQ Composite (COMP.IND) finished +2.6%.
It seems investors digested December’s key non-farm payroll report and its possible implications on future Fed moves. While job growth remained robust and the unemployment rate fell, indicating a tight job market, wage increases continued to slow. The report came in the wake of other employment data and the Fed’s meeting minutes this week that appeared to solidify expectations of the Fed remaining aggressive in its rate hike campaign.
Meanwhile, domestic services sector activity tumbled into contraction territory for the first time since May 2020 and factory orders fell more than forecasts.
Treasury yields dropped following the data, and the U.S. dollar fell, while crude oil prices nudged higher, and gold gained ground. News on the equity front was in short supply, but Tesla was back in the news after it said it will slash prices in China for a second time, and Bed Bath & Beyond is reportedly near filing for bankruptcy, while Costco reported net sales that were well received.
Stocks in Asia were mixed, and European stocks were noticeably higher, as the markets digested regional economic data and the U.S labor report.
Posted on January 6, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Here are eight things to keep in mind as you prepare to file your 2022 taxes
1. Income tax brackets shifted somewhat
There are still seven tax rates, but the income ranges (tax brackets) for each rate shifted slightly to account for inflation. For 2022, the following rates and income ranges apply:
Taxable income brackets
Tax rate
Single filers
Married couples filing jointly (and qualifying widows or widowers)
10%
$0 to $10,275
$0 to $20,550
12%
$10,276 to $41,775
$20,551 to $83,550
22%
$41,776 to $89,075
$83,551 to $178,150
24%
$89,076 to $170,050
$178,151 to $340,100
32%
$170,051 to $215,950
$340,101 to $431,900
35%
$215,951 to $539,900
$431,901 to $647,850
37%
$539,901 or more
$647,851 or more
2. The standard deduction increased somewhat
After an inflation adjustment, the 2022 standard deduction increases to $12,950 for single filers and married couples filing separately and to $19,400 for single heads of household, who are generally unmarried with one or more dependents. For married couples filing jointly, the standard deduction rises to $25,900.
3. Itemized deductions remain essentially the same
For most filers, taking the higher standard deduction is more practical and saves the hassle of keeping track of receipts. But if you have enough tax-deductible expenses, you might benefit from itemizing.
State and local taxes: The deduction for state and local income taxes, property taxes, and real estate taxes is capped at $10,000.
Mortgage interest deduction: The mortgage interest deduction is limited to $750,000 of indebtedness. But people who had $1,000,000 of home mortgage debt before December 16, 2017 will still be able to deduct the interest on that loan.
Medical expenses: Only medical expenses that exceed 7.5% of adjusted gross income (AGI) can be deducted in 2022.
Charitable donations: The deductions for charitable donations are not as generous as they were in 2021. In 2022, the annual income tax deduction limits for gifts to public charities1 are 30% of AGI for contributions of non-cash assets—if held for more than one year—and 60% of AGI for contributions of cash.
Miscellaneous deductions: No miscellaneous itemized deductions are allowed.
4. IRA contribution limits remain the same and 401(k) limits are slightly higher
The traditional IRA and Roth contribution limits in 2022 remain the same as the prior year. Individuals can contribute up to $6,000 to an IRA, and those age 50 and older also qualify to make an additional $1,000 catch-up contribution. If you’re able to max out your IRA, consider doing so—you may qualify to deduct some or all of your contribution.
However, the 2022 contribution limits for 401(k) accounts have increased to $20,500. If you’re age 50 or older, you qualify to make an additional $6,500 catch-up contribution for this tax year as well.
5. You can save a bit more in your health savings account (HSA)
For 2022, the maximum you can contribute to an HSA is $3,650 for an individual (up $50 from 2021) and $7,300 for a family (up $100). People age 55 and older can contribute an extra $1,000 catch-up contribution.
To be eligible for an HSA, you must be enrolled in a high-deductible health plan (which usually has lower premiums as well). Learn more about the benefits of an HSA.
6. The Child Tax Credit is lower after a one-year bump
Tax credits, which reduce the tax you owe dollar for dollar, are normally better than deductions, which reduce how much of your income is subject to tax.
In 2021, the American Rescue Plan Act (ARPA) temporarily enlarged the Child Tax Credit. But in 2022, the credit returns to $2,000 per child age sixteen or younger. The credit is also subject to a phase-out starting at $400,000 for joint filers and $200,000 for single filers. For other qualified dependents, you can claim a $500 credit.
7. The alternative minimum tax (AMT) exemption is higher
Until the AMT exemption enacted by the Tax Cuts and Jobs Act expires in 2025, the AMT will continue to affect mostly households with incomes over $500,000. For 2022, the AMT exemptions are $75,900 for single filers and $118,100 for married taxpayers filing jointly. The phase-out thresholds are $1,079,800 for married taxpayers filing a joint return and $539,900 for all other taxpayers. (Once your income for the AMT hits the phase-out threshold, your AMT exemption begins to phase out at 25 cents for every dollar over the threshold.)
8. The estate tax exemption is even higher
The estate and gift tax exemption, which is indexed to inflation, rises to $12.06 million for 2022. But the now-higher exemption is set to expire at the end of 2025, meaning it could be essentially cut in half at that time if Congress doesn’t act.
The annual gift exclusion, which allows you to give money to your loved ones each year without incurring any tax liability or using up any of your lifetime estate and gift tax exemption, increases to $16,000 per recipient (up $1,000 from 2021).
Don’t get caught
Finally, if you’re age 72 or older, make sure you’ve taken your required minimum distribution (RMD) from your retirement accounts before the end of the year or else you face a 50% penalty on any undistributed funds (unless it’s your first RMD, in which case you can wait until April 1, 2023).
Silvergate Capital Corporation reported a sharp drop in fourth-quarter crypto-related deposits on Thursday as investors spooked by the collapse of FTX pulled out more than $8 billion in deposits, sending shares down more than 42%. The crypto-focused bank also said it would cut its workforce by 40%, or about 200 employees, as it tries to rein in costs amid a deepening industry downturn. Its stock was last trading at $12.55.
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U.S. stocks were lower as the markets continued to speculate as to how long the Fed will keep its monetary policy tight. Yesterday’s minutes from the Fed’s December meeting suggested that the Central Bank will remain aggressive. Jobs data pointed to a tight labor market, as the ADP Employment Change Report came in higher than expected, and jobless claims were lower than anticipated, which seemed to be solidifying expectations of further rate hikes. Services sector data also came out, with output being revised higher but continuing to depict contraction.
Treasury yields were mixed, and the U.S. dollar rallied following the data, while crude oil prices rose, and gold dropped.
Equity news offered varying results, as Exxon Mobil offered mixed Q4 guidance, T-Mobile US’ phone customers topped forecasts, Constellation Brands missed earnings estimates and lowered guidance, and Conagra Brands topped quarterly estimates.
Finally, Asian stocks finished mostly higher, and European stocks were mixed following a three-day winning streak, as the markets digested the Fed’s minutes and amid optimism regarding China’s reopening.
Remember, in 2023, do not trigger the US estate and gift tax. Last year’s inflation, the highest in decades, means married couples can now hand their heirs almost $26 million tax-free, $1.7 million more than in 2022 and $2.4 million more than in 2021.
The hike in the lifetime estate-and-gift tax exemption — adjusted for price growth annually by the Internal Revenue Service — is the largest since 2018, when the amount was doubled by Republican-passed legislation signed by former President Donald Trump the prior year. As a result, the individual exemption, which is easily shared between spouses, has rocketed to $12.9 million from $5 million in 2011.
But, richer Americans may be running out of time to pass on this much wealth. The exemption is slated to be cut in half in three years, when provisions of Trump’s tax law are set to expire. While even $26 million is a drop in the bucket for the ultra-rich, the exemption’s size shows why generational wealth transfers — estimated by research firm Cerulli to total almost $73 trillion in the US through 2045 — go largely untouched by the government.
Plus, financial advisors may use loopholes and leverage to multiply the amount of tax-free money available to heirs.
Posted on January 5, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Ark Invest, the firm led by prominent stock picker Cathie Wood, bought up millions worth of Tesla during the electric vehicle maker’s worst daily dip in more than two years as Wood continues to double down on what initially brought her riches.
U.S. equities finished modestly higher, paring some of the losses that have weighed on the markets to start of 2023.
Treasury yields continued to drop, and the U.S. dollar gave back some of yesterday’s rally, while crude oil prices plunged to extend a recent decline and gold traded to the upside.
Equity news remained sparse, with Dow member Salesforce announcing plans to cut its workforce by about 10%, while Alibaba rallied on signs China may be easing its clampdown on the tech sector.
The economic calendar offered some lackluster data points, as manufacturing activity remained in contraction territory for the second-straight month, and mortgage applications fell for a second-consecutive week as interest rates jumped, while job openings came in above forecasts. Elsewhere, the Fed released the minutes from its December monetary policy meeting, indicating its commitment to continue to raise rates until more progress is made in curbing inflation.
Asia finished mixed, and Europe added to yesterday’s solid start to 2023.
Posted on January 5, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
Limitless possibilities – Compassionate care
By Staff Reporters
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DEFINITION: GE HealthCare is a subsidiary of American multinational conglomerate General Electric incorporated in New York and headquartered in Chicago, Illinois. As of 2017, it is a manufacturer and distributor of diagnostic imaging agents and radio-pharmaceuticals for imaging modalities used in medical imaging procedures
“Central bank money” refers to money that is a liability of the central bank. In the United States, there are currently two types of central bank money: physical currency issued by the Federal Reserve and digital balances held by commercial banks at the Federal Reserve.
While Americans have long held money predominantly in digital form—for example in bank accounts, payment apps or through online transactions—a CBDC would differ from existing digital money available to the general public because a CBDC would be a liability of the Federal Reserve, not of a commercial bank.
Posted on January 3, 2023 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Stocks are coming off their worst year since 2008 due to investors misjudging how high inflation would soar and the lengths central banks would go to bring it back down.
For example, Global equities lost a record $18 trillion in 2022 amid nearly 300 interest rate hikes from central banks around the world.
But not all stocks were clobbered equally by Jerome Powell and Co.: High-growth tech companies that got a boost from an era of low interest rates got rocked the most in what some are calling the sequel to the bursting of the dot-com bubble in 2000–01. The tech-heavy NASDAQ posted four straight negative quarters for the first time since that crash.
Others survived unscathed. The energy sector soared 59% last year thanks to a boost from surging oil prices. Exxon Mobil finished the year as the eighth-most valuable public company in the US, despite starting 2022 outside the top 25.
The Future?
No one really knows, but analysts generally think stocks will go sideways, weighed down by more rate hikes and a potential recession. The average Bloomberg projection for the S&P at the end of 2023 is 4,009 points (the index closed 2022 at 3,839.50).
Another down year would be extremely rare: The S&P has dropped for two consecutive years in just four instances since 1928.
Posted on December 28, 2022 by Dr. David Edward Marcinko MBA MEd CMP™
By SMART ASSET
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If shrinking your tax liability is high on your list of priorities, a few states stand out. The winners in the list below either have no state income tax, no tax on retirement income, or a substantial discount on the taxes levied on retirement income. But that’s just the start.
While several additional states have no state income tax, the states that made our list also have favorable sales, property, inheritance, and estate taxes.
Alaska
Florida
Georgia
Mississippi
Nevada
South Dakota
Wyoming
If those seven locations aren’t ideal, consider the next tier of tax-friendly states. Tax benefits aren’t quite as high as those above, but they do stand out in one specific category: no taxes on social security income.
That’s not to say they don’t make up for it in other areas, however. Washington State, for example, has no state income tax, but does have a 6.5% state sales tax. Still, it’s always beneficial to avoid income tax when possible.
The bargain-hunting value style is looking for shares that are under priced in relation to the company’s future potential. A value investor will invest in a company in the expectation that its shares will increase in value over time. Value investing is based essentially on quantitative criteria; asset values, cash flow, and discounted future earnings. The key properties of value shares are low Price/Earnings, Price/Sales ratios, and normally higher dividend yields.
So, on observing a company’s earnings growth, a value manager will decide whether to buy shares based on the company’s consistency or recovery prospects. The key research questions are: 1) Does the current P/E ratio warrant an investment in a slow growth company or, 2) Is the company a higher growth candidate that has dropped in price due to a temporary problem. If this is the case, will the company’s earnings growth recover, and if so, when? The key to value investing is to find bargain shares (priced low historically or for temporary and/or irrational reasons), avoiding shares that are merely cheap (priced low because the company is failing).
The buying opportunity is identified when a company undergoing some immediate problems is perceived to have good chances of recovery in the medium to long term. If there is a loss in market confidence in the company, the share price may fall, and the value investor can step in. Once the share price has achieved a suitable value, reflecting the predicted turnaround in company performance, the shareholding is sold, realizing a capital gain. A potential risk in value investing is that the company may not turn around, in which case the share price may stay static or fall.
Tax-loss harvesting is a strategy to lower investment taxes that involves selling securities at a loss to offset capital gains. BofA said investors in the past week also pulled out $10 billion from bonds.
Amazon.com Inc. has erased more shareholder wealth than any other publicly traded company in 2022. In total, investors in Amazon have lost $804.6 billion this year. The stock is down 48% in 2022.
Apple Inc. and Microsoft Corp. have also suffered larger market-cap declines than Tesla, by virtue of their sheer size.
Posted on December 24, 2022 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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You don’t have to sign all the forms to be treated
Part of being a patient is signing stacks of forms, most of which you barely read much less understood. This is a mistake, Charlotte O’Leary says. Look for any “blank check” clauses on intake forms—it’s the part that reads, “I will be responsible for all costs not covered by insurance.”
Instead, Charlotte Hilton Andersen, MS recommends crossing it out and writing, “I will be responsible for all costs that are medically necessary, that are not the responsibility of my insurer, are competitively priced, and that I am made aware of prior to treatment if they are not part of standard operating procedures.”
Posted on December 23, 2022 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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U.S. stocks plunged as December’s sell-off intensified after a fleeting rally in the previous session. The S&P 500 (^GSPC) closed down 1.4% after dropping as much as 2.8% in afternoon trading, while the Dow Jones Industrial Average (^DJI) shed 350 points, or 1%. The technology-heavy NASDAQ Composite (^IXIC) tumbled 2.2%.
And, the markets continued to contend with the ultimate impacts of aggressive monetary policy tightening globally. Earnings reports disappointed, as Micron Technology and CarMax both missed earnings estimates and lowered their guidance. A host of economic reports were released, as jobless claims came in below estimates, which seems to play into the theme of a tight labor market that has dampened investor sentiment.
Additionally, Q3 GDP and Personal Consumption were revised higher, the Leading Economic Index declined more than anticipated, and manufacturing activity in the Kansas City region fell further into contraction territory.
Treasury yields were mixed, and the U.S. dollar ticked higher, while crude oil and gold prices lost ground.
Asian stocks diverged and markets in Europe ended lower as the international markets continued to digest recent central bank actions.
Moreover, Micron Technology will reduce its workforce by 10% next year and take other cost-cutting measures as the computer memory chip maker struggles to deal with too much supply amid a drop in demand. Micron CEO Sanjay Mehrotra announced the restructuring during during a quarterly conference call with investors, noting that prices for computer memory products had “deteriorated significantly” in recent months, Boise television station KTVB reported.
Posted on December 22, 2022 by Dr. David Edward Marcinko MBA MEd CMP™
By Vitaliy Katsenelson CFA
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The stock market bubble that I’ve been writing about for the last few years is finally bursting. For the first time in almost a decade, it feels like common sense has stopped being a painful headwind and is turning into a tailwind.
Paying any price for the stocks of companies that were growing revenues but had no hint of profitability and were diluting shareholders by giving away 10% of shares in stock-based compensation every year is an approach that has stopped working.
Investors are discovering that the price you pay matters, eventually. Many of these companies are down 70-80% from their highs and are still expensive.
Rising interest rates are making value investing great again!
Posted on December 20, 2022 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Know Your Customer (KYC) guidelines in financial services require that professionals make an effort to verify the identity, suitability, and risks involved with maintaining a business relationship. The procedures fit within the broader scope of a bank’s anti-money laundering (AML) policy.
KYC processes are also employed by companies of all sizes for the purpose of ensuring their proposed customers, agents, consultants, or distributors are anti-bribery compliant, and are actually who they claim to be. Banks, insurers, export creditors, and other financial institutions are increasingly demanding that customers provide detailed due diligence information.
Initially, these regulations were imposed only on the financial institutions but now the non-financial industry, fintech, virtual assets dealers, and even non-profit organizations are liable to oblige.
Posted on December 19, 2022 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Here’s what Covid vaccines have to do with auto insurance
A new study of 11 million adults in Canada revealed that people who weren’t vaccinated against Covid were 72% more likely to get into car accidents where at least one person had to go to the hospital.
Now, that doesn’t mean your jab protects against car accidents, of course, but it does suggest that folks who reject public health recommendations might also reject road rules. The difference was striking enough that the researchers said doctors should discuss road safety with unvaccinated patients, and that car insurance companies might want to factor it into their rates.
Posted on December 18, 2022 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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FTX’s New Chief Executive Officer?
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John J. Ray III (born January 1959) is an American attorney and insolvency professional. He specializes in recovering funds from failed corporations. He was appointed CEO of cryptocurrency exchangeFTX in the aftermath of its November 2022 collapse.
He previously served as chairman of Enron Creditors Recovery Corp., a company tasked with recovering creditor funds from Enron in the wake of its accounting scandal and subsequent collapse. He also worked on the bankruptcies of Nortel, Residential Capital, and Overseas Shipholding.
Posted on December 18, 2022 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Here are some of the companies the Yahoo Finance team suggests you watch?
Kraft Heinz (KHC) may be on the road to recovery. It announced stronger-than-expected earnings, with CEO Miguel Patricio saying that the company is making “good progress” on identifying the problems with its past performance. But he admitted they’re still delivering results “below our potential.”
Altria’s (MO) third-quarter earnings beat Wall Street estimates but the company revealed it is writing down a third of its investment in Juul. The company wrote-down $4.5 billion of its $12.8 billion investment in the vaping company. Juul is facing lawsuits and potential new regulations after an outbreak of vaping related illnesses.
Ford (F) and the UAW have reached an agreement to hold-off a strike. The new contract includes $6 billion worth of investment in U.S. facilities and adding 8,500 jobs to Ford’s workforce. This deal is expected to follow the same guidelines as the GM contract and include lump-sum payments and wage increases.
Former Secretary of State and Exxon Mobile (XOM) CEO Rex Tillerson is insisting that Exxon Mobile did not lie about the company’s plan for the financial risks of climate change. Tillerson testified for three and a half hours in the securities fraud trial in New York, denying that the company’s plans were meant to dupe investors. Exxon Mobile earnings are due out tomorrow before the opening bell.
Finally, it could be a very Merry X-mass for Hershey (HSY). A recent survey found Reese’s Peanut Butter Cups, made by Hershey, are the No. 1 favorite candy for Halloween. Snickers, made by privately-owned Mars, were a distant second. The National Retail Federation says Americans will spend $2.6 billion on Halloween candy this year.
Posted on December 18, 2022 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Last year, all hospitals were required to list their prices for elective services on an annual basis. Whether you have insurance or plan to pay cash – find and compare prices.
Posted on December 17, 2022 by Dr. David Edward Marcinko MBA MEd CMP™
MORGAN STANLEY
BANK OF AMERICA
By Staff Reporters
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[The Scream is a composition created by Norwegian artist Edvard Munch in 1893]
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What [another] a week? U.S. equities declined, posting a second-straight weekly loss, as recession worries have ratcheted higher in the wake of a host of global central bank actions earlier this week. The Fed’s mid-week 50 basis point rate increase was followed by similar actions from the European Central Bank, the Bank of England, and Swiss National Bank. The moves came amid an evident slowdown in global economic growth, with data released today showing most manufacturing and services PMIs domestically and across the globe continue to see a contraction in activity, adding fuel to the recessionary fears.
RECESSION?
With U.S. stocks down more than 20% so far this year, investors are looking for some good news – and it may be coming from a prominent Wall Street analyst who says the current bear market could come to an end sometime around St. Patrick’s Day, 2023.
In an interview with Bloomberg Television, Mike Wilson, the Equity Strategist and Chief Investment Officer for Morgan Stanley predicted that the bear market in U.S. stocks could come to a conclusion early in 2023. Investors are taking note because Wilson, who’s typically skeptical about the market, is listed as No. 1 on Institutional Investor’s recent ranking of portfolio strategists.
WHEN?
“We think ultimately the bear market will be over probably sometime in the first quarter,” Wilson said on the broadcast.
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Mutual Fund managers have taken their cash positions to the highest level in 21 years, according to the long-running monthly survey of portfolio managers. Relative to the history of the survey, investors are 2.6 standard deviations overweight cash and 3 standard deviations underweight equities.
A net 72% expect a weaker economy in the next 12 months, and 91% say earnings are unlikely to rise 10% of more in the next year. A growing percentage are expecting a policy pivot: 28% expect lower short-term rates in the next 12 months, up from 14% in September.
The survey “screams macro capitulation, investor capitulation, and crucially start of policy capitulation,” said Bank of America strategists led by Michael Hartnett. The S&P 500 has dropped 23% this year, and S&P’s U.S. government bond index has declined by 12%.
Posted on December 17, 2022 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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U.S. equities declined, posting a second-straight weekly loss, as recession worries have ratcheted higher in the wake of a host of global central bank actions earlier this week. The Fed’s mid-week 50 basis point rate increase was followed by similar actions from the European Central Bank, the Bank of England, and Swiss National Bank. The moves came amid an evident slowdown in global economic growth, with data released today showing most manufacturing and services PMIs domestically and across the globe continue to see a contraction in activity, adding fuel to the recessionary fears.
Treasury yields diverged, and the U.S. dollar was little changed, while crude oil prices fell, and gold traded to the upside. The equity front was relatively quiet, but Adobe’s quarterly results beat the Street on the top line, and the company reaffirmed its guidance, while shares of Darden Restaurants fell despite posting better-than-expected earnings and an upbeat outlook.
Asian stocks were mixed and European stocks saw widespread losses, as the global markets continued to digest the flood of monetary policy decisions around the world.
Posted on December 16, 2022 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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DEFINITION: Pump and dump (P&D) is a form of securities fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements, in order to sell the cheaply purchased stock at a higher price. Once the operators of the scheme “dump” (sell) their overvalued shares, the price falls and investors lose their money. This is most common with small-cap cryptocurrencies and very small corporations/companies, i.e. “microcaps“.
And so, Federal prosecutors and the SEC have accused seven popular Twitter and Discord users of wielding social media to manipulate stock prices—pumping the shares and then selling off mass quantities for profit once they rose.
An additional defendant, whose Twitter handle was @DipDeity, was charged with aiding and abetting the alleged fraud for hosting a podcast that featured and promoted the seven influencers as skilled traders to follow.
Each influencer charged had well over 100,000 followers and, according to the SEC, the group earned about $100 million total in the scheme.
Yesterday the SEC proposed the biggest update to the stock trading rules book since 2005. The four proposed rules may become the magnum opus of Gary Gensler, who took over as SEC chair after the meme stock mayhem of 2021. The rules aim to get retail traders better prices by targeting a method of executing trades called payment for order flow (PFOF). PFOF works like this:
Brokers like Robinhood send trades to wholesalers like Citadel, which profit off the difference between the individual trader’s proposed price and the price they actually make the trade for.
Wholesalers pay brokers a small fee for the privilege of making the trade, and *juicy detail alert* those “small fees” make up a huge chunk of the brokers’ revenue.
Gensler has long argued that PFOF limits competition and encourages brokers to gamify risky trading behavior—like vetting your life savings on GameStop stock. The practice is banned in the UK and Canada.
But the SEC has definitely put it in the “no longer sparks joy” pile
Under the most significant rule proposed yesterday, the “order competition” rule, wholesalers would have to send most retail investors’ trades to an auction where dealers compete to fulfill them for the best price.
The wholesaler only gets to fulfill any leftover trades that no one has bid on. Some on Wall Street argue this will be the most common scenario so the rule won’t have its intended effect, but Gensler thinks auctions could save individual traders up to $1.5 billion per year.
Posted on December 14, 2022 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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When Rite Aid dropped roughly $2 billion in 2015 to buy its pharmacy benefit management (PBM) subsidiary now known as Elixir, the company had framed the investment as a strategic move to compete in the healthcare marketplace among rivals like CVS and Walgreens.
The deal quickly helped make Rite Aid $4.1 billion in its newly formed pharmacy services segment—including Elixir and other pharmacy services, according to the company—bolstering its financial standing the next fiscal year. Maybe it would no longer be the ugly duckling next to the cooler, sleeker swans.
It seemed to be working—for a while at least. But by 2018, analysts were recommending Rite Aid sell off Elixir to reduce the parent company’s debt. Still, Rite Aid stuck with Elixir in hopes of boosting its competitiveness in the retail pharmacy scene.
This year, Rite Aid President and CEO Heyward Donigan was still painting a rosy picture of Elixir, saying in earnings calls that the PBM was gaining more members and Elixir’s operating margins were improving.
But a month after its latest earnings call in September, Rite Aid was hit with a class-action lawsuit accusing the company of making “false and/or misleading statements” to investors about Elixir’s status between April and September of this year.
Posted on December 12, 2022 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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(Bloomberg) — Amgen Inc. has agreed to buy Horizon Therapeutics Plc at a valuation of about $26 billion in what would be its biggest-ever acquisition, according to a person familiar with the matter. The US biotechnology giant offered around $116.5 for each Horizon share, said the person, who asked not to be identified as the information is private. The offer price is at a around 20% premium to Horizon’s closing price of $97.29 on Friday.
Horizon rose as much as 15% to $111.70 in pre-market trading today while Amgen slipped 0.5%. But, the deal or announcement could be delayed and talks could still fall apart.
As of Friday’s close, Horizon shares had surged 24% since the company revealed on Nov. 29th that Amgen, Sanofi SA and a Johnson & Johnson unit were in preliminary talks about a possible acquisition. That pushed its market value to $22 billion, prompting Sanofi to back out Sunday, as J&J did earlier this month. Amgen has a market value of about $149 billion after rising by 24% this year.
Posted on December 12, 2022 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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In recent months, Japan’s SoftBank Group Corp. has pared its stakes in the Chinese e-commerce company Alibaba Group Holding Ltd. and the Indian mobile-payments company Paytm, in both cases following declines in their share prices. Berkshire Hathaway Inc., Warren Buffett’s company, has been gradually reducing its stake in BYD Co., a Chinese electric-vehicle maker that it has owned shares in since 2008.
And, Tencent Holdings Ltd., a tech giant that earlier amassed stakes in hundreds of tech firms, is divesting itself of billions of dollars in shares of listed companies. Meanwhile, Tencent‘s biggest shareholder, Prosus NV, is cutting its large stake in the Chinese social-media and gaming company.
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Finally, the value of new Venture Capital deals globally is down 42% in the first 11 months of this year compared to last, to $286 billion, according to research firm Preqin. That’s the deepest slump the researchers have recorded yet, surpassing the nadirs of the early 2000s and the 34% collapse after the 2008 financial crisis.
Posted on December 11, 2022 by Dr. David Edward Marcinko MBA MEd CMP™
THE RESULTS ARE IN
By Staff Reporters
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Investment portfolios owned by individual investors have lost a combined $350 billion this year, Bloomberg reports. The average retail trader’s portfolio is down 30% in 2022, compared to the S&P’s 17% loss, per Vanda Research. Some estimates put the damage as even worse than that: JPMorgan calculates that retail traders are down 38% this year.
As they’ve watched their portfolios crumble further than SBF’s credibility, these traders aren’t trading nearly as much as they did during peak Covid.
At the apex of the meme stock craze in Q1 2021, Charles Schwab was handling 8.4 million daily average trades. In Q3 of this year, it recorded 5.5 million.
Robinhood, both an enabler and the villain of the individual trader movement, shed 1.8 million users between Q2 and Q3 this year.
So what happened?
Individual investors piled into a specific set of stocks during the height of the pandemic, and those stocks in particular are getting rocked by shifting trends and the Fed’s rate hikes. Just consider that Tesla, by itself, accounts for ~10% of the average active retail trader’s portfolio. So as the stock plunged ~55% this year, it wiped out $78 billion in value for retail investors, per Vanda.
As for meme stocks?
Good luck trying to send a struggling company to the moon these days. GameStop is down nearly 41% this year, and after its dud of an earnings report this week one analyst wrote that “GameStop’s turnaround plan has proven fruitless so far,” specifically citing the poor performance of its NFT marketplace.
And so, with retail traders riding the bench during the market downturn, the companies that rely on them for revenue are having to switch up their tactics. This week, according to Neal Freyman of Morning Brew, Robinhood introduced retirement accounts (traditional or Roth IRAs) with a 1% match to lure back users. It may not be a flashy product, but as investors who got burned this year have realized, there are worse things than being boring.
Posted on December 10, 2022 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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DEFINITION
The wash-sale rule prohibits selling an investment for a loss and replacing it with the same or a “substantially identical” investment 30 days before or after the sale. If you do have a wash sale, the IRS will not allow you to write off the investment loss which could make your taxes for the year higher than you hoped.
Even if you sell at a loss from a brokerage account or IRA, it still might not want to permanently exit a portfolio position. It may want to get back into an investment now at a cheaper cost with room to re-grow.
BUT – Just wait a moment, according to the IRS “wash-sale” rule.
The IRS will not count a capital loss if, within 30 days before the sale or within 30 days afterwards, the taxpayer is also buying or acquiring a “substantially identical” investment. The rule applies to investments like stocks, bonds, mutual funds, exchange traded funds and options – but not cryptocurrency.
The basic trick is just keeping track of the days. Another skill is considering what counts as “substantially identical” for the fast-moving investor who sees a buying opportunity either 30 days before or after the day of sale.
An investor could sell a stock and buy an exchange traded fund or mutual fund that contains the stock and not run afoul of the rule, Going the other way, from a mutual fund or ETF containing a stock to a direct stock purchase, also will not trigger the rule, he noted.
EXAMPLE: Suppose an investor has several investment accounts — perhaps one is a long-term account and the other is more for short-term trades. The rule applies across the account. So if one sells and the other buys within 30 days before or after, the wash-sale rule will scrap the capital loss.
Buying and selling shares of two different funds tracking the same index within the 30-day period could also cause the wash sale rule to kick in. However, a move like selling a piece of an ETF tracking the S&P 500, and then soon buying an ETF tracking the Russell 1000 Index would be OK according to a tutorial from Charles Schwab SCHW, +3.70%. “That would preserve your tax break and keep you in the market with about the same asset allocation,” an explainer said.
But while someone’s eyeing a repurchase and letting the wash-sale window close one place, they may have a chance to start the tax strategy process in a different part of their portfolio. “There’s really tax loss harvesting opportunities across a number of different asset classes this year.”
Posted on December 10, 2022 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Generally, they are defined as the ratio of a change in output (ΔY) to a discretionary change in government spending or tax revenue (ΔG or ΔT) (Spilimbergo and others, 2009). Thus, the fiscal multiplier measures the effect of a $1 change in spending or a $1 change in tax revenue on the level of GDP.
“Physicians who don’t understand modern risk management, insurance, business, and asset protection principles are sitting ducks waiting to be taken advantage of by unscrupulous insurance agents and financial advisors; and even their own prospective employers or partners. This comprehensive volume from Dr. David Marcinko and his co-authors will go a long way toward educating physicians on these critical subjects that were never taught in medical school or residency training.” —Dr. James M. Dahle, MD, FACEP, Editor of The White Coat Investor, Salt Lake City, Utah, USA
“With time at a premium, and so much vital information packed into one well organized resource, this comprehensive textbook should be on the desk of everyone serving in the healthcare ecosystem. The time you spend reading this frank and compelling book will be richly rewarded.” —Dr. J. Wesley Boyd, MD, PhD, MA, Harvard Medical School, Boston, Massachusetts, USA
Posted on December 2, 2022 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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If your student loans were forgiven, you may still owe state taxes
Though widespread federal student loan relief remains on hold, you may have received student loan forgiveness through the Public Service Loan Forgiveness program or another similar endeavor. if you had any balances forgiven in 2022, you won’t owe federal taxes on the canceled amount. That’s because of a provision tucked into the 2021 American Rescue Plan, preventing forgiven post-secondary education loans from federal taxation through 2025.
However, there are a handful of states where forgiven loan balances may be taxed. Indiana, Minnesota, Mississippi and North Carolina have confirmed they will tax any student loan debt relief on your 2022 taxes. A few other states may as well, though the details are still being hammered out.
And, if you live in one of the states taxing forgiven student loans, you may be on the hook for county taxes on your debt relief, as well.
The expanded charitable cash contribution benefits that were offered in 2020 and 2021 have ended. The temporary suspension of the 60% AGI limit in 2020 and 2021 is now back, limiting the amount you can claim in charitable contributions.
Posted on November 29, 2022 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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More than 300 people are still dying each day on average from covid-19, most of them 65 or older, according to data from the Centers for Disease Control and Prevention. While that’s much lower than the 2,000 daily toll at the peak of the delta wave, it is still roughly two to three times the rate at which people die of the flu — renewing debate about what is an “acceptable loss.”
And, U.S. equities started off the new week with solid losses, as protests in China over its zero-tolerance COVID policy kept investors on edge. Adding to the mix, BlockFi filed for bankruptcy amid the continued fallout within the cryptocurrency markets. Equity news was in short supply on this Cyber Monday, with reports suggesting Black Friday weekend activity was solid despite the highly inflationary environment, while gaming stocks were in focus following a tentative agreement to renew casino licenses in Macau.
The economic calendar was light today, with the lone report of note showing manufacturing activity in the Dallas region unexpectedly improved but remained solidly in contraction territory.
Treasury yields were mixed, while the U.S. dollar rallied, crude oil prices were higher, and gold traded to the downside.
Markets in Asia and Europe finished lower amid the global uneasiness toward China.
Posted on November 27, 2022 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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On ground and On line shoppers didn’t let concerns about higher prices or a recession keep them from a record-setting this Black Friday.
Consumers spent a record $9.29 billion while online shopping yesterday, Black Friday, according to Adobe Analytics which tracks more than 85% of the top 100 U.S. onlineretailers. That’s an increase of 2.8% over a year ago – surpassing the previous online Black Friday sales high mark of $9.03 billion in 2023.
Nearly half (48%) of online sales were made over smartphones, up from 55% last year, according to the company’s 2023 Holiday Shopping Trends & Insights Report.
Posted on November 26, 2022 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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What’s shrinking in size, overworked and woefully underpaid?
Did you know that only half of U.S. adults live in a household with an annual income of $52,000 to $156,000, the range it takes to be considered middle income, according to the Pew Research Center. That share is significantly lower than it was in 1971, when 61% of the nation’s adults qualified as middle income.
In 2022 — an era of historic inflation and a manic economy in which jobs are plentiful but wages are stagnant — more Americans are living paycheck to paycheck. And it’s affecting more than just their income.
“People judge whether or not they’re achieving the American dream by comparing their income and their lifestyle, or what their income can buy, to what they see around them,” says Isabel Sawhill, a senior fellow at the Brookings Institution.
On paper, middle-class household income has increased considerably in the last 50 years. Measured in 2020 dollars, the median salary of the U.S. workforce is 50% higher now ($90,131) than it was in 1971 ($59,934), primarily thanks to women’s increased participation in the workforce, says Sawhill, who’s a co-author of the Brookings report “A New Contract with the Middle Class.”
Those gains, however, pale in comparison to the 69% growth enjoyed by the wealthiest households. Elisabeth Jacobs, a deputy director at the research nonprofit Urban Institute, said in a 2021 Brookings panel that if middle incomes had grown at the same pace as the top 20% of earners over the past 50 years, a solidly middle-class family would average around $139,000 annually (post-tax).
I enjoy writing about taxes as much as I enjoy going to the dentist. But I feel what I am about to say is important. We – including yours truly – have been mindlessly conditioned to do tax selling at the end of every year to reduce our tax bills. On the surface it makes sense. There are realized gains – why don’t we create some tax losses to offset them?
Here is the problem. With a few exceptions, which I’ll address at the end, tax-loss selling makes no logical sense. Let me give you an example.
Let’s say there is a stock, XYZ. We bought it for $50; we think it is worth $100. Fourteen months later we got lucky and it declined to $25. Assuming our estimate of its fair value hasn’t changed, we get to buy $1 of XYZ now for 25 cents instead of 50 cents.
But as of this moment we also have a $25 paper loss. The tax-loss selling thinking goes like this: Sell it today, realize the $25 loss, and then buy it in 31 days. (This is tax law; if we buy it back sooner the tax loss will be disqualified.) This $25 loss offsets the gains we took for the year. Everybody but Uncle Sam is happy.
Since I am writing about this and I’ve mentioned above I’d rather be having a root canal, you already suspect that my retort to the above thinking is a great big NO!
In the first place, we are taking the risk that XYZ’s price may go up during our 31-day wait. We really have no idea and rarely have insights as to what stocks will do in the short term. Maybe we’ll get lucky again and the price will fall further. But we’re selling something that is down, so risk in the long run is tilted against us. Also, other investors are doing tax selling at the same time we are, which puts additional pressure on the stock.
Secondly – and this is the most important point – all we are doing is pushing our taxes from this year to future years. Let’s say that six months from now the stock goes up to $100. We sell it, and… now we originate a $75, not a $50, gain. Our cost basis was reduced by the sale and consequent purchase to $25 from $50. This is what tax loss selling is – shifting the tax burden from this year to next year. Unless you have an insight into what capital gains taxes are going to be in the future, all you are doing is shifting your current tax burden into the future.
Thirdly, in our first example we owned the stock for 14 months and thus took a long-term capital loss. We sold it, waited 31 days, and bought it back. Let’s say the market comes back to its senses and the price goes up to $100 three months after we buy it back. If we sell it now, that $75 gain is a short-term gain. Short-term gains are taxed at your ordinary income tax bracket, which for most clients is higher than their capital gain tax rate. You may argue that we should wait nine months till this gain goes from short-term to long-term. We can do that, but there are costs: First, we don’t know where the stock price will be in nine months. And second, there is an opportunity cost – we cannot sell a fully priced $1 to buy another $1 that is on fire sale.
Final point. Suppose we bought a stock, the price of which has declined in concert with a decrease of its fair value; in other words, the loss is not temporary but permanent. In this case, yes, we should sell the stock and realize the loss.
We are focused on the long-term compounding of your wealth. Thus our strategy has a relatively low portfolio turnover. However, we always keep tax considerations in mind when making investment decisions, and try to generate long-term gains (which are more tax efficient) than short term gains.
We understand that each client has their unique tax circumstances. For instance, your income may decline in future years and thus your tax rate, too. Or higher capital gains may put you in a different income bracket and thus disqualify you from some government healthcare program.
We are here to serve you, and we’ll do as much or as little tax-loss selling as you instruct us to do. We just want you to be aware that with few exceptions tax-loss selling does more harm than good.
Posted on November 19, 2022 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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DEFINITION: Passive income is a type of unearned income that is acquired automatically with minimal labor to earn or maintain. It is often combined with another source of income. In the United States, the IRS divides income into three categories: active income, passive income, and portfolio income.
For those physicians fully invested in non-dividend-paying stocks, bear markets are a difficult time. However, they’re an opportunity for those with cash or income-producing assets.
WY? Bear markets can accelerate any investors’ capacity to generate passive income because they can turn dividend income and idle cash into bigger income streams. That can enable investors to make more money in the future, putting them even closer to reaching their financial goals.
Posted on November 18, 2022 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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DEFINITION: The Pew Research Center defines the middle class as households that earn between two-thirds and double the median U.S. household income, which was $65,000 in 2021, according to the U.S. Census Bureau. 21 Using Pew’s yardstick, middle income is made up of people who make between $43,350 and $130,000.
The American middle class is facing the biggest hit to its wealth in a generation going into the midterm election, although it is also entering the vote richer than it has ever been thanks to a decade of cheap money and the wealth boom it fed.
That’s the conclusion of a Bloomberg News examination that paired new wealth data with an exclusive Harris Poll of attitudes of the 100 million adults who sit at the core of the US economy and its politics ahead of the election.
Posted on November 18, 2022 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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U.S. equities ended the day lower in a cautious trading session as the markets reacted to a host of economic and corporate data. Investors also weighed comments from Fed officials who signaled that the rate-hiking campaign to slow the pace of inflation is not considered sufficiently restrictive.
On the economic front, housing starts and building permits fell, jobless claims moderated slightly more than expected, while manufacturing activity in Philadelphia tumbled.
Earnings reports again offered mixed results, as Cisco Systems beat on both the top and bottom lines, but NVIDIA fell well short of estimates amid the continued problems plaguing the chip industry, and Macy’s topped forecasts amid strength in its luxury units.
Treasury yields were higher, and the U.S. dollar rose, while crude oil prices fell, and gold lost ground.
European stocks were lower for the most part, as geopolitical tensions dampened investor sentiment, and as the U.K. announced its new budget plans. Markets in Asia finished mostly lower amid weakness in technology stocks.
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