As we approach the one-year mark since the coronavirus pandemic (COVID-19) began, we want to reflect on the year that the market has had. Its been quite a wild ride, especially in the past week or so, with the 10-year treasury yield hitting its highest level in one year, reaching 1.619%, to date. We have also seen a great deal of volatility in technology stocks, as they are currently down relative to the Dow Jones Industrial Average.
As we continue to see volatility a year into the pandemic, we want to stress knowing your timeframes, understanding volatility along with time in the market versus timing the market.
Below we have attached a chart from JP Morgan illustrating the difference in return if you were to miss the best days in the market. This chart will help you see the true understanding of sticking to your long term plan. Check out the video below for Brad’s take on the market in detail, including tax implications, timing the market, and more. Let us know what you think and reach out to us with any questions at email@example.com.
Due to tremendous economic aid, interest rates, particularly the 10-year treasury yield, has skyrocketed back up towards where it was a year ago around 1.2%, prior to the coronavirus pandemic.
We have been following this rate quite closely on our instagram handle, @shermanwealth, as we recorded it last week hitting 1.6%. Of course this spike has created tremendous volatility in the housing market in terms of interest rates as well as the stock market in terms of how equities have been priced.
We will continue to follow the 10-year treasury yield closely for you all. Check out the video below for Brad’s take on these interest rates and the effects they are having countrywide. As always, if you have any questions for us, please reach out with questions at firstname.lastname@example.org or schedule a complimentary 30-minute consultation here.
Getting swept up in the crypto-currency craze? Thought so. Since the coronavirus pandemic took its toll on the world in March, bitcoin has rocketed towards the sky. Hovering at approximately $5,000 in March, bitcoin broke its record high at $50,000 this week as you can see in the chart below.
With the increase of interest in meme stocks and crypto-currency in recent months, we want to bring light a facet of these stocks that you may not be thinking about. With tax season beginning as discussed in our previous blog, you should take a second to look at the tax implications involved with bitcoin and meme stocks. If you are to get swept up in day trading on Robinhood or other platforms, you should know the difference between short and long term tax rates. It’s important to note that some of these alternative coins cannot convert to cash, which could cause some complications when it comes to your taxes. Most people are not aware that if you hold onto any asset for less than 365 days, it will be taxed as ordinary income, which can get quite expensive for some individuals, as you can see in the chart below.
No matter what asset class you are investing in, keep in mind that it’s either most tax efficient in a retirement account or to hold onto for more than a year. If you are day trading or thinking for the short term, be very aware of the tax implications and how that affects the overall return of said investment. If you do not plan on selling your investments or are thinking about selling, it is important to understand these tax implications as well. As always, make sure you understand the risks involved before investing and only risk what you can afford to lose. When listening to the media and the Dave Portnoy’s of the world, it’s easy to swept up in the hype; however, these influencers do not usually discuss the serious tax surprises that these investments can have. Sherman Wealth is charitably inclined, and if you are as well you might want to consider setting up a donor advised fund or donating your gains right to charity if you are sitting on gains before selling.
While it may be exhilarating and increasingly popular to get involved with meme and heavily shorted stocks, keep in mind the complications and volatility involved. At Sherman Wealth, we always encourage you to keep a diversified portfolio that will benefit your financial future and goes along with your individual risk tolerance and financial plan. If you have any questions about anything discussed in this blog or need help finding the right tax professional to help you with your tax return or discuss donating assets to charity, please reach out to us at email@example.com or schedule a 30-minute consultation here.
In our previous blog, we discussed the recent short squeeze events that occurred on Wall Street. In addition to the short stock names, the last thirteen months in the stock market have been a rollercoaster, with the coronavirus pandemic, the federal reserve, post inauguration record market highs, an influx in “TikTok” day traders, and a great deal of record earnings reports. Check out the wild ride the stock market took in the last 12 months.
Through all these various events, social media has played a large role. News sources, TikTok, the twitter world, and celebrities have blown up the media, sharing their opinions and beliefs. The Dave Portnoy’s of the world believe one thing, while Mark Cuban, Ja Rule, and TikTok are saying another, that’s what makes a “market”. Remember some of these same people told you to sell at the bottom in March when COVID-19 was hitting. With the strong influence and prevalence of social media, it’s hard to know what to believe and where to get your conflict-free advice from. Remember, these TikTok “experts” and celebrities are not financial advisors and do not have the full scope of your financial situation when they post their advice online.
We know it’s hard not to get swept up in the media and fads at the time, but we encourage you to drown out the noise and focus on the decisions that really matter. Focus on your long-term investment goals and strategies to make sure your financial future is secure. For those who are involved with short-term investments, remember to only risk what you are comfortable with losing and keep in mind tax implications. Everyone’s situation is quite different, and the media won’t always reflect your personal financial situation.
When the market is volatile and unexpected events may occur, however, we encourage our clients to try to ignore the investment biases that occur. At Sherman Wealth, we believe that all individuals should have access to capital markets, no matter their financial situation. We encourage our clients to diversify their portfolios, invest fearlessly, but successfully at the same time. We know this last year has been a wild ride and quite confusing for some, so we want to help you understand. If you have any questions or would like to discuss how we can help your current situation moving forward, please contact us at firstname.lastname@example.org or schedule a complimentary 30-minute consultation here.
As many of you probably already know, Wall Street was been flipped upside down this week. For those who don’t, what happened?
Well, this past week, we saw the most heavily shorted names on Wall Street sky rocket to start the year. Most notably, we saw monster moves in short squeeze stocks like GameStop, AMC, Express, Nokia and Blackberry. How did this happen? Will Wall Street Hedge Funds Recover? Will this Continue? Want more details on Reddit? Robinhood? Need help on what to do next?
Check out our most recent Youtube video to see Brad’s explanation of this wild roller coaster we are seeing in the stock market. As always, let us know if you have any questions or would like to have a more in-depth discussion surrounding these events. If so, please book a free 30-minute consultation on our site.
November was a big month for the stock market, signaling that Wall Street sees better things ahead for the economy in 2021. Between the coronavirus pandemic, the election, vaccine news, and where we were just nine months ago, it’s hard to believe that our stock market is breaking record highs these days. It will be interesting to see how the November rally holds as we move into December.
This month alone, The 30-stock average rose 11.8% in November, its biggest one-month gain since January 1987. Back then, the Dow jumped 13.8%. Just last week the Dow Jones Industrial Average traded and closed above 30,000 for the first time.
The Russell 2000 remained up nearly 19% for November, putting the small-cap gauge on track for its biggest monthly gain since its inception more than 40 years ago. It was far outpacing the large-cap benchmark S&P 500, which was up more than 10% and on track for its biggest monthly rise since April, while the tech-heavy Nasdaq Composite was up around 11.3%.
And while December is historically a strong month for equities, analysts state that the strength of those November gains suggests a note of caution would be in order. We will continue to monitor how the market plays out this December, but November’s strong rally proves how important it is to stick with your long-term plan. Here at Sherman Wealth, we always encourage you to drown out the noise and biases within the market and stick with your initial plan for the long-term. If you have any questions about your portfolio, please reach out to us at email@example.com or schedule a complimentary 30-minute consultation on our site.