Stock market investors are nervous, there’s fears that rising rates will hurt bonds, and consumer sentiment is at all-time lows. The tariffs haven’t caused as much harm as initially projected, but they haven’t helped either, and this war still isn’t over. It’s time to focus on what matters with stocks and shift your bond portfolio without abandoning bonds altogether. This week’s reading list explains, as well as provides some Social Security advice for solo agers and a Florida real estate update for those looking to purchase a second home. It wraps up with a little known tax-break for founders and early employees, plus my latest book recommendation and Boston Corner.
This Week’s Takeaways:
- Strong corporate earnings matter more to investors these days than higher oil prices and a potential economic slowdown.
- Social Security claiming strategies for solo agers are different for those who were never married compared to those who are widowed or divorced as the first group may benefit from waiting and has an easier decision to make while the second will need to analyze more claiming scenarios.
- The worst case fears from higher tariffs haven’t materialized, but neither have manufacturing gains. Those will take time and companies will need to see policy continuity before investing in U.S. based manufacturing.
- The Florida real estate correction is showing signs of easing, especially in the Panhandle and parts of Northern Florida. Prices in the Southwest are still 15% off the peak.
- Owning short-term bonds is a way to address concerns with the long-term direction of U.S. interest rates and makes more sense than abandoning bonds altogether if predictions about a prolonged bond bear come true.
- Section 1202 allows eligible shareholders in certain small C corporations to exclude up to $10 million, or potentially much more, in capital gains from federal income tax when they sell their stock
- Plus, my latest book recommendation and this week’s Boston Corner.
Quick Thoughts: Are markets complacent? by Franklin Templeton
Investors continue to ask if the market is ignoring too many risks, which is another way of asking are we getting ready for a sharp downturn we’re not prepared for? So far, strong corporate earnings driven by increased productivity are carrying the day and more than offsetting concerns about an economic slowdown driven by the Iran war and higher oil prices.
Social Security Tips for Solo Agers by AARP
Claiming options and strategies differ for people who are divorced or widowed or who never married. Financial planners say solo agers should get an estimate of their prospective monthly payment well before retiring. For lifelong singles, delaying Social Security to get the biggest possible payment is especially important, while if you are divorced or widowed you need to analyze more scenarios since you can claim off someone else’s primary benefit.
How Trump’s Tariffs Plus Iran War May Help US Manufacturing by Trumponomics Podcast from Bloomberg
It’s been a year into President Trump’s tariff plan. Growth hasn’t collapsed, inflation hasn’t spiked, and lots of revenue has been generated. At the same time, we will need more time with these policies to see if they will lead to a manufacturing revival. The initial investment via the tariff policy has been made, but it’ll take longer and companies will need to see policy continuity if they are to achieve their manufacturing aims.
The intensity of Florida’s housing market correction is easing across many pockets of the state by ResiClub
If you’re looking to buy a second home in Florida, the market correction there is showing signs of easing, particularly in the Panhandle and Northern Florida. Southwest Florida still has the most homes that are down 15% from their prior peak.
A Bond Bear Market Is Brewing. 5 Ways to Make It Work in Your Favor. by Barron’s
Some are predicting that interest rates will continue to rise in the U.S. for a variety of reasons centered around higher deficits, ongoing inflation, and foreign creditors having less to invest in U.S. bonds. We’ve heard the deficit concerns for a long-time and the bond market hasn’t reflected those concerns yet. If you are worried, the solution isn’t to abandon bonds but to own short-term ones and reinvest the proceeds when they mature in higher-yielding bonds.
Qualified Small Business Stock: The Tax Break Tech Founders and Early Employees Need to Know by Savant Wealth
If you’re a founder or early employee at a startup, there’s a tax provision that could result in significant federal tax savings, and many people in tech have never heard of it. It’s called qualified small business stock, or QSBS, and it’s found in Section 1202 of the Internal Revenue Code. Section 1202 allows eligible shareholders in certain small C corporations to exclude up to $10 million, or potentially much more, in capital gains from federal income tax when they sell their stock. For tech professionals who join early-stage companies and later experience a successful exit, the tax savings can be enormous for some taxpayers.
Book Recommendation
2024: How Trump Retook the White House and the Democrats Lost America by Josh Dawsey, Tyler Pager, and Isaac Arnsdorf
In 2024, award-winning reporters Josh Dawsey, Tyler Pager, and Isaac Arnsdorf bring us the definitive, inside story of the most high-stakes and volatile presidential election in modern U.S. history
Boston Corner
‘Distressing number’ of young people leaving Greater Boston, survey shows by NBC Boston
