Walsh & Associates welcomed two new hires to our Sarasota, Florida office in February: Client Relationship Manager Jordan Rehkow (left) and Administrative Assistant Erin Cooper (right).
Jordan is a Criminal Justice/Pre-Law graduate from the University of Central Missouri, where she was a student athlete playing golf for the Jennies. After graduating, she spent more than three years working as a Golf Pro before entering the field of finance in Missouri. She moved from Kansas City to Sarasota this year to be closer to her fiancé.
Originally from Buffalo, New York, Erin's family moved to Venice, Florida, when she was a child. But Erin is an honorary "native" of Florida considering she graduated from Venice High School, earned her Associate degree in Business from State College of Florida, and then committed over 30 years to a career in local government.
Please welcome both to the team. We're thrilled to have them!
While not as competitive as 2021, 2022 remains a home seller's market in many parts of the country. If you are on the fence about selling your primary residence, knowing the tax implications could help you decide.
A KEY FACTOR: HOW LONG HAVE YOU OWNED IT?
If you owned your home for at least two years and it was your primary residence for two years then the IRS allows a capital gains tax exemption on the first $250,000 of profit, or "gain," for single filers (or $500,000 if married filing jointly). Any gain above and beyond the exemption will be taxed at the long-term capital gains tax rate, which applies to assets held for more than a year. This rate is 15% for single filers with taxable income—including the sale—of $40,400 to $445,850 (or $80,800 to $501,600 if married filing jointly). The rate is 20% if your income exceeds these thresholds.
If you owned the home for more than one year but less than two, you won't get the exemption but will be taxed at the long-term capital gains rate.
If you owned the home for less than a year, any gain from the sale of your home is short-term and will be taxed as ordinary income. Those tax rates go as high as 37% for single taxpayers with income—including the sale—greater than $539,900 ($647,850 if married filing jointly).
Determine your gain by subtracting your basis (what you originally paid for the home plus any improvements you made) from the sale price.
Still not sure if the tax consequence is worth the sale? Give us a call and we can talk through it with you.
When the Bureau of Economic Analysis of the U.S. Department of Commerce released their first estimate of second quarter GDP on July 28, it showed that inflation-adjusted real GDP decreased by 0.9%. What does that mean? Well, since first quarter 2022 GDP had also decreased (by 1.6%), the news means the U.S. has had "two back-to-back quarters of negative GDP growth," which is the traditional layman's definition of a recession.
But are we truly in a recession? And if we are in a recession, what does that actually mean for investors and their portfolios?
The first question may not be answered until the alleged recession is in the rearview; the National Bureau of Economic Research—the official arbitrator of when recessions begin and end—usually doesn't make this call until a recession is well underway. Perhaps more important than whether we use the label "recession" or not is that the global economy is currently facing three major headwinds that are causing portfolios to suffer: slowing growth, stubbornly high inflation, and central bank tightening (a.k.a. the raising of interest rates). This combination of factors has caused a market pullback and negative GDP growth for the first half of the year.
The rise in inflation is really the key to understanding what is going on in the economy. Inflation has hollowed out consumer purchasing power, causing demand for goods and services to suffer. Core inflation (which excludes energy and food) has been running well above the Federal Reserve's (Fed) stated 2% long-term target for over a year now. The Fed is raising interest rates to slow demand in the hopes of finding the sweet spot of tightening financial conditions enough to bring down inflation without inducing a recession and massive job losses.
But there are two sides to our current inflation conundrum because we can't forget about the completely disrupted supply chains and lack of workers causing supply-driven inflation. How much of our current inflation is driven by increased demand versus supply chain issues? A recent study by the Federal Reserve Bank of San Francisco attempted to answer this question by analyzing last months' core inflation reading. According to the study, about 45% was due to supply-driven inflation, about 40% was demand-driven and about 15% of inflation was ambiguous.1 This suggests that if we can figure out our supply chain issues, inflation may moderate significantly without totally cratering demand, thus sending us into a recession.
The July employment picture showed that we may have avoided a recession for the near-term. The economy added nearly 528,000 jobs—double what was expected. Total employment and the unemployment rate have gotten back to their February 2020 pre-pandemic levels. Even though labor participation remains lower due to the aging of the population, if we continue to get these types of job numbers it is hard to see a deep recession on the horizon.
Many of us—the Walsh team included—found and mastered new hobbies and took on educational pursuits during the pandemic. Joe Walsh III and Michael Walsh earned their CERTIFIED FINANCIAL PLANNER™ certifications while Tom Walsh earned his Accredited Investment Fiduciary® (AIF)® designation. Additionally, Michael earned his Certified Private Wealth Advisor® (CPWA®) certification.
For the third year in a row, CEO Joseph Walsh Jr was ranked among the Forbes Best-In-State Wealth Advisors (2020-2022), a spotlight of more than 6,500 top advisors across the country chosen from almost 35,000 advisor nominations.
Meanwhile, Arminta McKelvey earned her Series 7 and Series 66 licenses and was promoted to the role of Associate Advisor, and new hire Jordan Rehkow earned her Series 7 license. Congrats to the team on their accomplishments!
Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the certification mark CERTIFIED FINANCIAL PLANNER™ in the United States, which it authorizes use of by individuals who successfully complete CFP Board's initial and ongoing certification requirements.
Forbes Best-in-State Wealth Advisors ranking was developed by SHOOK Research and is based on in-person, virtual, and telephone due diligence meetings to measure best practices; also considered are: client retention, industry experience, credentials, review of compliance records, firm nominations; and quantitative criteria, such as: assets under management and revenue generated for their firms. Investment performance is not a criterion because client objectives and risk tolerances vary, and advisors rarely have audited performance reports. SHOOK's research and rankings provide opinions intended to help investors choose the right financial advisor and are not indicative of future performance or representative of any one client's experience. Past performance is not an indication of future results. Neither Forbes nor SHOOK Research receive compensation in exchange for placement on the ranking.
Series 7 held through LPL Financial. Series 66 held through Walsh & Associates and LPL.
We recently read a U.S. News & World Report article recommending 10 alternatives for grocery items that have gone up in price. Their alternative for beef? Beans. For chicken? Eggplant. For bacon or breakfast sausage? Eggplant again, or perhaps tofu.
Paycheck-to-paycheck living is no joking matter, and many of us learned as young adults when pinching pennies to reach for store brands over name brands, choose pre-owned over new, trim unnecessary subscriptions and consider cashback cards or apps when making large purchases.
However, we find these sort of meat-swapping tips about as helpful as the now-cliché advice that Millennials could afford to buy a home if they would simply stop buying avocado toast and coffee. Although the intent might be to encourage healthy spending habits, the result is passing judgment on someone else's discretionary spending while giving flat-out bad advice.
Besides, assuming the breakfast combo costs $20 dollars and someone eats it twice a week, it could still take six years of skipping avocado toast to save up a mere 5% down payment for a house that costs $250,000, which (a) is so little that our Millennial would have to pay private mortgage insurance (PMI) until they've built up 20% equity in their home, and (b) in this market, that house may be hard to find!
Better inflation-busting tips include earning more money by asking for a raise, taking advantage of the competitive job market, or starting a side gig; investing when the market is low (especially for young workers who have time on their side); and reducing one's tax burden by utilizing tax-advantaged accounts and recognizing losses as appropriate.
But if you're a meat-eater who wants a breakfast burrito and aren't in the mood for tofu, we say spring for the bacon. After all, you're apparently saving a fortune by not getting the avocado toast.
Securities offered through LPL Financial, member FINRA/SIPC.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
Investing involves risk including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.
U.S. Treasuries may be considered "safe haven" investments but do carry some degree of risk including interest rate, credit, and market risk. They are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.
Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.
International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
The Bloomberg Barclays US Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities, asset-backed securities and collateralized mortgage-backed securities.
The Bloomberg Barclays US Corporate High Yield Index measures the USD-denominated, high yield, fixed-rate, corporate bond market. Securities are classified as high yield if the middle rating of Moody's, Fitch, and S&P is Ba1/BB+/BB+ or below, excluding emerging markets debt.
Gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a country's borders in a specific time period, though GDP is usually calculated on an annual basis. It includes all of private and public consumption, government outlays, investments, and exports less imports that occur within a defined territory.
The MSCI EAFE Index is a capitalization-weighted index that tracks the total return of common stocks in 21 developed-market countries within Europe, Australasia, and the Far East.
The MSCI Emerging Markets Index captures large and mid cap representation across 26 Emerging Markets (EM) countries. With 1,404 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country.
The Russell 2000 Index measures the performance of the small cap segment of the U.S. equity universe and is comprised of the smallest 2000 companies in the Russell 3000 Index, representing approximately 8% of the total market capitalization of that Index.
The Russell 1000 Index measures the performance of the 1000 largest companies in the Russell 3000 Index, which represents approximately 92% of the total market capitalization of the Russell 3000 Index.
The S&P 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
Asset allocation does not ensure a profit or protect against a loss.
2350 Fruitville Rd., Ste. 201
Sarasota, FL 34237
HOURS: M-F, 9:00-5:00 ET
444 E. Hillcrest Dr., Ste. 230
DeKalb, IL 60115
HOURS: M-F, 9:00-5:00 CT