Dropping The Ball For 2018

Happy New Year 2019! The New Year’s Eve tradition of “dropping the ball” to usher in the new year seems especially appropriate to close out 2018. The stock market had a tumultuous ride in 2018 and “dropped the ball” at year end! The year began with an uptrend in January, a pullback in February, and a steady climb into October. The final quarter was characterized by extreme volatility with wild daily swings up or down of 2%, 3% and even as much as 5% on the stock market indexes.

Several times during 2018, our portfolio management strategies hedged against a portion of the equity in larger accounts. The net effect helped to reduce the negative returns. In addition, we implemented tactical trading for tax loss harvesting in taxable accounts where appropriate. Both the fixed income and equity markets provided opportunity for tax loss harvesting.

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Here’s a look at of the extreme levels of volatility:

The stock market may continue its higher than normal levels of volatility in 2019. Our advice and guidance will help to mitigate the effects of stock market volatility. Our goal is to help avoid the common impulse to “panic” when bombarded by negative news on global trade issues, economy, politics, international relations…

From a financial planning perspective, April 2019 will be the first year of tax filing under the new 2018 tax changes. The Tax Cuts and Jobs Act (TCJA) of 2017 introduced new marginal tax brackets and higher standard deductions, and reduced or eliminated many of the common itemized tax deductions.

It will be important for you to compare the benefit of itemizing deductions versus using the new increased standard deductions. The new standard deductions are: $12k for single, $18k for head of household, and $24k for married filing jointly. Your finalized tax return for 2018 will provide a good baseline for our planning in 2019.

We look forward to talking or meeting with you in the first quarter of 2019!

Happy New Year,
Tom Pietrack, CFP®
January 14, 2019

How can we help you?

Do you need help with financial planning, investment management or benefits guidance? Contact us for a complimentary call. We look forward to discussing your unique financial goals and personal values!

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