On Our Minds

Planning for Retirement? Here’s What You Need to Know

Retirement planning is a combination of cash flow planning, income tax planning, investment planning, estate planning, distribution planning and lifestyle planning. In other words, you need to have a plan to retire, no matter your circumstances.

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Investors see an improving economy with continued low interest rates as positive.

Welcome to the Roaring ’20s

The S&P 500 Index gained 8.1% for the second quarter and 14.4% year-to-date despite concerns over Federal Reserve policy, fiscal spending and the spreading delta variant of COVID. Most investors see an improving economy with continued low interest rates being positive for corporate earnings. Small cap stocks, which are mostly leveraged to an improving domestic economy, are leading the market higher. The best performing sectors were energy, financial, healthcare, and materials as value and cyclical companies are perceived to have more inflation-induced pricing power. The reflationary and cyclical trade into financials, industrials, basic materials, and travel-related companies is beginning to wane, however, as earnings expectations are set astronomically high. This will make the second-quarter earnings period more challenging for those companies that miss high expectations. In addition, most commodity prices appear to have peaked. Growth stocks, particularly large cap technology stocks that are known for more consistent earnings, are coming back into favor as interest rates remain lower for longer.

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Buying a home? Here's what you need to know.

Before you start driving around neighborhoods looking at For-Sale signs or going online to search houses for sale, you should get your personal finances in order. That means tracking your living expenses and creating a strict budget, which will be invaluable in finding a home you can afford.

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Business Owners Need Ransomware Protection

Ransomware is a type of malicious software that locks up your files so that you no longer can access them and demands you pay a ransom to unlock the files. Paying in Bitcoin or cybercurrency gives the cybercriminal anonymity and cannot be traced.

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Investor confidence grows in May

The S&P 500 index was up slightly in the month of May due to growing investor confidence in higher 2021 corporate revenues and earnings. With the receding COVID pandemic, consumers and businesses are emerging from social-distancing protocols and accelerating their spending. This strong growth in demand for goods has led to inventory shortages in many cases. Temporary delivery delays for raw materials and components are constraining global growth. Employment is expanding, however, which means goods manufacturing should improve and service industries should gain momentum.

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Be safe and prepared this summer

You’ll be hearing a lot about hurricane preparedness this summer when it comes to protecting yourself and your loved ones in terms of shelter, safety and supplies. FEMA (Federal Emergency Management Agency) and the National Hurricane Center have posted some important operational guidelines.

Personal safety should remain your number one priority; however, don’t neglect your financial affairs. Ask yourself the following questions:

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Corporate earnings meet or beat expectations

Most first-quarter corporate earnings reports have been meeting or beating expectations and this has raised the confidence that equity valuations are not excessive. The S&P 500 Index is trading at a reasonable 22x Price to Earnings multiple, but earnings estimates are being actively raised by analysts who see stronger revenue and profit growth in the second half of 2021. Financial, industrial, energy and basic materials companies are showing considerable revenue acceleration, expense control and order backlogs. Earnings from Apple, Alphabet, Amazon, Facebook, Microsoft and Qualcomm were all above expectation and guidance was strong for the year ahead. Both growth and value stocks are rising, but the pervasive microchip shortage is constraining production at some cyclical companies like Caterpillar and Ford. Small Cap and Mid Cap stocks continue to lead the market, while the service sector, especially travel and leisure, is gradually recovering.

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The Meaning of Bitcoin in Today's Economy

The creation of cryptocurrencies or digital currencies such as Bitcoin has bankers, financiers and governments pondering the long-term potential economic and political ramifications for the future. While the increasing use of digital currencies demonstrates the power of a secure, secretive payment transfer system, it also has created a loophole from government control.

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Major Stimulus Sparks Economy

The S&P 500 Index grew 5.8% in the first quarter in response to the massive fiscal stimulus and the anticipation of a significant economic rebound. The recent passage of the $1.9 trillion federal stimulus package added to the previous five major stimulus bills totaling over $5.2 trillion. Lawmakers as well as the Federal Reserve have responded dramatically to the COVID pandemic flooding the market with liquidity and the markets responded positively. The COVID-relief money flooding into depository institutions is being used for consumption and investment and helping corporate earnings rebound quickly.

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Tax Time is Scam Time

You receive a phone call from someone claiming to be with the Internal Revenue Service. The caller says you have a tax bill due and will be arrested, deported or face penalties and fees if you don’t pay now. What do you do?

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