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By Michael Christodoulou

Michael Christodoulou
Michael Christodoulou

As an investor, your own decisions will be the biggest factor in your success. Nonetheless, you’ll always want to consider the potential power of external events. And today is no different — with the lingering effects of the pandemic, the geopolitical situation in Ukraine, the impact of inflation and the rise in interest rates, you might be grappling with feelings of uneasiness. How should you respond?

First of all, remember that the financial markets have shown great resilience through wars, recessions, natural disasters and political crises — events as serious as what’s going on now.

Nonetheless, you could still feel some discomfort when you’re bombarded by anxiety-producing news of the day. But you don’t have to go it alone. Many people have found support and guidance from a financial professional to be especially valuable in turbulent times. 

In fact, more than three-fourths of investors who work with a financial advisor are very or somewhat confident in their knowledge of the impact on the economy on their financial situations, according to a recent survey from Morning Consult, a research and data analysis company. By comparison, the same survey found that only about half of the adults in the general population have this degree of confidence.

Specifically, a financial professional can help you:

Reduce the tendency toward emotion-driven investing. It’s usually not a good idea to let emotions be a primary driver of your investment decisions. For example, if you let fear drive your choices, you could end up selling quality investments — ones that still have good prospects and are still suitable for your needs — when their prices have fallen, just to “cut losses.” A financial professional can help you make informed moves appropriate for your goals.

Put investment results in context. You may wonder why your investment portfolio’s performance doesn’t track that of a major index, such as the S&P 500. But if you maintain a diversified portfolio — and you should — you’ll own investments that fall outside any single index. So, instead of using an index as a benchmark, you should assess whether your portfolio’s performance is keeping you on track toward your individual goals. A financial professional can help you with this task and suggest appropriate changes if it appears you are falling behind.

Recognize investment trends and patterns. If you invest for several decades, you’ll likely see all kinds of event in the financial markets. You’ll see “corrections,” in which investment prices fall 10 percent or more in a short period of time, you’ll see “bear markets,” in which the downturn is even greater, and you’ll see bull markets, in which prices can rise, more or less steadily, for years at a time. A financial professional can help you recognize these trends and patterns — and this knowledge can make it much easier for you to maintain a long-term perspective, which lead to informed decision-making.

Gain feelings of control. Most important of all, a financial professional can enable you to gain a feeling of control over your future by helping you identify your important goals and recommending strategies for achieving them.

The world, and the financial markets, will always be full of events that can be unsettling to investors. But by getting the help you need, you can reduce the stress from your investment experience — and you’ll find it’s easier to keep moving in the direction you want to go.

Michael Christodoulou, ChFC®, AAMS®, CRPC®, CRPS® is a Financial Advisor for Edward Jones in Stony Brook. Member SIPC.

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By Michael E. Russell

Michael E. Russell

As I sit here on Sunday morning pondering what I would recommend to readers, I find myself in a quandary.

Ukraine is in the forefront of the news, while Canadian truckers are being arrested and having their bank accounts taken due to their opposition to Trudeau and his position on masking and vaccinations.

Is it time to put money to work during these uneasy times? Emotionally an investor could think not. History says otherwise.

Once again, the reader only has to look back in time and realize that sound investment decisions can be made at any juncture. 1929, 1952, 1987, 2001, 2002, 2008. These dates were extremely stressful to the investor. Sell, hold or buy? DECISIONS, DECISIONS!

Today, it is more of the same. Companies that we have mentioned are still financially strong with solid balance sheets. Yet, they are being punished by this market! Do we sell shares in these companies while earnings are robust?

Is 5G now a passing fancy? Not so.

Increasing interest rates will bolster the balance sheets of many Money Center and Regional banks. It is fair to say that even though the ten-year treasury is now yielding 2%, our checking and savings accounts are still yielding close to 0%! Thus, bank earnings and balance sheets are stronger than ever.

I believe that based on past history, investors should think about adding or starting a position in some great companies. Dollar cost averaging is a smart way to start or increase your positions. Emotion should not play a part in selling a stock. 

Banks need to watch their loan portfolios and manage the risk as to their non-performing loans.

We are all aware of the supply chain problems thus effecting the costs of goods and services.

With all of this in mind, we need to remember a basic tenet; try to have enough liquidity to cover 6 months of household and business expenses. It is especially important now to monitor your debt load due to higher interest rates.

Let us look at some stocks that have been mentioned before. Qualcomm is certainly a quality investment at these levels, even during this volatile market period. It is reasonably priced with a P.E. ratio of 14x forward earnings with a solid dividend. Morgan Stanley is another sound investment idea. The company is buying back $3 billion in stock each quarter while paying a 3% dividend. 

Still a favorite is Nvidia. This company has exceeded even the highest expectations of forward guidance for earnings. A great CEO, Jensen Huang, has Nvidia positioned to take advantage in the growth of 5G. For those suffering from cabin fever, look at Disney. Increase pricing power and high occupancy rates at their theme parks suggest good earnings growth.

In closing, let us hope the people of Ukraine will be safe. By the time this article is published we will probably know if Russia has decided to invade.

Be safe and stay healthy. 

Michael E. Russell retired after 40 years working for various Wall Street firms. All recommendations being made here are not guaranteed and may incur a loss of principal. The opinions and investment recommendations expressed in the column are the author’s own. TBR News Media does not endorse any specific investment advice and urges investors to consult with their financial advisor. 

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By Nancy Burner, Esq.

Nancy Burner, Esq.

On January 1, 2020, as we entered another year without any idea of what was on the horizon, a new federal law took effect regarding retirement accounts. 

The SECURE Act, “Setting Every Community Up for Retirement Enhancement,” affects millions of Americans who have been saving through tax-deferred retirement plans with the biggest impact falling those set to inherit these plans. Now, two years later, SECURE is still a new concept for many clients who are unaware of the law or how it applies to their own situation.

One change is that the age at which a plan holder must take required minimum distributions (“RMDs”) was increased from 70 1⁄2 to 72. RMDs are taken annually, based on the full value of the account on December 31 of the prior year and the life expectancy of the plan holder. The delay to age 72 will result in a year and a half more of tax-deferred growth on the funds.

SECURE also created a $10,000 penalty-free withdrawal for someone giving birth to or adopting a child. The Act also expanded the ability for small business owners to offer retirement plan funding. However, the most drastic item in SECURE takes aim at the beneficiary of the plan after the death of the original plan holder.

Prior to SECURE, a non-spouse designated beneficiary had the option of converting the plan to an inherited IRA and taking a RMD based upon their own life expectancy. The beneficiary could take more than the RMD if needed, realizing that each distribution is taxable income. 

Consider a 90-year-old with an IRS life expectancy of 12.2 years who names a 65-year-old child as designated beneficiary. A 65-year-old has an IRS life expectancy of 22.9 years. That beneficiary could previously “stretch” the distributions over their life expectancy and allow those funds to grow tax-deferred for many more years. With SECURE, this stretch is lost for the majority of beneficiaries. SECURE prescribes a mandatory 10-year payout for a designated beneficiary. Being forced to liquidate in the 10 years will result in the payment of more income taxes than if the beneficiary had the 22.9-year payout.

The SECURE Act carved out limited exceptions to this 10-year payout rule. These five categories of designated beneficiaries include a spouse, minor child of the plan holder, chronically ill person, disabled person, or a person not more than 10 years younger than the plan holder.

If you have retirement assets, this change serves as a trigger to have your plan reviewed by your estate planning attorney and financial advisor. This review is especially important where an estate plan includes a trust as the beneficiary of a retirement account. The terms of the trust may need to be adjusted from being a conduit trust to an accumulation trust. 

A conduit trust forces all distributions out to the beneficiary, whereas an accumulation trust allows the distributions to remain protected in the trust. Other clients may decide to leave tax-deferred retirement assets to charities rather than individuals. Still others may rearrange allocations to make IRAs payable to a person not less than 10 years younger than them, such as a sibling, thereby focusing on saving other types of assets for beneficiaries otherwise forced to take a 10-year taxable payout.

Many Americans have spent their working lives contributing to tax-deferred plans with the idea that it will give them a stream of income in retirement, and pass on to their beneficiaries as a stream of income. While SECURE may not alter the plan for some, the impact of SECURE should be considered by all. Stay tuned for future updates because there are already whisperings about SECURE 2.0 which, among other things, may raise the age at which RMDs are required.

Nancy Burner, Esq. practices elder law and estate planning from her East Setauket office. Visit www.burnerlaw.com.

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By Michael Christodoulou

Michael Christodoulou
Michael Christodoulou

Are you expecting a tax refund this year? If so, what will you do with it?

Of course, the answer largely depends on the size of your refund. For the 2020 tax year, the average refund was about $2,800, according to the Internal Revenue Service. But whether your refund this year will be about that size, smaller or larger, you can find ways to benefit from the money.   

Here are some possibilities:

Contribute to your IRA 

You’ve got until April 18 to fully fund your IRA for the 2021 tax year. But if you’ve already reached the maximum for 2021, you could use some, or all, of your refund for your 2022 contribution. Assuming you did get around $2,800, you’d be almost halfway to the $6,000 annual contribution limit. (If you’re 50 or older, you can contribute up to $7,000.)

Invest in a 529 plan 

If you have children or grandchildren, you might want to invest your refund in a 529 education savings plan. A 529 plan’s earnings can grow federal income-tax free, and withdrawals are federal income-tax free provided the money is used for qualified education expenses. If you invest in your own state’s plan, you might get a tax deduction or credit. 

A 529 plan can be used to pay for college, vocational training and even some K-12 expenses in some states. Plus, if you name one child as a beneficiary, and that child’s educational journey does not require the funds from a 529 plan, you may change the beneficiary to another eligible family member of the original beneficiary.

Boost your emergency fund

You could use your tax refund to start or supplement an emergency fund. Ideally, this fund should contain three to six months’ worth of living expenses, with the money kept in a liquid, low-risk account. (If you’re already retired, you might need this fund to cover a full year’s worth of expenses.) Without such a fund, you might be forced to dip into long-term investments to pay for costly housing or auto repairs or large medical bills.

Add to the ‘cash’ part of 

your portfolio

It’s generally a smart move to keep at least a portion of your overall investment portfolio in cash or cash equivalents, because the presence of cash can help you in two ways. First, since its value won’t change, it can help cushion, at least to a degree, the effects of market volatility on your portfolio. And second, by having cash available, you’ll be ready to take advantage of attractive investment opportunities when they arise.

Reduce your debt load 

It’s not always easy to minimize your debt load, even if you’re careful about your spending habits. But the lower your debt payments, the more money you’ll have available to invest for your future. So, you may want to consider using some of your tax refund to pay off some debts, or at least reduce them, starting with those that carry the highest interest rates.

Donate to charity

You could use part of your refund to donate to a charitable organization whose work you support. And if you itemize on your tax return, part of your gift may be deductible.

A tax refund is always nice to receive  and it’s even better when you put the money to good use.

Michael Christodoulou, ChFC®, AAMS®, CRPC®, CRPS® is a Financial Advisor for Edward Jones in Stony Brook. Member SIPC.

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New Webster Bank corporate signage unveiled at a Long Island-based Webster branch.

It’s official. The Connecticut-based Webster Financial Corp. has completed its $10.3-billion acquisition of Sterling Bancorp, creating one of the largest commercial banks in the Northeast. The merger was initially announced in April 2021, and federal regulators gave the deal final approval in December of that year.

John R. Ciulla, President and Chief Executive Officer, Webster Bank and Webster Financial Corporation

With the merger, Webster Bank acquired Sterling National Bank’s 33 branches on Long Island, from Wading River in Suffolk County to Valley Stream on the border of Queens. The bank signs were changed this week.

“Today marks a transformative moment in Webster’s history that will greatly benefit our colleagues, clients, communities and shareholders,” said John R. Ciulla, President and CEO of Webster in a Feb. 1 press release. “Our bank will have enhanced scale, significant loan growth potential, best-in-class deposit franchises and a longstanding commitment to community development and corporate citizenship.”

The combined company has approximately $65 billion in assets, $44 billion in loans, and $53 billion in deposits based on balances as of December 31, 2021 and operates 202 financial centers in the Northeast region. 

The new headquarters of Webster is in Stamford, Connecticut, and Webster will have a continued multi-campus presence in the greater New York City area and Waterbury, Connecticut.

“The completion of the merger with Webster brings the best of our banks together, promising an elevated experience for our clients and colleagues as the financial services industry evolves,” said Executive Chairman Jack L. Kopnisky of the newly combined bank. 

Both Webster and Sterling clients will continue to bank as they normally do at their existing banking centers and through Webster’s and Sterling’s websites and mobile applications. For more information, visit www.websterbank.com.

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By Lisa Scott

Bail is a part of our justice system that seeks to ensure that those who are charged with crimes appear in court to be held accountable. When someone is arrested and charged, the court will set an appearance date with a hearing or trial usually weeks or months away. Prior to bail reform, there were no standards and judges did whatever they wanted for any charge to assess the person’s potential to flee and not return to court. Sometimes quantitative tools that can measure “risk” were used, and those have been found to be plagued with bias. 

If the person cannot pay the bail amount, they remain incarcerated until their case is resolved, either through a settlement, a hearing, a trial, or dismissal. If they post bail, the money is not returned until the case is finalized – which can be months or in some cases, years later (less 9% processing fee).

There is an obvious but complex problem inherent in this system. People with good credit or access to funds can post their own bail and go home. People who have no money or credit are held in jail until trial. For those on the bottom of the totem pole, a simple arrest, guilty or not guilty, can destroy a life, or a family. If they had, for instance, a minimum wage job, their incarceration will almost certainly lead to losing it. What happens to the rest of the family? What happens to any stability they may have had in their lives? The collateral damage of an arrest and even a relatively small but unaffordable bail can bring down the house. Average court costs can be over $15,000. 

The question we ask ourselves is not whether the justice system should continue to use bail, but whether or not the bail system is used justly. In America, we are innocent until proven guilty, but the bail system can end up being incredibly punitive even before guilt is established in court. 

New York State’s 2020 Bail Reform Act provided some relief and created uniform standards. For most misdemeanors and nonviolent felonies the law now required judges to release people with the least restrictive conditions necessary to reasonably assure the person will come back to court. Previously, the court could impose cash bail on any offense. The reform codified no cash bail and non-monetary bail conditions and provided for a third option of non-secured or partially secured surety bond (a loan due if the charged fails to appear). 

The Reform was amended in April 2020 to include more situations where judges can impose cash bail. They will also have more discretion in setting bail and other conditions of pretrial release. It did not abolish bail but greatly reduced the role of money and enhanced the rule of law in determining whether defendants will be freed or jailed pending trial. 

The new law, however, came under attack during the 2021 mid-term elections, especially from candidates campaigning on a “law and order” platform. Using a handful of instances of bail abuse, some tried to make generalizations about the new bail rules that data does not support. It is important to remember that bail (in its legal conception) was always about making sure people appear before the court, not punishing them before they’ve had their day in court. 

Results of bail reforms so far have been positive. Pre-covid data sets from state level bail reforms in New Jersey, New Mexico and Kentucky as well as reforms in 4 major cities and 5 counties have indicated decreases in pretrial jail population, decreased or unchanged ”new criminal activity” rates and no increase in recidivism. In New York City, data during covid shows that just under 4% of those released pre-trial under bail reform have been rearrested for violent felonies. 

This is a low percentage, yet this number is used to both support and criticize bail reform. As NYS Senator Julia Salazar of Brooklyn said, “It’s not really about facts. It’s about competing narratives about public safety” (City & State NY January 10, 2022). We must remember that bail reform saves lives and families and evens the playing field. The few cases of bail abuse are not enough to outweigh the benefits of these reforms. We support them every time we say the end the pledge of allegiance with “and Liberty and Justice for all.”

For more information: 

–January 18, 2022 article by Steven B. Wasserman in the New York Law Journal

–Brennan Center’s explanation of the NYS Bail Reform law at  https://www.brennancenter.org/our-work/analysis-opinion/new-yorks-latest-bail-law-changes-explained

–True cost of incarceration at https://finesandfeesjusticecenter.org/articles/who-pays-true-cost-incarceration    

Lisa Scott is president of the League of Women Voters of Suffolk County, a nonprofit, nonpartisan organization that encourages the informed and active participation of citizens in government and influences public policy through education and advocacy. For more information, visit https://my.lwv.org/new-york/suffolk-county or call 631-862-6860.

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By Michael E. Russell

Michael E. Russell

Interest rate hikes are in the forecast for 2022. But how many?

Jerome Powell, Chairman of the Federal Reserve has a perplexing problem: how to curb inflation, while not derailing the economy. Most analysts are expecting 3 to 4 increases, while Jamie Dimon, JP Morgan Chase CEO thinks 6 or 7 are possible.

What does all this mean? The Consumer Price Index rose7% in December from its year ago level. What caused this? COVID, supply chain issues, the government printing money as if there was an unlimited supply?  Maybe. We need to be aware that no mention is made of our 30 TRILLION-dollar deficit that is growing by the hour. It appears that fiscal irresponsibility is the norm in our Capitol.

Another factor that is being ignored is what is called The Misery Index. This index came about during the Carter administration. During the late 70s, stagflation was rampant. We all know about inflation. I have mentioned price increases in my previous article, but little is mentioned in the media as the effects on middle and lower-income Americans.

A problem that will concern us in the coming months is one in which the Fed stops the repurchase of approximately $60 billion of Treasury and Agency securities each month. This means that the market will have to absorb more than $300 billion of maturing bonds in 2022. This may cause liquidity problems.

What about Crypto? Some investors purchased Bitcoin in 2010 at prices hovering around $100. On January 3 of this year, it rose to a price of nearly $61,000. Wow! A reality check has hit some investors. Those making purchases at that level have seen it fall to a level $36,000, a substantial drop.

As I mentioned previously, the lack of regulation and knowledge on the part of Washington warrants concern.

This week, the Dow Industrials lost 4.6%, the S&P dropped 5.7% and the Nasdaq slumped 7.6%. Is this the start of a 15-20% correction, maybe? The Nasdaq highflyers took some hits the past few weeks. Case in point, Netflix.  On January 3, it was priced at $597 a share. This past Friday, it closed at $397, losing 110 points on Friday — loss of 34% in 3 weeks.

This is the time for investors to evaluate their holdings and determine what their short-term liquidity needs are. Several of us have seen the crash of ’87, the Enron fiasco, the attacks on 9-11 and the severe drop of 2008. Those who stayed the course remained patient and had nice gains in their portfolios.

Remember, there are great companies to invest in. This may be an opportunity to start buying at these levels. I will mention a few that look promising. Nvidia, a chip maker with great earnings potential. I am a big believer that our major oil suppliers will make a transition to cleaner fuel, reducing the carbon footprint. Occidental Petroleum and Exxon Mobil are standouts.

Until next month, buckle up your seat belts!!

Michael E. Russell retired after 40 years working for various Wall Street firms. All recommendations being made here are not guaranteed and may incur a loss of principal. The opinions and investment recommendations expressed in the column are the author’s own. TBR News Media does not endorse any specific investment advice and urges investors to consult with their financial advisor. 

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By Michael Christodoulou

If you’re a certain age, you’ll need to withdraw money from some of your retirement accounts each year. But in 2022, the amount you must take out may be changing more than in other years — and that could affect your retirement income strategy.

Here’s some background: Once you turn 72, you generally must start taking withdrawals, called required minimum distributions, or RMDs, from some of your retirement accounts, such as your traditional IRA and your 401(k) or similar employer-sponsored plan. Each year, your RMDs are determined by your age and account balances. This year, the life expectancy tables used by the IRS are being updated to reflect longer lifespans. This may result in lower annual RMDs than you’d have to take if this adjustment hadn’t been made.

If you’ve started taking RMDs, what does this change mean to you? It can be a positive development for a few reasons:

Potentially lower taxes: Your RMDs are generally taxable at your personal income tax rate, so the lower your RMDs, the lower your tax bill might be.

Possibly longer “lifespan” for retirement accounts: Because your RMDs will be lower, the accounts from which they’re issued — including your traditional IRA and 401(k) — may be able to last longer without becoming depleted. The longer these accounts can stay intact and remain an asset, the better for you.

More flexibility in planning for retirement income: The word “required” in the phrase “required minimum distributions” means exactly what it sounds like — you must take at least that amount. If you withdraw less than your RMD, the amount not withdrawn will be taxed at 50%. So, in one sense, your RMDs take away some of your freedom in managing your retirement income. But now, with the lower RMDs in place, you may regain some of this flexibility. (And keep in mind that you’re always free to withdraw more than the RMDs.)

Of course, if you don’t really need all the money from RMDs, even the lower amount may be an issue for you — as mentioned above, RMDs are generally taxable. However, if you’re 70½ or older, you can transfer up to $100,000 per year from a traditional IRA directly to a qualified charitable organization, and some, or perhaps all, of this money may come from your RMDs. By making this move, you can exclude the RMDs from your taxable income. Before taking this action, though, you’ll want to consult with your tax advisor.

Here are a couple of final points to keep in mind. First, not all your retirement accounts are subject to RMDs­ — you can generally keep your Roth IRA intact for as long as you want. However, your Roth 401(k) is generally subject to RMDs. If you’re still working past 72, though, you may be able to avoid taking RMDs from your current employer’s 401(k) or similar plan, though you’ll still have to take them from your traditional IRA.

Changes to the RMD rules don’t happen too often. By being aware of how these new, lower RMDs can benefit you, and becoming familiar with all aspects of RMDs, you may be able to strengthen your overall retirement income situation.

Michael Christodoulou, ChFC®, AAMS®, CRPC®, CRPS® is a Financial Advisor for Edward Jones in Stony Brook. Member SIPC.

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By Nancy Burner, Esq.

Nancy Burner, Esq.

As we enter a new year, it’s important that there is an understanding of the updated estate and gift taxes on both the federal and state level. 

The Tax Cuts and Jobs Act (the “Act”) increased the federal estate tax exclusion amount for decedents dying in years 2018 to 2025. The exclusion amount is for 2022 is $12.06 million. This means that an individual can leave $12.06 million, and a married couple can leave $24.12 million dollars to their heirs or beneficiaries without paying any federal estate tax. This also means that an individual or married couple can gift this same amount during their lifetime and not incur a federal gift tax. The rate for the federal estate and gift tax remains at 40 percent.

There are no 2022 changes to the rules regarding step-up basis at death. That means that when you die, your heirs’ cost basis in the assets you leave them are reset to the value at your date of death. 

The Portability Election, which allows a surviving spouse to use his or her deceased spouse’s unused federal estate and gift tax exemption, is unchanged for 2022. This means a married couple can use the full $24.12 million exemption before any federal estate tax would be owed. To make a portability election, a federal estate tax return must be timely filed by the executor of the deceased spouse’s estate. 

For 2022 the annual gift tax exclusion has increased to $16,000. This means that an individual can give away $16,000 to any person in a calendar year ($32,000 for a married couple) without having to file a federal gift tax return. 

Despite the large Federal Estate Tax exclusion amount, New York State’s estate tax exemption for 2021 is $5.93 million. As of the date of this article, the exact exclusion amount for 2022 has not been released. It is anticipated to be a little over $6 million in 2022. New York State still does not recognize portability.

New York has a three-year lookback on gifts as of January 16, 2019. However, a gift is not includable if it was made by a resident or nonresident and the gift consists of real or tangible property located outside of New York State; while the decedent was a nonresident; before April 1, 2014; between January 1, 2019, and January 15, 2019.

 Most taxpayers will never pay a federal or New York State estate tax. However, there are many reasons to engage in estate planning. Those reasons include long term care planning, tax basis planning and planning to protect your beneficiaries once they inherit the wealth. 

In addition, since New York State has a separate estate tax regime with a significantly lower exclusion than that of the Federal regime it is still critical to do estate tax planning if you and/or your spouse have an estate that is potentially taxable under the New York State law. 

Nancy Burner, Esq. practices elder law and estate planning from her East Setauket office. Visit www.burnerlaw.com

——————————–

LIVE WEBINAR: Burner Law Group, P.C. presents a free webinar titled 2022: The Year of Trusts on Thursday, Jan. 20 at 2:30 p.m. Attorney Britt Burner will discuss the anatomy of trusts, the types of trusts used in Estate and Medicaid planning and how they can benefit you and your loved ones. To RSVP, call 631-941-3434 or email [email protected].

 

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By Michael E. Russell

Michael E. Russell

The S&P rebounded with the biggest weekly increase since February. There have been some encouraging signs, specifically, that the Omicron variant may have less severe symptoms than the Delta variant.

A major concern is growing inflation. Fed Chairman Jerome Powell has radically changed his position on fiscal tightening. This is due to severe price increases that we have seen over the past 6 months.

This week, at the conclusion of the FOMC meeting, we will have a much clearer picture as to what the FED is thinking.

This past week all sectors of the market were higher. Tech and energy were the leaders, while discretionary and utilities did well also. These 2 sectors were up 2.5%

The U.S. Department of Labor reported initial jobless claims fell again. The numbers indicated almost full employment.

CPI data which measures the prices to consumers for goods is used as one measure of inflation.  November numbers indicate a 0.8% on top of a 0.9% advance in October.  These numbers are troublesome in that they are the highest in more than 40 years. For those of us that were around then, think about the years of the administration of Jimmy Carter. As a side note, I remember that the administration sold the Presidential yacht Sequoia for $60,000! I thought that the Treasury was down to its last $60,000.

What to expect for 2022

Wow! So many things to ponder. Putin-Ukraine, China-Taiwan, OPEC, Southern Border Immigration.

The energy sector will be one to focus on. Gas and oil prices are already up 50%.

Supply chain issues will still be in the forefront. Cargo ships are laying at or outside the port of Los Angeles; some have been there for more than 50 days.  A shortage of chips, meat prices up 30%, vegetables up 22%, etc. With all of this inflationary data, the stock market keeps going up. The reason for this is simple. TINA! — There is no alternative.

I am a staunch follower of Jim Cramer.  I closely monitor what the holdings are in his charitable trust. Here are some of my favorites: Abbot Labs, Advanced Micro Devices, Alphabet (Google), Amazon, Apple, Chevron, Costco, Ford and Wells Fargo

Costco is a well run company, opening new facilities in France and China as well as 19 more in the U.S. As I mentioned before, containers destined for Costco are delayed for up to 2 months. If the supply chain issue is resolved, the earnings should be even more robust.

Ford should be looked  at also. Their truck division, specifically the all electric F150, should add to earnings.

To summarize, the stock market should continue to climb with 5-10% corrections interrupting its upward momentum. For those crypto currency followers, I would expect some government regulation to occur.

From my family to yours, we wish all a great holiday and a happy and healthy New Year!

Michael E. Russell retired after 40 years working for various Wall Street firms. All recommendations being made here are not guaranteed and may incur a loss of principal. The opinions and investment recommendations expressed in the column are the author’s own. TBR News Media does not endorse any specific investment advice and urges investors to consult with their financial advisor. 

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