This 4th Week of February 2022 Thoughts

What Matters to You

Inflation Throws Gasoline on The Fire: Prices of food, cars, housing and more hit 7.24% in December, reaching a 39-year high.

ESG: Environmental, Social & Governance factors. Often called “non-financial” or qualitative factors, there are still lots of numbers behind sustainable impact investing. Attached to this Week’sThoughts is an ESG infographic: Seek; Avoid; Exclude; Engage and Vote.

Life Insurance is too important to ignore: this fpPathfinder flowchart organizes all the important information in one place. Call if this is on your To-Do List.

Divesting from China was the right thing to do: stay tuned to next Week’s Thoughts.

This Week’s Fund Profile: This week’s profile is Boston Common Asset: This Impact Update is so inspiring!

Well, we are not the only ones who are worn out after 2 years of Pande-monium: our friends at the IRS are feeling the strain too. The IRS has a long history of raising taxpayer ire, but this tax filing season could be one for the record books. Plan now to get your tax documents together as soon as possible…and shoot for getting them to your CPA’s office by the first week of March. If that isn’t possible, let your CPA know you’ll be glad to file an extension: just be sure you have made your estimated tax payments so you don’t incur any penalties.

This year your tax return is due by April 18th because of Emancipation Day and Patriot’s Day: different states have different April 15th holidays.

The IRS has warned that this could be a banner tax-filing season for problems: this is a not just another overstated warning from a government agency. The IRS mess will impact you personally so be ready and be patient. You have the best chance of bypassing the logjams and headaches if you file electronically, as early as possible and opt for electronic deposits for refunds.

Early reports indicate some of the letters reporting advanced payments are incorrect and a major challenge for taxpayers is how to report pandemic-related stimulus and child tax credit payments on their 2021 returns.

While it might be hard to believe, since many stimulus payments were deposited directly to bank accounts, there are people who don’t even know they got them, let alone how much they got!

The 2020 tax filing season included exceptionally long hold times for speaking with IRS customer service as well as technical glitches on the IRS “Where’s My Refund” website. Expect that the 2021 tax filing season will be no different: the IRS has reported it has a backlog of about 11.8 million tax returns from last year that it still needs to process.

😊 Why does this matter to you? Schwab often has to send out a corrected 1099 so don’t rush too quickly to get your taxes filed: a corrected 1099 could result in your needing to file an amended return! If you do need to call the IRS, your best chance of reaching a human is before 9 am on Tuesday-Thursday.

You can view status reports and your records by creating an account on the IRS website: https://www.irs.gov/account.

This is not a market to be trifled with. Over the last 2 years I’ve profiled the companies making big stock gains…often tech stocks…with major weaknesses in the logic behind those moves. Each week I had something to say about the risking risks, and what I thought it meant to you. I also wrote about strategies to position your portfolio and be prepared for the opportunities that always come out of tough market.

You know, everyone talks about the gains in the market, but the reality is that you don’t get to “lock in” the gains from last year…just because the New Year’s Eve clock clicks over. Stock selloffs can erase last year’s gains and even cut into the last several years’ worth. How do you deal with this “heads-you-lose-tails-you-lose” scenario? You gotta be smart, know a lot about economics, have good timing and take action as the market is topping. Then, repeat this, in reverse, as the market is bottoming.

It may take months, sometimes years, for the market to top: you need to be willing to leave some money on the table to reduce the risk in your portfolio. The hardest thing of all…after a rough patch, is you must have faith that good returns…will return. 2020 showed that inexperienced, home-bound investors could run the market up as high as it did…even in the middle of the worst of times. The Fed flooded the economy with cheap money and with low interest rates: it felt that stocks were the only road to take.

Even with high valuations…your only option was to sit it out in cash and watch the market move higher. Today, this chart puts the newest “big” risk into perspective. Inflation is not abating any time soon.

Required Disclosures: Always read the fine print! This content reflects the opinions of Julie Skye and is subject to change without notice. This content is for informational and entertainment purposes, and it is not a recommendation regarding the purchase or sale of any security. There is no guarantee that any statements, opinions, or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Securities investing involves risk, including the potential for loss of principal. There is no assurance any investment plan or strategy will be successful.

Registration with the SEC does not imply a certain level of skill or training.

Julie Skye 918-408-7981 julie@sustainableadvisors.com