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  • Writer's pictureJulie Skye

this 2nd Week of April 2021 "Thoughts" for April 2021

Updated: Jun 8, 2021

ESG | ESG | ESG Matters

thoughts as we finish this 2nd week of March 2021

Got to talk about inflation again, sorry…it continues to be the issue consensus is worried about. Linda Duessel, CFA, CFP Federated Hermes

You know I love smart analysts that help us assess where are we and when I find a piece that says it better than I can, I just quote and attribute it to them! Here are three nuggets from Linda Duessel, quoted above. Folks, corporations are going to pay higher taxes…and that is exactly what needs to happen. Note: sorry for all of Linda’s acronyms and initials…I think you will get my point…

Somebody’s got to pay. | As the chorus grows from the United Nations, IMF and World Bank over the rising global debt burden. The OECD and G-20 are calling for a global minimum corporate tax rate and measures to tax multinationals. Irrespective of the difficulties to enforce and pass local laws, many countries will find it impossible to ignore increasing the corporate tax “take.’’

Perhaps we should focus on tax revenue | Despite generally higher statutory tax rates, U.S. corporate tax revenue as a share of GDP has steadily run below global, developed, and emerging markets since 2000. On average, U.S. corporate tax revenues were 2% of GDP from 2000-17 and fell to 1% following the 2017 tax cut. By contrast, tax revenue for the rest of the world has remained stable at about 3% of GDP, despite their steadily declining statutory tax rates. Folks, we are not being over-taxed…just the opposite.

Should we sell in May and go away? Equities are priced for perfection, Bank of America Research says, noting its propriety capitulation gauge, is at a level that historically has been followed by a 10% correction or worse. Other troubling technicals: the AAII bull/bear ratio is 2 standard deviations above neutral, almost 96% of S&P 500 stocks are above their 200-day moving averages (a well-known sell signal) and volumes have been falling while the S&P makes new highs.More than ever…we need to re-do your risk tolerance and be sure we have the cash you need for the next year.

Required Disclosures: Always read the fine print!

The foregoing content reflects the opinions of Sustainable Advisors Alliance LLC and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or 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. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.

These are some of the “headline” stocks this year: note how much volatility there is in the price of a single stock--over the short term. Mutual funds were created when academic studies showed you needed 13-15 stocks to “even out” the variability in daily prices. Now, the key, is what do you buy, and when do you sell, but with funds, this is what we pay managers to do. If you own individual stocks, you have gotten a taste of the volatility that is customary!

😲 Why does this matter to you? It is hard to read, so just focus on the red numbers! The key to “peaceful” investing is getting the right balance between growth at the level of volatility you can stand and still sleep at night with.

Special Purpose Acquisition: SPACs are all the rage! Here money is raised in a private fund that was created to be a blind trust. When there was enough for the founders to take the company public, voila, the cost and legal hurdles were lower, and the public gets to get in on a hot deal.

😲Why does this matter to you?If you think this sounds like a deal for the founders, you are right!

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