Trending Topics


This Month’s Trending Topics

Markets

Halfway through the year, equity markets look very similar to 2023 as the seven stocks which drove returns last year account for almost 2/3 of the S&P 500 return for 2024. The biggest companies continue to get bigger and now account for their highest percentage composition of the S&P 500 ever.   These may be good companies, but valuations are looking a little stretched and they seem to be trading more on “hope for the future” than actual results.   While the S&P 500 and NASDAQ have surged to new highs, many other indices continue to lag behind.       

The year started with a cautiously optimistic tone for most analysts, and now seems to be moving to all out optimism as every major firm’s year end S&P 500 target has already been exceeded just halfway through the year.   Now, many of these same analysts are increasing their year-end targets as this more optimistic outlook appears to be the new consensus view. This new optimism concerns us a bit, as markets usually climb on pessimism and worry and top out when everyone becomes overly optimistic.   While we’re not saying its time to get out, we wouldn’t be surprised if markets took a breather this summer and even pulled back a bit.     

Taxes

The fact that most of us don’t enjoy paying taxes won’t come as a surprise, but what does surprise and upset tax payers is owing a penalty on top of their taxes.  Tax penalties are on the rise and catch many off-guard.  The penalty for underpayment is interest charged on the amount underpaid which currently is 8 percent. 

The requirements to avoid an underpayment penalty are that you pay:

  • 90% of the tax owed for the current year if owing more than $1,000 or
  • 100% of the taxes paid on your prior-year return or 110% if your adjusted gross income is more than $150,000 if married filing jointly.  ($75,000 if single or married filing separately) 

We often get asked how to avoid making quarterly estimated payments.  

  1. Be sure you are having enough withheld from your paycheck or any IRA distributions to cover taxes owed for the year.  Increase your tax withholdings if coming up significantly short each year.
  2. If you are making required withdrawals from your IRA each year and don’t need the full amount, consider increasing tax withholdings from distributions to cover quarterly estimated payments. If it makes things easier, we can have this money sent to the IRS over making quarterly payments if your required distributions are large enough to cover.

Be sure to work with your accountant well prior to tax deadlines to ensure enough is being sent to the IRS to avoid any penalties.   Also, be sure to make all quarterly estimated payments unless you are able to pay via payroll deduction or IRA tax withholdings.    

Summer around the office

As we move into summer, many of you have asked our plans and what we have going on this summer. 

Bob

With an upcoming new grandchild, Bob will be spending a lot of time in Chicago giving Ruby the attention she will seek.  Bob had a fabulous weekend July 6th in Pittsburgh where his nephew is the new controller of the Pirates and gave them a tour of the city, a visit to the  stadium and a ball game.

Eric

Eric and Tiffany took a road trip to Gatlinburg, Tennessee that didn’t turn out well. After the passing of their dog Logan earlier in the year, they decided on a road trip so they could take their other dog Gia with them. While things didn’t turn out as planned, a few lessons were learned:  

  1. If taking a road trip, consider renting a car over using your own. 
  2. You may want to find out the exact location of an Airbnb before booking.
  3. If you take pets with you on vacation, be sure someone back home knows exactly where you are staying and wherever you are staying knows how to contact them if something were to happen to you.

 

Enjoy your summer as we look forward to hearing about all the exciting, fun, and maybe even not so fun, things you did.    

 


This material is meant for general illustration and/or informational purposes only.  Views expressed in this newsletter may not reflect the views of Osaic Wealth, Inc.  It is our goal to help investors by identifying changing market conditions.  However, investors should be aware that no financial advisor can accurately predict all of the changes that may occur in the market.   This material should not be relied upon as investment advice.  Investors should note that there are risks inherent in all investments, such as fluctuations in investment principal.   There is no guarantee that a diversified portfolio will outperform a non-diversified portfolio in any given market environment. This article contains forward looking statements and projections.  Past performance is no guarantee of future results.  Neither Osaic Wealth, Inc. nor its representatives provide tax or legal advice.  If you don’t wish to receive marketing emails from this sender, please reply to this email with the word REMOVE in the subject line.