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The Best of What They Said and I Read Week Ending 12/1/2019

Short excerpts from articles I found interesting.  I may not agree with the author and the following material is not intended as investment advice

Barron’s – November 29, 2019 – The S&P 500 Notches Its 26th Record This Year Before Falling Back -  Lawrence C. Strauss

  •  “The Dow Jones Industrial Average finished the week at 28,051.41, up 0.63%. It has made gains in five of the past six weeks…it finished at 28,164, which marked the Dow’s 15th record close of the year.  The S&P 500 index and the technology-heavy Nasdaq Composite also set record closes on Wednesday—the S&P 500 for the 26th time this year and the Nasdaq for the 21st time. The S&P 500 finished the week at 3,140.98…It gained 0.99% during the week. The Nasdaq Composite…to close at 8,666.47…notched a weekly gain of 1.71%.  The Russell 2000, which tracks small-cap issues…closing up 2.2% for the week, at 1,624.50…The index’s record close occurred in August 2018, when it hit 1,740.75. As of Friday’s close, it was about 7% off that record…As of Friday, the S&P 500 had returned 25.8% for the year, on pace to have its best result since 2013.”

Barron’s – November 30, 2019 – 4 Ways to Manage Your Required Minimum Distributions When You Don’t Need the Money -  Nick Fortuna

  •  “After years spent saving, many retirees find it hard to shift gears and start spending—leaving them with more money than they know what to do with when they’re required to start making withdrawals.  More than half of customers with Fidelity Investments who have traditional individual retirement accounts take out only their required minimum distribution amounts starting at age 70½, choosing instead to keep their money invested for as long as possible, the company says.  The reasons vary, says Keith Bernhard, vice president of retirement income at Fidelity. Many fear unexpected health-care expenditures, while others just want to keep growing their assets in a tax-deferred investment vehicle. And still others are protecting their nest eggs while adjusting to life without a paycheck…so what should retirees do with that money when they don’t need it for living expenses? Here are some tips:”

  • “…Reduce RMD amounts by converting a portion of your traditional IRA to a Roth IRA. In the years immediately after retirement, many seniors get by on Social Security and their savings, so their taxable income is relatively low. That makes it a good time to consider converting a portion of a traditional IRA to a Roth IRA, which will lower RMDs in the future, Bernhardt says…Retirees can convert money from a traditional IRA to a Roth IRA over several years to avoid getting bumped into a higher tax bracket in any one year...”

  • “…Decrease RMDs by purchasing a qualified longevity annuity contract. Seniors can use as much as 25% of a 401(k) or IRA, up to $130,000, to purchase a QLAC, Bernhardt says. The assets used to purchase the deferred annuity aren’t taxed, though the monthly payments from the annuity will be taxed. The retiree can choose to start receiving payments at any age up to 85, and the longer the senior delays collecting, the higher those monthly payments will be.  Since purchasing a QLAC lowers the total value of the 401(k) or IRA account, future RMDs will be reduced.  The guaranteed income does come with drawbacks, however. Retirees miss out on any potential investment gains that would have come from the principal amount used to buy the QLAC, and seniors typically have to live until their late 80s or longer just to recoup the principal. In addition, they have less liquidity in their retirement accounts and less assets to leave to their children.  Is that worth the peace of mind of having additional guaranteed income late in life? For some, the answer may be yes.”

U.S. Global Investors - Investor Alert – November 29, 2019 – Frank Holmes 

  • “…Deere & Co. issued a more cautious outlook than expected for 2020 as the continued trade war and difficult growing conditions keep North American farmers from replacing large equipment, reports Bloomberg. Global sales of agriculture and turf equipment are forecast to fall 5 percent to 10 percent for fiscal 2020.”

  • “…According to a new survey, most young Russians (53 percent), aged 18 to 24 years would like to emigrate from Russia. Higher age groups have less of a desire to leave the country but the numbers are still high, with 30 percent of those aged 25 to 39 wanting to leave and 19 percent of 40 to 54 years old wishing to emigrate. Those with a desire to leave Russia want a better future for their children, a stronger economy and a different political situation in the country.”

  • “…China said it will raise penalties on violations of intellectual property rights in an attempt to address one of the sticking points in trade talks with the U.S. The country will also look into lowering the thresholds for criminal punishments for those who steal IP, according to guidelines issued by the government on Sunday. The U.S. wants China to commit to cracking down on IP theft and stop forcing U.S. companies to hand over their commercial secrets as a condition of doing business there. China said it’s aiming to reduce frequent IP violations by 2022.”

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