Clarus Blog

Inflation cooled in June, according to Labor Department data. Compared to the +9.1% inflation rate in the 12 months through June 30, the consumer price index (CPI) in the 12 months through July 31 increased by +8.5%. The Standard Poor’s 500 rallied +2.1%.  However, just because inflation cooled in July and may even have peaked does not mean the worst of the financial economic turbulence is behind us. For long-term retirement investors and ..

In the three tumultuous months of the second quarter, the Federal Reserve of Atlanta’s algorithm for estimating quarterly economic growth was far more accurate than consensus forecasts by leading economists. That’s unusual. The Atlanta Fed’s GDPNow predictions are sometimes wildly wrong. Though consensus forecasts of economists are far from perfect, the humans have been more reliable than the GDPNow algorithm.     The Fe..

Volatility in the stock market has increased. Recently we actually hit some down days of -3.6% and -4% in the stock market.  That shakes people up. But remember why you bought stocks.  The basic axiom of investing in the stock market is that you deliberately looked for an asset class that was volatile. After all, if you don't own an asset class that's going to be volatile, why are you entitled to 10% long-term total return in the stock ..

By our count, the bear market of 2022 is the latest of more than 20 market crises that came and went since 1957. The bear market of 2022 began June 13, when the Standard & Poor’s 500 index closed more than -20% lower than its all-time closing high on January 3, 2022. No one knows how long the bear market will last. The average bear market in modern history lasts about 11 months. On the other hand, having come off its low of June 16, this be..

In 2017, the Tax Cuts & Jobs Act of 2018 (TCJA) effectively repealed estate tax by doubling the amount of wealth that could be transferred tax exempt from $5.5 to $11.2 million. In 2022, lifetime and post-mortem gifts of $12.06 million are exempt from taxation. Allowing joint filers (read: couples) to pass $25 million to their heirs tax-free redefined the rules of estate planning not only for the top one-half of 1% of taxpayers, it also rewro..

In 2022, the lifetime exemption from gift and estate tax is $12.06 million. Under current law, which is unlikely to be changed in Congress, the exemption rises annually through 2025 based on the inflation rate. With inflation in the first half of 2022 soaring at an annual rate of 8.6%, the exemption from estate and gift taxes will be about $12,180,000 in 2023. After 2022, inflation is expected to revert to its historical norm of 3%, so an estimat..

Bear markets in stocks tend to bring out investment deals and scams preying on fear. With the bear market becoming official on June 13, when the Standard &Poor’s 500 index closed more than -20% lower than its January 3 all-time high close of 4,796.56, please be aware that investment pitches and outright scams that prey on fear become more believable in bear markets. In an exuberant bull market in stocks, speculative investments are more eas..

Since a 1965 book by financial planner Norman Dacey popularized avoiding probate, the strategy has become ingrained in the American financial psyche, and the U.S. financial system has accommodated consumers by making it easy to set up IRAs and other brokerage accounts to avoid probate. Now, with the first generation of Americans who set themselves up to avoid probate starting to die, the quiet evolution toward avoiding probate has suddenly create..

Nearly half of professionals say the bear market would bottom after sustaining a loss of -25% -- a mere three percentage point loss from yesterday’s closing price. Another 34% of practitioners say the S&P 500 loss would bottom at a loss of 30% before a new bull market begins.  The poll was conducted Tuesday, June 14 at 5 p.m. EDT, at a financial economics class attended by more than 200 professionals. More than half of the advisors att..

If you’re feeling stressed about inflation, the War in Ukraine, Covid-19 subvariants, you’re not alone. “Amid historic inflation spike and geopolitical strife, money and economic stress is mounting,” according to the latest results of a poll by the American Psychological Association (APA) and The Harris Poll. “These more recent findings were alarming,” according to APA. “Stress about money is the highest recorded since 2015.” &nbs..

At age 65, only about 20% of American retirees have family and financial resources to cover high-intensity care for at least three years. About 30% cannot afford any help at all. The remaining half of older adults lie somewhere in between, depending on their marital status, education, and race. These are the grim conclusions of The Center for Retirement Research (CRR) at Boston College. CRR is part of a consortium of research groups funded by the..

The list of risks threatening investors is unusually long. Stocks are at the edge of a bear market. Inflation last raged so high in 1981. The pandemic lingers as does the risk of bad subvariants. Supply chain problems remain a drag on consumer spending. Oil prices could spike higher still, as Russia’s pariah  status compels Germany to impose a ban on imports of Russian oil and gas. This is a great moment to ask yourself: “What’s my pla..

After flirting with a -20% decline from its record high price, which would have placed it in bear market territory, the stock market, as measured by the Standard & Poor’s 500 index, has bounced back – for now.  The drop in stock prices could resume, however. Inflation, Russia, and the pandemic are wild cards and any one of them could send stocks tumbling again. It’s a time of high financial anxiety.  2022 has been a bad year f..

At a class for professionals, L. Paul Hood, Jr., one of the nation’s leading estate planning educators of lawyers, accountants, and financial advisors, recently identified all the things that can go wrong with an estate plan. It’s a lot! For individuals facing estate plan questions, here are some important considerations. The players involved in creating an estate plan include you, the client, of course. But you will probably need to work wit..

The economy shrank 1.4% last quarter but is expected to grow 2.7% in the next four quarters. Economist Fritz Meyer, at a webinar for financial professionals today, called the state of financial economic conditions “cognitive dissonance,” which is defined as the discomfort felt when two or more thoughts contradict each other. Here’s a factual perspective of the clashing cognitions of financial economic conditions currently.  The most re..

Five years is not a long time in financial planning. However, it is the shortest time-period to consider in planning a long-term portfolio that can outlive you. In America, the world’s largest and most rewarding financial economic system, building a portfolio that outlives you is the No. 1 financial goal of parents, family leaders, and charitably inclined individuals.  Data in this bar chart showing five years of history should inform your..

Investments in IRAs are the main source of funding retirement income for a vast majority of Americans. Your IRA is probably crucially important to your retirement success and may also play a role in your estate plan.  Trouble is, the rules on IRAs have changed and so has the investment environment, and, as a result, taking a strategic approach is not so easy. Here is a very simplified explanation of strategic planning opportunities triggered..

A new survey of long-term care insurer rate increases offers a rare glimpse into an insurance sector with a history of problems for consumers.  Long-term care insurance (LTCI) is a relatively new type of insurance. For most of its 50-year history, insurers made overly optimistic assumptions about key factors in the price of their policies, including: how much to charge for policies how many policyholders would keep their policies in force ho..

Financial services giants make financial planning and wealth management sound very simple in slick TV ads, but it’s not.  Managing wealth requires knowing a lot about technical highly topics, like math, taxes and finance as well as history, psychology and how to communicate with loved ones about sensitive issues. This article highlights many of the topics of knowledge needed to manage wealth and why it’s so daunting without the help of a..