The ESG Update, Vol. 6
3rd Quarter Record-Keeping.
June 30th marked the end of the 2018 2nd Quarter which means July is a busy time for us. Expect these reports before the end of July, either via email or your mailbox:
If you have elected electronic delivery, you will receive an email that your Quarterly Performance Report and First Affirmative’s Newsletters Affirmative Impact, Market Commentary, and Economic Commentary are available. Please call if you have questions or problems or want us to send a paper version of these newsletters!
If you have elected paper delivery, you will receive the very same reports, just the paper versions.
Please let me know if you want to change your delivery preferences…either to paper or electronic delivery. If you wish to change your delivery options, please let me know ASAP, as I think we can still make that change for your 2nd Quarter report.
Regardless of your reporting election, you will receive your Quarterly Invoice, showing the investment management services we have provided, for the PAST quarter. While last year’s tax reform has limited your ability to itemize our tax return, keep these for year-end tax reporting. File these invoices in the 2018 Taxes folder I sent you a few months ago.
Also, if you have an IRA or a Roth IRA, you should have received the IRS form 5498 which provides the IRS with the value of your retirement account on 12/31/2017. This information is provided to the IRS and is information only...you don't need to do anything other than file it in your 2018 Taxes folder.
Along with investment-related items, file anything you will need at tax-time in this folder: January 2019 will be here before we know it. Most people receive charitable contribution letters and while we don't know the full impact of last year's tax reform, let's be sure we don’t lose track of contributions.
Our focus for the 3rd Quarter will be Tax Planning so please make sure I have your 2017 Tax Return — we will be able to see if your taxes, in fact, will be lower for 2018.
Follow Skye Advisors on Social Media!
Skye Advisors’ Facebook page has posts of interest, real-time charts, and my thoughts…especially when we have volatile days. I love having the freedom to communicate and keep you in-the-know.
Keep These Support Phone Numbers Handy
Schwab Website Problems and Password Reset: Schwab Alliance Team (800) 515-2157
Julie Skye’s Backup Contact: Diane Conrad at the First Affirmative Home Office (719) 636-1045 ext. 0
Using the Schwab Mobile App
Follow account values, deposit checks directly into your account, and more!
Signatures Needed – Investment Policy Statement (IPS)
As I continue to work on portfolio re-balancing, I will need your signature on your Investment Policy Statements (IPS). I’ll be using Skye Advisors’ DocuSign, and I will always give you a heads up when it is on the way, so you know it is coming from me!
‘Right Capital’ Financial Planning.
While working on your portfolios, we’re also inputting your information into my choice for financial planning: Right Capital. This is good news if you loved using the cloud to share information with me or use to keep your financial records secure for when you are not at your desk.
Wonder if a Home Warranty Truly Makes Financial Sense?
Budget-minded Clark Howard, in general, is no fan of warranties and says, “Home warranties aren’t worth the paper they’re written on.” He does have one time he does think they make sense: “If you are selling a home, it might give the buyer a sense of confidence about your used home and give you the edge as a seller trying to entice a buyer in a tough market.” According to one study, homes that come with warranties sell 11 days quicker and for an average of $2,300 more than those without. Please let me know your experience with home warranties so I can pass it along.
JP Morgan Endorses ‘Sustainable’ Investing as a way to Outperform the Market.
MAY 11, 2018 • RYAN VLASTELICA
While clients and just about anyone that knows me has heard my views on sustainable impact investing – ESG – this way of investing is now getting attention from some of Wall Street’s biggest names.
JP Morgan Chase now thinks “sustainable investing is mature enough to be considered a viable strategy on returns grounds, as opposed to a niche option for investors who want to put their money in places that don’t violate their personal beliefs.”
“We find that ESG investment no longer requires foregoing returns as companies that are socially responsible are likely to lead in overall management capabilities,” JP Morgan wrote. ESG refers to environmental, social, and corporate governance, or the three primary screens that are used in evaluating securities on sustainable metrics. “ESG investing is now moving into the mainstream and gravitating from negative screening of sinful industries to more quantitative, data-driven and index approaches as the availability and quality of ESG metrics and reporting have increased,” the investment bank wrote. Socially responsible investing “recognizes the fiduciary role for companies and issuers to act in the best long-term interests of beneficiaries.”
While I don’t really need JP Morgan’s approval to know we’re on the right side of history, it is nice to know that we are years ahead of the pack.
Transparency Matters: Pulling Back the Curtain
Behavioral Finance Made Simple with Gil Weinreich.
This month we look at transparency…by looking into YOUR brain. Check out this podcast by Gil Weinreich, one of my favorite authors at Seeking Alpha.
“I’ve yet to see a straightforward way of applying behavioral finance insights to investing. Are you supposed to have a checklist to make sure you’re not anchoring, herding or acting out of confirmation bias? In this brief podcast (2:35), I propose a simpler way of understanding what investing requires.”
Financial Moguls and Markets
Strong Signals Support the Fed’s Path Forward.
JUNE 15, 2018 • RYAN DRISCOLL AND KRISTOFER KWAIT
The stock market’s 100-point daily moves that are becoming a way of life might make you think our economy is on the brink of collapse. To get a more nuanced look, however, take a look into the recent action of the Federal Open Market Committee, known by most as “The Fed.” Their unanimous vote to raise interest rates at their June meeting was proof they feel there are positive trends in the economy. They also raised their forecasts for economic growth and inflation and are now signaling that we may see 4 increases in 2018!
Key is their take on the “output” of our economy…known as GDP…and the gentle uptick in inflation that helps them feel the economy can absorb slow, measured “steps-ups,” each quarter. While the forecast GDP of 2.8% is lower than the 3.5% they would like to see, this was the 7th increase since December 2015. If this cycle is like previous ones, we have 6 more increases before we hit their goal of an average of 13 increases. Expect to see jittery markets going into their meetings, and following them. If they get it right, the markets will continue higher, reflecting a steady economy and moderate inflation.
W-4 Withholding and Tax Reform.
MAY 8, 2018 • TURBOTAX BLOG TEAM
Last December, the President signed the tax reform bill into law and now that your 2017 taxes are behind you…what should you expect for 2018? One of the most important changes you can make is to make sure you have the correct amount of withholding taken out of your paycheck or IRA withdrawal. While this is NO substitute for your CPA, TurboTax can help you explore the impact changes might have on you.
Check out the TurboTax W-4 Withholding Calculator, which has been updated to reflect 2018 tax law changes.
Under the new rules, individual tax rates are being lowered to 10%, 12%, 22%, 24%, 32%, 35%, and 37% and these new rates will be reflected in the amount of money being withheld from your 2018 paychecks, as well as your tax liability for 2018.
The IRS recently updated withholding tables with the new rates for employers to use during 2018. Employers began using the new withholding information Feb. 15, 2018. The new withholding tables are designed to work with the Forms W-4 that workers have already filed with their employers to claim withholding allowances.
For people with simpler tax situations, the new tables are designed to produce the correct amount of tax withholding. The revisions are to help withhold the correct amounts from taxpayers’ paychecks. If you have questions, talk to me!