November 6,
2017
The
Markets
“Taxes are
what we pay for a civilized society.”
U.S.
Supreme Court Justice Oliver Wendell Holmes’s statement is engraved on the
front of the Internal Revenue Service building in Washington, D.C. Some people
agree with the sentiment. Others believe it to be a logical fallacy.
It’s
likely the tax plan proposed by House Republicans last week had all of them
talking, regardless of position on the opinion spectrum. Some of the changes suggested
in the proposal include:
·
Reducing current marginal income tax brackets from seven to four (12, 25, 35, and 39.6 percent). The New York Times reported, “While the
lowest income rate would increase, typical families in the existing 10 percent
bracket would most likely be better off because of a larger child tax credit
and an increase in the standard deduction.”
·
Repealing the Alternative Minimum Tax.
·
Increasing the standard deduction to $12,000 for individuals and $24,000 for married
couples, while eliminating personal exemptions (the $4,050 exemptions you claim
for yourself, your spouse, and your dependents).
·
Repealing state and local tax deductions.
·
Reducing (and eventually eliminating) estate taxes.
·
Setting the corporate tax rate at 20 percent. Financial
Times wrote, “This will not
increase wages or growth by much, and nowhere near the wild claims made by
its proponents. But a lower rate combined with a broader tax base is not a
terrible idea…To pay for the cuts, the tax law writers have gone after
corporate deductions…”
·
Eliminating medical expense deductions. The Hill explained, “Under current law, the IRS allows individuals
to deduct qualified medical expenses that exceed 10 percent of a person’s
adjusted gross income for the year. The bill would repeal that itemized
deduction, effective in 2018.”
In
addition to headline news about tax reform, investors contemplated the
appointment of Jerome Powell as the next Chair of the Federal Reserve and
embraced strong earnings. The Standard & Poor’s 500 Index, Dow Jones
Industrial Average, and NASDAQ closed at record highs last week.
Data as of
11/3/17
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
|
Standard & Poor's 500 (Domestic Stocks)
|
0.3%
|
15.6%
|
23.9%
|
8.7%
|
12.8%
|
5.6%
|
|
Dow Jones Global ex-U.S.
|
0.9
|
21.6
|
22.9
|
4.0
|
5.4
|
-0.9
|
|
10-year Treasury Note (Yield Only)
|
2.3
|
NA
|
1.8
|
2.4
|
1.7
|
4.3
|
|
Gold (per ounce)
|
0.1
|
9.3
|
-2.6
|
2.8
|
-5.5
|
4.6
|
|
Bloomberg Commodity Index
|
1.2
|
-0.7
|
3.9
|
-9.6
|
-9.1
|
-7.1
|
|
DJ Equity All REIT Total
Return Index
|
1.2
|
7.0
|
14.0
|
7.2
|
10.2
|
6.8
|
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg
Commodity Index returns exclude reinvested dividends (gold does not pay a
dividend) and the three-, five-, and 10-year returns are annualized; the DJ
Equity All REIT Total Return Index does include reinvested dividends and the
three-, five-, and 10-year returns are annualized; and the 10-year Treasury
Note is simply the yield at the close of the day on each of the historical time
periods.
Sources: Yahoo! Finance, Barron’s, djindexes.com,
London Bullion Market Association.
Past performance is no guarantee of future results.
Indices are unmanaged and cannot be invested into directly. N/A means not
applicable.
are you bullish about Pet Tech? Early in the last
century, authors like Anna Sewell (Black Beauty)
and Jack London (White Fang) wrote stories that encouraged readers to
understand and empathize with animals. Today,
entrepreneurs are developing devices to help people better understand pets.
Here are a few innovations in the pet-tech space that may (or may not) become household
necessities or in-demand holiday gifts:
·
Remote
control pet interaction. You may be sitting in your office,
miles from home, but that doesn’t mean you can’t pull out your smartphone and fling
a treat to Fido or shine a laser for Boots to chase. That’s right, interactive
pet cameras let you see, feed, talk to, and play with your pet when you’re far
away.
·
Pet insight
software. A tech writer at Slate
wrote, “For the most part, [my cat’s] feelings, daily activities, and health
are a black box to me.” Apparently, it’s a common issue. Entrepreneurs have
invested $10 million to develop “deep learning software that can analyze the
huge quantities of pet video…to learn more about animal behavior and how it's
linked to animal health issues and moods.”
·
Fitness
trackers for pets. Pet owners who suspect their animals
are too sedentary may want to invest in smart collars for their pets. Some
collars track temperature, heart rate, heart rate variability, activity,
calories burned, and more. Once a normal baseline has been established, pet
owners may be able to spot anomalies that signal health issues.
·
Robotic
pets with artificial intelligence. Perhaps, you just don’t
have the time to feed, walk, and play with a pet. Maybe, you travel too much or
dislike the household wear and tear associated with pets. If you want a pet that
behaves perfectly and requires less care, you may want to consider a robotic
alternative that’s “packed with an array of sensors, cameras, microphones, and
internet connectivity, as well as far more advanced AI backed by cloud
computing to develop the dog’s personality,” according to The Guardian.
It’s
a high-tech world, after all.
Weekly
Focus – Think About It
“Lots
of people talk to animals.... Not very many listen, though.... That's the
problem.”
--Benjamin Hoff, Author of The Tao of
Pooh
Best regards,
Womack
Investment Advisers, Inc.
WOMACK INVESTMENT ADVISERS, INC.
Oklahoma / Main Office: 1366 E. 15th Street - Edmond, OK 73013
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California Office: 4660 La Jolla Village Dr., Ste. 500 - San Diego, CA 92122
Phone (405) 340-1717 - Toll Free (877) 340-1717
Website: www.womackadvisers.com
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* These views are those of Carson Group
Coaching, and not the presenting Representative or the Representative’s
Broker/Dealer, and should not be construed as investment advice.
* This newsletter was prepared by Carson
Group Coaching. Carson Group Coaching is not affiliated with the named
broker/dealer.
* Government bonds and Treasury Bills are
guaranteed by the U.S. government as to the timely payment of principal and
interest and, if held to maturity, offer a fixed rate of return and fixed
principal value. However, the value of
fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk
than government bonds but normally offer a higher yield and are subject to
market, interest rate and credit risk as well as additional risks based on the
quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor's 500 (S&P 500)
is an unmanaged group of securities considered to be representative of the
stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged.
Unmanaged index returns do not reflect fees, expenses, or sales charges. Index
performance is not indicative of the performance of any investment.
* The Dow Jones Global ex-U.S. Index covers
approximately 95% of the market capitalization of the 45 developed and emerging
countries included in the Index.
* The 10-year Treasury Note represents debt
owed by the United States Treasury to the public. Since the U.S. Government is
seen as a risk-free borrower, investors use the 10-year Treasury Note as a
benchmark for the long-term bond market.
* Gold represents the afternoon gold price as
reported by the London Bullion Market Association. The gold price is set twice
daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in
U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed
to be a highly liquid and diversified benchmark for the commodity futures
market. The Index is composed of futures contracts on 19 physical commodities
and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index
measures the total return performance of the equity subcategory of the Real
Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* Yahoo! Finance is the source for any
reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change
without notice and are not intended as investment advice or to predict future
performance.
* Economic forecasts set forth may not
develop as predicted and there can be no guarantee that strategies promoted
will be successful.
* Past performance does not guarantee future
results. Investing involves risk, including loss of principal.
* You cannot invest directly in an index.
* Stock investing involves risk including
loss of principal.
* Consult your financial professional before
making any investment decision.
*
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Sources:
https://www.ft.com/content/ee5a97ce-c07e-11e7-b8a3-38a6e068f464 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/11-06-17_FinancialTimes-The_Good_the_Bad_and_the_Ugly_of_US_Tax_Reform-Footnote_4.pdf)
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