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2018 Social Security Wage Base and Cost of Living Adjustments

Recently announced changes by the Social Security Administration: WORKERS:  If you have a job then you pay 6.2% of your earnings into the Social Security system.   The maximum amount of earnings subject to the Social Security tax – the so-called “wage base” – will increase from $127,200 to $128,700.  Of the estimated 175 million workers [...]

Warren Buffett Reminds Us Smart People Can Do Stupid Things

In an interview with CNBC the Oracle of Omaha disclosed that his investment vehicle (Berkshire Hathaway) is delaying taking profits in anticipation of a tax cut. Right now we're sitting and watching because within three months, actually less than that, we'll know the answer on it . . . I would feel kind of silly [...]

Tell Them What They Want To Hear

Should a financial relationship be about doing what’s right or feeling good?  The former, right?  Not so fast. A survey by index zealots DFA found the #1 thing valued in receiving financial guidance is a “sense of security / peace of mind.”  Not that that’s a bad thing of course but at 35% of respondents [...]

Intra-Year Market Drops vs. Year-End Results

Although investors claim to accept market fluctuation as normal we find precipitous selloffs overwhelming.  Why? . . . because they happen rapidly and randomly. Lost in the sea of emotion is that equity market annual returns have been mostly positive despite significant market declines in each year.  Since 1980 the average intra-year pullback in the [...]

Irrational Exuberance – Bull Market vs. Investment Mania

Semantics?  No! Bull markets end when the smart money (i.e. buying based upon fundamentals) changes its perception of earnings growth.  Markets “crash” when the dumb money (i.e. buying based upon recent performance) will no longer chase prices higher than already inflated levels. Where has the smart money been?  It’s followed businesses benefiting from increasing earnings, [...]