#Richard Abbe | Investing | New York

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The Signs of a Hot Stock Market

The Signs of a Hot Stock Market http://richardabbe.com/the-signs-of-a-hot-stock-market/?utm_source=rss&utm_medium=rss&utm_campaign=the-signs-of-a-hot-stock-market A hot stock market is a thrilling place to be. Prices are rising, investor confidence is high, and the potential for profits seems endless. But how can you tell when the market is genuinely heating up? Here are some key indicators to watch for. Rising Stock Prices This might seem obvious, but it’s the most fundamental sign. When stock prices steadily climb, it strongly indicates a bullish market. Significant indices like the S&P 500 and Nasdaq Composite are often used as benchmarks. If these are consistently hitting new highs, it’s a good sign. Increased Trading Volume: A surge in trading activity is another hallmark of a hot market. More people are buying and selling stocks, driving up prices. Increased volume can be a sign of growing investor interest and enthusiasm. Positive Economic Indicators A thriving economy often fuels a hot stock market. Look for indicators like low unemployment rates, rising GDP, and increasing consumer spending. These factors create a positive business environment in which to grow and prosper, boosting stock prices. Investor Confidence When optimistic, investors’re more likely to invest in the stock market. This increased confidence can lead to a buying frenzy and push prices higher. Surveys and polls of investor sentiment can give you a sense of market mood. New IPOs and Hot Stocks A hot market is often characterized by a flurry of new IPOs (Initial Public Offerings). Companies see an opportunity to raise capital and cash in on investor enthusiasm. Additionally, certain stocks become “hot” and attract intense investor attention, rapidly driving their prices. Low Volatility While market fluctuations are expected, a sustained low volatility can indicate a healthy and upward-trending market. Investors feel more comfortable buying stocks when they believe prices are relatively stable. Media Hype Increased media coverage of the stock market, especially positive news and stories about investing success, can signify a hot market. When everyone is talking about stocks, it suggests widespread interest and optimism. It’s important to remember that these are just indicators, and the stock market can be unpredictable. A hot market can turn cold quickly, so research and consider your risk tolerance before investing is essential. While being part of a rising market is exciting, staying informed and protecting your investments are equally important.   The post The Signs of a Hot Stock Market first appeared on Richard Abbe | Investing | New York.

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Nature Kushner Likely Paid No Federal Income Taxes for Years, Documents Show

Nature Kushner Likely Paid No Federal Income Taxes for Years, Documents Show Nature Kushner Likely Paid No Federal Income Taxes for Years, Documents Show http://www.nature-business.com/nature-kushner-likely-paid-no-federal-income-taxes-for-years-documents-show/

Nature

Over the past decade, Jared Kushner’s family company has spent billions of dollars buying real estate. His personal stock investments have soared. His net worth has quintupled to almost $324 million.

And yet, for several years running, Mr. Kushner — President Trump’s son-in-law and a senior White House adviser — appears to have paid almost no federal income taxes, according to confidential financial documents reviewed by The New York Times.

His low tax bills are the result of a common tax-minimizing maneuver that, year after year, generated millions of dollars in losses for Mr. Kushner, according to the documents. But the losses were only on paper — Mr. Kushner and his company did not appear to actually lose any money. The losses were driven by depreciation, a tax benefit that lets real estate investors deduct a portion of the cost of their buildings from their taxable income every year.

In 2015, for example, Mr. Kushner took home $1.7 million in salary and investment gains. But those earnings were swamped by $8.3 million of losses, largely because of “significant depreciation” that Mr. Kushner and his company took on their real estate, according to the documents reviewed by The Times.

Nothing in the documents suggests Mr. Kushner or his company broke the law. A spokesman for Mr. Kushner’s lawyer said that Mr. Kushner “paid all taxes due.”

In theory, the depreciation provision is supposed to shield real estate developers from having their investments whittled away by wear and tear on their buildings.

In practice, though, the allowance often represents a lucrative giveaway to developers like Mr. Trump and Mr. Kushner.

A Step-by-Step Explanation of How It Worked

The law assumes that buildings’ values decline every year when, in reality, they often gain value. Its enormous flexibility allows real estate investors to determine their own tax bills.

The White House last year championed a sweeping revision of the nation’s tax laws that expanded many of the benefits enjoyed by real estate investors, allowing them to reap even larger deductions.

“The Trump administration was in a position to clean up the tax code and promised to get rid of some of the complexity that certain taxpayers use to their advantage,” said Victor Fleischer, a tax law professor at the University of California, Irvine. “Instead, they doubled down on those provisions, particularly the ones they have familiarity with to benefit themselves.”

The documents, which The Times reviewed in their entirety, were created with Mr. Kushner’s cooperation as part of a review of his finances by an institution that was considering lending him money. Totaling more than 40 pages, they describe his business dealings, earnings, expenses and borrowing from 2009 to 2016. They contain information that was taken from Mr. Kushner’s federal tax filings, as well as other data provided by his advisers. The documents, mostly created last year, were shared with The Times by a person who has had financial dealings with Mr. Kushner and his family.

Thirteen tax accountants and lawyers, including J. Richard Harvey Jr., a tax official in the Reagan, George W. Bush and Obama administrations, reviewed the documents for The Times. Mr. Harvey said that, assuming the documents accurately reflect information from his tax returns, Mr. Kushner appeared to have paid little or no federal income taxes during at least five of the past eight years. The other experts agreed and said Mr. Kushner probably didn’t pay much in the three other years, either.

Peter Mirijanian, a spokesman for Mr. Kushner’s lawyer, Abbe Lowell, said he would not respond to assumptions derived from documents that provide an incomplete picture and were “obtained in violation of the law and standard business confidentiality agreements. However, always following the advice of numerous attorneys and accountants, Mr. Kushner properly filed and paid all taxes due under the law and regulations.”

Mr. Mirijanian added that, with regard to the tax legislation, Mr. Kushner “has avoided work that would pose any conflict of interest.”

Representatives of the White House and Mr. Kushner’s firm, Kushner Companies, didn’t respond to requests for comment.

The revelation about Mr. Kushner’s minimal tax payments comes as his father-in-law’s taxes are under renewed scrutiny. A Times investigation published this month found that Mr. Trump participated in outright fraud that shielded his family’s fortune from estate and gift taxes.

Mr. Trump has broken with decades of tradition by refusing to release his tax returns. But portions of a 1995 tax return previously published by The Times show trends similar to the one visible in the documents detailing Mr. Kushner’s finances. Mr. Trump at the time reported nearly $916 million in losses, which could have permitted him to avoid any federal income taxes for almost two decades.

The summaries of Mr. Kushner’s tax returns reviewed by The Times don’t explicitly state how much he paid. Instead, the documents include disclosures by his accountants that estimate how much tax he owed for the year just ended — called “income taxes payable” — and how much he paid during the year in anticipation of taxes he would owe, called “prepaid taxes.” For most of the years covered, both were listed as zero.

Image

An excerpt of Mr. Kushner’s net worth statement for 2011 to 2016, with highlighting by The New York Times. The amount he paid in anticipation of taxes he would owe is called “prepaid taxes.”

Peter Buell, who runs tax services for the real estate practice of the accounting firm Marcum, said the lack of prepayments indicated Mr. Kushner most likely didn’t owe income taxes in those years. Mr. Buell said he was especially confident that Mr. Kushner had no tax liability because the documents also report no “income taxes payable.”

Image

Another clue from the net worth statement: “income taxes payable,” the amount his accountants estimated he owed at year’s end, also highlighted by The Times.

Kushner Companies — where Mr. Kushner was chief executive and remains an owner — has been profitable and has thrown off millions of dollars in cash annually for Mr. Kushner and his father, Charles, according to an analysis by the company that was included in the documents reviewed by The Times.

But as far as the Internal Revenue Service is concerned, the Kushners have been losing money for years.

Kushner Companies, like many real estate firms, passes on any tax obligations to its owners, including Mr. Kushner and his father, who incorporate them into their personal tax returns.

Unlike typical wage earners, the owners of such companies can report losses for tax purposes. When a firm like Kushner Companies reports expenses in excess of its income, the result is a “net operating loss.” That loss can wipe out any taxes that the company’s owner otherwise would owe. Depending on the size of the loss, it can even be used to get refunds for taxes paid in prior years or eliminate tax bills in future years.

Mr. Kushner’s losses, stemming in large part from the depreciation deduction, appeared to wipe out his taxable income in most years covered by the documents.

He is reporting the losses even though he bought his properties with borrowed funds. In many cases, Mr. Kushner kicked in less than 1 percent of the purchase price, according to the documents. Even that small amount generally was paid for with loans. Mr. Kushner’s credit lines from banks rose to $46 million in 2016 from zero in 2009, the documents show.

The result: Mr. Kushner is getting tax-reducing losses for spending someone else’s money, which is permitted under the tax code. Depreciation deductions are available in other industries, but they generally don’t get to take losses related to spending with borrowed money.

“If I had to live my life over again, I would have been in the real estate business,” said Jonathan Blattmachr, a well-known trusts and estates lawyer, now a principal at Pioneer Wealth Partners, who reviewed the Kushner documents. “It’s fantastic. You get tax deductions for things you don’t pay for.”

More on Taxes in the Trump Administration

One of the only years in which Mr. Kushner appeared to have owed anything was 2013, when he reported income taxes payable of $1.1 million. According to the documents, Mr. Kushner has filed tax returns separately from his wife, Ivanka Trump — a relatively common practice among wealthy couples who want to avoid entwining their complex personal finances.

Mr. Kushner’s father appears to have benefited from the same tax deductions, the documents indicate. The experts interviewed by The Times said Charles Kushner most likely avoided paying federal income taxes from at least 2012 to 2016.

The tax code affords real estate investors great leeway in how they calculate their depreciation — flexibility that often is used to inflate their annual deductions. Among the tactics used by many developers: Their tax advisers prepare studies arguing that much of a property’s value is attributable to things like appliances and parking lots, which under the law can be depreciated more quickly than the building.

Such strategies are almost never audited, tax professionals say. And the new tax law provides even more opportunities for property investors to take larger deductions.

Developers might have to pay capital gains taxes if they sell their properties. But the Kushners, like others in the real estate business, often avoid that tax, too, by using the proceeds of sales to buy more properties within a certain time window.

At least in part because of that perk, the Kushners’ property sales in the period covered by the documents — totaling about $2.3 billion, according to Real Capital Analytics, a research firm — generated little or no taxable income for Mr. Kushner.

Last year’s tax legislation eliminated that benefit for all industries but one: real estate.

Read More | https://www.nytimes.com/2018/10/13/business/jared-kushner-taxes.html |

Nature Kushner Likely Paid No Federal Income Taxes for Years, Documents Show, in 2018-10-13 15:46:23

[computacionalblog]

Nature Kushner Likely Paid No Federal Income Taxes for Years, Documents Show

Nature Kushner Likely Paid No Federal Income Taxes for Years, Documents Show Nature Kushner Likely Paid No Federal Income Taxes for Years, Documents Show http://www.nature-business.com/nature-kushner-likely-paid-no-federal-income-taxes-for-years-documents-show/

Nature

Over the past decade, Jared Kushner’s family company has spent billions of dollars buying real estate. His personal stock investments have soared. His net worth has quintupled to almost $324 million.

And yet, for several years running, Mr. Kushner — President Trump’s son-in-law and a senior White House adviser — appears to have paid almost no federal income taxes, according to confidential financial documents reviewed by The New York Times.

His low tax bills are the result of a common tax-minimizing maneuver that, year after year, generated millions of dollars in losses for Mr. Kushner, according to the documents. But the losses were only on paper — Mr. Kushner and his company did not appear to actually lose any money. The losses were driven by depreciation, a tax benefit that lets real estate investors deduct a portion of the cost of their buildings from their taxable income every year.

In 2015, for example, Mr. Kushner took home $1.7 million in salary and investment gains. But those earnings were swamped by $8.3 million of losses, largely because of “significant depreciation” that Mr. Kushner and his company took on their real estate, according to the documents reviewed by The Times.

Nothing in the documents suggests Mr. Kushner or his company broke the law. A spokesman for Mr. Kushner’s lawyer said that Mr. Kushner “paid all taxes due.”

In theory, the depreciation provision is supposed to shield real estate developers from having their investments whittled away by wear and tear on their buildings.

In practice, though, the allowance often represents a lucrative giveaway to developers like Mr. Trump and Mr. Kushner.

A Step-by-Step Explanation of How It Worked

The law assumes that buildings’ values decline every year when, in reality, they often gain value. Its enormous flexibility allows real estate investors to determine their own tax bills.

The White House last year championed a sweeping revision of the nation’s tax laws that expanded many of the benefits enjoyed by real estate investors, allowing them to reap even larger deductions.

“The Trump administration was in a position to clean up the tax code and promised to get rid of some of the complexity that certain taxpayers use to their advantage,” said Victor Fleischer, a tax law professor at the University of California, Irvine. “Instead, they doubled down on those provisions, particularly the ones they have familiarity with to benefit themselves.”

The documents, which The Times reviewed in their entirety, were created with Mr. Kushner’s cooperation as part of a review of his finances by an institution that was considering lending him money. Totaling more than 40 pages, they describe his business dealings, earnings, expenses and borrowing from 2009 to 2016. They contain information that was taken from Mr. Kushner’s federal tax filings, as well as other data provided by his advisers. The documents, mostly created last year, were shared with The Times by a person who has had financial dealings with Mr. Kushner and his family.

Thirteen tax accountants and lawyers, including J. Richard Harvey Jr., a tax official in the Reagan, George W. Bush and Obama administrations, reviewed the documents for The Times. Mr. Harvey said that, assuming the documents accurately reflect information from his tax returns, Mr. Kushner appeared to have paid little or no federal income taxes during at least five of the past eight years. The other experts agreed and said Mr. Kushner probably didn’t pay much in the three other years, either.

Peter Mirijanian, a spokesman for Mr. Kushner’s lawyer, Abbe Lowell, said he would not respond to assumptions derived from documents that provide an incomplete picture and were “obtained in violation of the law and standard business confidentiality agreements. However, always following the advice of numerous attorneys and accountants, Mr. Kushner properly filed and paid all taxes due under the law and regulations.”

Mr. Mirijanian added that, with regard to the tax legislation, Mr. Kushner “has avoided work that would pose any conflict of interest.”

Representatives of the White House and Mr. Kushner’s firm, Kushner Companies, didn’t respond to requests for comment.

The revelation about Mr. Kushner’s minimal tax payments comes as his father-in-law’s taxes are under renewed scrutiny. A Times investigation published this month found that Mr. Trump participated in outright fraud that shielded his family’s fortune from estate and gift taxes.

Mr. Trump has broken with decades of tradition by refusing to release his tax returns. But portions of a 1995 tax return previously published by The Times show trends similar to the one visible in the documents detailing Mr. Kushner’s finances. Mr. Trump at the time reported nearly $916 million in losses, which could have permitted him to avoid any federal income taxes for almost two decades.

The summaries of Mr. Kushner’s tax returns reviewed by The Times don’t explicitly state how much he paid. Instead, the documents include disclosures by his accountants that estimate how much tax he owed for the year just ended — called “income taxes payable” — and how much he paid during the year in anticipation of taxes he would owe, called “prepaid taxes.” For most of the years covered, both were listed as zero.

Image

An excerpt of Mr. Kushner’s net worth statement for 2011 to 2016, with highlighting by The New York Times. The amount he paid in anticipation of taxes he would owe is called “prepaid taxes.”

Peter Buell, who runs tax services for the real estate practice of the accounting firm Marcum, said the lack of prepayments indicated Mr. Kushner most likely didn’t owe income taxes in those years. Mr. Buell said he was especially confident that Mr. Kushner had no tax liability because the documents also report no “income taxes payable.”

Image

Another clue from the net worth statement: “income taxes payable,” the amount his accountants estimated he owed at year’s end, also highlighted by The Times.

Kushner Companies — where Mr. Kushner was chief executive and remains an owner — has been profitable and has thrown off millions of dollars in cash annually for Mr. Kushner and his father, Charles, according to an analysis by the company that was included in the documents reviewed by The Times.

But as far as the Internal Revenue Service is concerned, the Kushners have been losing money for years.

Kushner Companies, like many real estate firms, passes on any tax obligations to its owners, including Mr. Kushner and his father, who incorporate them into their personal tax returns.

Unlike typical wage earners, the owners of such companies can report losses for tax purposes. When a firm like Kushner Companies reports expenses in excess of its income, the result is a “net operating loss.” That loss can wipe out any taxes that the company’s owner otherwise would owe. Depending on the size of the loss, it can even be used to get refunds for taxes paid in prior years or eliminate tax bills in future years.

Mr. Kushner’s losses, stemming in large part from the depreciation deduction, appeared to wipe out his taxable income in most years covered by the documents.

He is reporting the losses even though he bought his properties with borrowed funds. In many cases, Mr. Kushner kicked in less than 1 percent of the purchase price, according to the documents. Even that small amount generally was paid for with loans. Mr. Kushner’s credit lines from banks rose to $46 million in 2016 from zero in 2009, the documents show.

The result: Mr. Kushner is getting tax-reducing losses for spending someone else’s money, which is permitted under the tax code. Depreciation deductions are available in other industries, but they generally don’t get to take losses related to spending with borrowed money.

“If I had to live my life over again, I would have been in the real estate business,” said Jonathan Blattmachr, a well-known trusts and estates lawyer, now a principal at Pioneer Wealth Partners, who reviewed the Kushner documents. “It’s fantastic. You get tax deductions for things you don’t pay for.”

More on Taxes in the Trump Administration

One of the only years in which Mr. Kushner appeared to have owed anything was 2013, when he reported income taxes payable of $1.1 million. According to the documents, Mr. Kushner has filed tax returns separately from his wife, Ivanka Trump — a relatively common practice among wealthy couples who want to avoid entwining their complex personal finances.

Mr. Kushner’s father appears to have benefited from the same tax deductions, the documents indicate. The experts interviewed by The Times said Charles Kushner most likely avoided paying federal income taxes from at least 2012 to 2016.

The tax code affords real estate investors great leeway in how they calculate their depreciation — flexibility that often is used to inflate their annual deductions. Among the tactics used by many developers: Their tax advisers prepare studies arguing that much of a property’s value is attributable to things like appliances and parking lots, which under the law can be depreciated more quickly than the building.

Such strategies are almost never audited, tax professionals say. And the new tax law provides even more opportunities for property investors to take larger deductions.

Developers might have to pay capital gains taxes if they sell their properties. But the Kushners, like others in the real estate business, often avoid that tax, too, by using the proceeds of sales to buy more properties within a certain time window.

At least in part because of that perk, the Kushners’ property sales in the period covered by the documents — totaling about $2.3 billion, according to Real Capital Analytics, a research firm — generated little or no taxable income for Mr. Kushner.

Last year’s tax legislation eliminated that benefit for all industries but one: real estate.

Read More | https://www.nytimes.com/2018/10/13/business/jared-kushner-taxes.html |

Nature Kushner Likely Paid No Federal Income Taxes for Years, Documents Show, in 2018-10-13 15:46:23

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Nature Kushner Likely Paid No Federal Income Taxes for Years, Documents Show

Nature Kushner Likely Paid No Federal Income Taxes for Years, Documents Show Nature Kushner Likely Paid No Federal Income Taxes for Years, Documents Show http://www.nature-business.com/nature-kushner-likely-paid-no-federal-income-taxes-for-years-documents-show/

Nature

Over the past decade, Jared Kushner’s family company has spent billions of dollars buying real estate. His personal stock investments have soared. His net worth has quintupled to almost $324 million.

And yet, for several years running, Mr. Kushner — President Trump’s son-in-law and a senior White House adviser — appears to have paid almost no federal income taxes, according to confidential financial documents reviewed by The New York Times.

His low tax bills are the result of a common tax-minimizing maneuver that, year after year, generated millions of dollars in losses for Mr. Kushner, according to the documents. But the losses were only on paper — Mr. Kushner and his company did not appear to actually lose any money. The losses were driven by depreciation, a tax benefit that lets real estate investors deduct a portion of the cost of their buildings from their taxable income every year.

In 2015, for example, Mr. Kushner took home $1.7 million in salary and investment gains. But those earnings were swamped by $8.3 million of losses, largely because of “significant depreciation” that Mr. Kushner and his company took on their real estate, according to the documents reviewed by The Times.

Nothing in the documents suggests Mr. Kushner or his company broke the law. A spokesman for Mr. Kushner’s lawyer said that Mr. Kushner “paid all taxes due.”

In theory, the depreciation provision is supposed to shield real estate developers from having their investments whittled away by wear and tear on their buildings.

In practice, though, the allowance often represents a lucrative giveaway to developers like Mr. Trump and Mr. Kushner.

A Step-by-Step Explanation of How It Worked

The law assumes that buildings’ values decline every year when, in reality, they often gain value. Its enormous flexibility allows real estate investors to determine their own tax bills.

The White House last year championed a sweeping revision of the nation’s tax laws that expanded many of the benefits enjoyed by real estate investors, allowing them to reap even larger deductions.

“The Trump administration was in a position to clean up the tax code and promised to get rid of some of the complexity that certain taxpayers use to their advantage,” said Victor Fleischer, a tax law professor at the University of California, Irvine. “Instead, they doubled down on those provisions, particularly the ones they have familiarity with to benefit themselves.”

The documents, which The Times reviewed in their entirety, were created with Mr. Kushner’s cooperation as part of a review of his finances by an institution that was considering lending him money. Totaling more than 40 pages, they describe his business dealings, earnings, expenses and borrowing from 2009 to 2016. They contain information that was taken from Mr. Kushner’s federal tax filings, as well as other data provided by his advisers. The documents, mostly created last year, were shared with The Times by a person who has had financial dealings with Mr. Kushner and his family.

Thirteen tax accountants and lawyers, including J. Richard Harvey Jr., a tax official in the Reagan, George W. Bush and Obama administrations, reviewed the documents for The Times. Mr. Harvey said that, assuming the documents accurately reflect information from his tax returns, Mr. Kushner appeared to have paid little or no federal income taxes during at least five of the past eight years. The other experts agreed and said Mr. Kushner probably didn’t pay much in the three other years, either.

Peter Mirijanian, a spokesman for Mr. Kushner’s lawyer, Abbe Lowell, said he would not respond to assumptions derived from documents that provide an incomplete picture and were “obtained in violation of the law and standard business confidentiality agreements. However, always following the advice of numerous attorneys and accountants, Mr. Kushner properly filed and paid all taxes due under the law and regulations.”

Mr. Mirijanian added that, with regard to the tax legislation, Mr. Kushner “has avoided work that would pose any conflict of interest.”

Representatives of the White House and Mr. Kushner’s firm, Kushner Companies, didn’t respond to requests for comment.

The revelation about Mr. Kushner’s minimal tax payments comes as his father-in-law’s taxes are under renewed scrutiny. A Times investigation published this month found that Mr. Trump participated in outright fraud that shielded his family’s fortune from estate and gift taxes.

Mr. Trump has broken with decades of tradition by refusing to release his tax returns. But portions of a 1995 tax return previously published by The Times show trends similar to the one visible in the documents detailing Mr. Kushner’s finances. Mr. Trump at the time reported nearly $916 million in losses, which could have permitted him to avoid any federal income taxes for almost two decades.

The summaries of Mr. Kushner’s tax returns reviewed by The Times don’t explicitly state how much he paid. Instead, the documents include disclosures by his accountants that estimate how much tax he owed for the year just ended — called “income taxes payable” — and how much he paid during the year in anticipation of taxes he would owe, called “prepaid taxes.” For most of the years covered, both were listed as zero.

Image

An excerpt of Mr. Kushner’s net worth statement for 2011 to 2016, with highlighting by The New York Times. The amount he paid in anticipation of taxes he would owe is called “prepaid taxes.”

Peter Buell, who runs tax services for the real estate practice of the accounting firm Marcum, said the lack of prepayments indicated Mr. Kushner most likely didn’t owe income taxes in those years. Mr. Buell said he was especially confident that Mr. Kushner had no tax liability because the documents also report no “income taxes payable.”

Image

Another clue from the net worth statement: “income taxes payable,” the amount his accountants estimated he owed at year’s end, also highlighted by The Times.

Kushner Companies — where Mr. Kushner was chief executive and remains an owner — has been profitable and has thrown off millions of dollars in cash annually for Mr. Kushner and his father, Charles, according to an analysis by the company that was included in the documents reviewed by The Times.

But as far as the Internal Revenue Service is concerned, the Kushners have been losing money for years.

Kushner Companies, like many real estate firms, passes on any tax obligations to its owners, including Mr. Kushner and his father, who incorporate them into their personal tax returns.

Unlike typical wage earners, the owners of such companies can report losses for tax purposes. When a firm like Kushner Companies reports expenses in excess of its income, the result is a “net operating loss.” That loss can wipe out any taxes that the company’s owner otherwise would owe. Depending on the size of the loss, it can even be used to get refunds for taxes paid in prior years or eliminate tax bills in future years.

Mr. Kushner’s losses, stemming in large part from the depreciation deduction, appeared to wipe out his taxable income in most years covered by the documents.

He is reporting the losses even though he bought his properties with borrowed funds. In many cases, Mr. Kushner kicked in less than 1 percent of the purchase price, according to the documents. Even that small amount generally was paid for with loans. Mr. Kushner’s credit lines from banks rose to $46 million in 2016 from zero in 2009, the documents show.

The result: Mr. Kushner is getting tax-reducing losses for spending someone else’s money, which is permitted under the tax code. Depreciation deductions are available in other industries, but they generally don’t get to take losses related to spending with borrowed money.

“If I had to live my life over again, I would have been in the real estate business,” said Jonathan Blattmachr, a well-known trusts and estates lawyer, now a principal at Pioneer Wealth Partners, who reviewed the Kushner documents. “It’s fantastic. You get tax deductions for things you don’t pay for.”

More on Taxes in the Trump Administration

One of the only years in which Mr. Kushner appeared to have owed anything was 2013, when he reported income taxes payable of $1.1 million. According to the documents, Mr. Kushner has filed tax returns separately from his wife, Ivanka Trump — a relatively common practice among wealthy couples who want to avoid entwining their complex personal finances.

Mr. Kushner’s father appears to have benefited from the same tax deductions, the documents indicate. The experts interviewed by The Times said Charles Kushner most likely avoided paying federal income taxes from at least 2012 to 2016.

The tax code affords real estate investors great leeway in how they calculate their depreciation — flexibility that often is used to inflate their annual deductions. Among the tactics used by many developers: Their tax advisers prepare studies arguing that much of a property’s value is attributable to things like appliances and parking lots, which under the law can be depreciated more quickly than the building.

Such strategies are almost never audited, tax professionals say. And the new tax law provides even more opportunities for property investors to take larger deductions.

Developers might have to pay capital gains taxes if they sell their properties. But the Kushners, like others in the real estate business, often avoid that tax, too, by using the proceeds of sales to buy more properties within a certain time window.

At least in part because of that perk, the Kushners’ property sales in the period covered by the documents — totaling about $2.3 billion, according to Real Capital Analytics, a research firm — generated little or no taxable income for Mr. Kushner.

Last year’s tax legislation eliminated that benefit for all industries but one: real estate.

Read More | https://www.nytimes.com/2018/10/13/business/jared-kushner-taxes.html |

Nature Kushner Likely Paid No Federal Income Taxes for Years, Documents Show, in 2018-10-13 15:46:23

[captainblogger100posts]

Nature Kushner Likely Paid No Federal Income Taxes for Years, Documents Show

Nature Kushner Likely Paid No Federal Income Taxes for Years, Documents Show Nature Kushner Likely Paid No Federal Income Taxes for Years, Documents Show http://www.nature-business.com/nature-kushner-likely-paid-no-federal-income-taxes-for-years-documents-show/

Nature

Over the past decade, Jared Kushner’s family company has spent billions of dollars buying real estate. His personal stock investments have soared. His net worth has quintupled to almost $324 million.

And yet, for several years running, Mr. Kushner — President Trump’s son-in-law and a senior White House adviser — appears to have paid almost no federal income taxes, according to confidential financial documents reviewed by The New York Times.

His low tax bills are the result of a common tax-minimizing maneuver that, year after year, generated millions of dollars in losses for Mr. Kushner, according to the documents. But the losses were only on paper — Mr. Kushner and his company did not appear to actually lose any money. The losses were driven by depreciation, a tax benefit that lets real estate investors deduct a portion of the cost of their buildings from their taxable income every year.

In 2015, for example, Mr. Kushner took home $1.7 million in salary and investment gains. But those earnings were swamped by $8.3 million of losses, largely because of “significant depreciation” that Mr. Kushner and his company took on their real estate, according to the documents reviewed by The Times.

Nothing in the documents suggests Mr. Kushner or his company broke the law. A spokesman for Mr. Kushner’s lawyer said that Mr. Kushner “paid all taxes due.”

In theory, the depreciation provision is supposed to shield real estate developers from having their investments whittled away by wear and tear on their buildings.

In practice, though, the allowance often represents a lucrative giveaway to developers like Mr. Trump and Mr. Kushner.

A Step-by-Step Explanation of How It Worked

The law assumes that buildings’ values decline every year when, in reality, they often gain value. Its enormous flexibility allows real estate investors to determine their own tax bills.

The White House last year championed a sweeping revision of the nation’s tax laws that expanded many of the benefits enjoyed by real estate investors, allowing them to reap even larger deductions.

“The Trump administration was in a position to clean up the tax code and promised to get rid of some of the complexity that certain taxpayers use to their advantage,” said Victor Fleischer, a tax law professor at the University of California, Irvine. “Instead, they doubled down on those provisions, particularly the ones they have familiarity with to benefit themselves.”

The documents, which The Times reviewed in their entirety, were created with Mr. Kushner’s cooperation as part of a review of his finances by an institution that was considering lending him money. Totaling more than 40 pages, they describe his business dealings, earnings, expenses and borrowing from 2009 to 2016. They contain information that was taken from Mr. Kushner’s federal tax filings, as well as other data provided by his advisers. The documents, mostly created last year, were shared with The Times by a person who has had financial dealings with Mr. Kushner and his family.

Thirteen tax accountants and lawyers, including J. Richard Harvey Jr., a tax official in the Reagan, George W. Bush and Obama administrations, reviewed the documents for The Times. Mr. Harvey said that, assuming the documents accurately reflect information from his tax returns, Mr. Kushner appeared to have paid little or no federal income taxes during at least five of the past eight years. The other experts agreed and said Mr. Kushner probably didn’t pay much in the three other years, either.

Peter Mirijanian, a spokesman for Mr. Kushner’s lawyer, Abbe Lowell, said he would not respond to assumptions derived from documents that provide an incomplete picture and were “obtained in violation of the law and standard business confidentiality agreements. However, always following the advice of numerous attorneys and accountants, Mr. Kushner properly filed and paid all taxes due under the law and regulations.”

Mr. Mirijanian added that, with regard to the tax legislation, Mr. Kushner “has avoided work that would pose any conflict of interest.”

Representatives of the White House and Mr. Kushner’s firm, Kushner Companies, didn’t respond to requests for comment.

The revelation about Mr. Kushner’s minimal tax payments comes as his father-in-law’s taxes are under renewed scrutiny. A Times investigation published this month found that Mr. Trump participated in outright fraud that shielded his family’s fortune from estate and gift taxes.

Mr. Trump has broken with decades of tradition by refusing to release his tax returns. But portions of a 1995 tax return previously published by The Times show trends similar to the one visible in the documents detailing Mr. Kushner’s finances. Mr. Trump at the time reported nearly $916 million in losses, which could have permitted him to avoid any federal income taxes for almost two decades.

The summaries of Mr. Kushner’s tax returns reviewed by The Times don’t explicitly state how much he paid. Instead, the documents include disclosures by his accountants that estimate how much tax he owed for the year just ended — called “income taxes payable” — and how much he paid during the year in anticipation of taxes he would owe, called “prepaid taxes.” For most of the years covered, both were listed as zero.

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An excerpt of Mr. Kushner’s net worth statement for 2011 to 2016, with highlighting by The New York Times. The amount he paid in anticipation of taxes he would owe is called “prepaid taxes.”

Peter Buell, who runs tax services for the real estate practice of the accounting firm Marcum, said the lack of prepayments indicated Mr. Kushner most likely didn’t owe income taxes in those years. Mr. Buell said he was especially confident that Mr. Kushner had no tax liability because the documents also report no “income taxes payable.”

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Another clue from the net worth statement: “income taxes payable,” the amount his accountants estimated he owed at year’s end, also highlighted by The Times.

Kushner Companies — where Mr. Kushner was chief executive and remains an owner — has been profitable and has thrown off millions of dollars in cash annually for Mr. Kushner and his father, Charles, according to an analysis by the company that was included in the documents reviewed by The Times.

But as far as the Internal Revenue Service is concerned, the Kushners have been losing money for years.

Kushner Companies, like many real estate firms, passes on any tax obligations to its owners, including Mr. Kushner and his father, who incorporate them into their personal tax returns.

Unlike typical wage earners, the owners of such companies can report losses for tax purposes. When a firm like Kushner Companies reports expenses in excess of its income, the result is a “net operating loss.” That loss can wipe out any taxes that the company’s owner otherwise would owe. Depending on the size of the loss, it can even be used to get refunds for taxes paid in prior years or eliminate tax bills in future years.

Mr. Kushner’s losses, stemming in large part from the depreciation deduction, appeared to wipe out his taxable income in most years covered by the documents.

He is reporting the losses even though he bought his properties with borrowed funds. In many cases, Mr. Kushner kicked in less than 1 percent of the purchase price, according to the documents. Even that small amount generally was paid for with loans. Mr. Kushner’s credit lines from banks rose to $46 million in 2016 from zero in 2009, the documents show.

The result: Mr. Kushner is getting tax-reducing losses for spending someone else’s money, which is permitted under the tax code. Depreciation deductions are available in other industries, but they generally don’t get to take losses related to spending with borrowed money.

“If I had to live my life over again, I would have been in the real estate business,” said Jonathan Blattmachr, a well-known trusts and estates lawyer, now a principal at Pioneer Wealth Partners, who reviewed the Kushner documents. “It’s fantastic. You get tax deductions for things you don’t pay for.”

More on Taxes in the Trump Administration

One of the only years in which Mr. Kushner appeared to have owed anything was 2013, when he reported income taxes payable of $1.1 million. According to the documents, Mr. Kushner has filed tax returns separately from his wife, Ivanka Trump — a relatively common practice among wealthy couples who want to avoid entwining their complex personal finances.

Mr. Kushner’s father appears to have benefited from the same tax deductions, the documents indicate. The experts interviewed by The Times said Charles Kushner most likely avoided paying federal income taxes from at least 2012 to 2016.

The tax code affords real estate investors great leeway in how they calculate their depreciation — flexibility that often is used to inflate their annual deductions. Among the tactics used by many developers: Their tax advisers prepare studies arguing that much of a property’s value is attributable to things like appliances and parking lots, which under the law can be depreciated more quickly than the building.

Such strategies are almost never audited, tax professionals say. And the new tax law provides even more opportunities for property investors to take larger deductions.

Developers might have to pay capital gains taxes if they sell their properties. But the Kushners, like others in the real estate business, often avoid that tax, too, by using the proceeds of sales to buy more properties within a certain time window.

At least in part because of that perk, the Kushners’ property sales in the period covered by the documents — totaling about $2.3 billion, according to Real Capital Analytics, a research firm — generated little or no taxable income for Mr. Kushner.

Last year’s tax legislation eliminated that benefit for all industries but one: real estate.

Read More | https://www.nytimes.com/2018/10/13/business/jared-kushner-taxes.html |

Nature Kushner Likely Paid No Federal Income Taxes for Years, Documents Show, in 2018-10-13 15:46:23

[inerginc]

GTM Smart Grid http://ift.tt/2eJlQnQ

GTM Squared will live stream all panels from New York REV Future 2017 on September 26 and 27. Squared members get exclusive access to the live broadcast and the video on-demand after the event. See the broadcast agenda below and sign up for Squared here to make sure you don't miss any insights.

Tuesday, September 26, 2017 (all times ET)

9:00 a.m.-9:30 a.m. Opening Keynote New York City: Renewable & Distributed Energy Future

Nilda Mesa, Director, Urban Sustainability & Equity Planning Program, Urban Design Lab/Earth Institute

Moderator: Steve Propper, Director, Consulting & Content Strategy, GTM Research

9:30 a.m.-10:10 a.m. Policy Debate: How Has REV Stimulated Markets & Changed the Role of the Utility?

Todd Glass, Partner, Wilson Sonsini Goodrich & Rosati

Matt Ketschke, Vice President, Distributed Resource Integration, Consolidated Edison

Jim Steffes, Executive Vice President, Corporate Affairs, Direct Energy

Scott Weiner, Deputy for Markets & Innovation, New York State Department of Public Service

Moderator: Katherine Tweed, Senior Editor, GTM Creative Strategies

10:10 a.m.-10:30 a.m. Keynote Interview: New York as a Sustainable Energy Center

Carlos Nouel, Vice President, New Energy Solutions, National Grid

Moderator: Cory Honeyman, Associate Director, U.S. Solar, GTM Research

10:50 a.m.-11:40 a.m. Crowdsourced Market Insights: Distributed Energy Growth & Predictions for New York in 2025

Patricia DiOrio, Vice President, U.S. Strategy & Technology, National Grid

Ryan E. Katofsky, Vice President of Industry Analysis, Advanced Energy Economy

James Schulte, Managing Director, Energy Impact Partners

Sandy Simon, Vice President, Grid Modernization Practice, BRIDGE Energy Group

Moderator: Scott Clavenna, Co-Founder & CEO, Greentech Media

11:40 a.m.-12:25 p.m. Urban Future Lab Presents: Successful REV Pilots

Bob Currie, Chief Technology Officer & Co-Founder, Smarter Grid Solutions

Andy Frank, Founder & CEO, Sealed

Joshua Wong, President & CEO, Opus One Solutions

Moderator: Pat Sapinsley, Managing Director of Cleantech Initiatives, Urban Future Lab/ NYC ACRE/ Powerbridge at NYU Tandon School of Engineering

1:30 p.m.-2:00 p.m. Afternoon Keynote: The Energy Vision for 2018-2022

Richard L. Kauffman, Chairman of Energy & Finance, New York State

Moderator: Steve Propper, Director, Consulting & Content Strategy, GTM Research

2:00 p.m.-2:30 p.m. Market Design: What Work Remains to Align Incentives With DSP & Customer Behavior?

Cameron Bard, Director, Cypress Creek Renewables

Paul Kazmierczak, Principal Program Manager of Market Engagement, National Grid

Beth Reid, CEO, Olivine

Moderator: Elta Kolo, Ph.D, Analyst, Grid Edge, GTM Research

2:30 p.m.-2:50 p.m. Case Study with Lime Energy

Adam Procell, President & CEO, Lime Energy

Moderator: Elta Kolo, Ph.D, Analyst, Grid Edge, GTM Research

2:50 p.m.-3:20 p.m. Financing a Distributed Energy Marketplace: Considerations for New and Changing DER Asset Owners

Nick Sangermano, Managing Director, CohnReznick Capital

Nicholas Whitcombe, Managing Director, Investment & Portfolio Management, New York Green Bank

Alta Yen, Managing Director, Investment Strategy, GE Energy Financial Services

Moderator: Cory Honeyman, Associate Director, U.S. Solar, GTM Research

3:50 p.m.-4:10 p.m. Case Study with ABB

Carlos A. Romero, Vice President, Energy Portfolio Management , ABB Inc.

Moderator: Steve Propper, Director, Consulting & Content Strategy, GTM Research

4:10 p.m.-4:40 p.m. Wholesale Markets: Expanding Renewable & DER Market Development

Michael DeSocio, Senior Manager, Market Design, NYISO

Melissa Kemp, Director of Policy, Northeast, Cypress Creek Renewables

John Moran, Project Manager, sPower

Moderator: Elta Kolo, Ph.D, Analyst, Grid Edge, GTM Research

4:40 p.m.-5:20 p.m. Exporting REV: If You Can Make It Here,You Can Make It Anywhere

Andrew H. Darrell, Chief of Strategy, Global Energy & Finance, Environmental Defense Fund

Joshua Kmiec, Manager, ScottMadden, Inc.

Adam Penque, BS, MS, Director Utility Partnerships & Programs, North America Distributed Energy, Direct Energy

Dwight Scruggs, Senior Vice President, Client Services & Business Development, Allconnect

Moderator: Katherine Tweed, Senior Editor, GTM Creative Strategies

Click here to join GTM Squared.

Wednesday, September 27, 2017 (all times ET)

9:00 a.m.-9:30 a.m. Morning Keynote with NYSERDA

Alicia Barton, President & CEO, NYSERDA

Moderator: Scott Clavenna, Co-Founder & CEO, Greentech Media

9:30 a.m.-10:00 a.m. Low Income Household Potential: Over 2.3 Million Reasons to Pay Attention to This Segment

Tamara Bryan, Project Manager, ConEd

Greg Hale, Senior Advisor to the Chairman of Energy & Finance, Office of Governor Andrew M. Cuomo

Peter Mandelstam, Executive Director, GRID Alternatives Tri-State

Moderator: Katherine Tweed, Senior Editor, GTM Creative Strategies

10:00 a.m.-10:30 a.m. Large Energy Users: Innovative Solutions From 1,000 Feet Up in the Sky to Sprawling Manufacturing Facilities

Kristin Barbato, , Energy Management Advisory Services

Jon Guerster, CEO, Groom Energy Solutions

Sarah Miller, Associate, Booz Allen Hamilton

Moderator: Colleen Metelitsa, Analyst, Grid Edge, GTM Research

10:30 a.m.-10:50 a.m. Case Study with AVANGRID

Drury MacKenzie, ESC Customer & Market Innovation Lead, AVANGRID

Moderator: Colleen Metelitsa, Analyst, Grid Edge, GTM Research

11:15 a.m.-12:00 p.m. Customer Energy Management: Where's the Fine Line Between Engagement & Automation?

Pravin Bhagat, Director, Program Marketing, Itron

Patty Durand, President & CEO, Smart Energy Consumer Collaborative

David Oberholzer, Vice President, Business & Partner Development, Whisker Labs

Moderator: Fei Wang, Senior Analyst, GTM Research

12:00 p.m.-12:30 p.m. Fireside Chat with NYPA

Jill Anderson, Executive Vice President & Chief Commercial Officer, New York Power Authority

Moderator: Steve Propper, Director, Consulting & Content Strategy, GTM Research

Click here to join GTM Squared.

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How to Spot Red Flags in Financial Advisors

How to Spot Red Flags in Financial Advisors http://richardabbe.com/how-to-spot-red-flags-in-financial-advisors/?utm_source=rss&utm_medium=rss&utm_campaign=how-to-spot-red-flags-in-financial-advisors Finding the right financial advisor can feel like searching for a hidden treasure – exciting but potentially frightening. While a good advisor can help you navigate the complexities of investing and secure your financial future, a bad one can leave you feeling lost and worse off. So, how do you separate the gold from the pyrite (fool’s gold) in financial advice? Here are some red flags to watch out for: Red Flag #1: Guarantees and Hype If an advisor promises unrealistic returns or guarantees your money will grow, hit the brakes! The market is inherently unpredictable, and anyone who suggests otherwise is likely more interested in selling you something than helping you build wealth. Red Flag #2: FOMO Frenzy Beware of advisors who pressure you to invest in hot new trends or chase the latest “get rich quick” schemes. Sound financial planning is about building a diversified portfolio for long-term goals, not impulsive decisions based on market hype. Red Flag #3: Mystery Box Fees Financial advisors have different fee structures, but you should always understand what you pay for. Run for the hills if an advisor dodges your questions about fees or uses confusing jargon to explain them. Transparency is critical – you deserve to know how your hard-earned money is used. Red Flag #4: The Disappearing Act A good advisor is like a good friend – someone you can rely on for guidance and support. If your advisor is challenging to reach, takes forever to respond to your questions, or doesn’t explain things clearly, it’s a sign they might not prioritize your needs. Red Flag #5: Not Putting You First (Fiduciary vs. Suitability) Not all financial advisors are created equal. A “fiduciary” advisor must act in your best interests. A “suitability” advisor, on the other hand, simply has to recommend investments that are “suitable” for your situation, which might not always be the best option for your long-term goals. Ask your advisor upfront about their fiduciary status – it’s a crucial distinction. Red Flag #6: Pressuring You to Invest in Unfamiliar Products Be cautious if an advisor pushes you towards complex financial products you don’t understand. A good advisor will take the time to explain any investment recommendation in a way that makes sense to you, considering your risk tolerance and financial goals. Remember: You’re in charge of your financial future. Be bold, ask questions, get second opinions, and walk away if something feels off. Finding the right financial advisor is an investment, and it’s worth taking the time to do it right.   The post How to Spot Red Flags in Financial Advisors first appeared on Richard Abbe | Investing | New York.

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Financial Analysis for Beginners: Understanding the Basics of Data Interpretation

Financial analysis is a fundamental skill for individuals who want to understand the financial health of a business or make informed investment decisions. It involves interpreting financial data to assess a company's performance, profitability, liquidity, and financial position. While financial analysis can be intimidating to beginners, mastering the basics offers valuable insights.

The Importance of Financial Analysis

Financial analysis allows individuals to view a company's financial health and performance comprehensively. It helps investors evaluate the viability of potential investment opportunities and assists businesses in making strategic decisions based on financial data.

Types of Financial Analysis

There are various types of financial analysis, including horizontal analysis (comparing financial data over multiple periods), vertical analysis (analyzing financial data as a percentage of a base figure), and ratio analysis (calculating and interpreting vital financial ratios).

Financial Statements

The three primary financial statements used in financial analysis are the balance sheet, income statement, and cash flow statement. Each statement provides specific information about a company's assets, liabilities, revenues, expenses, and cash flow activities.

Horizontal Analysis

Horizontal analysis involves comparing financial data over consecutive periods to identify trends in financial performance. It helps assess a company's growth and progress over time.

Vertical Analysis

Vertical analysis expresses each line item on a financial statement as a percentage of a chosen base figure. For example, an income statement shows revenues and expenses as a percentage of total revenue. Vertical analysis aids in understanding each financial statement.

Ratio Analysis

Ratio analysis involves calculating and interpreting key financial ratios that provide insights into a company's financial health. Common ratios include liquidity ratios (e.g., current ratio), profitability ratios (e.g., gross profit margin), and debt-to-equity ratios.

Interpreting Ratios

Interpreting financial ratios is crucial for understanding a company's financial position and performance. A ratio may indicate a company's ability to meet short-term obligations, generate profits, manage debt, or efficiently use its assets.

Benchmarking

To put financial analysis into context, benchmarking is often used to compare a company's financial performance against industry peers or best practices.

With a grasp of the fundamentals, beginners can confidently navigate the world of finance and use data interpretation to guide their financial goals or investment choices.

[richardabbe]

Building a Financial Planning Career

Building a Financial Planning Career http://richardabbe.com/building-a-financial-planning-career/?utm_source=rss&utm_medium=rss&utm_campaign=building-a-financial-planning-career Financial planning is an essential aspect of everyone’s life, and a career as a financial planner can be both rewarding and lucrative. Financial planners are professionals who help individuals and businesses create and manage their financial plans. If you’re considering a career in financial planning, here are some steps you can take to get started. Get an education Most financial planners have a bachelor’s degree in finance, economics, accounting, or a related field. A degree in one of these areas can provide a solid foundation for understanding financial principles and concepts. It’s also essential to continue your education by earning industry certifications and staying up-to-date on changes in the financial planning landscape. Gain experience Many financial planners start their careers working for financial planning firms or other financial institutions. This can provide valuable experience and help you build a network of professional contacts. As you gain experience, you may also have the opportunity to take on additional responsibilities and advance your career. Build your skills In addition to education and experience, financial planners need various skills to succeed. These include analytical skills, communication skills, and customer service skills. You should also be comfortable using financial planning software and be able to explain complex financial concepts in a way that clients can understand. Obtain licenses and certifications To become a financial planner, you’ll need to obtain the appropriate licenses and certifications. These can vary depending on your area of specialization and the type of clients you work with. For example, if you plan to offer investment advice, you’ll need to obtain a Series 7 license. You may also want to consider earning certifications such as the Certified Financial Planner (CFP) designation or the Chartered Financial Analyst (CFA) designation. Establish your business Once you have the necessary education, experience, skills, licenses, and certifications, you can start building your financial planning business. This may involve establishing a physical office, building a website, and marketing your services to potential clients. Becoming a financial planner can be a rewarding and fulfilling career path. With the right tools and dedication, you can help clients achieve their financial goals and build a brighter future for themselves and their families. The post Building a Financial Planning Career first appeared on Richard Abbe | Investing | New York.

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Myths About Investing

Myths About Investing http://richardabbe.com/myths-about-investing/?utm_source=rss&utm_medium=rss&utm_campaign=myths-about-investing A strong instrument for accumulating money and attaining financial objectives is investing. However, several myths and misconceptions surrounding the investing world can hinder individuals from making informed decisions.  This article will debunk some common myths about investing and shed light on the truth. Myth 1: Investing is Only for the Wealthy:  One of the biggest misconceptions is that investing is reserved for the wealthy or those with significant money. In reality, anyone can start investing with even small amounts. Many investment platforms offer low-cost options and fractional shares, allowing individuals to begin their investment journey with limited funds. Myth 2: Investing is Gambling:  Some people view investing as a form of gambling, believing it is based on luck and speculation. In truth, investing is a strategic approach to growing wealth over time. Unlike gambling, investing involves thorough research, analysis, and understanding of the underlying assets.  Myth 3: Investing is Too Risky:  While investing carries a certain level of risk, it is essential to differentiate between risk and speculation. Risk can be managed through diversification and a long-term perspective. Investors can reduce risk and possibly enhance returns by distributing their investments among a variety of asset classes and businesses.  Myth 4: Timing the Market is the Key:  Many people think that buying low and selling high, as well as timing the market, are the keys to successful investment. Even for seasoned specialists, timing the market consistently is essentially difficult. Focus on time spent in the market rather than market timing.  Myth 5: You Need to Constantly Monitor and Trade:  Another myth is that successful investing requires constant monitoring and frequent buying and selling of investments. Overtrading can lead to unnecessary fees and undermine long-term returns. Myth 6: Only Stocks Can Generate Returns:  While stocks are a popular investment option, they are not the only avenue for generating returns. Various asset classes, including bonds, real estate, mutual funds, and exchange-traded funds (ETFs), offer diversification and potential returns.  Myth 7: You Need a High Level of Financial Expertise:  Although investing may appear complicated, you don’t need to be an expert in finance to begin. Numerous resources, online platforms, and robo-advisors offer educational materials and guidance for beginner investors.  Myth 8: Investing is a Get-Rich-Quick Scheme:  Investing is a long-term commitment and not a shortcut to instant wealth. It requires patience, discipline, and a focus on long-term goals. While investing can generate substantial returns over time, setting realistic expectations and avoiding chasing quick profits or falling for scams promising unrealistic returns is essential. Debunking common myths about investing is crucial for individuals looking to build wealth and secure their financial future. Understanding the realities of investing, such as its accessibility, the importance of diversification, and the need for a long-term perspective, can empower individuals to make informed decisions and embark on a successful investment journey.  The post Myths About Investing first appeared on Richard Abbe | Investing | New York.

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Savings vs. Investments: Finding the Right Balance

Savings vs. Investments: Finding the Right Balance http://richardabbe.com/savings-vs-investments-finding-the-right-balance/?utm_source=rss&utm_medium=rss&utm_campaign=savings-vs-investments-finding-the-right-balance In personal finance, striking the right balance between savings and investments is crucial for long-term financial health. Both avenues serve distinct purposes, yet many individuals need help understanding how to allocate their resources effectively. This blog aims to shed light on the differences between savings and investments and provide insights into achieving an optimal balance. Understanding Savings: The Foundation of Financial Stability Savings are the cornerstone of financial stability, offering a safety net for emergencies and unexpected expenses. Typically held in low-risk accounts such as savings accounts or certificates of deposit (CDs), savings provide liquidity and accessibility when needed. Additionally, savings can help individuals achieve short-term goals like purchasing a car, taking a vacation, or covering medical expenses. Limitations of Savings While essential, relying solely on savings can hinder wealth accumulation over time. With interest rates often failing to outpace inflation, the purchasing power of savings may diminish gradually. Consequently, individuals may need help to meet long-term financial objectives such as retirement or wealth generation. Understanding Investments: Building Wealth through Investments Investments involve putting money into assets to generate returns over time. Unlike savings, investments carry varying risk, including stocks, bonds, real estate, and mutual funds. By harnessing the power of compounding returns, investments have the potential to grow wealth exponentially, outpacing inflation and maximizing long-term financial growth. Diversification and Risk Management One of the fundamental investing principles is diversification, which means spreading investments across different asset classes to mitigate risk. While investments offer the potential for higher returns, they also entail the risk of market volatility and potential loss of principal. Therefore, understanding risk tolerance and adopting a diversified investment strategy is essential for achieving financial goals while minimizing exposure to market fluctuations. Finding the Right Balance: Assessing Financial Goals and Risk Tolerance Understanding one’s financial goals and risk tolerance is the key to finding the right balance between savings and investments. Short-term goals such as building an emergency fund or saving for a down payment on a house may warrant a higher allocation towards savings. Conversely, long-term goals like retirement planning or wealth accumulation may necessitate a more substantial focus on investments to harness the power of compounding returns. Creating a Balanced Portfolio A well-rounded financial strategy incorporates savings and investments to cater to short-term needs while fostering long-term growth. Establishing an emergency fund equivalent to three to six months’ expenses provides a financial safety net, ensuring stability during unforeseen circumstances. Simultaneously, allocating a portion of funds towards diverse investment vehicles allows for capital appreciation and wealth accumulation over time. Conclusion In conclusion, achieving a harmonious balance between savings and investments is paramount for financial success. By understanding the distinct roles of savings and investments and tailoring strategies to individual financial goals and risk tolerance, individuals can pave the way for long-term prosperity. Whether building an emergency fund, planning for retirement, or seeking wealth accumulation, finding the right balance ensures financial stability and growth in an ever-changing economic landscape. The post Savings vs. Investments: Finding the Right Balance first appeared on Richard Abbe | Investing | New York.

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Behavioral Finance: Understanding the Role of Psychology in Investment Decisions

Behavioral Finance: Understanding the Role of Psychology in Investment Decisions http://richardabbe.com/behavioral-finance-understanding-the-role-of-psychology-in-investment-decisions/?utm_source=rss&utm_medium=rss&utm_campaign=behavioral-finance-understanding-the-role-of-psychology-in-investment-decisions Various factors, including economic indicators, market trends, and financial analysis, often influence investment decisions. However, an often overlooked aspect is the role of psychology in shaping these decisions. Behavioral finance investigates how psychological biases and emotions impact investor behavior and market outcomes.  Understanding Investor Behavior Traditional finance theory assumes that investors are rational and make decisions based solely on maximizing their wealth. However, behavioral finance recognizes that humans are not always rational and can be influenced by cognitive biases, emotions, and social factors. Psychological Factors in Investment Decisions Overconfidence Bias: Investors often overestimate their abilities and tend to be overly confident in their investment decisions. This bias can lead to excessive trading, ignoring risks, and poor portfolio diversification. Loss Aversion: People generally experience a more robust emotional response to losses than gains. Loss aversion can lead investors to keep losing investments for too long, refusing to sell and cut their losses. Herd Mentality: Investors follow the crowd and make decisions based on what others are doing. This herd mentality can lead to market bubbles, irrational exuberance, and panic selling during market downturns. Anchoring Bias: Investors often rely heavily on recent or well-known information when making decisions, anchoring their judgment to a specific reference point. This bias can prevent them from fully considering new information and adjusting their strategies accordingly. Confirmation Bias: Investors tend to seek out information that confirms their existing beliefs and ignore contradictory evidence. This bias can lead to a narrow perspective and hinder objective decision-making. Implications for Investors Understanding the impact of psychology on investment decisions is crucial for investors. Investors can make more informed and rational choices by recognizing and managing psychological biases. Here are some strategies to mitigate the influence of behavioral biases: Education and Awareness: Learn about common cognitive biases and their impact on investment decisions. Self-awareness is the first step towards overcoming biases. Diversification: Build a well-diversified portfolio to mitigate risks associated with individual investments. Diversification helps reduce the impact of emotions on decision-making. Long-Term Perspective: Adopt a long-term investment horizon and avoid making impulsive decisions based on short-term market fluctuations. Consult Professionals: Seek advice from financial advisors or professionals who can provide an objective perspective and help navigate market volatility. Conclusion  Behavioral finance sheds light on the complex interplay between psychology and investment decisions. Recognizing the role of psychological biases and emotions can enhance investors’ decision-making processes and lead to better long-term outcomes. Investors can make more rational and objective investment decisions by understanding shared preferences, staying informed, and employing strategies to mitigate their influence. Integrating behavioral finance principles can contribute to a more prosperous and resilient investment journey. The post Behavioral Finance: Understanding the Role of Psychology in Investment Decisions first appeared on Richard Abbe | Investing | New York.

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The Benefits of Investing in Index Funds

The Benefits of Investing in Index Funds http://richardabbe.com/the-benefits-of-investing-in-index-funds/?utm_source=rss&utm_medium=rss&utm_campaign=the-benefits-of-investing-in-index-funds There are various strategies to consider in investing. One popular option is investing in index funds. These funds offer a range of benefits that make them attractive to novice and experienced investors. Below is an overview of the advantages of investing in index funds, including diversification, low costs, simplicity, and potential for long-term returns. Diversification  One of the primary benefits of index funds is the instant diversification they offer. An index fund is designed to track a specific market index, such as the S&P 500 or the FTSE 100. Investing in an index fund gives you access to a wide range of companies within that index. This diversification helps reduce the risk associated with investing in individual stocks. Even if one company performs poorly, the impact on your overall investment is mitigated by the performance of other companies in the fund. Diversification can protect your investment against market volatility and provide more consistent returns over the long term. Low Costs  Index funds are known for their low costs compared to actively managed funds. Since index funds aim to replicate the performance of an index rather than trying to outperform it, they require less active management and lower expenses. The absence of a fund manager actively selecting and trading stocks results in lower management fees, which directly benefits investors. This cost advantage is significant, especially considering the compounding effect over time. By keeping expenses low, index funds allow investors to retain a higher portion of their returns, potentially enhancing long-term growth. Simplicity and Accessibility  Investing in index funds is straightforward, making it accessible to investors of all experience levels. There is no need to be a financial expert or spend considerable time researching individual companies. With index funds, you can gain exposure to an entire market segment or the overall market with a single investment. This simplicity eliminates the need to monitor and make frequent investment decisions constantly. Additionally, many brokerage platforms offer easy access to index funds, making them readily available to individual investors. Potential for Long-Term Returns  Index funds aim to match the performance of the underlying index. However, historical data suggests that the overall market tends to provide positive returns over the long term. By investing in index funds, you have the potential to capture the market’s growth. While there may be short-term fluctuations, a long-term investment horizon allows you to benefit from the compounding effect and the overall upward trajectory of the market. This approach aligns with the passive investing philosophy, emphasizing a buy-and-hold strategy rather than attempting to time the market or pick individual stocks. Conclusion Investing in index funds offers advantages such as diversification, low costs, simplicity, and the potential for long-term returns, making it an appealing prospect for investors looking to build a well-rounded portfolio. Index funds provide a simple and cost-effective way to gain exposure to the broader market or specific market segments. Their inherent diversification helps manage risk, while low expenses enhance returns. Investors can benefit from the market’s overall growth by focusing on long-term investment goals and harnessing the power of compounding. Whether you are a seasoned investor or just starting, considering index funds as part of your investment strategy can be a wise decision. Remember, conducting thorough research, understanding your investment objectives, and seeking professional advice before making investment decisions is essential. The post The Benefits of Investing in Index Funds first appeared on Richard Abbe | Investing | New York.

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Navigating Volatile Markets: Strategies for Successful Investing

Navigating Volatile Markets: Strategies for Successful Investing http://richardabbe.com/navigating-volatile-markets-strategies-for-successful-investing/?utm_source=rss&utm_medium=rss&utm_campaign=navigating-volatile-markets-strategies-for-successful-investing Investing in the stock market can be a rollercoaster ride. The fluctuation in the market can make even the most seasoned investor anxious. These ups and downs can cause panic selling, leading to losses for investors. However, volatile markets can also present opportunities for savvy investors who know how to navigate them. Here are some strategies for successful investing in volatile markets. Diversify your portfolio Diversification is a critical way to ensure a successful investment strategy, but it is even more crucial in volatile markets. Diversification means spreading your investments across various asset classes, such as stocks, bonds, real estate, and commodities. By diversifying, you can reduce your exposure to a particular asset and minimize your risk of loss. Keep a long-term perspective Volatility can make investors anxious, but remember that investing is a long-term game. Markets will go up and down, but they tend to trend upward over the long run. Don’t let short-term volatility derail your long-term investment strategy. Stay the course and keep your eyes on your long-term goals. Have a plan Having a solid investment plan is crucial in volatile markets. Your plan should include investment goals, risk tolerance, and asset allocation strategy. Stick to your plan even when the market is fluctuating, and resist the urge to make impulsive decisions based on emotions. Focus on quality In volatile markets, it’s essential to focus on quality investments. Look for companies to invest in that have strong fundamentals, such as stable earnings, low debt-to-equity ratios, and solid management teams. Avoid speculative investments that are more likely to be impacted by market volatility. Keep cash on hand Cash on hand can give you the flexibility to take advantage of opportunities in volatile markets. Consider keeping some money in your portfolio to take advantage of buying opportunities when you see them. Stay informed Staying informed about the market and economic trends can help you make informed investment decisions. Keep up with financial news and analysis, and stay abreast of significant developments that could impact your investments. In conclusion, navigating volatile markets can be challenging, but it’s not impossible. By diversifying your portfolio, keeping a long-term perspective, having a solid plan, focusing on quality investments, keeping cash on hand, and staying informed, you can successfully navigate the ups and downs of the market and achieve your investment goals. The post Navigating Volatile Markets: Strategies for Successful Investing first appeared on Richard Abbe | Investing | New York.

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How to Choose the Right Investment Strategy for Your Goals

How to Choose the Right Investment Strategy for Your Goals http://richardabbe.com/how-to-choose-the-right-investment-strategy-for-your-goals/?utm_source=rss&utm_medium=rss&utm_campaign=how-to-choose-the-right-investment-strategy-for-your-goals Investing is a great way to grow wealth and achieve financial goals. However, with so many investment strategies available, choosing the right one for your purposes can take work.  Identify Your Investment Goals The first step in choosing the right investment strategy is identifying your goals for investing. Ask yourself if you are investing for short-term or long-term goals. Do you want to generate income or achieve capital appreciation? Once you have identified your investment goals, you can choose a strategy that aligns with them. Assess Your Risk Tolerance Risk tolerance is the level of risk you are willing to take on for the potential returns. Assessing your risk tolerance is critical in choosing the right investment strategy. If you have a low-risk tolerance, you may want to choose a conservative investment strategy, such as investing in fixed-income securities. If you have a high-risk tolerance, choose a more aggressive approach, such as investing in stocks or alternative investments. Understand Different Investment Strategies There are several investment strategies to choose from, including: Buy and Hold Strategy – This strategy involves buying and holding investments for the long term. This strategy suits investors willing to have assets for several years or even decades. Value Investing – This strategy involves buying undervalued securities and holding them until their value increases. This strategy suits investors willing to research and take a long-term view. Growth Investing – This strategy involves investing in companies with high growth potential. This strategy suits investors willing to take on more risk for potentially higher returns. Income Investing – This strategy involves investing in securities that generate income, such as bonds or dividend-paying stocks. This strategy is suitable for investors who want a steady stream of income. Diversify Your Portfolio Diversification is critical in investment strategy. Diversifying your portfolio can reduce risk and increase potential returns. Diversification involves investing in a mix of asset classes. These assets can include stocks, bonds, alternative investments, and diversifying within each asset class. Consider Your Investment Horizon Your investment horizon is the length of time you plan to hold your investments. Your investment horizon will affect your investment strategy. If you have a short investment horizon, you may want to choose a more conservative investment strategy. Select a more aggressive investment strategy if you have a long investment horizon. Seek Professional Advice If you are still deciding which investment strategy to choose, consider seeking professional advice. A financial advisor can help assess your investment goals, risk tolerance, and horizon to recommend an appropriate investment strategy. Conclusion Choosing the right investment strategy is critical for achieving your investment goals. To select the right investment strategy, you must identify your investment goals, assess your risk tolerance, understand different investment strategies, diversify your portfolio, consider your investment horizon, and seek professional advice. Following these steps, you can choose the right investment strategy for your goals and achieve financial success. The post How to Choose the Right Investment Strategy for Your Goals first appeared on Richard Abbe | Investing | New York.