Rockbridge Institutional – January 2024 Market Review
The Price Earnings (P/E) Ratio The P/E ratio is used by analysts to establish a company’s expected value. Multiplying either reported or projected earnings by this ratio gives an indication of this value. It provides a perspective on current stock prices. The PE ratio is the price per share divided by earnings per share. It […]
Cash Management In A Declining Interest Rate Environment
Over the last two years, interest rates have risen at a historic clip. As a result, Rockbridge has dedicated moretime helping clients manage cash reserves to take advantage of the current market environment. In previous years, “high yield” savings accounts were (and some still are) paying less than 1%. Now, it is easy to find […]
Market Indifference: How Presidential Elections Impact Your Portfolio
With the 2024 presidential election coming up, many investors wonder how the outcome could affect their investment portfolios. Historically, there has been a perception that Republican presidents are better for the stock market, while Democratic presidents are better for the bond market. However, statistics shows that the market responds indifferently to which party wins the […]
Rockbridge Institutional – December 2023 Market Review
Year in Review After plenty of ups and downs throughout the year, financial markets turned in reasonable results in 2023 – a globally diversified stock portfolio was up 16%, a reasonable proxy for bonds (Barclays Aggregated Bond Index) returned 6%. News on several fronts helps to explain this year’s results: Interest Rates, Inflation and Prospects […]
Qualified Charitable Distributions
Qualified Charitable Distributions (QCDs) allow taxpayers age 70 ½ or older with traditional IRAs (not including active SEP or SIMPLE IRAs) to make charitable contributions directly from their IRA to a qualified charity (not a donor advised fund or private foundation) that will be excluded from their taxable income. This is especially beneficial for those […]
Bonus Depreciation Phase Out
When businesses purchase eligible property such as equipment, there are two options available to allow them to accelerate book depreciation, rather than write the asset off over the useful life. Under Section 179 of the Internal Revenue Code (IRC), the business may expense the entire cost of that piece of property in the year of […]
Advisor-Managed vs Outside-Managed Accounts
Most clients have investment accounts in each of the three major tax buckets: tax-deferred (ex. 401(k)), tax-free (ex. Roth IRA), and after-tax (ex. Brokerage account). Due to the different tax statuses, each account type “behaves” differently. When investors save adequately across these accounts, there are a myriad of benefits. From a tax management standpoint, a […]
Rockbridge Institutional – November 2023 Market Review
Investing in the “Magnificent Seven” Now the leading high-tech companies are the “Magnificent Seven” (those of a certain age will relate). These companies – Apple, Alphabet (Google), Amazon, Meta (Facebook), Microsoft, Nvidia, and Tesla – make up about 30% of the S&P 500 index. While it is a stretch to expect an investor is lucky […]
Rockbridge Institutional – October 2023 Market Review
Interest Rate Risk in Bonds Rapidly rising interest rates explain bond market losses in recent periods. The Bloomberg U.S. Aggregate Bond Index, a reasonable proxy for the U.S. bond markets, is off 4% over the past three months, confirming that bonds are risky. Bond risk is from two sources primarily – credit risk and interest […]
Maintaining Equity Exposure in the Current Interest Rate Environment
In today’s interest rate environment, some investors are tempted to lock in “guaranteed” returns through fixed income instruments yielding 5% or more. However, investing solely in fixed income would be a mistake for most long-term investors. Discussed below are a few reasons why that is the case: Higher Long-Term Returns Over the past 90 years, […]