Remember, the only choice is optimism, the pessimists never get it right.

Surveys indicate about 75% of Americans believe they will have enough money for their retirement. Because of the inability to go out, money spent on various recreational events like eating out, traveling and other leisure options, people may be socking away a few more acorns preparing for winter.

Last week all the major indexes posted losses with the S&P off 0.60%. One reason may have been President Biden’s announcement that he intended to double the taxes on capital gains bringing it equal to the top income tax rate. And his target is those individuals earning more than $1,000,000 per year. It’s hard to come to any conclusions since this and the Infrastructure bill are a long way from becoming law but the spending and proposed tax increases do remain an issue.

Currently, the consensus view from all the talking heads is that earnings are coming in strong, the unemployment rate is going down and the hiring signs in many of the retail outlets tells me it’s becoming hard to find workers. (Could be that the unemployed are getting to much unemployment money.) Q2 earnings will be impressive and the consensus S&P estimate for FY2021 is low. Food for thought: the last time the capital gains tax rate was raised, revenue to the federal government decreased.

The family bank has been something I have talked about for more than a few years and actually have done. The attached article outlines a very formal approach with accountability included. The best source of funds for the family bank I know is the cash values from a permanent life insurance contract. When a loan is taken, the policy continues to be credited with the guaranteed cash value increases. Loans do affect dividends, but the guarantees are still there. In the meantime, whether interest is charged on the loan or not, a middleman is eliminated, and the entire family may benefit from the transaction.

Finally, as always, should you have any questions or wish to talk, please email or give me a call.

Doug Alden

Link to article one…
Link to article two…

Office 828.668.0665
Cell 828.713.4602

PS: This is not an offer to buy or sell securities. No investment process is free of risk, and there is no guarantee that the investment process or the investment opportunities referenced herein will be profitable. Past performance is not indicative of current or future performance and is not a guarantee. The investment opportunities referenced herein may not be suitable for all investors.

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