Market-Moving News[i]
All that glitters IS gold
2024 has been a banner year for gold. Now worth $2,736 per troy ounce, the precious metal has climbed over 30%, on pace for its best year since 1979, and set 41 all-time highs. Since gold doesn’t produce income, its price is typically inversely correlated to real interest rates. However, this year's rally has come despite a ~32bp increase in 10-year real rates, suggesting other factors are driving prices higher.
According to the World Gold Council, gold demand in 2024 climbed to a record 3,761.9 tonnes (t) through the third quarter, largely driven by strong interest from investors and central banks. With geopolitical tensions, fiscal concerns and, more recently, election-related uncertainty elevated, investors have flocked to gold as a “safe-haven” asset. In fact, 3Q24 marked the first quarter since 1Q22 in which gold ETFs saw net inflows. Moreover, after the U.S. sanctioned Russian assets in early 2022, global central banks, particularly in emerging markets, accelerated gold purchases to diversify reserves from U.S. dollars. Quarterly net purchases from banks have averaged 257t since 2022 compared to 118t from 2010 to 2021. While higher prices have weighed on central bank buying in recent quarters, net purchases remained elevated during 3Q24 at 186t.
Election jitters
Later this week, U.S. election jitters should fade as investors gain clarity on who will take office, alleviating some upwards pressure on gold prices. That said, geopolitical tensions and fiscal concerns likely aren't going away anytime soon, and with monetary easing likely to increase gold's relative value, having modest gold exposure to diversify could make sense. However, long-term investors should remember that there is more that glitters than just gold. By providing greater capital appreciation with less volatility, opportunities across stocks, bonds and other alternatives can help better support strategic investment goals.
Economic news
Nonfarm payrolls rose by 12,000 jobs, well below consensus. The U.S. economy expanded at a 2.8% saar in 3Q24, below expectations of 3.2%
The Week Ahead: Nov 4-8
- November FOMC meeting
- U.S. election
Philosophy Quote of the Week[ii]
Not good, nor bad
“There is no evil in things changing, just as there is no good in persisting in a new state.”
Marcus Aurelius, Meditations, 4.42
When people say change is good, they’re usually trying to reassure someone (or themselves). Because instinctively we view change as bad – or a least we’re suspicious of it. The Stoics want you to do away with those labels altogether. Change isn’t good. The status quo isn’t bad. They just are.
Remember, events are objective. It’s only our opinion that says something is good or bad (and thus worth fighting against or fighting for). A better attitude? To decide to make the most of everything. But to do that you must first cease fighting.
Tax Tips[iii]
What to do if you win the lottery or win big in Vegas!
“Someday…if I win the lottery!” Aren’t we all harboring a thought like this in some tiny corner of our heart? Yes, many of us hope to win the lottery at some point in our lives. Who can deny the charm of a fancy, glamorous life, without really having to work hard for it? What if the Powerball winning number matches this time, or if you win at the casino? We dream of the easy life and being able to buy whatever we want without worrying about the cost, but what are some of the tax ramifications of such a windfall? There are a few ways to keep more of what you win! Let’s find out!
Gambling Income
Gambling income includes winnings from lotteries, horse racing and casinos. It also includes cash prices and the fair market value of prizes like cars and trips.
Payer Tax Form
If you win, you may get a Form W-2G, Certain Gambling Winnings, from the payer. The IRS also gets a copy of the W-2G. The payer issues the form depending on the type of game you played, the amount of your winnings and other factors. You’ll also get the form if the payer withholds taxes from what you won.
How to Report Winnings
You must report all your gambling winnings as income. This is true even if you don’t receive a Form W-2G. You normally report your winnings for the year on your tax return as “other income.”
How to Deduct Losses
You can deduct your gambling losses on Schedule A, Itemized Deductions. The amount you can deduct is limited to the amount of the gambling income you report on your return.
Keep Gambling Receipts to Save, If You Win Later
You should keep track of your wins and losses. This includes keeping items such as a gambling log or diary, receipts, statements or tickets. Often, once players find out they did not win, people simply throw the losing tickets away. WRONG!! You may not win today but keep all those losing tickets until the end of the year as proof that you lost. This, because you can reduce any winnings that year against any losses you incur until the end of the year. Then you start over again next year. Consider throwing away $1,000 worth of losing tickets, and then at the end of the year, you win $3,000. You will pay taxes overall $3,000 unless you kept the losing tickets. Keeping those tickets lets your educe your winnings and your tax bill. For most people that’s about a $300 savings.
Seek Professional Advice
If you win the BIG ONE, always see a good accountant and attorney BEFORE you tell anyone about the win. These professionals can give you some excellent advice before going public.
Consider a Partnership Strategy for Ticket Ownership
If you buy a ticket as a member of a group or family, consider a Limited Partnership to be the entity that owns the winning ticket rather than an individual. This is a great way to reduce taxes by spreading the wealth around the group, because people in the group will be in different tax brackets.
Decide Which Payout Option to Use
Consider whether to take the cash payout or the 20-year payout. For older winners, the cash payout may be best, but perhaps a 20-year payout would be a form of protection for your heirs. GET PROFESSIONAL ADVICE before deciding!
Key Points to Remember
- Keep your playing tickets until year-end (in case you win later)
- Seek professional assistance (CPA, EA or Attorney)
- Consider a partnership to own the winning ticket
- Decide which payout option is best for you
Remember – always contact your tax professional for help! That’s what you pay them for!
Long-Term Care Planning Month[iv]
Navigating the Holidays with a Loved One Who Has Dementia
Introduction
The holiday season, filled with joy and connection, can pose significant challenges for families caring for a loved one with dementia. This white paper aims to provide practical strategies and insights to help caregivers create a supportive and enjoyable holiday experience for both their loved one and the family as a whole. By understanding the impact of dementia on behavior and cognition, families can adapt their celebrations to foster inclusivity and comfort.
Holidays often bring families together to celebrate traditions, share meals, and create lasting memories. However, for families dealing with dementia, these times can evoke a mix of emotions, including stress, sadness, and anxiety.
Understanding Dementia
Dementia encompasses a range of cognitive impairments that affect memory, communication, and the ability to perform everyday tasks. Common types include Alzheimer’s disease, vascular dementia, and Lewy body dementia.
Symptoms may vary, but they often include:
- Memory loss
- Difficulty communicating
- Changes in mood and behavior
- Confusion about time and place
Impact on Holiday Celebrations
The cognitive and emotional challenges associated with dementia can affect how a loved one experiences the holidays. Changes in routine, overstimulation, and unfamiliar environments can lead to increased anxiety and agitation. Recognizing these factors is essential for creating a supportive atmosphere.
Strategies for a Successful Holiday Season
- Plan Ahead
- Assess the Situation
- Discuss holiday plans with family members and involve your loved one in the conversation, if possible.
- Consider their preferences and comfort levels. Are they more active in the morning or evening?
- Create a Flexible Schedule
- Outline a timeline for holiday activities but remain flexible! Allow for breaks and downtime.
- Simplify Things
- Limit Guests
- Consider hosting smaller gatherings to reduce noise and chaos, which can be overwhelming.
- Choose Familiar Traditions
- Make sure to include familiar foods, music, and activities that your loved one enjoys.
- Modify Activities
- Simplify games and activities to accommodate their cognitive limitations.
- Limit Guests
- Create a Comfortable Environment
- Designate a Quiet Space
- Set aside a quiet area where your loved one can retreat if feeling overwhelmed.
- Use Familiar Decorations
- Opt for decorations that are nostalgic or meaningful.
- Communicate Clearly
- Use Simple Language
- Speak slowly and clearly, using short sentences to enhance understanding.
- Non-Verbal Cues
- Utilize gestures and facial expressions to reinforce communication. Your body language matters!
- Use Simple Language
- Involve Your Loved One
- Encourage Participation
- Engage your loved one in simple tasks, such as setting the table or folding napkins. Everyone likes to feel helpful!
- Share Memories
- Reminisce about past holidays to foster connection and spark moments of joy.
- Manage Emotions
- Recognize Feelings
- Take time to acknowledge feelings of grief, frustration, or sadness that may arise for both the caregiver and the loved one.
- Seek Support
- Reach out to support groups or talk with loved ones to share experiences and gain insights
- Recognize Feelings
- Assess the Situation
Conclusion
Navigating the holidays with a loved one who has dementia requires careful planning, patience, and compassion. By implementing the strategies outlined in this white paper, families can create a festive and inclusive environment that honors their loved one’s current needs while preserving the spirit of the season. Ultimately, the goal is to foster connection and joy, making the holiday experience meaningful for everyone involved. By embracing understanding and flexibility, families can navigate the complexities of dementia and create cherished holiday memories together.
Resources
- Alzheimer’s Association: www.alz.org
- Creating Moments of Joy with Jolene Brackey, https://www.enhancedmoments.com/
National Institute on Aging: www.nia.nih.gov
Reflect on the changes and opportunities each of these situations offers. Whether it’s rebalancing your portfolio, preparing for tax implications of an unexpected gain, or creating an inclusive holiday plan for family, a proactive approach can help you make the most of life’s moments, big and small.
Toll Free: 888-339-0093
Email: admin@mfplanners.com
[i]https://am.jpmorgan.com/content/dam/jpm-am-aem/americas/us/en/insights/market-insights/wmr/weekly_market_recap.pdf. Accessed 11.04.2024. Chart of the Week: Source: Bloomberg, ICE BofA, Standard & Poor's, J.P. Morgan Asset Management. The 60/40 portfolio is rebalanced on a monthly basis, and is 60% invested in the S&P 500 Total Return Index and 40% invested in the Bloomberg U.S. Aggregate Total Return Index. Thought of the week: Source: Bloomberg, World Gold Council, J.P. Morgan Asset Management. Abbreviations: Cons. Sent.: University of Michigan Consumer Sentiment Index; CPI: Consumer Price Index; EIA: Energy Information Agency; FHFA HPI: - Federal Housing Finance Authority House Price Index; FOMC: Federal Open Market Committee; GDP: gross domestic product; HPI: Home Price Index; HMI: Housing Market Index; ISM Mfg. Index: Institute for Supply Management Manufacturing Index; PCE: Personal consumption expenditures; Philly Fed Survey: Philadelphia Fed Business Outlook Survey; PMI: Purchasing Managers' Manufacturing Index; PPI: Producer Price Index; SAAR: Seasonally Adjusted Annual Rate Equity Price Levels and Returns: All returns represent total return for stated period. Index: S&P 500; provided by: Standard & Poor’s. Index: Dow Jones Industrial 30 (The Dow Jones is a price-weighted index composing of 30 widely-traded blue chip stocks.) ; provided by: S&P Dow Jones Indices LLC. Index: Russell 2000; provided by: Russell Investments. Index: Russell 1000 Growth; provided by: Russell Investments. Index: Russell 1000 Value; provided by: Russell Investments. Index: MSCI – EAFE; provided by: MSCI – gross official pricing. Index: MSCI – EM; provided by: MSCI – gross official pricing. Index: Nasdaq Composite; provided by: NASDAQ OMX Group. MSCI EAFE is a Morgan Stanley Capital International Index that is designed to measure the performance of the developed stock markets of Europe, Australasia, and the Far East. Bond Returns: All returns represent total return. Index: Bloomberg US Aggregate; provided by: Bloomberg Capital. Index: Bloomberg Investment Grade Credit; provided by: Bloomberg Capital. Index: Bloomberg Municipal Bond 10 Yr; provided by: Blomberg Capital. Index: Bloomberg Capital High Yield Index; provided by: Bloomberg Capital. Key Interest Rates: 2 Year Treasury, FactSet; 10 Year Treasury, FactSet; 30 Year Treasury, FactSet; 10 Year German Bund, FactSet. 3 Month LIBOR, British Bankers’ Association; 3 Month EURIBOR, European Banking Federation; 6 Month CD, Federal Reserve; 30 Year Mortgage, Mortgage Bankers Association (MBA); Prime Rate: Federal Reserve. Commodities: Gold, FactSet; Crude Oil (WTI), FactSet; Gasoline, FactSet; Natural Gas, FactSet; Silver, FactSet; Copper, FactSet; Corn, FactSet. Bloomberg Commodity Index (BBG Idx), Bloomberg Finance L.P. Currency: Dollar per Pound, FactSet; Dollar per Euro, FactSet; Yen per Dollar, FactSet. S&P Index Characteristics: Dividend yield provided by FactSet Pricing database. Fwd. P/E is a bottom-up weighted harmonic average using First Call Mean estimates for the "Next 12 Months" (NTM) period. Market cap is a bottom-up weighted average based on share information from Compustat and price information from FactSet's Pricing database as provided by Standard & Poor's. MSCI Index Characteristics: Dividend yield provided by FactSet Pricing database. Fwd. P/E is a bottom-up weighted harmonic average for the "Next 12 Months" (NTM) period. Market cap is a bottom-up weighted average based on share information from MSCI and Price information from FactSet's Pricing database as provided by MSCI. Russell 1000 Value Index, Russell 1000 Growth Index, and Russell 2000 Index Characteristics: Trailing P/E is provided directly by Russell. Fwd. P/E is a bottom-up weighted harmonic average using First Call Mean estimates for the "Next 12 Months" (NTM) period. Market cap is a bottom-up weighted average based on share information from Compustat and price information from FactSet's Pricing database as provided by Russell. Sector Returns: Sectors are based on the GICS methodology. Return data are calculated by FactSet using constituents and weights as provided by Standard & Poor’s. Returns are cumulative total return for stated period, including reinvestment of dividends. Style Returns: Style box returns based on Russell Indexes with the exception of the Large-Cap Blend box, which reflects the S&P 500 Index. All values are cumulative total return for stated period including the reinvestment of dividends. The Index used from L to R, top to bottom are: Russell 1000 Value Index (Measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values), S&P 500 Index (Index represents the 500 Large Cap portion of the stock market, and is comprised of 500 stocks as selected by the S&P Index Committee), Russell 1000 Growth Index (Measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values), Russell Mid Cap Value Index (Measures the performance of those Russell Mid Cap companies with lower price-to-book ratios and lower forecasted growth values), Russell Mid Cap Index (The Russell Midcap Index includes the smallest 800 securities in the Russell 1000), Russell Mid Cap Growth Index (Measures the performance of those Russell Mid Cap companies with higher price-to-book ratios and higher forecasted growth values), Russell 2000 Value Index (Measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values), Russell 2000 Index (The Russell 2000 includes the smallest 2000 securities in the Russell 3000), Russell 2000 Growth Index (Measures the performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values). Past performance does not guarantee future results. Diversification does not guarantee investment returns and does not eliminate the risk of loss. Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be appropriate for all investors. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. 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Copyright 2024 JPMorgan Chase & Co. All rights reserved. ©JPMorgan Chase & Co., November 2024. Unless otherwise stated, all data is as of November 4, 2024 or as of most recently available.
[ii] Holiday, Ryan. The Daily Stoic: 366 Meditations on Wisdom, Perseverance, and the Art of Living. Kindle edition, page 329. Accessed 11.04.2024.
[iii] Hockensmith, Robert F. 52 Ways to Outsmart the IRS, Weekly Tax Tips to Save You Money. Kindle edition, page 195-197, accessed 11.04.2024.
[iv]https://www.certitrek.com/cltc/wp-content/uploads/sites/3/2024/11/CLTC_2024_Holiday_Whitepaper_navigating-the-holidays_dementia_yellow-headline.pdf, accessed 11.04.2024.