FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
Investors Are Overreacting to December’s Retail Weakness (Morgan Stanley)
Morgan Stanley’s Kimberly Greenberger is holding fast to her below-consensus expectations for December’s retail sales. But she says investors have jumped too soon on discounting retail stocks. “December sales likely missed plans but not to the degree implied by market swings,” she writes. “We think the street could be overlooking readthroughs from solid online results, a potential 200-400 bps [same store sales] calendar shift benefit, and better y/y inventory control.”
Why Investors With Longer Time Horizons Can Rest Easier On Taxes (NYU Stern School)
Stern finance professor Aswath Damodaran has a neat chart showing how investors with shorter-term horizons end up paying more taxes:
Photo: Aswath Damodaran
Investors with short time horizons generally pay more in taxes for two reasons: (1) their holding periods are too short to qualify their gains for long term capital gains, thus converting their price appreciation in ordinary income (with higher tax rates) and (2) the high turnover in their portfolios makes it impossible to have a cohesive tax strategy.
Bill Gross’s 2013 Forecast Tweet Is Not Good (Business Insider)
PIMCO boss Bill Gross continues to make Twitter a platform for major announcements. Today, he broadcast his predictions for 2013. They were:
1) Stocks & bonds return less than 5%
2) Unemployment does not move below 7.5 per cent
3) Gold does up
A ‘Grand Bargain’ Was Always Going To Be A Fantasy (Reuters)
Felix Salmon says there was never going to be a megadeal that addresses long term fiscal and debt problems. “If and when we do get some kind of fiscal cliff deal, it will be a patched-together hodgepodge of policies designed with exactly one goal in mind: finding a piece of legislation which is capable of getting, somehow, through Congress.
And that’s not good enough, he writes. “The result is complete idiocy like running up against the debt ceiling, or raising taxes on pretty much every income-earning American, despite the fact that nobody wants either thing to happen.”