FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
Few workers are expecting holiday bonuses and pay raises (Bankrate)
A Bankrate survey has found just 25% of employees are expecting a holiday bonus and/or holiday pay raise at work this year. Among those who are expecting something extra, only 17% plan on spending that money on gifts. Bankrate says the remainder want to save (35%), pay down debt (22%) and pay bills (19%). Oakland University economics professor Jonathan Silberman told Bankrate, “The relatively low percentage of workers with a pay raise or holiday bonus reflects the still-impaired job market where there are not sustainable pay raises yet.”
4 tools the Fed might use (Westwood Capital)
On Wednesday, the Fed is expected to hike its benchmark interest rate for the first time since June 2006. Daniel Alpert, a managing partner at Westwood Capital, says there are for routes the Fed could take to try and get things back to normal. Alpert says the Fed could raise the fed funds rate and the discount rate, but due to excess liquidity in the system this would only have a psychological impact. Next he suggests, the Fed could also pay interest on reserves, but the lack loan demand from credit worthy borrowers likely makes this ineffective. Additionally, the Fed could use reverse repo to manage policy, but the outcome would be unpredictable as they’d be entering un-chartered waters. Finally, Alpert says the Fed could enter a phase “quantitative tightening” where it drained excess liquidity from the system, but this could send the world back into a nose-dive.
Boeing is buying back more stock and increasing its dividend (Business Insider)
The aerospace giant announced plans to buy back $14 billion worth of stock, replacing its $12 billion program that had a balance of $5.25 billion remaining. In addition, Boeing will increase its quarterly dividend 20%, to $1.09 a share from $0.91.
Navigating social media (Wealth Management)
With social media becoming a popular way for advisors to gain new clients, Wealth Management has decided to share some holiday do’s and don’ts. Wealth Management says to be sure to create holiday greetings for your clients and potential clients, but don’t publish too many of them. Do be sure to create holiday-themed investment advice, but don’t “overshare” ideas. Finally, do use social media to boost your brand, but don’t damage your brand with your use.
Some ways to save on taxes (Financial Advisor)
With 2015 winding down, it’s time to start preparing your taxes. Investors must pay a tax of 20% on any long-term gains, but have a few options to offset any tax impact. According to Financial Advisor, investors can implement a tax-loss harvesting strategy, which allows them to sell any holding at a loss to offset capital gains from elsewhere in their portfolio. Additionally, investors can sell a security at a loss, and replace it with a “similar, but different, securities to maintain the same type of industry, regional or factor exposure that was provided by the old securities,” Financial Advisor says. Finally, it’s important to pay attention to currency risk. Unhedged investments abroad might see an unexpected loss when converted back into the strong US dollar.
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