Sound Advice

The Ups and Downs of Technology Stocks Over extended periods, some of the strongest returns have been turned in by technology stocks.   But along the way, there have been big upsurges and unnerving plunges.   Last year, the group of technology stocks known as the FAANGs were market darlings.   The group includes Meta Platforms (a.k.a., Facebook), Amazon, Apple, Netflix, and Alphabet (a.k.a., Google). So far in 2022, they’ve hit the skids.   Here’s the comparison.   In calendar 2021, the FAANGs, led by Alphabet (+65%), climbed 27% on average.   Since January 1 st , they’ve dropped 30%. Other popular pandemic names had even worse fates.   Zoom Communications, often the virtual meeting application of choice, went down 46%, followed by a similar collapse this year.   DocuSign, another favorite, lost 32% in 2021 and then had a further loss of 44% for the year to date. Although the recent rough going for the markets reflects investors’ fears stemming from the war in Ukraine and unusu

Qualified Charitable Donations   If you have an Individual Retirement Account (IRA) and give to charitable organizations, you may want to consider doing so using a Qualified Charitable Donation (QCD).   This option will be of particular interest to people who have reached the age (72) of the first Required Minimum Distribution (RMD).   A donation from an IRA with a QCD must be made out and paid directly to an approved charity, not indirectly from an individual’s taxable account after the RMD has been transferred from the IRA.   It must be a cash donation, not a transfer of a property, tangible or intangible and it must be completed within the tax year.   The IRA owner can receive the check and deliver to the charitable organization, but cannot deposit the check and make out another one to the charity. A list of approved charities can be found on the IRS website.   This group includes nonprofit groups that are religious, charitable, educational, scientific or literary in purpose o

Tough Time For Bonds Over the years, difficult periods for the stock market have invariably prompted “flights to quality” on the part of investors.   In most cases, these shifts meant that funds were being moved from higher risk holdings to those appearing to offer increased safety.   That usually led to a redeployment from stocks to bonds, typically those of the U.S. Treasury or high-grade corporate borrowings.   With interest rates now rising, however, that approach is no longer working.  Indeed, in recent months it has backfired.  In the latest calendar quarter, the Treasury market posted its worst performance in more than 40 years.  For the period, the ICE 15+Year U.S. Treasury Index sustained a loss of 13%.  The iShares 20+ Year Treasury Bond Index dropped 14%. This is typical of what takes place when interest rates are rising.  The rule of thumb for bonds is that when rates rise, bond prices fall.  In most cases, the longer the maturity of the bonds, the greater the interim

Deadline for filing federal tax returns The deadline for filing federal taxes for most taxpayers is Monday, April 18, 2022 . That’s because April 15 is recognized as a holiday, Emancipation Day , in Washington, DC, home of IRA headquarters. Taxpayers in Maine and Massachusetts, however, have until Tuesday, April 19 because of the observance of Patriot’s Day in those states.   N. Russell Wayne, CFP ® Sound Asset Management Inc. Weston, CT   06883   203-222-9370 Any questions?   Please contact me at nrwayne@soundasset.com

E I E I Owe   The coming of Spring tends to bring mixed emotions.   For those of us up in the colder states who have managed to get through yet another frigid winter, the appearance of the first robins and yellow buds of forsythia signal the onset of a more comfortable time of year.   The flipside, however, is the discomfort that may be in store when Uncle Sam awaits the annual income tax payments.   Sending a check to the IRS may not be the most pleasant task, but the reality is that taxes due are based upon income.   Generally speaking, the greater the income, the greater the tax bite.   With the exception of income that is exclusively provided by tax-free investments, the prospect of no taxes due may well raise the thought of a difficult situation. With that said, proper investing necessarily involves a long-term view for at least two reasons.   First, regardless of the expertise brought to bear in the analysis of possible holdings, the impact of interim events on short-term p