The Long Term Investor

As a long term investor.....the markets today are simply a big waste of time to even think about. SO.....I will not waste any more time.......for now.

 

NINE....days to go in 2024.

LOL.....I ignored the whole day today. It was obvious this morning that there was no reason to pay any attention to the markets.....so I left.

I ended with another small loss today. I had two stocks in the green.....AAPL and msft. These losing days seem a lot worse than they are.....the actual losses are not that large considering. For example today I lost out to the SP500......but the loss was only by.....0.28%.

 

We now move on to day NINE and more importantly FED day. Perhaps the focus on the FED will help the markets get off this losing little hamster wheel.....that we have been on lately.

 

This sounds a lot worse than it has really been.

Dow logs longest losing streak since 1978 as stocks slide ahead of Fed decision

https://finance.yahoo.com/news/live...ks-slide-ahead-of-fed-decision-210053679.html

 

I cant see this little article since it is.....PAY only. But I like the sentiment.

Fed decision is ‘last hurdle’ before a Santa year-end rally, Bank of America says

https://www.cnbc.com/2024/12/17/fed...ore-santa-year-end-rally-bank-of-america.html

 

I think I will go and play a little guitar tonight.

 

I have been busy this morning....helping my son-in- law with some of his money decisions as he is at the dealer right now buying a new car. With trade, savings, and selling a bit of stock he will be able to pay cash and have no debt. It will be his first.....actually....."new car" without a payment.

 

LOL Road.....I assume you are trying to post that song.....by Europe...."Final Count Down". I also tried and never could find one that would post.

DAY NINE......in progress......THE FINAL COUNTDOWN.

 

Of course it is FED DAY.

Wall Street is betting the Fed will deliver a final 2024 rate cut and get more cautious about 2025

https://finance.yahoo.com/news/wall...sANImuuk0Aj66YME-qRy0485ApUvZI6kSskJZ2QeVAUif

(BOLD is my opinion OR what I consider important content)

"Investors widely expect the Federal Reserve to cut interest rates Wednesday by a quarter percentage point, the third and final reduction of 2024.

But their bigger question is whether the central bank is ready to scale back its expected cuts for 2025 — and how chair Jerome Powell will address questions about the Fed's path at his Wednesday afternoon press conference.

"Fed Chair Powell will face the delicate exercise of having to reconcile a 25-basis point rate cut with stronger economic and inflation projections and a more gradual policy easing trajectory,” said Greg Daco, chief economist for EY.

All eyes will be on the so-called "dot plot," a chart updated quarterly that shows the prediction of each Fed official about the direction of the federal funds rate.

In September, as the central bank initiated its first rate cut in more than four years, the dot plot revealed a consensus among Fed officials for two more cuts in 2024 and four small additional reductions in 2025.

Now that 2025 projection is in question following a string of stubborn inflation readings and cautious commentary from Fed officials. Many Fed watchers expect policymakers to pull back their estimates for next year.

"We expect the main message of the December meeting to be that the FOMC anticipates that it will likely slow the pace of rate cuts going forward," Goldman Sachs chief economist Jan Hatzius said in a note.

Hatzius has revised his forecast for 2025 to eliminate a cut in January, but he continues to expect cuts in March, June, and September next year, ending with a slightly higher neutral rate of 3.5-3.75%.

That prior prediction for four rate cuts next year has "got to be rethought," former Cleveland Fed president Loretta Mester told Yahoo Finance.

Two or three cuts in 2025 "seems right to me."

Some Fed watchers disagree, saying Fed officials will stick with their estimates for four cuts in 2025.

"The story overall is they still expect inflation to come down," said Wilmington Trust chief economist Luke Tilley, who expects the median 2025 estimate to stay at four reductions.

"They still think rates are restrictive."

Unless there is a sharp slowdown in the job market, regaining more confidence that inflation is in fact heading back down is likely to be the most important factor in determining the timing of the next rate cut, according to Deutsche Bank chief US economist Matt Luzetti.

"The Fed can afford to be patient with the economy continuing to show strength and downside risks to the labor market having diminished," Luzetti added. "Incoming inflation data have exceeded expectations and have raised the risks that progress will be slower than anticipated, if not stall."

Minutes from the Fed's last policy meeting in November revealed that many officials were uncertain about where the neutral rate is, referring to the level of the Fed’s benchmark interest rate that neither boosts nor slows growth.

That is creating ambiguity around how restrictive interest rates are right now, making it appropriate for many officials to support a more gradual reduction of rates going forward.

Fed Chair Jerome Powell has left enough breathing room for the Fed to adopt a slower pace if needed, saying in early December that "we can afford to be a little more cautious" because the economy is stronger than expected earlier in the fall."

MY COMMENT

The magic FED hour today will be.....2:00ET. I dont expect anything to happen that is a shock. We should see a rate cut at 0.25%. As to next year......it is pretty safe to assume 2-4 more rate cuts.

 

Well.....DUH. The selling and disrespecting of earnings over the past six month is CRAZY.

Nvidia stock jumps as Wall Street analysts maintain bullish outlooks


https://finance.yahoo.com/news/nvid...f-8jlcqOmp62GxLKMaFT2rEshtmpjFuQTBOCiLZsmL3Lp

 

Just a BASIC flat day for the markets today....and....for me. I have five stocks down right now and four up. BUT.....the big one for me.....NVDA....is currently up nicely.

The fun today will come when the FED does their rate cut and starts talking. Other than that.....the day is pretty much wasted as we wait for the FED.

 

Here is a bit of year end information.

More Nitty Gritty Personal Finance Reminders for Yearend Checkups
Tie up loose ends and set yourself up for 2025.

https://www.fisherinvestments.com/e...rsonal-finance-reminders-for-yearend-checkups

(BOLD is my opinion OR what I consider important content)

"With the holidays in full swing, we are loving this season of opening joyous things. Cookie tins. Festive drink bottles. Beautifully wrapped packages. And … the MarketMinder mailbag! It isn’t quite time for our monthly Q&A, but feedback on last week’s personal finance rundown suggests to us a sequel focusing on the nitty gritty of yearend financial housekeeping is in order. So, what are the Is to dot and the Ts to cross as we wind toward New Year’s Eve? Read on.

Check Your Contributions

For all those who love compound growth and hate paying more taxes than you need to, tax-deferred retirement accounts are a major blessing. If you have the means to do so, maxing them out yearly is a wonderful way to reduce your taxable income and put more of your money to work toward your long-term goals. And with contribution limits a moving target, we think it is always wise to take a look before yearend to ensure you are socking away as much as you can.

On the IRA front, contribution limits rose from $6,500 to $7,000 in 2024, with the catch-up amount remaining at $1,000 for the 50+ crowd. Eligibility for tax deferral is a smidge complicated, depending on your income, marital status and whether you have access to a workplace plan—the IRS has all the details here, along with the rules on Roth IRA eligibility for 2024. While the year is winding down, you still do have time to make those contributions if you are eligible: While it may be beneficial to plow it in as soon as possible, you technically have until April 15 to make a prior-year contribution.

Now, for workers with 401(k)s, your ability to top up contributions to the $23,000 2024 limit may be harder, since contributions are made chiefly through salary deferral. But there is news to be aware of here, too, and action you can take: While next year’s IRA contribution limits will match 2024’s, there are some bigger changes coming in the 401(k) world.

The main contribution limit will inch up from $23,000 to $23,500, while the catch-up contribution amount for folks age 50 and older will stay at $7,500. But if you are age 60, 61, 62 or 63 at any point next year, you get a special, higher catch-up contribution limit of $11,250—a handy present from the SECURE 2.0 Act. As always, plan participation varies, but it is worth investigating and, if relevant, having a wee chat with your plan administrator to ensure you are getting everything Uncle Sam offers. Regardless, yearend is a time to review your contribution rate and ensure you are plugging away as much as your budget or the law allows.

Make Sure You Took Your RMD

Of course, while Uncle Sam giveth, Uncle Sam also taketh away, which brings us to annual required minimum distributions (RMDs). Traditional IRAs and 401(k)s are funded with pre-tax money and grow tax-free, which is lovely, but the tradeoff is that withdrawals are taxed as ordinary income. And to ensure the government gets its cut, minimum distributions are required annually once you hit age 73. If you fail to take your RMD on time, you get slapped with a penalty of 10% of the undistributed amount … which rises to 25% if you don’t fix the error within two years.

If you turned 73 this year, you have a bit of wiggle room. Your first RMD is due by April 1, 2025. But keep in mind you will still have to take your 2025 RMD by 12/31/2025, and taking both in the same calendar year will increase your tax bill. What is right for you will depend on your needs and overall financial situation, but that is a consideration worth weighing carefully.

For everyone else, review all your tax-deferred retirement accounts to see if you have taken your RMDs yet. And if you haven’t, take them. Determining your RMD should be easy, as it will be on your Form 5498, which you will typically receive early in the year, and it is on many IRA custodians’ account statements. If you can’t find it, you can also call your financial professional, who is likely able to help quite easily. If for some reason you can’t track this down, most brokerage firms have RMD calculators you can use. Or you can do it yourself with pen, paper and a calculator, using your 12/31/2023 account balance and the IRS’s life tables.

If you inherited an IRA from someone who isn’t your spouse, we strongly counsel talking to a tax adviser or financial professional about required distributions. The 2019 Secure Act included a provision that required many non-spousal beneficiaries to fully deplete the account within 10 years via annual withdrawals. Failure to do so could result in a penalty of 25% of withdrawal amount. Now, this penalty has been waived every year since—including 2024. But it still may behoove you to take funds now for tax planning reasons. Again, this is an area of tax law that has been evolving lately—so being aware of how this rule may affect you is key.

Mind Your HSA and FSA

Tax-advantaged accounts aren’t just for retirement saving anymore—it is also for healthcare. There are two main account types: the Health Savings Account (HSA) and Flexible Spending Account (FSA).

Starting with the simpler of the two, the HSA lets you put pre-tax money in an account dedicated to healthcare spending, and the money accumulates over time. To participate, your health insurance plan must be eligible (which generally means it must be high-deductible), and you can’t have an HSA and an FSA. And like a 401(k), an HSA has annual contribution limits. These are important to keep in mind not only to ensure you are participating to the fullest extent possible, but because over-contributing is a major no-no.

For 2024, contribution limits are $4,150 if your plan covers just yourself and $8,300 if it covers your family. Note, this limit includes any employer matching. The limit isn’t $4,150 plus whatever your employer chips in. It is $4,150, period. Oh, and folks age 55+ get an extra $1,000 catch-up contribution. So check in and see if a top-up makes sense.

Moving on to FSAs, these also let you use tax-free dollars to fund medical expenses, and you contribute through payroll deductions. But contributions don’t accumulate—they are basically use it or lose it. For 2024, the contribution limit is $3,200. If you and your spouse each have an FSA, the limit is $3,200 in each plan. But of this amount, you can only carry over $640 into 2025. So if you currently have more than this sitting in your FSA, you risk watching the excess vanish at yearend.

Which means … you may want to get busy. If you aren’t able to cram in a medical appointment you have been putting off, there is a long laundry list of over-the-counter items that are FSA-eligible, everything from basic medicine and medical supplies to sunscreen to hearing aids. Restocking your medicine cabinet, updating your first aid kit, replacing the thermometer whose accuracy you have been questioning … these and many other endeavors can help you put the funds to good use. The IRS has the full eligibility list here.

Consider a Charitable Donation

While Congress debates whether to extend 2017’s Tax Cuts and Jobs Act, its provisions remain in force for this year and next—which means itemized deductions remain limited. The major exception is charitable contributions. So if you have the means and desire to donate to the organizations and causes that touch your heart, this is a good time to see if a donation might improve your tax situation for next year.

Which brings us back to RMDs. IRS rules allow for up to $105,000 in qualified charitable distributions from an IRA—distributions that go straight from your account to the charitable organization. These are tax-free (meaning, they don’t count as withdrawals), and crucially, they also count toward your RMD. So if you don’t need your RMD for living expenses, taking it as a qualified charitable contribution satisfies the requirement without adding to your income tax bill. And it benefits people and causes you care about. If ever there were a win-win-win, we think this qualifies."

MY COMMENT

For many the above is a good way to save money and grow that money for retirement. Be sure to take your RMD....the penalties are HUGE if you dont. If you cant figure it out talk to someone at your broker or a professional.

 

Not much of a surprise here.

Fed cuts rates by quarter point, scales back cuts for 2025

https://finance.yahoo.com/news/fed-...sANImuuk0Aj66YME-qRy0485ApUvZI6kSskJZ2QeVAUif

(BOLD is my opinion OR what I consider important content)

"The Federal Reserve reduced interest rates by a quarter percentage point Wednesday and scaled back the number of cuts it expects to make next year.

In a split vote, the central bank voted to reduce its benchmark interest rate by 25 basis points to a new range of 4.25%-4.5%, initiating its third consecutive rate cut of 2024 despite signs that inflation isn’t entirely going away.

Newly appointed Cleveland Fed president Beth Hammack objected, preferring not to cut rates. Her dissent marked the second dissent against a policy decision since September.

The consensus among Fed officials is for three rate cuts next year, down from four previously forecast in September.

Ten officials estimated 3 cuts next year, while three saw two cuts next year, three saw 4 cuts next year, one saw no cuts.

“In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks,” officials said in their policy statement.

The statement added in the wording “extent and timing,” to indicate that the Fed may not continue its consecutive meetings of rate cuts and slow the pace.

The so-called neutral rate – the rate on the Fed’s benchmark policy rate designed to neither boost nor slow economic growth – is now seen as higher, ending at 3%, up from 2.9%.

The new estimate implies that the central bank sees reducing rates to roughly the same level as previously.

The outlook for interest rate projections comes as Fed officials now see inflation as measured by the “core” Personal Consumption Expenditures Index, which excludes volatile food and energy prices, ending next year at 2.5%, higher than the 2.2% previously envisioned.

The unemployment rate is seen ticking down a tenth to 4.3% from its previous forecast of 4.4%. Economic growth is expected to remain roughly the same as previously forecast next year at 2.1%, up from 2.0% previously.

Officials see inflation ending this year at 2.8%, up from 2.6% previously. The unemployment rate is seen ending the year at 4.2%, down from 4.4%.

The new guidance from the Fed follows two developments that surprised some economists after the Fed in September cut rates for the first time since 2020, signalling an end to its most aggressive inflation-fighting campaign since the 1980s.

First, the job market did not show any new signs of weakness this fall. Second, inflation remained in a stubborn sideways holding pattern, refusing to make the final descent toward the Fed’s 2% goal.

That latest evidence came last week when inflation data from the Bureau of Labor Statistics showed that the Consumer Price Index (CPI) increased 2.7% over the prior year in November, a slight uptick from October's 2.6% annual gain in prices.

On a "core" basis, which strips out the more volatile costs of food and gas, prices in November climbed 3.3% over last year for the fourth consecutive month.

Wholesale prices also rose more than expected in November, adding to the string of sticky inflation prints."

MY COMMENT

Expectations have been met. I like the potential for THREE rate cuts in 2025. Not too hot, not too cold......a goldy-locks....rate plan.

I also like that the FED seems to not be too committed to their made up 2% inflation figure. It is a totally made up figure anyway that does not reflect historic reality.

 

AND....of course....ALL the big averages have now gone RED in response.....to the OBVIOUS.

The reason....3 rate cuts next year instead of 4. Just a bunch of WHINING IDIOTS running and trading the short term markets.

This is the perfect lesson in the STUPIDITY of the short term in the markets. At least there is a way to avoid all this "stuff"......simply invest for the long term......and REFUSE to get drawn into the short term IDIOCY.