Wealth and Wisdom: Week of October 17, 2022

Investors will be focused on one key factor in the coming weeks: earnings. Stock prices have fallen into a bear market this year, but if profits can remain relatively strong, it could give the market some protection against further price declines. If earnings deteriorate, however, it might presage an economic slowdown or recession, and stocks may have a harder time finding the bottom.

Earnings anxiety is already growing among major companies. Target and Walmart, for example, have already launched holiday sales in hopes of working off their bloated inventories. That could hurt profits, but the alternative is sitting on warehouses full of unsold goods, an ever more expensive proposition.

I’m traveling on business for the next couple of weeks. Wealth and Wisdom will return to your inbox the first week of November.

IRS waives penalties on inherited IRAs

The IRS has decided not to penalize IRA beneficiaries who waited for the agency to get around to making new rules for required distributions. (Reading time: 2 minutes)

Remembering Black Monday

It was 35 years ago this week that stocks lost a quarter of their value in a single day. (Reading time: 2 minutes)

Whatever happened to the computer chip shortage?

Semiconductor manufacturers couldn’t keep up with demand during the pandemic. Now those orders are drying up. (Reading time: 5 minutes)

Dividends are in; buybacks are out

S&P 500 companies are now paying record-high dividends – but many have stopped buying back their own shares. (Reading time: 2 minutes)

Record demand for Series I bonds

Inflation-protected government bonds are paying high yields, which is overwhelming TreasuryDirect – the only place you can purchase them. (Reading time: 3 minutes)

Is your company changing 401(k) providers?

Transitions don’t always happen smoothly. Here’s what to watch for if your employer changes your retirement plan. (Reading time: 4 minutes)

Why you should plan for an early retirement

Life doesn’t always go the way we plan – and it’s wise to keep your retirement parachute packed just in case. (Reading time: 3 minutes)

‘The biggest retirement challenge no one talks about’

Hint: It has nothing to do with inflation, interest rates, or bear markets. (Reading time: 4 minutes)

12 Terms Every Investor Needs to Know

See how familiar you are with these key investment concepts. (Reading time: 9 minutes)

Mike’s Pro Tip of the Week

The idea that you will always be better off financially owning a home as opposed to renting – is a myth. Yes, owning helps you build equity, avoid rent increases, and possibly save money on your taxes. Renting, however, gives you greater flexibility, lower maintenance costs, and requires no borrowing and down-payments. Base your housing decision on how long you plan to live in the area, current market conditions, and your own financial situation.

Words to the Wise

“Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold.”
Warren Buffett

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