Leonesmoneymonitormonthly's Blog

By Edward Leone Jr. CFP RFC DMD MBA
Contact Information: edleonedds@gmail.com 303-478-6793

We all need to be aware of changes which are in place for 2015 regarding the IRS Tax Code as follows:
Top Income Tax Rate 39.6%
Personal Exemption $4000
Standard Deduction Married Filing Joint Return $12,600
Social Security Tax On Income Up To $118,500
Social Security Earned Income Limit For Those Under Full Retirement Age $15,720
Alternative Minimum Tax Exemption $83,400
Section 179 Expense $25,000
Top corporate Tax Rate 39%.
These are just a few of the changes experienced by many of us. In general, rates are up significantly while allowances are up slightly.

Such factors as a stronger dollar, volatile oil prices, continued geopolitical uncertainty in some areas of the globe and economic issues in Europe and Asia (China’s national debt is 200% of GDP) will continue to promote concerns for investors. According to Dow Theory Forecasts, some 74% of large-cap managed mutual funds have trailed the Standard and Poor’s 500 index over these past three years. Well so much for the experts and what we pay them to manage these funds. The slow growth of the US economy will likely continue as burdens represented by the cost of government, a potential squeeze on corporate profits, significant unemployment and restrained consumptive spending by the public persist. Our economy still looks comparatively attractive on the global scene. Now that the newly elected Congress is in session, it will be interesting to see if many changes occur regarding both domestic and foreign policy matters.

I continue to find statistics on economic and social issues as presented in the Journal of Financial Planning very interesting. 74.5% of American families are in debt. 40% of workers had a defined benefit pension plan in 1979, while by 2011, that number was reduced to 10%. The Social Security system is now 77 years old. The average American spends 4 hours and 55 minutes per day watching television. 40% of Americans are not investing at this time due to a variety of reasons. Only 19% of full-time students at nonflagship US public universities earn a bachelor’s degree in four years. What does this stuff tells about ourselves and our future?

It must be clear to readers based on the content of the paragraphs above, investors must understand that:
1. diversification in a portfolio matters
2. fund managers matter
3. past performance is not a guarantee of future positive results
4. value buying can occur on bad news
5. buy and hold is not an old strategy
6. seeking expert advice is essential.
Look at long term trends and not short or quick gratification!!

For The Record:
DJIA 18,140.44
S and P 500 2,110.3
NASDAQ 4,955.97
Suggested Reading: “Marketing Strategy” by Ferrell and Hartline

Tags: Income Tax Rate

This entry was posted on February 22, 2015 at 9:57 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.