Not all returns are created equal, especially in the eyes of the government. While you may think a 10% return is the same regardless of whether it is categorized under capital gains or dividends, the “powers that be” would beg to differ. In fact, the US tax code treats the two sources of return very differently.

Market highlights

The first month of the new year saw markets testing new all-time highs, but by month-end the Dow Jones Industrial Average slipped about -2% from New Year’s Eve with factors like Gamestop speculation and disappointing news about Johnson & Johnson’s vaccine trial contributing to the decrease. 

The returns from what’s happened with GameStop over the last few weeks has to have investors wondering, where’s the next opportunity? Another quick stock tip from the Reddit forum r/WallStreetBets would be easier than winning the MegaMillions jackpot, right? 

During the fourth quarter of 2020, the US economy continued to recover from the ‘black swan’ recession caused by unexpected global lockdowns over Covid-19. Throughout 2020, global central banks and policy makers were able to stay ahead of the recession with massive fiscal and direct monetary intervention that cushioned the blow of what would have otherwise been a long and drawn-out global recession. As we look forward to 2021 against the backdrop of a continued rise in Covid-19 infections and multiple vaccine rollouts, we are hopeful that 2021 will bring us some return of normalcy to our daily activities. 

 

Most of us know it’s important to contribute to a retirement plan, but many people struggle starting out because choosing a plan can be overwhelming. I’m here to make the decision a little easier, starting with a quick review of the major benefits and drawbacks of the most common retirement plans.