Tuesday, December 6, 2016


Picture credit: theenchantedmanor.com
November memories include a completed election season (finally), a continuing softening of bond prices, a rocket ride for small cap prices, a President-elect who continues to defy all convention, and Thanksgiving. 

Turning to public markets first, bond prices, as measured by BLV, were off 6.6% in November, over several concerns, including that the FOMC would begin raising interest rates consistently.  The FOMC meets next week, and the consensus is they will raise rates by at least 0.25%.

Small caps, on the other hand, went straight up, with most indices which track small caps up more than 10%.  VIOO, the Vanguard Small Cap 600 ETF, was up 11.3% in November, while the Russell 2000 was up 11%.

President-elect Trump continues to defy all Presidential convention, making full use of the bully pulpit of the President.  Many cringe in embarrassment, while others cheer him on.  He appears to be more an opportunist than a conservative, though many is the leader who has risen to the occasion, when given the role.  Only time will tell what these next few years will bring.  They will certainly be interesting.

In economic news, the BLS reported the official unemployment rate at 4.6% in November, its lowest level since August 2007.  According to the BLS, November added 178,000 jobs, with a total of 15.6 million new jobs since early 2010.

Picture credit: businessinsider.com
Coke is studying next best steps for growth, as the cultural war on sugary drinks has led to decreased revenue.  Over the years, Coke, aware of these trends, has diversified away from carbonated soft drinks to brands such as Dasani, VitaminWater, MinuteMaid, Honestea and others.  It will no doubt continue this diversification.

Speaking of fascinating cultural trends, Snapchat has introduced its Spectacles, glasses that take short, first person videos, which can be uploaded to its platform.  Retail is $129, with demand causing them to sell for $5000 on eBay.  Of course, I don’t understand which makes me a dinosaur.   

For year-end tax planning, a few thoughts.  On the business side, if you need to buy equipment, buy sooner rather than later, using the available deduction under Sec. 179.  You can also establish a retirement plan for the current tax year, as long as plan documents are signed by December 31.  Funding can take place the sooner of the day the company files its tax return or the filing deadline, including extensions.  

On the personal side, look at several things.  If your employer offers a 401(k), make sure you are maximizing contributions.  The contribution limit for the year is $18,000 or $24,000, if you were 50 or older this year.  Make sure your state taxes paid are at least as much as your anticipated liability, as state taxes paid are a deduction on your federal return.  If you are charitably inclined, you can use a donor-advised fund to increase deductible contributions.  You can choose the final beneficiary of those contributions later. 

We enjoyed Thanksgiving.  It was a combination family reunion for my mother’s side of the family, and a three day Thanksgiving visit.  There were 37 of us on Thanksgiving Day.  On Thursday afternoon, our seven-year-old grandson graduated from a BB gun to a 20 gauge.  My cousin had set up the clay thrower and showed Joseph, our grandson, how to follow and shoot the clay.  Joseph took out a clay on his first shot with a 20 gauge.  That was a highlight.  Enough bragging, though.

As we move into the holiday season, what are you grateful or thankful for?  I was thinking about this the other day.  Here’s a short list.  Send us an email, or post to our blog, at www.centurionag.blogspot.com, and let us know what you are thankful for. 

Good health, the opportunity to be married to my best friend, children and grandchildren who are close both geographically and relationally, work that makes a difference, opportunities to serve and help outside of work, opportunities to travel and see friends and places around the country and world, and things as simple as a hot shower and hot coffee, a home that is warm in winter and cool in summer.  We are grateful for so many things, experiences and people, and to the Giver of all good and perfect gifts.

Picture credit: coniscorner.com
Quote of the week:

“When you rise in the morning, give thanks for the light, for your life, for your strength.  Give thanks for your food, and for the joy of living.  If you see no reason to give thanks, the fault lies in yourself.”