Investment Education & Insights

Links to timely, topical articles and information

**NEW** Wells Fargo Investment Institute - 2022 Outlook - Which way to the recovery

Capital markets have reached a crossroads at the threshold of 2022. Despite a thrid straight year of strong market price gains, many investors now perceive a delicate balance between further asset price appreciation and a potential retreat from the risk-taking environment in place since the economy reopened in 2020. Read More

**New** - House advances the Build Back Better Act: What could it mean for you?

Key Takeaways: On November 19, 2021, the Democratic-led House of Representatives passed the Build Back Better (BBB) Act, a broad $1.75 trillion bill focused on addressing climate change, education, poverty, health care, and other priorities. The House-passed BBB also includes tax increases and tax changes that are applicable to businesses, high income individuals, and individuals with higher-balance retirement-investment accounts. The BBB debate will now continue in the Senate, where the details of the legislation is likely to change. Read More 

2021 Year-End Planning Guide

This year ushered in a new President and Congress, as well as new proposals that could significantly alter the tax landscape. As the uncertainty about possible changes continues to play out, you do not need to be idle. There are still planning strategies and steps you can take now to help potentially lower your 2021 tax liability and keep your financial plan on track into 2022. The deadline for implementing most investment-related strategies that could reduce your 2021 tax bill is December 31, 2021. Read More

Wells Fargo Investment Institute - Investing in Bitcoin

The digital asset ecosystem has taken several quantum leaps forward since the creation of bitcoin in 2009, and cryptocurrency is now widely considered a viable investable asset. Read More

Wells Fargo Investment Institute - The Future of Globalization

Investing in an interconnected world. We consider globalization the interdependence that arises as goods, services, people and information cross borders and encourage globally integrated markets. For example, smartphone components could leave factories in South Korea or Taiwan for assembly in China, and then the finished products cross the pacific to a shelf of a U.S. retailer. Read More

To Invest or Reduce Debt?  

Many young investors may be grappling with high levels of personal debt. Specifically, student debt, which has ballooned to roughly $1.73 trillion in the second quarter of 2021, according to the Federal Reserve. The graph below depicts the large difference in consumer credit between student loans, revolving debt and motor vehicle loans. This makes student loans the second largest category of consumer borrowing (behind mortgages) in the United States. As the newest generation of investors begin their careers and start to earn money, they will face an onerous choice; invest early or focus on paying off their debt? Read More 

Saving for college - Giving children and grandchildren the opportunity of a lifetime

Whether your children or grandchildren are toddlers or teenagers, it’s only a matter of a time before they leave the family home, probably as they head off to college. The cost of sending just one child to college for four years can be staggering, and tuition and fee hikes regularly outpace inflation. Rather than sending your children or grandchildren into the world with the burden of student-loan debt, you can save to help cover at least a portion, if not all, of their higher-education expenses. Read More

Retirement Education Articles

**NEW** - Roth IRA conversion overview

One financial strategy that is often overlooked when evaluating your retirement and estate planning options is the Roth IRA conversion. Converting allows you to reposition your current tax-deferred retirement account to a Roth IRA by paying federal and possibly state income tax [but without the IRS 10% additional tax for taking early or pre-59½ distributions (10% additional tax)] on the taxable amount of the conversion. The benefit is that any earnings would be distributed tax-free, if certain conditions are met. Read More

**NEW** - What is a back-door Roth conversion strategy?

Are you interested in making contributions to a Roth IRA but your Modified Adjusted Gross Income (MAGI) is too high? Do you choose not to contribute to a Traditional IRA because you are covered by a workplace retirement plan (WRP) and your MAGI is at or above the phase-out limits for a deduction? If so, chances are good you’ve been told or read about the “back-door” Roth conversion. But what is it? Read More

Additional Articles

Wells Fargo Investment Institute - State of The Markets - Risks to Fade, Follow or Fear

Over the past few weeks investors have asked us about various market risks and the possibilities of a near term correction. Read More

Wells Fargo Investment Institute Investment Strategy, August 10, 2021

Deciphering Early Cycle Market Dynamics - We prefer to understand stock market conditions and potential future trends by synthesizing economic cycle dynamics and secular drivers. We believe that a focus on risk assets (stocks over bonds) and cyclical sectors can continue to benefit the investment portfolio in the current environment. Read More

Seeing Wealth Differently Across Generations - Wells Fargo Investment Institute

For most investors, spending and investing follows a circular pattern: a focus on discretionary spending in younger years, followed by a greater emphasis on saving — for retirement, a home down payment, or children’s education — and then a return to discretionary spending once any long-term debts are paid off. Read More

Wells Fargo Investment Institute - Cryptocurrency Q&A - The basics

Cryptocurrencies originated as a new kind of currency in 2009. They are not physically minted or printed, like a dime or a $20 bill. Cryptocurrencies are digital, which means that they only exist electronically. Using them as a currency requires a digital device such as a smart phone, tablet, or computer. Read More

The changing tax landscape: How tax proposals may impact you

Carefully consider the planning implications of any potential tax changes. Any action should align with your long-term goals and objectives, and not be motivated solely by short-term tax concerns. Read More

Wells Fargo Investment Institute 2021 Midyear Outlook - Fuel for growth

One year after the global economy emerged from lockdowns, the economy is running faster than many of us have seen in our lifetimes. The U.S. and China have led the way, thanks to the various COVID-19 vaccines, whose accelerating distribution is speeding the recovery and driving faster spending. This, plus a rise in private savings, low interest rates, and the “visible hand” of multiple government support programs are providing fuel for growth that should intensify the 2021–2022 U.S. economic recovery to its fastest two-year pace since 1965–1966. Read More

Why asset allocation matters in uncertain times. How has asset allocation stood the test of time?

The wide performance swings over the past several years demonstrate a key principle of asset allocation1 — that asset returns and their rankings vary from year to year — but historically, over multiple-year time periods, asset-class performance has tended to smooth out. A diversified portfolio is designed to help reduce volatility over multiple-year time periods, but it also can accomplish this goal over shorter periods of significant return fluctuations, like we saw in 2020 with a sharp downturn and quick recovery. Read More