White Paper I - Dividends & Tax Rates
June 30, 2012 - As it stands
today, barring a political compromise, the
highest tax rate payable on dividends will
jump from 15.0% to 43.4% for the 2013 tax
year. That sets up two important questions
for investors in dividend-oriented strategies.
First, how will the securities of dividend
payers and dividend growers perform relative
to the market as investors are forced to share
a larger portion of their income with the
government? And second, will companies opt
to put their cashflows to alternative uses,
such as stock buybacks or M&A, rather
than grow their dividends?
Review - Investment Commentary
Tantrums Revisited- Q1 2018
Through most of 2017 and into 2018, thanks
to improving economic data and expectations
for accelerated growth post tax reform, equity
performance was strong and investor attitudes
toward rising rates were sanguine. But, on
February 5th the CBOE Volatility Index (VIX)
suddenly spiked 116% and the S&P 500 Index
sank 4% on concerns of higher interest rates
and mounting inflation. By quarter-end, the
US ten-year Treasury yield had climbed to
2.74%, up more than one-third of a point from
market is concerned on a few fronts. First,
there’s the risk that the Federal
Reserve throws too much water on the fire,
if it believes that the economy is overheating.
Likewise, a mounting federal budget deficit
– exacerbated by tax reform –
may become increasingly difficult to finance
at higher borrowing costs, while also crowding
out private investment. Finally, recently
announced US trade policies could result
in a trade war that slows economic growth
for the US and world.
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