Archive for 'August 2015'

    Tax-Filing Deadline Detours

    August 27, 2015 2:00 PM by Vito Fronda

    The 2015 "Highway Act" changes the filing deadlines for certain income taxes.


    On July 31, 2015, the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (aka the “Highway Act”) was signed into law. As the name suggests, the law approves funding for highways and public transportation. It also appropriates monies from the Veteran’s Choice Fund to pay for certain health care provided to veterans outside of the Veterans Administration (VA) network. 

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    The Chinese Correction: The Case for Calm

    August 26, 2015 10:20 AM by Zane Brown

    Investor fear recently reached levels not seen since 2008. That’s not justified by current U.S. economic conditions.

    In an earlier blog post, Milton Ezrati, Lord Abbett Partner, Senior Economist and Market Strategist, addressed current investor fears about China’s slowing economy, and why those fears are overdone. We thought it would be worthwhile to look at recent history to put those fears into context.

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    Equities: A "China Syndrome" Sequel? Not Quite

    August 24, 2015 10:12 AM by Milton Ezrati

    The sell-off in U.S. stocks in response to reports of a weakening Chinese economy shows that investor emotions have gotten ahead of reality.

    The U.S. equity market's recent selloff seems to have its roots in an exaggerated, indeed panicked, response to negative news out of China. A recent Economic Insights on the Lord Abbett website explains in detail why such interpretations are erroneous. The equity rout in China, though severe, is an entirely unsurprising response to the market's previous and unsustainable run-up during the previous year.

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    IRA Beneficiary Planning: A Window on "See-Through" Trusts

    August 20, 2015 4:25 PM by Brian Dobbis

    Naming a trust as beneficiary of an IRA is one of the more complicated estate-planning tools. Advisors can be invaluable in helping their clients decide if this is right for them.


    In my visits with financial advisors, I spend a lot of time talking about IRA beneficiaries and how clients can make sure their assets will be distributed in accordance to their wishes after they die.

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    Wrestling with the Costs of Crumbling Infrastructure

    August 17, 2015 12:45 PM by Lord Abbett Editorial Staff

    Infrastructure systems are failing to keep pace with the current and expanding needs, and investment is faltering. Will tax-free municipal bonds be enough to pay the bills?

    In its most recent report card, the American Society of Civil Engineers (ASCE) gave America’s infrastructure (defined as roads, ports, bridges, tunnels, dams, aviation, rail networks, transit, water, hazardous waste, and solid waste facilities) a D+. According to the World Economic Forum, the U.S. ranked twelfth globally for infrastructure in 2014, down from seventh place in 2003.

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    Emerging Markets: Reading the Tea Leaves on China's Currency Moves

    August 14, 2015 1:18 PM by Leah G. Traub, Ph.D.

    China first devalues—then supports—its currency.  What exactly is going on?

    After two days of depreciating its currency, the yuan (or “renminbi”), and effectively sending global currency markets into turmoil, China’s policymakers apparently decided late Wednesday (August 12, Shanghai trading time) that the currency had fallen far enough, at least for now.  

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    Remedies for RMDs

    August 13, 2015 2:27 PM by Brian Dobbis

    Prescriptions for avoiding the pain of taking the wrong minimum distributions at the wrong time


    It’s true in life and it’s true for required minimum distributions (RMDs): Timing is everything. The matter of when individuals withdraw their retirement savings can be delicate. Too early and they may deplete their funds too quickly and miss investment opportunities in the process. Too late and they may run afoul of the tax man.

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    China's Devaluation Calculation

    August 11, 2015 4:38 PM by Milton Ezrati

    Beijing is betting that lowering the value of the yuan will help its faltering export sector. But the move may not immediately produce the desired economic boost.

    In a move to shore up its flagging export sector, China lowered the yuan’s value against the U.S. dollar by 1.9% on August 11, the biggest such move in nearly 20 years. This action, which essentially is a devaluation of the Chinese currency, sent the U.S. dollar and other currencies sharply higher in response.

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    457(b) Plans: Same Code, Different Rules

    August 7, 2015 4:30 PM by Brian Dobbis

    All participants in 457(b) deferred-compensation savings plans can build assets on a tax-favored basis. But the rules are not the same for everyone. 


    State and local governmental entities, such as fire and police departments, and public schools; and certain nongovernmental, tax-exempt entities, are eligible to sponsor Internal Revenue Code (IRC) Section 457(b) non-qualified deferred-compensation plans. Although the same Internal Revenue Code—457(b)—applies to both groups, the rules for plans sponsored by governmental entities are very different from the rules for plans sponsored by tax-exempt organizations as defined by IRS Section 501(c). 

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    How Multiple Generations Are Fueling an Apartment Boom

    August 7, 2015 12:00 PM by Lord Abbett Editorial Staff

    It’s not just millennials who are renting. Baby boomers and well-heeled Generation X-ers also are driving a surprising share of the overall demand for rental units.

    Don’t let news of the slow housing recovery fool you. While sales and construction of single-family houses have faced considerable headwinds since the financial crisis of 2008–09, strong demand for rental units has fueled an apartment boom.

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    Puerto Rico Decides to Default

    August 5, 2015 11:45 AM by Daniel S. Solender, CFA

    The government has the ability to pay interest, but apparently is no longer willing to pay bondholders.

    On August 3, Puerto Rico made a payment of only $628,000 out of the $58 million it owes on its Public Finance Corporation bonds. After two years of conversations and media statements, this is the commonwealth’s first default. Officials claimed that the payment was not made because the money had not been appropriated by their legislature; but this only happened because they had failed to make the funding request a few weeks ago. 

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