Don’t Pay Off Your Mortgage, Immunize it!
Should you lock-in high yields on fixed income assets and immunize your mortgage? A mortgage immunization strategy uses fixed income assets to pay off future mortgage debts. If you have a low interest rate mortgage, you can lock-in higher interest rates on high quality fixed income assets now and earn more on these investments than the interest cost on your mortgage. This is a better strategy than paying off the mortgage. Retirees often think it is wise to pay off their home mortgage early. But this will reduce their long-term net worth and financial security if their mortgage interest cost is low (under 3.5%).
(more…)Read MoreYear-End 2023 Planning Opportunity Checklist
Now is a good time to review year-end tax strategies and plan for the year ahead. Below are some items that should be completed or reviewed before year end:
(more…)Read MoreWESCAP Q3 Quarterly Commentary: Stock Returns, Bond Yields, and Interest Rates
Portfolio results for the third quarter of 2023 were generally negative for stocks and for long-term bonds. For the quarter, the S&P 500, EAFE index (foreign stocks), and long-term Treasury bonds (Bloomberg/Barclays 20+ Yrs) returned -3.3%, -4.1%, and -13.0%, respectively. Small cap stocks and real estate stocks (REITs) had losses greater than the S&P 500 last quarter due to greater sensitivity to higher interest rates.
(more…)Read MoreSection 529 College Savings Plans – August 2023
State-administered College Savings Plans (often called 529 plans) are attractive vehicles for accumulating savings to pay for post-secondary educational expenses. Any individual donor, regardless of income level, can fund an account for any individual beneficiary – while still retaining control over the account. By funding a plan, the donor’s contribution is (in most cases) removed from his/her own estate. The plan’s beneficiary can be changed to any of a wide array of relatives (of the beneficiary) as often as needed.
(more…)Read MoreWESCAP Q2 Quarterly Commentary: Investor Sentiment, Cooling Inflation, and Artificial Intelligence
Portfolio results for the second quarter of 2023 were generally positive for stocks and negative for long-term bonds. For the quarter, the S&P 500, EAFE index (foreign stocks), and long-term Treasury bonds (Bloomberg/Barclays 20+ Yrs) returned +8.7%, +3.0%, and -2.4%, respectively.
(more…)Read More