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The Power of Dividends Part I: Oil and Gas

Posted By Lineweaver Financial Group
April 28, 2022 Category: Blog, Economy, Commentary, Dividends, Portfolio

As we all deal with continued market volatility, inflation, and other economic headwinds, qualified dividends can be a great strategy for your portfolio. This is the first in a two-part series discussing possible dividend strategies. So, what are the main benefits we can expect from qualified dividends?   There are three things you should consider when adding qualified dividends to your portfolio. First, they can be a major contributor to total return. Second, you need to carefully vet the quality. And third, they can have very beneficial tax treatment. There are many types of dividend-paying stocks, but there are two that are particularly timely: bank preferred shares, and oil and gas exploration and production.   The first thing to understand about oil and gas E&P is that these are really just common shares of U.S. or Canadian gas and energy production companies.   Many of these companies paid down debt substantially in the last 5 years, have reduced well costs, and have a break-even price with West Texas Intermediate, or WTI at $30-$35 a barrel.  And as all of us know who have bought gas recently, it’s significantly more than that!   These are generating significant free cash flow right now, which won’t surprise most of us who have been to the gas pump recently. But many companies have committed to use this excess cash flow to reward shareholders by raising base dividends, and some are even adding a variable dividend based

What Do Events In Ukraine Mean For Your Portfolio?

Posted By Lineweaver Financial Group
April 13, 2022 Category: Blog, Newsletter, Economy, Commentary, Finance, Portfolio

U.S. stock markets have been declining since the beginning of January and fell further into correction territory after the Russian invasion, though markets recovered from their lowest levels since then. During this correction, the S&P 500 declined nearly 15% from peak to trough, while the Russell 2000 Index and the Nasdaq Composite both briefly entered bear market territory (down 20% or more). While we recognize that the current geopolitical landscape in Eastern Europe remains highly uncertain, we believe history may be a reasonable guide for what to expect from financial markets. If history is any guide – and by history, we mean Iraq’s invasion of Kuwait and N. Korea’s invasion of S. Korea, since these are the most recent and similar events - financial markets tend to peak before the actual conflict date, as tensions rise, and the overall S&P 500 decline has historically been 14-21%. Therefore, equity markets may have more downside in the short term, but we may be closer to the end of this correction than the beginning, based on current geopolitical circumstances. However, we do expect financial markets to continue to experience heightened volatility in the short term. In our experience, sometimes individual investors tend to make emotional and often irrational decisions during periods of financial market volatility. Your emotions in situations like these can be your greatest enemy when it comes to making the right financial

HealthWatch: What Are Some Foods To Ease Your Anxiety?

Posted By Lineweaver Financial Group
April 13, 2022 Category: Blog, Newsletter, Economy, Commentary, Finance, Portfolio

People can make a variety of lifestyle changes to help manage their anxiety. Eating a diet high in vegetables, fruit, legumes, whole grains, and lean protein can be helpful. Anxiety is a widespread condition, affecting millions of people globally. Symptoms vary, and some people only experience them now and then. However, someone who experiences symptoms for 6 months or longer may have a generalized anxiety disorder (GAD).  Doctors often treat GAD with a combination of treatments, including talking therapies, such as cognitive behavioral therapy (CBT), alongside medications. Sometimes, these conventional treatments do not work long-term. However, some research suggests that proper nutrition can help improve symptoms. Nine foods to eat to help reduce anxiety: 1. Brazil nuts 2. Fatty fish 3. Eggs 4. Pumpkin seeds 5. Dark chocolate 6. Tumeric 7. Chamomile 8. Yogurt 9. Green tea Eating a healthful diet should provide all the nutrients needed for healthy brain function. A healthful diet that contains antioxidant and anti-inflammatory compounds, as well as vitamins and minerals might help reduce inflammation and oxidative stress. Reducing foods that are high in added sugar, salt, and fats - especially trans fats - may help reduce inflammation. Reduce alcohol, sugar, and coffee as these may increase episodes of anxiety and the associated symptoms. One report states that participating in enjoyable physical activity may also have a positive effect on mental

The WealthWatch: Protecting Your Legacy for Future Generations

Posted By Lineweaver Financial Group
April 13, 2022 Category: Blog, Newsletter, Economy, Commentary, Finance, Portfolio

Most of us spend our whole lives building wealth, and we want our families and the next generation to benefit. But without planning, it doesn’t work out that way. For example, one study found that most wealth is lost in America within three generations. The biggest concern we hear from clients is, “how will our children (or grandchildren) be spending their inheritance?” It’s not uncommon for an entire inheritance to be spent within a couple of months – which is fast when you consider that these inheritances are often substantial. Sometimes, it’s simply due to reckless spending.  But more often, we see it caused by one of three issues: emotion-based decision making, pressure from family and friends, and/or a lack of professional assistance. Let’s look at each of these a little more deeply. 1.     Emotion-Based Decision Making While we can understand grief and emotion in the wake of losing a parent or grandparent, we never make good decisions when we’re making decisions based on our emotions. And sometimes it is the impulse purchases that are the issue – like buying a car, or house, or taking a vacation. But, more often it involves making major life changes, like quitting a job, or sinking an entire inheritance into a new business venture that eventually fails. In the case of starting a new business, people often have a passion for a specific type of business, but don’t have the education or experien

President's Letter: Tax Tips For 2022

Posted By Lineweaver Financial Group
April 13, 2022 Category: Blog, Newsletter, Economy, Commentary, Finance, Portfolio

by Jim Lineweaver, CFP®, AIF® President and Founder Most of us have already filed our taxes for 2021, but that doesn’t mean we’re happy about it! As we saw our tax bills this year, many of us may have wished we would have planned differently last year. While there aren’t many strategies that still apply for 2021, we want to remind everyone that planning for next year’s taxes starts now. In 2021, many people started their own business or added consulting to their list of services. If you find yourself in this situation, there are a wide variety of tax deductions you can take advantage of, such as writing off a lease or mileage on your car, your home, and computer equipment you might have previously owned. For your new venture, there are also a wide variety of retirement plans available. Another common question we get each year is about gifting – whether it’s to a friend, family member, or a favorite charity. I always recommend that clients consider gifting appreciated securities rather than their hard-earned cash. Gifting an appreciated security means getting a write-off for its current full value. So, even if you only paid $10,000 for a security, and it’s now valued at $20,000, you can write off the whole $20,000 when you donate or gift it. And you can even gift appreciated property or real estate. This year, the IRS has also increased the “above the line” deduction that came about in 2020, to $300 a person