Snagging a lunch date with the financial economist Eugene Fama proved almost as hard as beating the stock market. My first attempt in 2021 foundered because of long-lasting Covid-19 lockdowns. A suggestion that we instead do it by video was forcefully shot down. “On Zoom, watching people eat and talk comes across as gross,” Fama emails. It’s hard to disagree.
Another try is scuppered by the University of Chicago professor spending winters on the West Coast. We finally find a time to eat in Chicago, but when I ask for some possible venues we hit another snag. In his terse email style Fama informs me that“I never eat lunch out”. As a compromise, I turn up at his office at the University of Chicago with two brown paper bags containing a dubious selection of sandwiches, wraps, salads, sushi and soft drinks acquired from a downstairs bodega.
Thankfully, the 85-year old Fama is no fussy eater, and happily grabs a chicken Caesar wrap. Feeling brave, I take the 12-pack of indeterminate sushi. It’s an underwhelming meal, but very efficient, which feels appropriate given what I want to talk about.
Fama is arguably the world’s most famous and influential finance professor, thanks to his revolutionary efficient market hypothesis — that stock market prices at anytime incorporate all available information, thanks to the cumulative and unending efforts of millions of investors constantly trying to outfox it. The paradox is that as a result of their efforts, the stock market is in practice almost impossible to beat.
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We have said many times that tax planning should be a year-round sport, and not consigned to December or the fourth quarter. With that in mind, let’s review six key tax planning strategies for every investor.
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Consider the numerous decisions we face every day: what to eat for breakfast, what we shouldwear to work or a restaurant, who we should spend time with, and whether and what to watch onour screens after the day ends. Those are undoubtedly choices that could fall under the umbrellaof “little decisions.” We make them regularly, they normally don’t come with dire consequences,and we can learn from them and do something different the next day.
But there’s a host of other decisions that might fall under a different umbrella: They’re the onesthat we rarely make, but they carry major consequences with them. Life’s “big decisions,” forinstance, represent questions like whether to get married or break up, move or stay put, changecareers or carry on, or lean into a new identity or continue living in a safer but less authentic way.
While so much academic psychology and behavioral economics have studied small decisions,relatively little has touched on the big ones. And for good reason: Big decisions are complex, theyare messy, what rings true for one person may not for another, and they are exceptionally diffi cultto audit and assess after the fact.
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Financial advisors and tax professionals whose clients are repairing or renovating their home or another real estate property can help them unlock some savings in the process.
The many available strategies for tax savings tied to home improvement begin with the question of whether the client is working on their personal residence, a house or apartment where they live but also operate their own business, or a property that they have invested in as a real estate endeavor, according to certified public accountant Miklos Ringbauer of Los Angeles-based MiklosCPA. And they revolve around regular meetings with clients discussing any plans they have for upgrades and exploring potential tax strategies, he said in an interview.
"That's exactly where the true value of a financial advisor or a tax professional comes in to proactively support the taxpayer," Ringbauer said.
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