Weekly Investment Newsletter
By: Kevin Dombrowski
Weekly Update
The market slightly rebounded this week with the financial and technology sectors leading the way. Market volatility has remained, a trend that may be likely to linger. With many economic conditions continuing to improve in the United States and the current uneased investor sentiment (due to Fed tightening, geopolitical threats, and trade tensions), the short term market may be a long term investing opportunity. 

About Last Week
Last week, US Stocks dropped by more than any week since the start of 2016. What happened? Most experts list a fear of trade wars and inflation as the leading causes. Others will tell you that this is healthy volatility that brings the markets more in line with its intrinsic values. Perhaps it is both. As you can see below, each month the largest threat to a sharp decline in the investment markets is rapidly changing. Some of these threats are more serious than others, but one thing is certain, investors always have a pressing concern which seems to be at the forefront of their minds and that specific pain point tends to change from month to month. 
Homeowners Ditch Refinancing
As home equity loans and adjustable rate mortgages grow in popularity, it has caused refinanced mortgages to fall. Currently, refinancing makes up a smaller portion of the mortgage business than at any time the past two decades.  With rising rates, many experts believe this trend will only continue, as fewer homeowners will be eligible to refinance. Mortgage experts are working to figure out how to maintain the growth of refinanced-mortgage investments. They are faced with headwinds, considering most savvy investors took advantage of the very low rates of the past decade with refinanced loans that beat today’s rates. 

From a prudent investment point of view, home-equity loans come with higher interest rates and are often used on projects that are designed to increase the value of your home. When evaluating a project, many experts recommend using comparables and speaking with a real estate expert before taking on this financial burden.
Adjustable rate mortgages come in many shapes and sizes so be certain you understand how payments work after a fixed rate period ends, especially now that rates are rising.   

The Audit Odds are in your Favor
When filing your tax returns, it’s common to double check every entry before your final submission in fear of getting audited. However, it’s far less likely than you might realize that you will be subjected to an auditEach year, less than 1% of tax returns overall, only 1.7% of tax returns of incomes exceeding $200,000, and only 5.8% of tax returns of incomes exceeding $1,000,000, are flagged for audits. 
What else can you do to decrease your chances of getting audited? According to USA Today there are a few things that can help. The first step is to submit accurate and full information – more is more in this instance. Second, they recommend hiring a good accountant if you donate $10,000 or more to charity as these plans receive much higher levels of scrutiny by the IRS. Third, make sure you submit your returns electronically and not via paper. For returns submitted on paper, the IRS reports an error rate of 21% versus 1% for electronic submissions.  
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