January 2016
January insights
Welcome to 2016!

Unfortunately, no one reminded the stock market that we wanted to celebrate the New Year. It was the poorest four-day beginning to a new year for the DOW in modern history.

Geopolitical events fueled the sell off including fears about China’s economy slowing as well as Saudi Arabia severing diplomatic ties with Iran and the effect on oil production.

What to do? Sell your stocks? That’s not the answer! At times like these, remember why you invested in the stock market and how it fit into your long term plans. June 2015 CNN Money wrote,” In nearly 90 years of market history, if you bought stocks on the absolute worst day, the average time to make your money back was 3 years.”  

With a longer term investment strategy, that is not a very long time and should not make you shy about investing in stocks. CNN added, “Take the 2008 financial crisis. If, you got in at the peak, it would have taken 5.5 years to recoup your money.”  Most people that got out of the stock market in 2008 have yet to recoup their money while those that rode out the storm and stayed the course have actually seen positive returns.

As I wrote in our August, 2015 Newsletter, “Remember the key to successful investing is adhering to an asset allocation strategy.  It’s time not timing that matters most.”

Below are a few articles which we hope you find useful. Let us know your thoughts and reach out with any questions. Really, safe is better than sorry.
Think hard before tapping your 401(k) balance

One of the features that make 401(k) plans so attractive is that your money is not completely out of reach should an emergency need arise. Most plans allow for loans that are completely tax free if repaid as agreed. (Interest payments will be required, but they will be credited to the account.)  In a major emergency, a hardship withdrawal may be permitted, subject to income tax and, usually, a 10% penalty as well.  Learn More.
Permanent tax relief  

For many years, Congress has had to address “tax extenders” each year, sometimes every two years. The “extenders” were a grab bag of tax breaks that were considered “too generous” to taxpayers to be made permanent, but too important in the short term to be allowed to expire.  Whenever it came time to renew the “extenders” the tax-writing committees would have to find other tax “loopholes” to close to raise the revenue to “pay for” another extension of the “extenders.” That all changed in December 2015. Learn More.
Trustworthy advice: Look no farther     

As a corporate fiduciary, we are dedicated to providing our clients with trustworthy asset management. Of course, we also provide traditional trust services, such as administering estates and managing trust funds for young or inexperienced beneficiaries. Our primary function, however, is helping people turn financial success into financial security. We would like to take this opportunity to introduce you to what we do and how we do it. Learn More.
Because of the rapidly changing nature of tax, legal or accounting rules and our reliance on outside sources, Garden State Trust Company makes no warranty or guarantee of the accuracy or reliability of information contained herein nor do we take responsibility for any decision made or action taken by you in reliance upon information provided here or at other sites to which we link. © All rights reserved.
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