Dear Survivor,
Should you sell in May and go away? You know Your Survival Guy doesn’t do predictions, but if you sold a year ago in May and never got back in, then you missed a good 52-week run in a number of areas.
Never mind all the volatility. Focus on what will make you a more comfortable investor, not an emotional wreck.
When you have the right mix of stocks for your retirement life, you might find you have plenty of peace of mind to worry about how to spend it.
Are You Giving a Tax Free Gift in 2025?
You have worked hard your whole life, and you’ve done well. You’ve saved til it hurt, and you have more than you will need. Now you want to pay it forward and give some help to your children or grandchildren. You want to teach them about compounding and maybe about getting out of debt. So you have decided to give them a tax-free gift. But how much is the right amount? At Kiplinger, Kelley R. Taylor explains the details of the 2025 gift tax rules, writing:
The IRS announced increases in gift and estate tax exemptions for 2025. The annual gift tax exclusion rises to $19,000 per recipient, up $1,000 from last year’s limit.
(These are the numbers you’ll refer to when planning your 2025 tax liability, returns typically filed in early 2026.)
- Individuals can give up to $19,000 to any number of people in 2025 without triggering gift tax reporting requirements.
- Married couples can effectively double this amount to $38,000 per recipient.
For example, if you are married and have two married children and two grandchildren, you and your spouse can give up to $38,000 to each of your kids, their spouses, and the grandchildren last year without having to file a gift tax return or pay any tax. This means you could give a total of $228,000 in tax-free gifts.
Remember: staying under these limits per recipient exempts you from filing a gift tax return for the year. However, the annual limit is time-sensitive, meaning you need to make 2025 gifts by Dec. 31, 2025.
Did You Make It a Good Month?
As many of you remember from Richard C. Young’s Intelligence Report, he would leave you with these wise words: “Make it a Good Month.” In other words, he gave you his best ideas. The only piece of the puzzle left was for you to make it happen.
How was your month? Did you make it a good month? Because for many of you, me included, May was not all bad. Gold took some time to consolidate, though.
How about for the last 52 weeks?
I’m not patting my back. I’m not saying gold is going up from here. Your Survival Guy’s not betting the ranch on gold. I’m not. But I do like gold, and I like keeping a single-digit percentage allocation with the idea that if gold goes down, that usually can mean things are calmer in the world.
Sure, May is just one month, but what many of you have come to realize this month and last is that it is not necessarily how much you make when investing but how much you keep. How much do you keep compounding? Over time, you realize consistent returns can be a lot easier to stomach than big wins and big losses. It’s about return of assets.
Look at what a balanced portfolio has done over time. When we look back on this year, it will be interesting to see how it will look with 20/20 hindsight.
If you need help with that final push, we all may need to “Make it Good Month,” you know who to call. Email me at ejsmith@yoursurvivalguy.com.
Survive and Thrive this month.
Warm regards,
“Your Survival Guy”
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P.S. Graduation season is here, and there are plenty of speeches to listen to for inspiration. I liked the speech The Wall Street Journal’s Jason Gay gave to the graduating class at the University of Wisconsin. You can check it out below.
I remember both of my graduations from high school and college like they were yesterday. I remember the relief of having the schoolwork behind me, and in the case of my graduation from Babson College, the anxiety about what was to come next. “The real world.” Uh-oh.
So, I delayed the real world for a year, visited a fraternity brother who lived on a Greek Island, met a junior high school friend in Rome to backpack through Europe, taught skiing for a season, and then got a job at Fidelity Investments the following March or April. Regrets? No. I’m glad I did it all, and it was time to get to work.
Writing to you this morning with over 30 years of work in the investment industry, I can’t help but think about the anxiety of graduation and how that relates to you. When you are in or near retirement, you are graduating into the unknown, again, both daunting in their own way, loaded with questions and anxiety, just like yesterday. And I thought we got a break from all this anxiety as we aged.
When in need of inspiration that turned into the song “Walking in Memphis,” Marc Cohn traveled to the place he loved so much and then returned home to Manhattan to write. Sometimes you need to take a trip to break out of your routine and see your life a little bit differently.
Big life events like graduations and retirement are sort of forced upon us. It’s not a bad idea to give yourself a break and a little time to ponder what is next, no matter how old or young you are.
P.P.S. “Inertia,” Dick Young said to me recently, “is terrible. Investors need to beat back this mighty foe.” A point he regularly explained to you inside the pages of Richard C. Young’s Intelligence Report.
Your Survival Guy was reminded of this recently during a foggy mid-afternoon walk coming back from Goat Island, admiring some of the recently launched boats and anticipating the season ahead. We were preparing to launch Tom Sawyer the next day. “If you can’t get excited at the beginning of the boating season, you probably never will.”
I’m excited for the season. I’m excited to go fishing. To make the walk down the dock, like driving to the ski mountain, thinking about what I may have forgotten, and a little nervous. You never know what’s going to happen, no matter how much you plan or your level of skill. And there’s always inertia or an excuse to stay home, cut the grass, stack wood, and wait for tomorrow, which never comes.
If you’ve sailed, gone fishing, skied, or what have you, you know perfect days are determined after the fact. You never quite know how the day will turn out. Some are scarier than others, where minutes can feel like hours. But it would be a shame not to get out there.
Do not miss the boat, though. Sometimes we need a guide to simply help us beat back the mighty foe of inertia. Waiting for the perfect day or market may never come. If you want help charting your course, I’m here, unless that is, I’m on the boat. See you out there.
P.P.P.S. The cause of the recent major power outage in Spain was reportedly a blackout in renewable solar energy, a problem many warned would happen. What can you do if something like this comes your way?
First, you always need to have some cash on you. Over the winter, hanging with my sister and brother-in-law up in New Hampshire, we talked about seeing Tyler Hubbard at the Cape Cod Melody Tent in August. She ordered the tickets on her phone, and to her surprise, I handed over the cash for Becky and me. “I always carry cash,” I told her.
During the blackout, those without cash on hand quickly learned that credit cards and cell phones did not work. Cash is always accepted. And begging for food and drink is not a good strategy for survival or peace of mind.
Even if we see an awakening to the green madness, a lot of work is in place destabilizing the grid, not to mention a lack of infrastructure for natural gas pipelines to the northeast. Last time I checked, it gets cold here in January.
Prepare as if an event like the blackout in Spain could happen to you. The obvious items for a one- or two-day event are to have cash, maintain security/self-defense, and to keep some food and water stored in your shelter. Remember, you’re just a name on a list when you need help, like everyone else. Be your own hero.
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