NEWSLETTER SECTIONS

Market Shivers
MANATee Performance Year to Date
Earnings Scorecard
RSUs: Plans are Nothing; Planning is Everything
Survey Says
Volatility, We Meet Again
Financial Fitness Test

Market Shivers

After a placid market in June and a bit of a wobbly July, August is off to a gut-wrenching start. As an equally-weighted portfolio, the 7 largest tech stocks actually entered bear market territory at the opening bell on August 3rd, down a collective 23% from their highs in July.

It's commonly believed that bad luck comes in threes. Here's the timeline of events that set the market reeling:

Jul 31 Bank of Japan issues a surprise interest rate hike

Aug 1 US manufacturing fell to an 8-month low

Aug 2 US unemployment rose to 4.3%

The interest rate hike in Japan set off the unwinding of a massive carry trade that had incentivized investors to borrow cheap Yen to finance the purchase of US tech stocks. By the time the stock market opened on August 5th, the 3 days of bad news had gained the strength of a tsunami.

It remains to be seen whether this down market was a fleeting opportunity or a bad omen of worse things to come.

MANATee Performance Year to Date

An equally weighted portfolio of the 7 largest tech stocks trounced the S&P 500 in Q2 and is still well ahead of the market index year to date, but the group underperformed in both July and the first several trading days of August (Aug 1-5).

Q2 Earnings Scorecard

RSUs: “Plans are Nothing; Planning is Everything”

Restricted Stock Units can make all the difference in one's wealth as a tech professional. That's why we recently concluded an analysis of RSU plans for Apple employees over the 10 year period ending July 2024. We look forward to sharing the findings in an upcoming YouTube video. However, in the meantime here's a table from the video comparing the RSU strategies we've evaluated.

Survey Says

We held a number of polls over the last several months. In the spirit of our current political climate, here's a sample of the more controversial ones. 😉

Here's how you voted on the scandal surrounding Sam Altman's plagiaristic use of Scarlett Johansson’s voice....

Volatility, We Meet Again

On Monday morning the volatility index, VIX, briefly reached 65.73, its highest reading since the dark days of COVID in March 2020 when it reached an all-time high of 82.69.

Financial Fitness Test

If you’re interested in improving your financial health, use take this financial fitness test. Just keep in mind that this checklist was designed specifically for employees of publicly traded technology companies (i.e. a company offering RSUs and a competitive 401k).

INSTRUCTIONS: Answer “YES” or “NO” to each question and then tally your score by counting the number of times you answered “YES”.

Do you have an RSU plan in place?
Do you fund a Mega Backdoor Roth every year?
Did you make employee contributions to your 401(k) of $54,750 in 2023? (Many people erroneously believe that the maximum employee contribution was $22,500 for 2023).
Do you have a revocable trust in place or some other form of estate planning?
Have you consolidated your old 401(k)s into an IRA?
Do you and all members of your household have Roth IRAs that they contribute to every year?
Has your investment portfolio generally performed as well or better than the S&P 500 over the long term without excessive concentration risk*?
Do you have an HSA?
If you have children, have you set up 529 plans and/or Roth IRAs for them?
Do you hold your high risk / high return assets (e.g. Bitcoin, tech stocks) in tax-efficient accounts that will avoid capital gain and income taxes?

*No company accounts for more than 20% of your portfolio. We’re assuming a slightly above average tolerance for risk, an assumption that will be adjusted for your particular circumstances.

SCORING: How many times did you answer “Yes”?

0-3. We can create a lot of value for you. Let’s talk.
4-5. Not too shabby, but there’s room for improvement! Let’s talk.
6-7. I’m impressed! If you’d like to explore the other 3-4 items, we’d be happy to speak with you. So let’s talk.
8-10. You are an inspiration! Have you considered a career in wealth management? Would love to consider bringing you on board as a partner. ;^)

If you'd like to discuss something specific or have a money matter that needs solving, let’s chat. I'm generally available for several meetings ever week - online or in person here in Silicon Valley. To set up a time, please tell me a little about yourself and set up an appointment on our website.

Disclaimer:

This newsletter is the opinion of Matt Lewis and is made from the perspective of a US tax payer. TechView Wealth Advisors LLC does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction or tax strategy.

Tech Giants Catch a Cold