It’s been a rough week in the Lone Star State.
Seven days ago, as I was putting the finishing touches on last week’s Accountable Update, Hurricane Harvey was rapidly strengthening into the strongest storm to hit the Texas coast in over 50 years. In the article, I took some pot shots at the “breathless TV meteorologists” that seemingly relish presenting worst case scenarios when making predictions.
In hindsight, at least in this instance, those dire prognostications proved to be more right than wrong. Perhaps I owe our local weather folks an apology for my skepticism and should direct my sardonic comments to the national media and politicians that are already politicizing our fellow Texans’ tragedy while many are still in harm’s way. On the other hand, maybe we all should expend our energy on helping those in need.
It has been difficult to sit idly by while our families, friends, and customers have experienced the devastation of Harvey first hand. However, it has been heartening to witness our state and country rally to help. There are many worthy recipients of assistance, but if you are looking for an idea, check out TD Ameritrade’s offer to our customers to match contributions made to the American Red Cross. Matching donations can be made through this link.
You can stretch your giving dollars further if you happen to own appreciated stocks in a taxable account. By gifting the property directly to a charity or through a Donor Advised Fund, you get the benefit of being able to make a tax deductible gift up to 30% of your adjusted gross income while also avoiding paying capital gains taxes.
If you have suffered losses from the storm, you have probably seen some of the reports in the media that there was some urgency to make your insurance claims by yesterday. The urgency stemmed from reports about House Bill 1774, which was a tort reform law that came out of the recent 85th Texas Legislature that sought to limit excessive lawsuits resulting from “forces of nature”, primarily hail storms.
The law reduces some of the penalties that insurance companies may be subject to if found to act “in bad faith” resulting from a civil court judgement. In other words, the law only applies to people suing their insurance company. There should be no impact on making claims under existing insurance policies. It’s also worth noting that losses covered by the National Flood Insurance Program or the Texas Windstorm Insurance Association are not impacted by the new law.
Hopefully, that is one less thing for victims to worry about as they focus on recovery.
Weather often offers similes for investors. We rebuilt smarter portfolios after the major storm of the Great Recession, as we will construct better buildings in Harvey’s wake. We got back on the bull to share in the market’s gains, as we will head back to the bays to angle for trout and redfish.
Then we can get back to discussing why anyone would want to invest in unicorns run by eccentric billionaires or live in places with high taxes, earthquakes, or snow. In the meantime, let's roll up our sleeves and start cleaning up Harvey’s mess.
God Bless Texas!