Weekly Market Notes – December 9, 2019

Weekly_Market_Notes

For the Week of December 9, 2019

The Markets

The three major indexes closed a choppy week on a positive note. Investors’ optimism was fueled by a glowing November jobs report. The Labor Department announced 266,000 non-farm payrolls were added. As a result, the unemployment rate fell to 3.5 percent – the lowest in 50 years. Because of earlier losses, two indexes still closed the week in the red. For the week, the Dow fell 0.06 percent to close at 28,015.06. The S&P gained 0.21 percent to finish at 3,145.91, and the NASDAQ dropped 0.10 percent to end the week at 8,656.53.

Returns Through 12/06/19 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) -0.06 22.98 15.06 16.04 12.01
NASDAQ Composite (PR) -0.10 30.46 20.43 17.52 12.61
S&P 500 (TR) 0.21 27.90 19.08 14.72 10.93
Barclays US Agg Bond (TR) -0.22 8.55 9.82 4.06 3.15
MSCI EAFE (TR) 0.37 18.62 16.13 9.24 4.42

Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. The NASDAQ is based on price return, which is the capital appreciation of the portfolio, excluding income generated by the assets in the portfolio in the form of interest and dividends. (TR) indicates total return. (PR) indicates price return. MSCI EAFE returns stated in U.S. dollars.

 

They Have No Choice — 46 percent of working Americans surveyed expect to remain in the workforce beyond age 65. Of the 46 percent of Americans continuing to work after age 65, 47 percent will continue to work only because they haven’t accumulated sufficient assets to retire (source: Northwestern Mutual 2019 Planning & Progress Study, BTN Research).

The Cost of Health Insurance — The average American employee paid $453 per month for their family’s health insurance coverage through an employer-sponsored plan in 2018. The $453 amount represents 28 percent of the total cost of the insurance coverage, i.e., the employer paid $1,164 per month (source: Commonwealth Fund, BTN Research).

Closed for Good — 9,271 American retail stores have closed YTD through Friday, Nov. 29, exceeding the all-time record of 8,139 store closures from 2017 (source: Coresight Research, BTN Research).

 

WEEKLY FOCUS: Thwarting Porch Thieves

According to the 2019 Shorr Packaging Theft Report, nearly 24 percent of the respondents reported they had personally experienced package theft, up 7 percent from 2017. *

The 2019 holiday shopping season is nearly a full week shorter than last year. And with less time, shoppers may turn even more to online shopping, especially if the vendor offers expedited home (or workplace) delivery. More packages on the porch can mean more porch pirates.

What can you do to protect your holiday gift packages? Some popular steps online shoppers are taking to protect themselves from theft include scheduling deliveries; installing home security systems and video doorbells; and using package lockboxes.

An item on many people’s shopping list this year is a video doorbell; 41 percent of the victimized respondents in the Shorr Report have purchased a video doorbell. Sixty-two percent of all the report’s respondents have purchased one. Video doorbells, which vary in price, notify your phone when someone’s at the door. Some of them allow you to talk with the person, making it appear you’re at home.

A fairly new option is a “package guard.” The circle-shaped device is placed on the porch, and the delivery person is instructed to place the package on the guard. The service sends a notice to your phone if the package is removed. It also makes an alarm loud enough for neighbors to hear.

Package lockers are becoming more popular for online shoppers who live close to locations offering the service. But even if it’s a secure alternative to an unwatched front porch, it does have limitations. For example, Amazon offers free Hub Locker service, but you must pick up your package within three days or it could be returned. Check with the service in your area for guidelines.

Just like protecting your online deliveries, protecting your financial future takes a plan. Call our office today. We can help you develop a plan to ensure your financial goals are protected.

*https://www.shorr.com/packaging-news/2019-11/2019-package-theft-report-porch-pirates-and-prevention

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* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright December 2019. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#2864730.1

December 2019 – Monthly Outlook – Can it Continue?

U.S. Equities closed the month of November near record highs.  The gains have been fueled by optimism that U.S.-China trade issues will be resolved amicably.  I remain skeptical of this. This can clearly be seen in the divergence of consumer confidence and CEO confidence.  Consumers tend to be more near-term focused, while CEOs have to make plans for staffing, capital expenditures and investments going out a year or two. Clearly CEOs are concerned.

12.4.2019_MONTHLY_OUTLOOK_CHART_1

Also, while consumer confidence remains significantly higher than CEOs, “Consumer confidence declined for a fourth consecutive month, driven by a softening in consumers’ assessment of current business and employment conditions,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board.

One key economic indicators I follow is the Leading Economic Indicators (LEI).  While month-to-month changes can be caused by “noise”, I watch the longer term trends.  Here are notes on the most recent report for October 2019:

  • “The US LEI declined for a third consecutive month, and its six-month growth rate turned negative for the first time since May 2016. The decline was driven by weaknesses in new orders for manufacturing, average weekly hours, and unemployment insurance claims,” said Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board. “The major difference this month is the softening in the labor market, whereas conditions in manufacturing remain weak and show no signs of improvement yet. Taken together, the LEI suggests that the economy will end the year on a weak note, at just below 2 percent growth.”

 

The fact that the 6-month growth rate has turned negative is concerning to me.

All told, I feel the US economy is slowing but will likely plod along at about 2% annual growth.  This is not the problem.

The problem is the financial markets, specifically US stocks, are reflecting a much better situation.  The term you might here is “stocks are priced for perfection”,  or “it’s a goldilocks market” meaning stock prices are reflecting positive outcomes to trade disputes, economic growth, monetary stimulus and consumer spending. How will the market react if any, or some, of these outcomes are not as positive?

For the last few months, I have been cautious and in a neutral position in portfolios.  Through the end of November, that posture proved too conservative.  However, stocks have declined by 2% over just the last three trading days, mostly because of new uncertainty around the trade situation. Just today, December 3rd, President Trump indicated he may wait until after the 2020 elections to push for a trade deal with China.  December 15th is a key date.  The US is set to impose new tariffs on China.  Will that happen? The market has been betting it will not. I’m not so sure.

I continue to believe the upside potential is less than the downside risk, at the moment. As such, we will remain neutrally positioned with a cautious bias. I would rather miss out on a small upside move to avoid getting caught in a swift downside adjustment.

P.S. Thank you for your referrals. They are making a big difference in my practice. Feel free to share my name with your friends on Facebook or LinkedIn.

December Calendar of Events   (comments and additions for future months are always welcome)

  • December is Universal Human Rights Day.  Let’s pray that all people, regardless of race, religion, gender, or nationality  can learn to treat others as we all wish to be treated.

 

December 10th            Human Rights Day   –  I have cherished the ideal  of a democratic and free society… it is an ideal for which I am prepared to die. – Nelson Mandela

December 15th            Healthcare open enrollment – for coverage starting Jan 1, 2020 – ENDS!   

December 19th            Christian’s birthday

December 21st                  Winter Solstice    –       The shortest day of the year and the start of winter

December 22nd           Happy Hanukkah  –    May it also be a festival of love, happiness, success, and health in your world now and always.

December 25th            Merry Christmas – have a wonderful holiday.  Let’s all remember the true significance of this day – the birth of Christ. 

 

Sources: The Conference Board, CNBC

 

 

Although information herein has been obtained from sources deemed reliable, its accuracy and completeness are not asserted. All opinions and estimates included in this report constitute the judgment of the financial advisor as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.

Investing involves risk and you may incur a profit or a loss. Diversification does not ensure a profit or ensure against a loss. There is no assurance that any investment strategy will be successful.  Past performance is no assurance of future results.

Please consider the charges, risks, expenses and investment objectives carefully before investing. Please see a prospectus containing this and other information. Read it carefully before you invest or send money.

Information provided should not be construed as legal or tax advice.  You should discuss any tax or legal matter with the appropriate professional.

Weekly Market Notes – November 25, 2019

Weekly_Market_Notes

For the Week of November 25, 2019

The Markets

Last week, investors weighed positive comments about a Phase 1 trade agreement from President Trump and President Xi against the Federal Communications Commission’s vote to label Chinese telecom giants Huawei and ZTE as national security risks. The three major indexes closed higher Friday but fell for the week. The Dow snapped a four-week winning streak; the S&P broke six weeks of gains, and the NASDAQ ended a seven-week advance. For the week, the Dow fell 0.41 percent to close at 27,875.62. The S&P lost 0.29 percent to finish at 3,110.29, and the NASDAQ dropped 0.25 percent to end the week at 8,519.88.

Returns Through 11/22/19 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) -0.41 22.13 16.73 16.28 12.07
NASDAQ Composite (PR) -0.25 28.40 22.19 16.51 12.57
S&P 500 (TR) -0.29 26.33 19.78 14.44 10.80
Barclays US Agg Bond (TR) 0.29 8.63 10.81 4.02 3.16
MSCI EAFE (TR) -0.58 17.57 12.86 9.53 4.25

Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. The NASDAQ is based on price return, which is the capital appreciation of the portfolio, excluding income generated by the assets in the portfolio in the form of interest and dividends. (TR) indicates total return. (PR) indicates price return. MSCI EAFE returns stated in U.S. dollars.

 

Small Group, Big Number — Just 6 percent of the 45 million Americans who have student loans hold 33 percent of the nation’s $1.50 trillion of outstanding student loans. This group comprises borrowers with at least $100,000 of outstanding student loan debt (source: Brookings Institute, BTN Research).

Households — Of the 123 million households in the United States as of Sept. 30, 2019, an estimated 30 million are homeowners with no mortgage, 50 million are homeowners with a mortgage and 43 million are renters (source: Census Bureau, BTN Research).

A Slowdown — 90 percent of the world’s economies are projected to grow more slowly in calendar year 2019 than they did in calendar year 2018. The U.S. economy grew by 2.9 percent in 2018 and to date has grown by an annualized 2.3 percent in 2019 (source: International Monetary Fund, BTN Research).

 

WEEKLY FOCUS – Precautions for Safe Online Shopping

If this holiday season is anything like last year’s, 8 percent of consumers will have their identity stolen in the next few weeks.1 If you plan to take advantage of the many great deals available on the internet this time of year, it’s important to take precautions to protect your sensitive information from cyber thieves and hackers.

Update Your Computer or Device: It’s critical to ensure you are running the latest antivirus software. Out of date software can give cyber thieves an open door to your personal data. There are many antivirus packages available, so do some comparison shopping before downloading one. While you’re updating your software, be sure you’re running the latest version of your browser to ensure it has the most current security patches.

Look for the “S”: Make sure you’re shopping on a secure website by looking for a URL that starts with “https.” If a retailer’s site doesn’t have the “s” on the end, it isn’t a secure site, and it’s best to find another retailer.

Do Not Save Credit Card Info to Accounts: Retailers often offer to save your credit card info, so you don’t have to enter it each time you make a purchase. But this convenience can also make that information more susceptible to theft.

Avoid Unfamiliar Retailers: Always shop with known reputable retailers. No matter how good an offer seems, if you haven’t heard of the vendor, it’s best to shop elsewhere or at least check customer reviews and other consumer feedback regarding the company and its products.

Don’t Use Public Wi-Fi: It may be tempting to shop while sipping a peppermint latte at your favorite coffee shop. But logging on to public wi-fi can open your personal information to hackers lurking on the same network.  If you must use public wi-fi, consider installing a virtual private network to encrypt the data on your smartphone, tablet or laptop.

Read the Privacy Policy: If you are uncertain about how a company uses and secures your credit card and other personal information, carefully read its privacy policy found on its website or request that they send it to you.

To learn more ways to protect your personal information during the holiday season and all year long, give us a call today.

1https://www.lifelock.com/learn-internet-security-safe-holiday-online-shopping-tips.html

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* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright November 2019. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#2844599.1

Weekly Market Notes – November 18, 2019

Weekly_Market_Notes

For the Week of November 18, 2019

The Markets

All three major indexes hit record highs Friday after White House economic adviser Larry Kudlow said current China-US negotiations are “very constructive.” The Dow hit 28,000 for the first time ever. The S&P 500 and the NASDAQ also broke records. For the week, the Dow rose 1.24 percent to close at 28,004.89. The S&P gained 0.94 percent to finish at 3,120.46, and the NASDAQ climbed 0.77 percent to end at 8,540.83.

Returns Through 11/15/19 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) 1.24 22.64 13.43 16.70 12.40
NASDAQ Composite (PR) 0.77 28.72 17.66 17.42 12.74
S&P 500 (TR) 0.94 26.69 16.63 14.97 11.13
Barclays US Agg Bond (TR) 0.54 8.31 10.79 3.78 3.12
MSCI EAFE (TR) 0.08 18.25 12.72 9.66 4.58

Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. The NASDAQ is based on price return, which is the capital appreciation of the portfolio, excluding income generated by the assets in the portfolio in the form of interest and dividends. (TR) indicates total return. (PR) indicates price return. MSCI EAFE returns stated in U.S. dollars.

 

That Would Hurt — Individual income taxes paid by American taxpayers would have to increase by 57 percent to eliminate our $984 billion deficit from fiscal year 2019 (source: Treasury Department, BTN Research).

Old and Still Owing Money — In 2016, 46 percent of American homeowners ages 65-79 had outstanding mortgage debt on their primary residence, almost double from the 24 percent of this age bracket that had mortgage debt 30 years earlier (source: Joint Center for Housing Studies of Harvard University, BTN Research).

Double in Length — The current bull market for the S&P 500 reached a new closing high for the index on Friday, Nov. 8, extending the bull run to 10.67 years. The average length for all 11 bull markets that have taken place since 1950, including the current bull, is 5.33 years (source: BTN Research).

 

WEEKLY FOCUS – Relocating in Retirement

The newfound freedom retirees experience and pre-retirees anticipate often leads to thoughts of relocating to be closer to grandchildren, live in an appealing climate or cut expenses. Because moves – particularly out-of-state moves – are costly, it’s important to weigh many factors, such as:

Cost of living. Research the cost of housing, healthcare, long-term care, food, services and taxes in a prospective community. Does the state tax income, sales and/or Social Security? What does it charge for auto sales and license renewals? How high is real estate tax in the area? Auto insurance? What are typical costs for heating and cooling a home? Are estate taxes favorable?

Job availability. According to an Employee Benefit Research Institute survey, 80 percent of workers expect to work for pay in retirement. If that option matters to you, rule out cities with high unemployment rates or limited jobs that would interest you. If you plan to work from home, remember some remote areas or small towns may only offer slow dial-up service.

Attractive lifestyle. Will you like the local culture? Will you fit in? Does the community offer civic events and leisure activities you’ll enjoy? Perhaps there’s a university that lets retirees audit courses at no charge or attend performances or sporting events at reduced prices. Is the city walkable? Does it provide adequate public transportation if you no longer want to drive? What is the crime rate? Are hospitals and health systems highly rated? Do they have a wide range of specialists? Is the housing market stable – in case you decide to sell your home at some point?

Before you move: Relocating is costly – and a major upheaval. So, it’s important to make sure you get it right. On top of thoroughly researching the factors above, subscribe to a local paper or magazine and join a community Facebook group to learn about the area’s social scene and crime rate and see what residents are discussing. And consider making one or more trial runs by renting a home for a week or two at different times of year.

Where you live – and the cost of living there – greatly impact how long your retirement assets will last. If you’re considering a retirement relocation, call our office. We can help you analyze the financial impact of your choices.

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* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright November 2019. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI# 2830702.1

Weekly Market Notes – November 11, 2019

Weekly_Market_Notes

For the Week of November 11, 2019

The Markets

Stocks closed higher Friday despite losses earlier in the day after President Trump told reporters he had not agreed to reduce tariffs on Chinese imports. All three major indexes still closed at record highs and ended higher for the week. For the week, the Dow rose 1.37 percent to close at 27,681.24. The S&P gained 0.93 percent to finish at 3,093.08, and the NASDAQ climbed 1.06 percent to end the week at 8,475.31.

Returns Through 11/08/19 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) 1.37 21.15 8.29 17.47 12.23
NASDAQ Composite (PR) 1.06 27.73 12.54 17.73 12.84
S&P 500 (TR) 0.93 25.52 12.48 15.36 11.03
Barclays US Agg Bond (TR) -0.87 7.74 10.60 2.98 3.01
MSCI EAFE (TR) 0.53 18.15 9.70 9.15 4.75

Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. The NASDAQ is based on price return, which is the capital appreciation of the portfolio, excluding income generated by the assets in the portfolio in the form of interest and dividends. (TR) indicates total return. (PR) indicates price return. MSCI EAFE returns stated in U.S. dollars.

 

Three in a Row — The Fed lowered short-term interest rates on Wednesday, Oct. 30, its third consecutive meeting that has resulted in a rate cut. That’s the first time the Fed has reduced rates over three straight meetings since Dec. 16, 2008 (source: Federal Reserve, BTN Research).

Procrastinate — 37 percent of 2,003 Americans surveyed in the first quarter of 2019 had less than $5,000 accumulated in pretax retirement accounts (source: Northwestern Mutual Planning & Progress Study, BTN Research).

Owners and Renters — The 111.2 million households in the United States on Sept. 30, 2009, were split 68/32 between 75.2 million owners and 36.0 million renters. The 122.7 million households in the United States on Sept. 30, 2019, were split 65/35 between 79.5 million owners and 43.2 million renters (source: Census Bureau, BTN Research).

 

WEEKLY FOCUS – November Is National Caregivers Month

With the graying of the baby boomers, more adult children juggle with new and unexpected responsibilities as caregivers for one or more of their aging parents. Boston College research has found that about 17 percent of adult children now provide some level of care for a parent and spend an average 77 hours each month looking after relatives. And an AARP study, “Family Caregiving and Out-of-Pocket Costs,” revealed 78 percent of family caregivers spent an average $6,954 (20 percent of their income) on care-related expenses in 2016.

In caring for a loved one, caregivers face social, emotional, medical and financial challenges. The following tips could guide you through some of the financial challenges you may face when caring for an aging loved one.

  1. Pick a point of contact. One sibling or other close relative should be in charge of communicating with doctors, with health care power of attorney.
  2. Find a family-friendly primary doctor. Your loved one may receive care from multiple specialists. Choose one to serve as a primary medical resource. If you’re caring from a distance, consider asking their doctor if they are willing to communicate via email.
  3. Create a central storage place for vital documents, including medical records, Social Security numbers and health insurance policy information. You don’t want to dig through decades of old files to find what you need in a hurry. Make duplicates of hard copy documents and store them in at least two fireproof and waterproof locations. Digital imaging and storage services are a convenient way to access files remotely.
  4. Talk to your parent about long-term care insurance. Nursing home costs continue to rise faster than inflation and can quickly deplete savings. If your loved one is healthy enough to qualify, paying premiums for them could help safeguard your savings from their future healthcare expenses.
  5. Discuss finances. The point-of-contact relative or another relative equipped to deal with financial matters should have financial power of attorney. They should know the location of key accounts and policies, and the names and phone numbers for key advisors.

Call our office today. We can help you prepare for the responsibilities of caring for your loved one and ensure your financial plans are ready if, or when, needed.

Weekly_Market_Notes

* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright November 2019. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI# 2819607.1

 

November 2019 Monthly Outlook – Fool Me Once ….. Won’t Get Fooled Again!

The equity markets ended October and have begun November on a high note.  This is mostly due to positive comments about a  US/China trade deal.  While I am hopeful that a deal can be struck, I will reserve judgement until ink is on paper.  Recall there was talk of a trade deal back in March 2019.  The equity markets rallied to a new all-time high in April, only to fall almost 7% in May after the trade talks broke down and both US and China imposed additional tariffs.   There was more “happy” talk about a deal in July, leading the stock market to rally to a new, even higher all-time high only to – you guessed it- have the talks break down and the market fall roughly 6.2% into August.  The recent talk of a “phase-one” deal has fueled the market to again climb to new all-time highs.  Perhaps the 3rd time is a charm, but I remain leery that we have a repeat of the two earlier setbacks in the talks.  Our administration is extremely unpredictable and China has also shown to be playing games.

In other news, the US economy continues to be resilient.  Growth has slowed somewhat but remains in the 2% annual GDP growth range, which is reasonable given all the variables.  The consumer continues to spend, supported by a solid job market.  This is offsetting manufacturing, which continues to decline, mostly impacted by trade.  The chart below shows that several recession indicators are flashing red but several others remain positive. The US economy will definitely fall back into a recession – the question is when, not if, and how severe will it be. If US / China trade tensions ease or at least remain at a truce, then I expect the US economy to avoid a recession until late 2020 or early 2021.  If trade tensions escalate then the likelihood of recession moves closer in time.

11.5.2019_MONTHLY_OUTLOOK_CHART_1

Our approach has always been to stay diversified and adjust as economic and market conditions dictate.  In years like 2019, diversification can feel disappointing but investing isn’t a 1 year game, it’s a long-term process and diversification generally wins in the long run. The results highlighted below are for a typical 60% equity 40% fixed income and cash portfolio,  and reasonably reflect how our investment philosophy has performed.

11.5.2019_MONTHLY_OUTLOOK_CHART_2

We will continue to follow our philosophy, while monitoring markets for opportunities and threats.

We hope you find this information helpful.  Please feel free to share it with family, friends and colleagues.

 

November Calendar of Events   (comments and additions for future months are always welcome)

  • November is National Family Caregivers Month.   Please consider reaching out to a family member or friend who is caring for a loved one. Why not offer to give them a day off.  This hits home for Eloise and I this year as we have been caring for my mom since August 2019 and her Uncle since May 2018.  Sadly Uncle CS passed away on November 1st.

 

November 1st           Healthcare open enrollment – runs through 12/15/18  – for coverage starting Jan 1, 2018  

                                    Note: Medicare open enrollment started 10/15/18 and end 12/7/18

November 3rd           Set those clocks back

November 5th           Election Day  – be sure to vote

November 11th         Veterans Day – says thanks a Vet

November 21st         Great American Smokeout – encourage a smoker to quit

November 28th        Thanksgiving – have a wonderful holiday 

 

 

P.S. Thank you for your referrals. They are making a big difference in my practice. Feel free to share my name with your friends on Facebook or LinkedIn

 

Sources:  BlackRock, Blackstone Investment Group

 

 

Although information herein has been obtained from sources deemed reliable, its accuracy and completeness are not asserted. All opinions and estimates included in this report constitute the judgment of the financial advisor as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.

Investing involves risk and you may incur a profit or a loss. Diversification does not ensure a profit or ensure against a loss. There is no assurance that any investment strategy will be successful.  Past performance is no assurance of future results.

Please consider the charges, risks, expenses and investment objectives carefully before investing. Please see a prospectus containing this and other information. Read it carefully before you invest or send money.

Information provided should not be construed as legal or tax advice.  You should discuss any tax or legal matter with the appropriate professional.

 

 

Weekly Market Notes – November 4, 2019

Weekly_Market_Notes

For the Week of November 4, 2019

The Markets

Stocks rose sharply during November’s first session. The S&P 500 and the NASDAQ surged to new records after a reassuring jobs report. The Labor Department estimated the U.S. added 128,000 new jobs in October and raised its estimate of employment growth for September and August. For the week, the Dow rose 1.44 percent to close at 27,347.36. The S&P gained 1.49 percent to finish at 3,066.91, and the NASDAQ climbed 1.74 percent to end the week at 8,386.40.

Returns Through 11/01/19 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) 1.44 19.51 10.38 17.64 12.18
NASDAQ Composite (PR) 1.74 26.39 12.81 17.62 12.61
S&P 500 (TR) 1.49 24.36 14.23 15.54 10.99
Barclays US Agg Bond (TR) 0.47 8.68 11.25 3.22 3.21
MSCI EAFE (TR) 1.18 17.53 10.99 8.70 4.43

Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. The NASDAQ is based on price return, which is the capital appreciation of the portfolio, excluding income generated by the assets in the portfolio in the form of interest and dividends. (TR) indicates total return. (PR) indicates price return. MSCI EAFE returns stated in U.S. dollars.

 

It Doesn’t Last Long — A study involving 2,500 wealthy families over decades of wealth transfers across generations found, on average, only 30 percent of the original family fortune remained at the end of the second generation, and only 10 percent remained at the end of the third generation (source: Williams Group, BTN Research).

No Work — 37 percent of American seniors report they retired earlier than planned as a result of health problems, buyout packages, layoffs, grandchildren or caring for an aging parent (source: Health and Retirement Study, BTN Research).

Live Within Your Means — 41 percent of American households make less than $50,000 of adjusted gross income (AGI) per year. Only 8 percent of American households make at least $200,000 of AGI (source: Census Bureau, BTN Research).

 

WEEKLY FOCUS – November Is Long-Term Care Awareness Month

Although the cost of long-term care is a huge concern for retirees, sales of traditional long-term care (LTC) insurance policies have fallen dramatically since the early 2000s. For several reasons. Amid longer lifespans and rising healthcare costs, many insurers have shortened the period of benefits, reduced the daily amount they will pay and/or cut their inflation-protection benefit.

Some companies now offer policies that require a co-pay for LTC services, and one is adding a co-pay option to existing policies. But the least popular change insurers have made is raising existing customers’ policy premiums – by as much as 100 percent.

Even if traditional LTC insurance is less popular than it once was, it’s important to prepare financially for the likelihood that future care will be needed. Here are some additional avenues to consider:

Life insurance with an accelerated death benefit rider that can be used for LTC or with a LTC rider. Unlike traditional LTC insurance, if you don’t use it, you will still leave a tax-deferred death benefit to your heirs. (These options aren’t usually available on term policies.)

Some annuity products, designed for accumulation or income, may also carry some LTC benefits.

Self-funding future LTC. This method requires discipline and time to build wealth. Maximizing yearly contributions to HSA and IRA accounts and letting them grow tax-deferred throughout your career is a good start. Other possible sources could be your Social Security payments, selling your home or getting a reverse mortgage if a spouse is still living in the home.

Here’s what NOT to do: rely on the government. With a few exceptions, Medicare primarily pays for short-term nursing home care following hospitalization. Medicaid only pays for LTC after nearly all your assets have been depleted – and limits the assets a spouse can retain. If you rely on Medicaid, you will probably not have access to a private room and will have fewer facilities to choose from. Many states do not pay for in-home, assisted living or adult day care.

While it’s great to hope you never need long-term care, it’s best to plan for the unplanned. I would be happy to meet with you to review your plan for long-term care funding and discuss changes you might consider to better prepare for this possibility.

 

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* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright November 2019. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#2810044.1