Go Figure – Bad News is Good News

Last week was filled with bad economic news:

  • The May jobs report came in at only 75,000 jobs added to the economy.  Both March and April figures were revised down.  More importantly, payroll gains have averaged 164,000 in 2019, a sharp decline from the 223,000 for all of 2018.  Clearly the job market is losing some steam.
  • While still at an impasse with China on trade, the Trump administration announced new tariffs on Mexico.
  • The International Monetary Fund highlighted increased risks of a global growth slowdown.

 

So what happened?  The stock markets had the most positive week since January 2019.  Go figure!

Why? I believe the market is betting that the Federal Reserve (and other central banks around the world) will come to the rescue by increasing monetary stimulus by lowering interest rates.

I’m not sure the market has this right. First, while the FED has been sounding dovish (open to cutting interest rates), my sense is that they would prefer not to cut rates now.  Second, even if they do cut rates, with interest rates already at very low levels, the amount they could cut rates would likely not be enough to offset the impact of trade and other factors impacting global growth.

If the FED doesn’t do what the market is expecting,  we likely see a swift negative reaction.  If the FED does cut rates, I think the upside is limited as the market has already priced that in.

As such, I am continuing to stay neutrally positioned, with a diversified balanced approach.  This allows us to participate in some of the gains the market has had recently, while reducing our downside risk if the market reverses.

Feel free to call if you have any questions or concerns.

Weekly Market Notes – June 10, 2019

Weekly_Market_Notes

For the Week of June 10, 2019

The Markets

Stocks jumped Friday. A weak job report appeared to fuel optimism the Federal Reserve would increase interest rates in the near future. Although economists anticipated 180,000 new jobs in May, the Labor Department reported 75,000 jobs were added. Positive sentiment pushed the Dow to its biggest weekly gain since November. For the week, the Dow rose 4.77 percent to finish at 25,983.94. The S&P gained 4.46 percent to finish at 2,873.34, and the NASDAQ climbed 3.88 percent to end the week at 7,742.10.

Returns Through 6/07/19 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) 4.77 12.67 5.39 15.90 11.64
NASDAQ Composite (PR) 3.88 16.68 1.40 15.99 12.37
S&P 500 (TR) 4.46 15.68 5.83 13.07 10.32
Barclays US Agg Bond (TR) 0.36 5.17 7.37 2.40 2.88
MSCI EAFE (TR) 3.23 11.12 -4.43 6.39 1.73

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.

 

Gotta Start Somewhere — An estimated 40 percent of this year’s college graduates will be underemployed with their first job, i.e., they will take a job for which they are academically overqualified (source: Strada Institute for the Future of Work, BTN Research).

Are You Better on Your Own? — The average American worker who retires in 2020 will have paid $135,000 in Social Security taxes during their working lifetime, less than the $193,000 in Social Security retirement benefits they are projected to receive (source: Urban Institute, BTN Research).

Debt-Free — Forty percent of U.S. homeowners own their home free and clear of any mortgage debt or home equity loan. Of the 60 percent of homeowners with an outstanding debt balance, the median debt total is $126,000 (source: American Housing Survey, BTN Research).

 

WEEKLY FOCUS – A Living Trust Can Help Your Assets Live On

With baby boomers passing the fruits of their labor to the next generation, we are witnessing the largest transfer of wealth in history. But many boomers are concerned about how that wealth will be used once it changes hands. A living trust is one way to protect your estate assets and provide clear direction on how you would like them disbursed after your death. In addition, a living trust can eliminate the time and expense of probate, which can take years and cost thousands of dollars.

A living trust has many advantages. It prevents your assets and their disposition from becoming part of the public record during a probate settlement. Your assets will be collected and distributed from a single point using your predetermined terms and conditions. It can be used while you’re alive to control, coordinate and distribute your assets if you become disabled, ill or mentally impaired. And it can be amended anytime during your lifetime.

Because everyone’s estates and final wishes are different, there are many different types of living trusts.

  • Revocable trusts are flexible, can be amended or revoked at any time and allow you to shift your trust assets around.
  • Irrevocable trusts cannot be changed and cannot be revoked, but the assets in the trust are protected from creditors.
  • Asset protection trusts are established for a specified time. During that period, those assets cannot be accessed by creditors. Once the trust expires, the assets that go undistributed are returned to the trust holder.
  • Charitable trusts benefit a specific charity or your favorite cause. Because they help lower or bypass estate and gift taxes, they can also provide significant tax benefits.

 

To set up a living trust, you’ll need to hire an estate attorney. You don’t need a will to set up a living trust. However, a will can ensure assets not covered by the trust are also distributed according to your wishes.

If you would like to discuss in more detail how you and your loved ones can benefit from a living trust, call us to schedule an appointment. We would be happy to meet with you and your estate attorney.

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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 June 2019. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI# 2582085.1

June 2019 Monthly Outlook – Business Cycle in the Late Stage

The global economy is entering into a mature / late cycle stage. We see continued solid, albeit slower, growth in the US, improvement in China, low inflation in most developed countries, and a pivot towards more fiscal stimulus and more accommodative monetary policies around the globe.  Historically, late-cycle phases have ranged from 9 months to more than 2 years.  The near-term risk of recession remains low, but the outlook for 2020 is less certain.

6.3.2019_MONTHLY_OUTLOOK_CHART_1

*The diagram above is a hypothetical illustration of the business cycle. There is not always a chronological, linear progression among the phases of the business cycle, and there have been cycles when the economy has skipped a phase or retraced an earlier one. A growth recession is a significant decline in activity relative to a country’s long-term economic potential. We use the “growth cycle” definition for most developing economies, such as China, because they tend to exhibit strong trend performance driven by rapid factor accumulation and increases in productivity, and the deviation from the trend tends to matter most for asset returns. We use the classic definition of recession, involving an outright contraction in economic activity, for developed economies. Source: Fidelity Investments (AART), as of April 30, 2019.

US: Late-cycle dynamics clear, pace of phase progression uncertain

The US is currently displaying more key late-cycle trends than it has over the past 3 years (see chart below). However, these trends remain relatively slow moving, and some have recently stalled, including wage growth and Fed tightening. The direction and rate of change of these trends should help determine how long the current cycle extends.

The US is exhibiting key late-cycle trends, but they have been slow moving

Indicator Current trend Latest readings
Employment/wages Labor markets tighter; wages higher than 2–3 years ago Pace of improvement has stalled
Monetary policy Fed policy tighter than one year ago Fed on indefinite pause
Yield curve Flattening Flat, near inversion
Credit Some tightening of lending standards Credit accessible, spreads tight
Corporate profits Margins lower than 3 years ago Earnings boosted from tax cuts; expectations ~5% and stable
 

Source: Fidelity Investments (AART), as of March 31, 2019.

 

China: Better but may not be enough to help global economy

China’s outlook has improved in 2019. Due in large part to a greater shift toward fiscal and monetary stimulus, industrial production growth has begun to recover and it appears the economy may be emerging from its growth recession.

 

Europe: Stabilizing at a weak level

Labor markets have generally continued to improve in many core European economies, but consumer sentiment and consumption gains remain muted. In fact, German households have increased their savings rate over the past year, even as unemployment has dropped to cyclical lows

 

Base-case scenario: Muddling through the late cycle

Our base-case scenario is that the global economy is past its peak and most major countries are in mature stages of the business cycle. While the absolute level of global growth remains muted, leading indicators of activity have recently reflected some signs of stabilization. This environment should be generally favorable to a balanced portfolio of stocks and bonds.

 

Best-case scenario: Prolonged Goldilocks environment

The best of all possible worlds would be if the various trade/tariff battles get resolved successfully, which would allow business investment to pick up.  US productivity growth re-accelerated on a sustained basis, providing faster growth without stoking inflation. This could allow the Federal Reserve to stay on hold (no rate increases). This environment should be generally favorable to risk assets such as stocks.

 

Worst-case scenario: Rising recession risks

The worst-case scenario is that the global economy continues faltering. In this scenario, China’s stimulus would prove insufficient, global economic growth would remain lackluster, and the US economy would decelerate. Current market expectations that the Fed’s next move will be a rate cut would be proven correct, but this would be a response to rising recession risks. In this environment riskier assets, such as stocks, would be expected to perform worse than more defensive ones, such as government bonds.

 

The big wild card: Trade policy

The big risk that could shock the global cycle into a more challenging outcome would be the escalation of US trade tensions. The US-China trade talks have stalled.  President Trump has threatened tariffs on Mexico, even before the recently negotiated US/Mexico/Canada trade deal has been ratified, and trade negotiations are ongoing with the European Union. A return to tit-for-tat tariff increases would create stagflationary headwinds on a global basis, and they would likely weigh heavily on business and financial-market sentiment. The worse-case scenario of rising global recession risk would become more pronounced.

 

The outcome of the trade issue is highly uncertain. While I can see reasons for a deal getting done (mostly the 2020 US election), the recent actions and rhetoric make that less likely.

 

There are several key dates I am watching in June:

 

  • June 1  –   the day Chinese tariffs are implemented on $60 billion of U.S. exports
  • June 10 –  the day the recently announced tariffs on Mexico are to be implemented
  • June 19 –  the next Federal Reserve meeting and interest rate announcement
  • June 24 –  when the U.S. could outline an additional $325 billion worth of Chinese imports to be tariffed
  • June 28 –  the potential face-to-face meeting between Presidents Trump and Xi at the G-20 summit in Japan

 

My outlook is cautious but not bearish.  We have tightened our risk-controls but have not gone defensive.  We continue to monitor all of our indicators and will respond accordingly.

Rest assured that your portfolio is diversified and prepared for this type of market environment. Expectations of increased volatility are built into your portfolio.

We hope you find this report helpful.  Please call us with any questions.  Also, please share this report with anyone you feel it would benefit.

 

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

  • June is LGBT Pride Month.  Let’s all work towards acceptance and inclusion of people regardless of their sexual orientation.
  • June is also National Safety month.  Schools are closing for summer and folks will be outside more so be mindful on the roads. Perhaps take a first aid or CPR course.

 

June 14th         Flag Day                  

June 17th         Father’s Day  – wishing all father’s, grandfathers, and great grandfathers a wonderful day.

June 21th         Summer begins – let’s see what Mother Nature has in store for us                   

On a personal note, the newest member of the Directional Wealth Management Team, Skyler Misa, was baptized on June 2nd.  Congratulations to the Misa family.

skylar_baptism

Sources: Fidelity Investments (AART), Investopedia Chart Advisor

 

 

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.

Credit Report Reminder

April showers bring May flowers, and May flowers bring barbecue season – and another reminder from us that you should be aware of what your credit report is.

The Fair Credit Reporting Act (FCRA) requires each of the nationwide credit reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months. Here is a link to the Federal Trade Commission website   http://www.consumer.ftc.gov/articles/0155-free-credit-reports

To get your credit report online visit this site:  https://www.annualcreditreport.com/index.action  Click on request your free credit report.

Since you get 1 report each year from each reporting company my suggestion is to spread them out during the year.  For example, request Equifax in January, Experian in May, and TransUnion in September.  That way you can see any changes made throughout the year.

If you would rather make the request by mail , print and complete the attached Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.  Again, I would print 3 copies and make separate requests throughout the year.

Review each report for inaccuracies or incomplete information and follow the supplied instructions on how to get these corrected.

Please call me if you have any questions on this information.annual-report-request-form

Weekly Market Notes – May 20, 2019

Weekly_Market_Notes

For the Week of May 20, 2019

The Markets

Stocks closed lower Friday after CNBC reported U.S. – China trade negotiations had stalled. In positive news, the Trump administration reached a deal with Canada and Mexico to end U.S. tariffs on steel and aluminum imports and said it would delay a decision on imposing broad tariffs on cars produced by major trading partners. But the three major indexes still closed mildly lower for the week. For the week, the Dow fell 0.61 percent to close at 25,764.00. The S&P lost 0.69 percent to finish at 2,859.53, and the NASDAQ dropped 1.27 percent to end the week at 7,816.28.

Returns Through 5/17/19 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) -0.61 11.49 6.66 16.45 12.02
NASDAQ Composite (PR) -1.27 17.80 5.88 18.35 13.83
S&P 500 (TR) -0.69 14.98 7.25 14.07 11.04
Barclays US Agg Bond (TR) 0.33 3.57 6.72 2.03 2.54
MSCI EAFE (TR) 0.21 10.25 -6.29 7.25 2.03

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.

 

Borrow — The Treasury Department auctioned off $19 billion of 30-year bonds with a 2.875 percent coupon May 9. The new bonds mature on May 15, 2049. The government has auctioned off 30-year bonds since 1977. The lowest yield ever on our nation’s 30-year paper was 2.1 percent on July 8, 2016 (source: Treasury Department, BTN Research).

One Indicator — The price/earnings ratio for the S&P 500 as of May 10 was 18.6, i.e., the raw index divided by the index’s trailing 12 months earnings per share before considering extraordinary items. The index’s long-term price/earnings ratio (dating back to 1954) is 16.7 (source: Bloomberg, BTN Research).

Long-Term Issue — The estimated Social Security shortfall today (i.e., a present value number) between the future taxes anticipated being collected and the future benefits expected to be paid out over the next 75 years is $13.9 trillion. The $13.9 trillion deficit could be eliminated by an immediate 2.7 percentage point increase in the combined Social Security payroll tax rate (from 12.4 percent to 15.1 percent) or an immediate 17 percent reduction in benefits that are paid out to current and future beneficiaries (source: Social Security Trustees, BTN Research).

 

WEEKLY FOCUS – Planning for the Inevitable

Most of us plan for major events in our lives: college educations, weddings, the births of children, retirement and our final estate. Yet, a study by the National Funeral Directors Association says although nearly two-thirds of consumers believe communicating their funeral wishes to family members is important, less than a fourth have done so.

Preplanning your funeral or memorial service allows you to choose the items, services and provider you prefer. It also lets you select people you want to be notified and individuals you would like to officiate, deliver eulogies, read prayers or poems, sing or serve as pallbearers.

Several websites can help you research options. You’ll find a wealth of articles on everything from choosing flowers to prepaying with a trust on everplans.com/funeral. Funerals.org offers a planning guide and tips for lowering costs. Parting.com lets you compare local funeral homes’ items and services. Funeraldecisions.com provides free instant quotes online and lets users sign up to receive direct estimates from funeral providers.

Once you’ve made your decisions, document your plan, share it with loved ones and create a legal document authorizing someone to handle your funeral arrangements. The best document to accomplish this is a Durable Power of Attorney for Health Care (DPOAHC) that includes a paragraph specifying who you want to make your funeral arrangements. The DPOAHC must be notarized to be legally binding. Give the person you’ve chosen to carry out your wishes copies of the DPOAHC and your plan. This is preferred to detailing your wishes in a will, which may not be read before the funeral, or leaving them in a safe deposit box since arrangements may need to be made on a weekend or holiday when the box won’t be available.

Many experts caution against prepaying for your funeral or buying an insurance policy through a home. Funeral homes can go out of business, change hands or lose their good reputation. There are several alternatives to prefund your final expenses. You can purchase burial insurance, create a trust or set up a Payable on Death account through your bank, which allows a beneficiary to receive the money to cover final expenses.

We can help you make financial arrangements that will make money readily available to your family to cover funeral expenses. Call our office for help with funeral and estate planning.

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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 May 2019. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#2547838.1

Weekly Market Notes – May 13, 2019

Weekly_Market_Notes

For the Week of May 13, 2019

The Markets

U.S. stocks dropped early Friday but rose after President Donald Trump and Treasury Secretary Steven Mnuchin described trade talks between China and the United States as productive. The rebound helped the S&P snap a four-day losing streak. For the week, the Dow fell 1.96 percent to close at 25,942.37. The S&P lost 2.10 percent to finish at 2,881.40, and the NASDAQ dropped 3.03 percent to end the week at 7,916.94.

Returns Through 5/10/19 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) -1.96 12.17 7.36 15.89 12.05
NASDAQ Composite (PR) -3.03 19.32 6.91 18.07 14.22
S&P 500 (TR) -2.10 15.77 7.99 13.69 11.20
Barclays US Agg Bond (TR) 0.31 3.22 5.71 1.90 2.56
MSCI EAFE (TR) -2.63 10.02 -6.06 7.01 2.05

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.

 

All Are Too High — On Dec. 17, 2018, 10 Wall Street strategists forecasted the yield of the 10-year Treasury note as of Dec. 31, 2019. The 10 predictions ranged from a low of 2.75 percent to a high of 3.60 percent. The yield on the 10-year Treasury note closed at 2.5 percent as of Tuesday, April 30 (source: Barron’s, BTN Research).

Fourteen — The best 14 trading days for the S&P 500 over the last 10 years gained 86.2 percent (total return), more than the 84.2 percent gained by the other 2,502 trading days in the decade (source: BTN Research).

What a Surprise — A divorced person who was married for at least 10 years is eligible to collect a Social Security survivor benefit when their ex-spouse dies, even if the ex-spouse had remarried. Please consult a Social Security expert for details (source: Social Security Administration, BTN Research).

 

WEEKLY FOCUS – Can You Afford to Miss Months of Work?

It won’t happen to me. It’s easy to think that way when considering the possibility of being out of work due to a debilitating illness or injury. But the numbers paint a different picture. More than one in four of today’s 20-year-olds can expect to miss work due to a disability for 90 days or more before they reach 67, and 45 percent of consumers who filed for bankruptcy between 2013 and 2016 cited medically related work loss as a contributor.1

Back injuries, cancer, strokes, heart attacks, diabetes and mental health issues are among the most common conditions that force people to take extended time away from work, but there are many more that unexpectedly afflict people every day. Worker’s compensation and Social Security do not cover most of these conditions.1 So, unless you plan to retire soon, or you can afford to go months without a paycheck, you should protect your income with disability insurance.

When selecting disability coverage, it’s important to understand the differences in policies. In general, there are two types of disability insurance: short-term and long-term. Both will replace a portion of your salary up to a cap.How much you pay for your coverage will vary depending on your age, health, occupation, how long it will pay benefits, gender (unlike life insurance, women typically pay higher rates for disability coverage) and the elimination period (the amount of time you must wait before collecting benefits).

When comparing coverage, be sure to know how the carriers define “disabled.” Some will only pay if you are unable to work at any job you’re qualified for. Others will pay if you can’t work in your occupation. Some will pay partial benefits if you can work part time, and others will only pay when you are unable to work at all.2

Disability coverage often excludes certain health issues, such as existing back problems or mild depression, meaning you cannot file a claim if you’re disabled for an excluded condition. But because many injuries and illnesses can lead to a disability, you should still consider purchasing coverage even if you have an exclusion.2

To learn more about how disability insurance can help protect your income and what coverage is right for you, call our office today to schedule an appointment.

1 https://disabilitycanhappen.org/wp-content/uploads/2019/05/DIAM2019_Facts.pdf

2 https://www.insuranceblogbychris.com/disability-insurance/

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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 May 2019. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#2538813.1

Weekly Market Notes – May 6, 2019

Weekly_Market_Notes

For the Week of May 6, 2019

The Markets

The major indexes ended solidly higher Friday following a robust jobs report. The Bureau of Labor reported the U.S. added 263,000 jobs in April, well above analysts’ predictions. The unemployment rate fell to a near 50-year low at 3.6 percent. For the week, the Dow fell 0.14 percent to close at 26,504.95. The S&P gained 0.22 percent to finish at 2,945.64, and the NASDAQ climbed 0.37 percent to end the week at 8,164.00.

Returns Through 5/03/19 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) -0.14 14.41 13.35 17.08 12.62
NASDAQ Composite (PR) 0.37 23.04 15.18 19.67 14.64
S&P 500 (TR) 0.22 18.26 14.28 14.91 11.66
Barclays US Agg Bond (TR) -0.06 2.90 5.33 1.86 2.50
MSCI EAFE (TR) 0.29 13.00 -2.54 7.72 2.53

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.

 

Twice As Long — On Wednesday, May 1, the U.S. began its 119th month of an economic expansion, i.e., the nation has been expanding since July 2009. The average length of all 33 expansions in the country since 1854 (not counting the current expansion) is 58 months (source: National Bureau of Economic Research, BTN Research).

Higher Here Than There — The U.S. economy is projected to grow 2.2 percent in 2019, nearly a percentage point higher than the 1.3 percent projected growth rate for the collective economies of the 19 nations that make up the Eurozone (source: International Monetary Fund, BTN Research).

Gotta Have It — On average, Americans pay out of pocket just 15 percent of the total health care expenditures they generate in a year. Out-of-pocket expenses include deductibles and co-payments for services and prescription drugs but do not include the cost of health insurance premiums. The remaining 85 percent of annual health care expenditures is covered by insurance (source: Health Care Cost Institute, BTN Research).

 

WEEKLY FOCUS – Talking to Loved Ones About Aging

Aging is not for the faint of heart. Seventy-five percent of those 65 and older have one or more chronic health conditions.1 Forty percent have at least one disability.2 And one in 10 has Alzheimer’s.3 Helping a parent or loved one through the aging process can be difficult, too. Following these useful guidelines to start and maintain an open dialog can help.

Be proactive instead of reactive. The ideal time to start a conversation is before any problems arise and emotions complicate matters. Next best is when one or more issues become recognizable, when you still have time for a series of small conversations that take place over time.

Be respectful and considerate. Choose a quiet moment, without distractions. Speak as a partner. Ask open-ended questions. You might say you’ve noticed a task is getting difficult for them and ask, “Is there a way we can make it easier for you?” Or, “As you age, what are your priorities?” Listen to their preferences and concerns. Let them make as many decisions as possible.

Discuss concerns with other family members. Be realistic about responsibilities you are or will be able to assume. Don’t make promises you can’t keep. Discuss what needs to be done now, what might eventually be needed and parts everyone can play.

Ask them to create necessary documents. A HIPAA authorization allows medical professionals to share health information. A medical power of attorney lets a family member make health care decisions if your loved one becomes unable to. A durable power of attorney for finances lets a relative manage financial affairs. A living will details the care your loved one wants to receive if they become incapacitated. A properly written will ensures their final wishes are carried out. Your loved one should also create an in-depth medical history and a financial profile. The financial profile should detail where they keep financial records and list their financial advisor, tax consultant and attorney.

Financial issues related to caring for a parent or loved one can be complicated and difficult to predict. Call our office today to discuss what you can do now to be financially prepared should your loved one require care.

1https://www.seniorliving.org/research/

2https://www.census.gov/newsroom/press-releases/2014/cb14-218.html

3https://www.aplaceformom.com/blog/2013-02-28-scary-facts-about-alzheimers-disease/

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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 May 2019. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI# 2529677.1