Weekly Market Notes – August 14, 2017

Weekly_Market_Notes

For the Week of August 14, 2017

The Markets

Wall Street showed some cracks last week after months of rallies. Following three days of losses, the major indexes closed higher Friday. While disappointing earnings results decreased odds of further interest rates increases, growing tensions between the United States and North Korea kept investors nervous. For the week, the Dow fell 0.91 percent to close at 21,858.32. The S&P lost 1.37 percent to finish at 2,441.32, and the NASDAQ dropped 1.50 percent to end the week at 6,256.56.

Returns Through 8/11/17 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) -0.91 12.30 20.41 12.48 13.42
NASDAQ Composite (PR) -1.50 16.23 19.66 12.44 15.68
S&P 500 (TR) -1.37 10.40 14.02 10.33 14.07
Barclays US Agg Bond (TR) 0.24 3.14 0.27 2.68 2.18
MSCI EAFE (TR) -1.48 16.05 15.23 3.20 8.31

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.

 

Long Ago — The last year when the high close for the S&P 500 occurred during August was 30 years ago in 1987. Since 1987, the high close for the index has occurred in December 16 times (source: BTN Research).

Through July — The S&P 500 was up 11.6 percent YTD (total return) through July 31, making it nine consecutive months of gains (and 16 of the last 17 months) by the $22 trillion index. The last time the S&P 500 was up in each of the first seven months of a year was 1995 (22 years ago). In 1995, the index produced 11 months of positive returns and a 37.6 percent gain for the entire year (source: BTN Research).

The Economy, National Debt and Market Capitalization — On June 30, the size of the U.S. economy was $19.227 trillion; the size of the U.S. national debt was $19.845 trillion; and the market capitalization of the S&P 500 stock index was $21.832 trillion (source: BTN Research).

 

WEEKLY FOCUS – Retirement Planning for Couples With Age Gaps

Planning for retirement can be tricky when there’s an age gap of 10-plus years between spouses. Rather than a scenario where they exit their careers at roughly the same time, a June-November couple will probably end up with staggered retirement dates. When the older spouse retires years before the younger, it takes a different approach to secure the financial future of both spouses. Some of the strategies involved address Social Security and health care.

When the older spouse will draw on Social Security is an important decision. If they pass away, they’ll want the death benefit for the surviving spouse as high as possible, which is achieved by delaying Social Security benefits. This is especially important when the younger spouse is the wife, as women typically live longer and often have lower earned benefits. If the older spouse waits until age 70 before taking benefits, they lock in the maximum benefit rate not just for themselves but also for their surviving spouse – for life.

While delaying Social Security payments on the surface favors the younger spouse, there is an added benefit for the older spouse. Today, it’s not so much dying early that’s a concern, it’s living longer. Deferring Social Security benefits as long as possible can help reduce the anxiety of outliving their savings.

 

Health care for the younger spouse can be a challenge when the retiring older spouse carries the couple’s health insurance. At age 65, the older spouse qualifies for Medicare. But the younger spouse may have several years before they’re eligible. One solution to this challenge is a triple-tax-advantaged HSA. Although they are tied to high deductible insurance plans, HSAs have several benefits. Contributions are tax-deductible, and capital gains, dividends and interest accumulate tax-free. Withdrawals for qualified medical expenses are tax-free. Beginning at age 65, money can be withdrawn from an HSA for nonmedical spending without penalty (though it’s taxed as ordinary income). And if a medical bill pops up that exceeds what they’ve saved, they can make a once-in-a-lifetime, IRA to HSA transfer – tax-free.

Whether or not you’re retiring together, planning for retirement should begin as soon as possible. Call our office to explore all the options available in planning for a staggered-age retirement. We can help you map out a workable road map to get you there.

DWM Plan Well logo

* 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 August 2017. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#1871121.1

Weekly Market Notes – August 7, 2017

Weekly_Market_Notes

For the Week of August 7, 2017

The Markets

The Dow Jones broke 22,000 for the first time on Wednesday and closed at a record for the eighth time on Friday. July’s better-than-expected jobs report helped all three major indexes close higher. For the week, the Dow rose 1.22 percent to close at 22,092.81. The S&P gained 0.23 percent to finish at 2,476.83, and the NASDAQ dropped 0.36 percent to end the week at 6,351.56.

Returns Through 8/04/17 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) 1.22 13.33 23.44 12.88 13.84
NASDAQ Composite (PR) -0.36 17.99 22.94 13.15 16.44
S&P 500 (TR) 0.23 11.93 16.83 10.83 14.65
Barclays US Agg Bond (TR) 0.16 2.88 -0.16 2.67 2.11
MSCI EAFE (TR) 0.87 17.80 20.25 3.36 9.05

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.

 

No Big Pullback — The S&P 500 has gone 324 calendar days without a 2 percent or greater one-day drop, the longest stretch without a tumble of 2 percent or more since Feb. 27, 2007, or nearly 10.5 years ago (source: BTN Research).

Credit Downgrade — Saturday, Aug. 5, was the six-year anniversary of the United States being downgraded by S&P from a top credit rating. Since the downgrade, the yield on the U.S. 10-year Treasury note has fallen from 2.57 percent to 2.29 percent, and the S&P 500 has gained 134 percent (total return), equal to 15.3 percent per year (source: BTN Research).

Social Security Status Report — Sixty-one million Americans received Social Security benefits (retirement or disability) in 2016. Social Security’s total income (payroll taxes collected plus interest earnings) amounted to $957 billion last year, $35 billion more than the $922 billion of program expenditures and outlays. Social Security actuaries project the program will have just five more years (2017-2021) during which total income will exceed expenditures and outlays (source: 2017 Social Security Trustees Report, BTN Research).

 

WEEKLY FOCUS – Sequence of Returns (SOR) Risk

Aside from the advantages of waiting until you’re 70, or at least 66, to draw Social Security, when you retire can have a big effect on how long your savings last. How the stock market performs in the years directly preceding and shortly after retirement can have a disproportionate impact on how quickly or slowly your money is consumed.

If the value of a new retiree’s investments have increased around the time of retirement, necessary withdrawals to cover their fixed costs will amount to a smaller percentage of their retirement assets, leaving more in their accounts to grow in coming years. The reverse also applies. If the new retiree’s investments have recently decreased in value, they will need to withdraw a greater percentage of assets for living expenses, and they’ll have fewer assets left to grow.

Imagine how much more a 30 percent drop would hurt a 65-year-old with a $2 million portfolio than it would hit a 45-year-old with $400,000 in investments. The 65-year-old loses more immediately while they are withdrawing living expenses from their portfolio at the same time, plus they have less time to recover their losses.

Consequently, two different individuals with the same portfolios who retire at the same age and spend the same amount but retire at different times could have dramatically different situations 20 years into retirement – even if the long-term market averages are similar.

There are several approaches to minimize SOR risk. One is to consider withdrawing a constant percentage from your nest egg, regardless of inflation or whether the portfolio has shrunk due to falling stock prices. Another is to reduce volatility on assets you’ll need to tap in the early years. One analyst suggests starting retirement with 20 percent in stocks and gradually increasing the percentage to 40 or 50 percent over time. The rest of your portfolio might be in fixed-income investments, like an annuity or a bond ladder (a series of bonds that mature in ascending years).

Whether you’re already retired, you’re approaching retirement or it’s a long way off, we can help you create an asset allocation strategy designed to safeguard your future.

DWM Plan Well logo

* 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 August 2017. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#1865444.1

August 2017 Monthly Outlook – Dog Days of Summer

August is known for the dog days of summer.  I always thought those were summer days so devastatingly hot that even dogs would lie around on the asphalt, panting.  It turns out the phrase comes from ancient Greek beliefs about a star.

August also tends to be a volatile in the financial markets.

That said, my outlook is for a continuation of the steady, synchronized expansion of the global economy that has emerged this year. The charts below, courtesy of Fidelity Investments, highlight this quite well.

8.4.2017_MONTHLY_OUTLOOK_CHART1

(Note: 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. Source: Fidelity Investments (AART), as of 6/30/17.)

This improving picture in the Business Cycle can be seen in corporate profits via the trend in Earnings Per Share (EPS) globally. You can also see that Developed International markets (DM) and Emerging Markets (EM) are accelerating at a faster pace than US.

8.4.2017_MONTHLY_OUTLOOK_CHART2

DM: Developed Markets. EM: Emerging Markets. NTM: Next 12 months. EPS: Earnings per Share. Source: MSCI, FactSet, Fidelity Investments (AART), as of 5/31/2017.

With the US stock markets (Dow Jones Industrials, S&P 500, and Nasdaq) all at or near all-time highs, many people are wondering if stocks can keep going up or are they about to go down.  The S&P 500 has not seen a 10% correction since February 2016.  While 17 months seems like a long time, it is actually not even close to being the longest period without a 10% correction as the following chart shows.

8.4.2017_MONTHLY_OUTLOOK_CHART3

So in summary, my outlook for August is that the risk of recession remains low, but economic growth may be muted by a shift toward tightening monetary policies (read: higher interest rates), which could increase volatility in the financial markets.  My approach is to remain diversified and to stay focused on your long-term objectives.

As always, feel free to call me if you have any questions or concerns.

 

August 2016 Calendar of Events   (comments and suggestions always welcome)

August the “What will be your legacy” month.  Are you a good cook, do you love gardening or are you an animal lover.  These are all part of your “legacy”.  Take some time during August to think about and write down things you are passionate about and want to pass on to the next generation.

August 4th         International Beer Day

August  8th        My birthday!

August 13th       International Left-Handers Day

August 14th       Social Security Act signed in 1935 by Pres. Franklin D Roosevelt

August 26th       National Dog Day – raise awareness of the thousands of dogs that need to be rescued.  We will be celebrating Buddy & Coco, our rescues.

 

I hope you find this information helpful.  Please share this report with anyone you feel would benefit from it.

 

Sources:  Fidelity Investments, Raymond James & Associates, Bespoke Investment Group

8.4.2017_MONTHLY_OUTLOOK_DOGS1

8.4.2017_MONTHLY_OUTLOOK_DOGS2

Weekly Market Notes – July 31, 2017

Weekly_Market_Notes

For the Week of July 31, 2017

The Markets

Stocks were mixed Friday. Small gains helped the Dow Industrials reach another record close, but the NASDAQ and S&P fell.  Disappointing earnings reports from Amazon, Exxon and Starbucks, along with a drop in shares of tobacco companies weighed the S&P. The Republican failure to repeal or replace the Affordable Care Act may have also dampened investor sentiment. For the week, the Dow rose 1.17 percent to close at 21,830.31. The S&P remained unchanged to finish at 2,472.10, and the NASDAQ fell 0.20 percent to end the week at 6,374.68

Returns Through 7/28/17 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) 1.17 11.96 21.32 11.50 13.61
NASDAQ Composite (PR) -0.20 18.42 23.66 12.77 16.60
S&P 500 (TR) 0.00 11.67 16.32 10.00 14.69
Barclays US Agg Bond (TR) -0.21 2.72 -0.25 2.62 2.09
MSCI EAFE (TR) 0.23 16.78 19.65 2.22 9.19

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.

 

Daily Swings — Through the close of trading last Friday, July 21 (the 29th trading week of calendar year 2017), the S&P 500 has had just four trading days (out of 139 trading days YTD) produce at least a 1 percent gain or 1 percent loss (total return). At the same date in 2016, the S&P 500 had recorded 39 trading days with at least a 1 percent upward or downward movement, or nearly 10 times as many volatile trading days (source: BTN Research).
The Month of August — The worst performing month for the S&P 500 since 1992 has been August. The stock index has suffered an average loss of 0.7 percent (total return) during August over the last 25 years (1992-2016). The best performing month since 1992 has been April, gaining an average of 1.9 percent (total return) (source: BTN Research).

Five Powerful Days — Over the five years of trading through June 30 (i.e., July 1, 2012, through June 30, 2017), the S&P 500 was up 14.6 percent per year on a total return basis, i.e., counting the impact of reinvested dividends. If you missed the five best performance days in those five years (i.e., five days in total, not five days each year), your average annual return was cut by 3 percent to 11.6 percent (source: BTN Research).

 

WMC Weekly Focus – What You May Not Know About HSAs

No matter the future of the Affordable Care Act, health savings accounts (HSAs) are likely to play an even bigger role in how people pay and save for health care.

An HSA is a savings account used to pay for qualified medical expenses that is attached to a qualified high deductible health plan (HDHP). These health plans were already the norm for ACA exchange plans, but a recent PwC survey projects that within three years nearly 40 percent of companies offering health insurance to their employees will make those plans the only choice.

Although the downside is an HSA must be paired with a HDHP, it offers many benefits. Contributions with an employer-based plan are made pre-tax, roll over year after year to grow tax-free – and you don’t pay taxes on withdrawals when paying for qualified medical expenses, including your plan’s deductible.

Although HSAs have yet to prove themselves as good investment vehicles, they do serve as tax-advantaged retirement savings plans. While the funds are intended primarily to pay for medical costs, you can withdraw at any time before age 65 with a 20 percent penalty. However, after you turn 65, you can withdraw funds from your HSA for any reason. While non-medical withdrawals will be taxed as income, they won’t incur a penalty.

There are a few cautions with HSAs. Make sure you have enough cash in your HSA to cover expected medical expenses, including your deductible. It may be best to make the maximum allowed contributions, especially if you’ve maxed out contributions to your 401(k) or IRA. The IRS capped individual coverage contributions for 2018 at $3,450 and family coverage at $6,900.

Pay close attention to the fees and expenses that come with the HSA, including set-up, maintenance and transaction fees. Understand you don’t have to go with the HSA offered by your employer. If you are unhappy with your employer-provided HSA, you could simply roll the funds into another HSA of your choice. Keep in mind, if your employer matches your contributions, it might be smart to stick with its plan.

Call our office today. We can help you determine if an HSA/HDHP is right for you or if you’re making the most out of your existing HSA.

DWM Plan Well logo

*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 July 2017. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI# 1859495.1

Weekly Market Notes – July 24, 2017

Weekly_Market_Notes

For the Week of July 24, 2017

The Markets

Taking a break from their record-setting performances, the three major indexes declined Friday. A drop in oil prices impaired energy stocks. General Electric’s disappointing annual profit projection weighed on the Dow. For the week, the Dow fell 0.22 percent to close at 21,580.07. The S&P rose 0.56 percent to finish at 2,472.54, and the NASDAQ climbed 1.19 percent to end the week at 6,387.75.

Returns Through 7/21/17 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) -0.22 10.67 19.52 10.92 13.79
NASDAQ Composite (PR) 1.19 18.66 25.89 13.02 16.91
S&P 500 (TR) 0.56 11.67 16.60 10.10 15.08
Barclays US Agg Bond (TR) 0.56 2.93 0.16 2.68 2.07
MSCI EAFE (TR) 0.47 16.51 19.47 2.37 9.42

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.

 

Higher and Higher — Of the 11 S&P 500 bull markets since 1949, only the 1990-2000 bull market (308 record closing highs) and the 1982-1987 bull market (152 record closing highs) have achieved more daily all-time highs than the current bull market’s 151 record closing highs (source: BTN Research).

Bull Market — Since bottoming on March 9, 2009, the S&P 500 has gained 334 percent (total return) and set 151 record closing highs through trading on Friday, July 14, equal to a 19.2 percent gain per year (source: BTN Research).

Who Loses Coverage — Of the estimated 22 million Americans who would not have health insurance coverage by 2026 under the Better Care Reconciliation Act, when compared to the current law, 15 million are Medicaid beneficiaries and 7 million buy their policies in the individual insurance market (source: BCRA, BTN Research).

 

WEEKLY FOCUS – Reducing Required Minimum Distributions

When it comes to pre-tax retirement accounts, there’s good news and bad news.

The bad news: Although the federal government allows you to delay paying taxes on qualified retirement plans so you can build your retirement funds, it wants to start collecting once you reach 70½. Aside from the basic unpleasantness of paying taxes, these required minimum distributions (RMDs) force you to withdraw investments you might not currently need for living expenses. And if your 401(k) or IRA is large, your distributions could bump you into a larger tax bracket.

The good news: There are ways to reduce minimum distributions. Because RMDs are based on the total value of an account, it may make sense to take more distributions in the early years of retirement if your income is lower at that time. Reducing the account’s value will mean lower RMDs in the future.

Converting all or some of a traditional IRA to a Roth can decrease future RMDs. It is a good idea to consult a financial or tax advisor, since you’ll pay income taxes when you roll funds into the Roth, and the conversion process can be complex. If you’re still working and your company offers a Roth 401(k), you may want to consider that option before RMDs become an issue.

If you work past 70½, the 401(k) you have with your employer may be exempt from RMDs. If so, you may even be able to roll 401(k) balances from previous employers into your current employer’s plan to reduce RMDs.

While a qualified charitable distribution (QCD) doesn’t actually reduce the amount of your RMD, it can decrease your tax liability. This income deduction doesn’t apply to 401(k)s, only IRAs.

Finally, Congress passed legislation in 2014 allowing 401(k) or IRA owners to use part of their balances to purchase a qualified longevity annuity contract, which allows owners to defer income until age 85. Even with the potential tax benefits, it’s important to determine whether a QLAC may be suitable for your portfolio.

Concerned about current or prospective tax bills? We’d be happy to work with your accountant to evaluate your present tax situation, analyze future scenarios and make recommendations to position your portfolio to reduce your tax liability. Securities America and its representatives do not provide tax advice; coordinate with your tax advisor regarding your specific situation.

DWM Plan Well logo

*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 July 2017. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI# 1853772.1

Weekly Market Notes – July 17, 2017

Weekly_Market_Notes

For the Week of July 17, 2017

The Markets

The Dow and the S&P 500 hit record highs Friday after some major banks reported better quarterly profits than expected and weak economic data reduced the likelihood of additional interest rate hikes this year. The S&P made its largest weekly gain since the end of May. For the week, the Dow rose 1.04 percent to close at 21,637.74. The S&P gained 1.42 percent to finish at 2,459.27, and the NASDAQ climbed 2.58 percent to end the week at 6,312.47.

Returns Through 7/14/17 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) 1.04 10.91 19.91 11.01 13.94
NASDAQ Composite (PR) 2.58 17.26 25.39 12.44 16.76
S&P 500 (TR) 1.42 11.05 16.05 9.84 15.06
Barclays US Agg Bond (TR) 0.45 2.36 -0.51 2.58 2.05
MSCI EAFE (TR) 2.38 15.97 19.11 1.95 9.41

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.

 

Jobs — In July 2009, there were 14.6 million unemployed Americans and 2.2 million job openings. In April 2017, there were 7.1 million unemployed Americans and 6 million job openings (source: Department of Labor, BTN Research).

Factory Work — United States corporations account for 19 percent of global manufacturing, second only to Chinese manufacturers who represent 25 percent of worldwide manufacturing. However, manufacturing accounts for just 12 percent of the U.S. economy today, down from 26 percent of our economy 50 years ago (source: Bloomberg BusinessWeek, BTN Research).

Why Not Longer? — As of the end of fiscal year 2017 (i.e., Sept. 30), only 14.2 percent of the outstanding debt of the U.S. will be older than 10 years based on original issuance type (source: Treasury Department, BTN Research).

 

WEEKLY FOCUS – Chip or No Chip: Identity Theft Still a Problem

Good news – the chip in your new credit or debit card is working. The flip side? Criminals are switching gears into other forms of identity theft. Chip card security, which is replacing decades-old, vulnerable magnetic strip technology, is designed to protect you against certain types of fraudulent transactions. Unfortunately, trying to stay ahead of identity thieves is like “squeezing Jell-O,” a Lifelock security expert said in a recent NBC News interview. Stop it in one area – “it squirts out someplace else.”

While the type of counterfeit fraud the new chip cards is designed to combat has, in fact, dropped, other types are on the rise. About one in every 16 U.S. adults fell prey to identity theft in 2016. Javelin Strategy & Research’s 2017 Identity Fraud Study found the use of stolen credit and debit card numbers to buy items online or over the phone jumped 40 percent last year. New account fraud, where criminals create new accounts in your name, but have the bill sent to another address, almost doubled during 2016.

Another type of identity theft involves stolen personal information. The criminal uses the information to access a credit or debit account and have a new card sent to them. These account takeovers rose dramatically last year, with an estimated loss of $2.3 million – up 61 percent over 2015.

While you can’t completely guard yourself from these crimes, you can reduce your risk. Check your financial accounts frequently and take advantage of free credit reports. Watch for a sudden drop in your credit score, strange credit inquiries and new accounts you didn’t open. Be aware that thieves hijack mobile phone accounts to intercept email and text messages for notifications and one-time passwords.

Other ways to reduce your risk: remove your name from marketing lists of the three credit reporting bureaus to limit pre-approved credit offers that could be stolen; harden your home computer by installing strong firewall and virus protection; and install software that identifies files or other software that make your personal information vulnerable to theft. Don’t carry extra credit cards, your birth certificate or passport, or other cards with your Social Security number, including your Medicare card.

To discuss more ways to secure your financial and personal information, call our office. We can help you develop a strategy to keep your information, and your finances, as secure as possible.

DWM Plan Well logo

* 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 July 2017. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#1848250.1

Weekly Market Notes – July 10, 2017

Weekly_Market_Notes

For the Week of July 10, 2017

The Markets

Falling energy prices and a positive jobs report helped stocks rebound Friday. Labor Department data showed the U.S. economy added 222,000 jobs in June, surpassing the 179,000 expected increase. The S&P saw its best gain in six sessions. For the week, the Dow rose 0.38 to close at 21,414.34. The S&P gained 0.14 percent to finish at 2,425.18, and the NASDAQ climbed 0.21 percent to end the week at 6,153.08.

Returns Through 7/7/17 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) 0.38 9.77 22.72 10.72 13.71
NASDAQ Composite (PR) 0.21 14.30 26.17 11.39 15.94
S&P 500 (TR) 0.14 9.49 18.03 9.33 14.77
Barclays US Agg Bond (TR) -0.37 1.90 -1.34 2.52 2.03
MSCI EAFE (TR) -0.47 13.27 21.60 0.83 8.73

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.

Lack of Planning — Of U.S. households, 52 percent with people at least age 55 had no money saved in any pre-tax defined contribution account, e.g., 401(k) or IRA (source: Government Accountability Office, BTN Research).

Ramping Up — The number of operating oil rigs in the U.S. reached 941 last week, up 43 percent YTD. The total has now increased for 23 consecutive weeks. The price of oil closed Friday, June 23, at $43.01 a barrel, down 20 percent YTD (source: Baker Hughes, BTN Research).

Better Recently — The Federal Reserve announced a target annual inflation rate of 2 percent in January 2012. In the 64 months since, trailing 12-month inflation (as measured by the CPI) has matched or exceeded 2 percent just 11 times but has reached that target rate in five of the last six months (source: Federal Reserve, BTN Research)

 

WEEKLY FOCUS – Mid-summer Tough Time for Charities

Most charities receive 60 percent of their annual donations in November and December. In contrast, they often take in the least during the summer months when many of us are enjoying the sun and the sights on well-deserved vacations – and not thinking about donations. Yet needs are often great at this time. Many non-profits’ fiscal year ends June 30, and they depend on donations to close in the black. Charities who serve the poor face increased demand for food as families must come up with hundreds of additional meals when children are home from school.

If you want to make a difference this summer, ensure your gift has the impact you desire; avoid making donations over the phone. A few years ago, the Federal Trade Commission charged four national cancer charities with defrauding consumers of $187 million by using telemarketers who gave false information on how gifts were used. If you get a solicitation call, hang up, research the charity and give directly.

After checking out the organization’s website, read independent reviews. Verify it is registered with the IRS as a tax-exempt organization by reviewing its Form 990. Although this form can be lengthy, you can find other basic information on it. Look for a clear description of the organization’s accomplishments, how much it spent on fundraising and how it compensated its CEO or other employees. Watch for board members and top executives who are related; leadership should be independent.

Another way to see how effectively the organization uses resources is to ask for its combined audited financial statement, which will contain information on all of its entities. At least 60 percent of a well-run organization’s funds should go to its programs or services. You can also check out an organization on websites that evaluate nonprofit companies, such as GuideStar.org, CharityNavigator.org, CharityWatch.org, GiveWell.org or Give.org.

Before donating, ask if the charity has a policy to keep your information confidential because many charities trade contact information with other organizations.

For information on targeting your charitable efforts, give our office a call. We can help you identify causes that align with your values. We can also work with your tax advisor to help you and your causes get the most benefit from your gifts. (We do not provide tax advice; coordinate with your tax advisor regarding your specific situation.)

DWM Plan Well logo

*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 July 2017. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#1842363.1