Weekly Market Notes – January 27, 2020

Weekly_Market_Notes

For the Week of January 27, 2020

The Markets

Stocks slid in a broad sell-off Friday amid concern the spread of China’s coronavirus could disrupt travel and slow global economic growth. After the Centers for Disease Control and Prevention confirmed the second case of the virus in the U.S., the S&P saw its biggest one-day percentage drop in more than three months. For the week, the Dow fell 1.01 percent to close at 28,989.73. The S&P lost 0.63 percent to finish at 3,295.47, and the NASDAQ dropped 0.45 percent to end the week at 9,314.91.

Returns Through 1/24/20 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) -1.01 1.68 20.96 16.05 13.13
NASDAQ Composite (PR) -0.45 3.82 31.69 18.49 14.38
S&P 500 (TR) -0.63 2.10 27.24 15.34 12.22
Barclays US Agg Bond (TR) 0.70 1.30 9.66 4.46 3.01
MSCI EAFE (TR) -0.17 0.42 17.29 8.83 5.60

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 Own It Now — Banks foreclosed on 143,955 homes nationwide in 2019, down 37 percent from 230,305 foreclosures in 2018 and down 51 percent from 291,579 foreclosures in 2017. The worst single month of foreclosures in U.S. history – 102,134 foreclosures in Sept. 2010 (source: ATTOM Data Solutions, BTN Research).

Really Low — Inflation, as measured by the Consumer Price Index, was up 2.3 percent for 2019. For the decade of the 2010s, inflation was up just 1.8 percent per year, the lowest decade of inflation in the U.S. since the 1930s. By comparison, the decade of the 1970s suffered 7.4 percent annual inflation (source: Department of Labor, BTN Research).

New Law — On Dec. 20, 2019, President Trump signed the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019. The legislation increases the required minimum distribution age from 70½ to 72 for Americans who turn 70½ after Dec. 31, 2019 (source: Congress, BTN Research).

 

WEEKLY FOCUS – Prevent Tax Identity Theft

You may not be ready for tax season, but IRS imposters and identity thieves are. They’re just waiting to get your Social Security number, file a fraudulent tax return and claim your refund. If their scam goes well, you won’t know what happened until you file your return and the IRS rejects it as a duplicate. Leaving you with a lengthy wait for your return while the IRS investigates. Here are a few ways to thwart thieves.

Don’t take the bait. Ninety percent of all data thefts start with an email phishing scam.1 Learn to recognize warning signs like misspellings, generic messages and a false sense of urgency. Delete emails from people you don’t know or companies you don’t do business with. If you get an email that says there is problem with your account, contact the company directly using a known website or phone number. Never open links unless you are sure of the source.

Keep your mobile device and computer updated. Add two-factor authentication on your financial accounts, requiring a one-time code sent by text or email to log in.

Be a little anti-social, less open and less trusting. Thieves embed dangerous links in social media ads, messages, tweets and posts. Be particularly suspicious of posts that say you’ve won a gift card, promise gossipy details about a celebrity, warn your account will be closed, feature a test or survey, or redirect you to see a photo of yourself. Avoid sharing personal details on social media, such as your birthday, address, schedule or mother’s maiden name.

Head them off at the pass. File your return as early as possible, especially if your personal information may have been compromised in a data breach. Research a tax preparer before handing over your personal information. If you file yourself, mail your return directly from the post office or use a secure internet connection to file electronically.

Remember the IRS will not call, text or email. They’ll contact you by U.S. mail with an official seal. If you aren’t sure a communication is legitimate, call the IRS at 800-829-1040 to verify. If you fear you’ve been a victim of tax identity theft, call the IRS at 800-908-4490 or visit www.irs.gov/identitytheft.

If you would like more information about identity theft and protecting your confidential and important information, please contact our office. 1https://www.irs.gov/newsroom/national-tax-security-awareness-week-day-2-dont-take-the-bait-recognize-avoid-phishing-scams-from-identity-thieves

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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 January 2020. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI# 2923324.1

 

Weekly Market Notes – January 13, 2020

Weekly_Market_Notes

For the Week of January 13, 2020

The Markets

Middle East turmoil created a volatile week on Wall Street, but investors appeared to shake off geopolitical concerns on Friday as the Dow climbed above 29,000 for the first time. However, a decent but weaker-than-expected jobs report dampened enthusiasm, causing stocks to fall. Despite the disappointment, the major indexes posted weekly gains. For the week, the Dow rose 0.67 percent to close at 28,823.77. The S&P gained 0.98 percent to finish at 3,265.35, and the NASDAQ climbed 1.75 percent to end the week at 9,178.86.

Returns Through 1/10/20 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) 0.67 1.05 23.03 15.94 12.92
NASDAQ Composite (PR) 1.75 2.30 31.39 18.26 14.31
S&P 500 (TR) 0.98 1.13 28.30 15.18 12.09
Barclays US Agg Bond (TR) -0.09 0.45 9.20 4.06 2.96
MSCI EAFE (TR) -0.09 0.19 17.60 8.98 6.26

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.

Newborns — Our nation’s general fertility rate, defined as the number of births per 1,000 women between the ages of 15-44, was just 59 births in 2018, a record low for birth data that has been tracked nationally since 1909, the last 110 years (source: National Center for Health Statistics, BTN Research).

For the Year — The S&P 500 gained 31.5 percent (total return) during 2019, its best performance since 2013 and the 13th year in the last 25 years that the $28.1 trillion index has returned at least 15 percent (total return) for the calendar year (source: BTN Research).

Long-Term — The S&P 500 has gained an average of 10.6 percent per year (total return) over the last 50 years. The index has been positive in 15 of the last 17 years. Over the long term, the S&P 500 has been up during 40 of the last 50 years, or 80 percent of the time (source: BTN Research).

 

WEEKLY FOCUS – A Safe Deposit Box or A Home Safe?

Comparing bank safe deposit boxes to home safes can be difficult because of different needs and the variety of good, better and best options with home safes. Despite these variables, some general comparisons apply.

Security. Homes don’t have the same level of security banks offer from outside intruders. However, in rare cases, box owners have lost valuables, whether through internal, administrative error or failure to pay fees. Although bank vaults are usually reinforced to withstand natural disasters, they are not immune to fire or flood. To mediate risk, ask for a box in a high location and keep valuables in plastic bags or containers. Since flash drives can melt, it’s better to store digital items in an online backup – perhaps an online safe deposit box.

Content in a safe deposit box is not federally insured. Your home owner’s insurance may cover valuables in a home safe better. In either case, look at the limits of your policy and consider extra insurance or a separate rider as needed. Make sure to take photos, document the contents of your safe or box and check its contents regularly. And keep copies of important documents in a second location.

Access. Access to bank boxes is limited by the bank’s business hours. So, don’t keep anything you may need on short notice in a bank box, such as a passport, power of attorney or insurance policy. In the event of your death, the box will be sealed. This can be true even if other family members have access to the box. An executor cannot access the box unless they can provide proof they have authority to do so. In some cases, securing this proof can take weeks or even months. Because of this, it’s ill-advised to keep an original will or funeral directives in a deposit box.

Restrictions. Make sure to read your safe deposit box rental agreement for forbidden items, which could include cash, firearms or anything considered hazardous. Banks may also limit the combined value of your box’s contents.

Protecting your personal and financial information is our top priority. If you would like more information about the safeguards we have in place to protect your identity, please contact our office.

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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 January 2020. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#2903108.1

January 2020 Market Outlook- What May Tip The Scale?

2019 proved to be a year full of surprises. Trade wars and a global manufacturing decline weighed on the global economies in 2019, although interest rate cuts and resilient consumers provided a positive stock market outcome.

The question heading into 2020 is: What may tip the scale?

Will ongoing trade uncertainty and weakened manufacturing hurt job growth, finally dragging down the services and consumer side of the economy? Or will interest rate cuts and a resolution of the trade war spark a fresh round of global economic growth?

Key takeaways:

  • The U.S. economy will likely remain split in early 2020, with manufacturing and business investment still struggling amid trade uncertainty but services activity and consumer spending healthy.
  • A preliminary U.S.-China trade deal might stabilize corporate confidence, but a strong business investment environment likely requires a comprehensive trade deal.
  • A global recession could occur if the manufacturing slowdown spreads to jobs and consumers.
  • The Fed’s 2019 rate cuts should support the economy and stocks, although the cuts are only a partial cure for what ails manufacturing and corporate profits.

1.7.2020_MONTHLY_OUTLOOK_CHART_1

Investing in 2020:

I have an increasing concern that equity prices may be out of line with corporate fundamentals (profits).

Although the stock market continues reaching record highs, companies are making less than they did five years ago, so this performance is largely driven by Price/Earnings (P/E) expansion. The gap between the S&P 500 and corporate profits hasn’t been this wide since the Tech Bubble in the late 1990s, another period when the S&P 500 had strong gains despite stagnant earnings.

1.7.2020_MONTHLY_OUTLOOK_CHART_2

Source: St. Louis Fed, Yahoo Finance

 

Risks I am watching:

  • Geopolitical risks – recently heightened by the US action in Iran
  • Election year – always creates uncertainty and therefore volatility
  • Global Trade relations – do the US & China strike a deal, do the US & Europe have a trade dispute, does the UK leaving the EU create problems in Europe.

Stay tuned!

I hope this note provides useful information.  Please feel free to share it with family and friends.

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

  • January is National Blood Donation Month.  Let’s all give a pint to help another.

 

January   5th                    My granddaughter Isys turns 14.  I must be getting old.

January 10th                    My better half, Eloise’s birthday.

January 15th                    10th anniversary of my independent practice – thank you to all my loyal clients.

January 20th                    Martin Luther King Day.  Let’s pray for more racial tolerance and understanding.

 

Sources: Schwab Investment Management, CNBC, Yahoo Finance

 

 

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 – January 6, 2020

Weekly_Market_Notes

For the Week of January 6, 2020

The Markets

Stocks fell across the board Friday after a U.S. air strike in Iraq killed Iran’s top military commander and escalated Middle East tensions. Crude oil prices surged in the wake of the strike. Along with geopolitical concerns, data showed U.S. factory activity shrank in December. For the week, the Dow was unchanged and closed at 28,634.88. The S&P lost 0.12 percent to finish at 3,234.85, and the NASDAQ rose 0.16 percent to end the week at 9,020.77.

Returns Through 1/03/20 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) 0.00 0.38 29.31 15.65 12.66
NASDAQ Composite (PR) 0.16 0.54 39.56 18.46 13.80
S&P 500 (TR) -0.12 0.15 34.82 15.01 11.74
Barclays US Agg Bond (TR) 0.40 0.54 8.56 4.23 3.11
MSCI EAFE (TR) -0.01 0.27 23.04 9.82 5.88

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.

 

Way Behind — After adjusting for the impact of inflation, an average millennial in 2019 had a net worth 41 percent less than the net worth of a similarly aged adult 30 years earlier in 1989. Millennials were born between 1981-97 and were age 22-38 in 2019 (source: Federal Reserve Bank of St. Louis, BTN Research).

We’re Almost Even — The U.S. has 121 companies in the Fortune Global 500 rankings for 2019 compared to 119 companies from China. Twenty years ago, the U.S. had 181 companies in the Fortune Global 500 rankings while China had just five. The rankings are based upon annual revenues (source: Fortune, BTN Research).

Shifting Away From China — U.S. manufacturers have moved some of their supply chains away from China in 2019, increasing imports from Taiwan (up 22 percent YTD through May 31, 2019), from India (up 12 percent YTD) and from South Korea (up 12 percent YTD) (source: Commerce Department, BTN Research).

 

WEEKLY FOCUS – Making Successful Financial Goals in 2020

There’s a good chance you’re among the 45 percent of Americans who made New Year’s resolutions last year, according to a report from the University of Scranton’s Journal of Clinical Psychology. It’s less likely you’re one of the 8 percent of resolution-makers to see them to fruition. But don’t despair. The good news? You get a reset every year.

Make realistic resolutions for 2020 and consider these financial goals.

Evaluate how much you’re worth. It’s an arbitrary date, but the New Year is as good a time as any to calculate your financial worth. This is a solid first step in assessing your financial health and establishing financial goals. Itemizing your assets and identifying liabilities will provide a clear picture of your priorities and reveal where you need to change spending and saving habits. You could even plan to recalculate your net worth every New Year to refine your financial strategy.

Refine/Reset Your Retirement Savings. If you don’t already, think about maxing out retirement contributions in your 401(k), 403(b) or 457 plan. Budget how much you can realistically afford to save each pay period. Instruct your employer to withhold enough salary deferrals to make sure you contribute, as much as possible, the maximum limit each year. If you’ll be 50 or older by Dec. 31, you can increase your contributions to take advantage of catch-up contributions.

If you’re self-employed, you can contribute to a SEP IRA or SOLO 401(k) plan. If you also work for another employer, you may be able to contribute to an individual retirement account and your employer’s 401(k) – provided your income meets the guidelines. The catch-up provision also applies here. The rules for contributing to multiple plans can be complex; please see the IRS website or a tax consultant for more details.

Silo Your Savings. If you’re like most people, easy access to your funds can be more than tempting. To help safeguard your financial efforts, eliminate the temptation. Automate savings transfers from checking to specially designated, separate savings or investment accounts that aren’t as easily accessed.

Call our office today. We can help you determine your net worth and develop realistic and timely financial goals. Securities America and its advisors do not provide tax advice.

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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 January 2020. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#2892536.1

Weekly Market Notes – December 23, 2019

Weekly_Market_Notes

For the Week of December 23, 2019

The Markets

The three major indexes attained record closing highs on Friday. Several factors boosted investor confidence: unemployment at 50-year lows, President Trump’s positive remark regarding a conversation about the trade deal with China’s president and an upwardly revised report on consumer spending in the third quarter. For the week, the Dow rose 1.14 percent to close at 28,455.09. The S&P gained 1.68 percent to finish at 3,221.22, and the NASDAQ climbed 2.18 percent to end the week at 8,924.96.

Returns Through 12/20/19 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) 1.14 24.98 27.54 15.21 12.55
NASDAQ Composite (PR) 2.18 34.51 36.71 17.63 13.37
S&P 500 (TR) 1.68 31.05 33.21 14.62 11.51
Barclays US Agg Bond (TR) -0.30 8.54 9.00 4.28 3.05
MSCI EAFE (TR) 0.64 21.43 21.97 9.70 5.49

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.

 

Mind Boggling — As of Thursday, Dec. 12, our national debt is $23.1 trillion. If the United States was to pay down the national debt by $1 million a minute ($1.44 billion a day), it would still take 44 years to extinguish $23.1 trillion of debt (source: Treasury Department, BTN Research)

Just Our Interest Expense — The government paid $376 billion of interest expense on our nation’s outstanding debt during fiscal year 2019; that equals roughly $1 billion per day (source: Treasury Department, BTN Research).

Where Have You Been? — 61 percent of 1,010 Americans adults surveyed in November 2019 indicated the stock market has had no impact or not much impact on their personal finances, suggesting they hold limited to no equity investments. 18 percent of those surveyed thought the stock market had declined YTD, when really, the S&P 500 was up 28.9 percent YTD (total return) through Friday, Dec. 13 (source: Peter G. Peterson Foundation, BTN Research).

 

WEEKLY FOCUS – Smart Spending Can Save You Money in the Year Ahead

As you look ahead to 2020 and start setting financial goals, don’t forget to also make plans on how you’ll spend your money. Of course, it’s wise to save and invest. But by spending your money smartly on the right things, you may improve the quality of your life and even save more money over the long run. Here are just a few key areas you may want to focus on as you set your spending goals for the year ahead.

Home Improvement: Your home is a big investment, and improvements help increase its value over the long run and may save you from being hit with large unexpected repair bills. Start by going room to room and make a prioritized list of improvements and upgrades, set a budget and shop around for the best prices on service and supplies. Also consider upgrading appliances and your furnace and air conditioning to more energy-efficient models.

Self-Improvement: Investing in your health today may save you from facing major health care expenses or having to miss work due to illness or injury down the road. But before you purchase an expensive piece of exercise equipment or a gym membership, be sure you are fully committed to using it all year long and beyond. Maintaining good health isn’t just about exercise. You also may want to buy better quality foods, take a long overdue vacation and purchase resources that will alleviate stress, improve sleep quality, ease pain, keep your teeth healthier or help you quit smoking.

Items that Can Save You Money: Upgrading to a programmable thermostat can potentially save you hundreds of dollars each year in heating- and cooling-related expenses. By installing water filters you can enjoy the same quality of drinking water found in much more expensive bottled water at a fraction of the cost. Adding low-flow shower heads and faucet aerators can help lower your water bill. And replacing standard light bulbs with long-lasting LEDs can significantly reduce electricity costs.

Also, be sure to schedule your car for regular maintenance to keep it running at peak performance, which can improve fuel economy and reduce the chances for costly repairs.

These are just a few suggestions to help you spend wisely in the year ahead. If you would like to discuss these and other ways you can save and invest your hard-earned money, please contact my office today to schedule an appointment.

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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# 2881971.1

Weekly Market Notes – December 16, 2019

Weekly_Market_Notes

For the Week of December 16, 2019

The Markets

Stocks closed slightly higher Friday after President Trump and Chinese officials announced a phase-one trade deal. The increase helped the S&P 500 and the NASDAQ notch all-time highs. The trade agreement reduces some U.S. tariffs in exchange for larger Chinese purchases of American farm products and some progress on the issue of China’s intellectual property theft. For the week, the Dow rose 0.49 percent to close at 28,135.38. The S&P gained 0.77 percent to finish at 3,168.80, and the NASDAQ climbed 0.91 percent to end at 8,734.88.

Returns Through 12/13/19 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) 0.49 23.57 17.21 14.89 12.97
NASDAQ Composite (PR) 0.91 31.64 23.54 16.93 13.42
S&P 500 (TR) 0.77 28.89 22.00 13.98 11.89
Barclays US Agg Bond (TR) 0.29 8.87 10.00 4.24 3.06
MSCI EAFE (TR) 1.72 20.66 17.11 8.87 5.54

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.

Has Not Happened Yet — 65 percent of 500 global money managers surveyed in October and November 2018, predicted the U.S. stock bull market would end in 2019. The current bull market run is three months short of 11 years in length. The survey included investors in 28 countries worldwide (source: Natixis Investment Managers, BTN Research).

Are We Twice as Healthy? — The United States spends 18 percent of its $21.5 trillion gross domestic product (GDP) on health-care expenditures, more than double the 8.6 percent of GDP spent by 35 other major economies throughout the world (source: Organization for Economic Cooperation and Development, BTN Research).

Keeping the Lights On — The Department of Energy predicts 38 percent of U.S. electricity in 2020 will be generated by natural gas, 22 percent from coal, 20 percent from nuclear power plants, 7 percent from hydropower (water) and the remaining 13 percent from wind, solar and other suppliers (source: Department of Energy, BTN Research).

 

WEEKLY FOCUS – Year-End Money Moves

As 2019 quickly draws to a close, it may be wise to consider making some last-minute moves to get your finances in the best possible shape for the new year. Here are a few steps to consider:

Max out your retirement contributions. For 2019, you can contribute $19,000 to your 401(k), but it must be funded by Dec. 31. You can contribute $6,000 to your IRA, and you actually have until the 2020 April tax deadline to do so. If you’re 50 or older, you can contribute an extra $6,000 to your workplace plan or another $1,000 to your IRA.

Make sure you’ve paid enough income tax to avoid a surprise tax bill. This is especially important for couples and people who have switched jobs or have multiple jobs. The tax withholding calculator on the IRS site can help.

Take any Required Minimum Distributions from your tax-advantaged retirement accounts by Dec. 31. Fail to do so, and you’ll pay a 50 percent penalty on the amount you should have withdrawn. (If you just turned 70½ in 2019, you have until April 1 to withdraw the necessary funds. But you’ll have to take two distributions in 2020.)

Rebalance your portfolio. Perhaps a certain class of investments has grown disproportionately to others. You may want to move some investments to maintain your desired balance of risk versus growth. Or, you may consider tax loss harvesting your investments – selling some losing stocks off. You can use up to $3,000 in short-term losses to offset $3,000 of income each year.

Strategize your giving. Determine whether it pays to itemize your 2019 taxes. If it does, you may want to donate several years’ worth of charitable giving in the next few weeks. You may also want to begin transferring some wealth to a child or grandchild. The IRS allows you to gift up to $15,000 without triggering gift tax issues.

Don’t forget your health accounts. Max out your Health Savings Account contributions. With a qualifying health plan, you can contribute $3,500 to an HSA as an individual or $7,000 for family coverage. If you’re 55 or older, add $1,000. If you have a Flexible Spending Account, make sure to use any funds that won’t roll over.

We can help you evaluate if any of these year-end money moves are right for you. Call our office today to schedule an appointment for a consultation. Securities America and its representatives do not provide tax advice; coordinate with your tax advisor regarding your specific situation.

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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#2873456.1

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