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.

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.

*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

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.

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.

* 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

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.

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.)

*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