For the Week of October 30, 2017

The Markets

Wall Street climbed higher on Friday after Amazon shares sent the tech sector surging and drove the Nasdaq to its best day in nearly a year. For the week, the Dow rose 0.45 percent to close at 23,434.19. The S&P gained 0.23 percent to finish at 2,581.07, and the NASDAQ climbed 1.09 percent to end the week at 6,701.26.

Returns Through 10/27/17	1 Week	YTD	1 Year	3 Year	5 Year
Dow Jones Industrials (TR)	0.45	20.87	32.19	14.54	15.16
NASDAQ Composite (PR)	1.09	24.49	28.48	14.31	17.53
S&P 500 (TR)	0.23	17.16	23.50	11.91	15.24
Barclays US Agg Bond (TR)	-0.10	2.91	0.68	2.20	2.03
MSCI EAFE (TR)	-0.34	21.05	22.60	6.60	8.41

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.

 

Better Than Average – The S&P 500 is up 16.9 percent YTD (total return) through Friday, Oct. 20, 2017, more than half again larger than the index’s trailing 50-year (1967-2016) average annual return of 10.2 percent (source: BTN Research).

If It Happened Today – When the S&P 500 fell 58 points on Black Monday (Oct. 19, 1987), the tumble represented a fall of 20.5 percent. A 20.5 percent decline on the Friday Oct. 20, 2017 closing index value of 2,575 would equate to a fall of 528 points (source: BTN Research).

Looking Into the Future – Just one of 10 Wall Street equity strategists polled by Barron’s on Dec. 17, 2016 forecasted a year-end 2017 closing value for the S&P 500 above 2500. The S&P 500 index closed at 2,575 on Friday, Oct. 20, 2017 (source: Barron’s, BTN Research).

 

WEEKLY FOCUS – What Women Should Know About Social Security

As a group, women face greater retirement challenges than their male counterparts. Women are less frequently covered by private retirement plans, and they still make less on the job. In 2016, full-time female workers earned 80 percent of what male workers made.* Along with those obstacles, they lose significant wages when they “off-ramp” from work to care for young children or aging relatives.

All of these factors leave women with fewer savings at retirement time, making them more reliant on their lower monthly Social Security benefits. And because they live more years, they need those benefits longer. That’s why it’s particularly important women understand the following:

They may be able to make up for lost time. Social Security benefits are calculated using a percentage of average monthly wages during an individual’s 35 highest earning years. Working through their 60s may help women knock out their earlier, lower-income years and/or caregiving years when they produced little if any earnings.

In addition to raising their average income on which benefits are based, women can also boost their monthly checks by waiting to claim them. Individuals born in 1943 or later can increase their benefits by 8 percent for each year they delay drawing them after their full retirement age.

They should make the most of spousal benefits. Women who worked in lower paying roles or served as homemakers or caregivers for extended periods may find a spousal benefit is greater than their own. Divorcees who were married for at least 10 years, have been divorced two years and are unmarried when they become eligible for Social Security can collect a percentage of their former spouse’s benefits or survivor benefits (up to 100 percent) if he is deceased.

If a wife will rely on her husband’s earnings record, waiting until he is 70 to draw his Social Security will increase her 50 percent spousal benefit while he is alive and increase her survivor benefit if he dies first.  A widow who did not remarry before turning 60 or is unmarried at retirement age may take a survivor benefit based on her husband’s earnings at her full retirement age and switch to her own benefit when she turns 70 (if it is higher).

If you or a loved one has concerns about maximizing your Social Security benefits as part of your comprehensive retirement plan, please contact our office.

*http://www.aauw.org/research/the-simple-truth-about-the-gender-pay-gap/

*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 October 2017. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#1935443.1

For the Week of October 23, 2017

The Markets

The Dow Jones Industrial Average broke 23,000 for the first time on Wednesday. The three major indexes closed at record highs Friday after the Senate passed a budget resolution, making it easier for President Trump’s tax reform plan to move forward. For the week, the Dow rose 2.04 percent to close at 23,328.63. The S&P gained 0.88 percent to finish at 2,575.21, and the NASDAQ climbed 0.35 percent to end the week at 6,629.05.

Returns Through 10/20/17	1 Week	YTD	1 Year	3 Year	5 Year
Dow Jones Industrials (TR)	2.04	20.33	31.65	15.34	14.64
NASDAQ Composite (PR)	0.35	23.15	26.46	15.38	17.14
S&P 500 (TR)	0.88	16.88	22.75	12.95	14.84
Barclays US Agg Bond (TR)	-0.45	3.01	0.31	2.14	2.04
MSCI EAFE (TR)	-0.31	21.46	22.11	7.41	8.08

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.

 

Living Longer — Life expectancy at birth for an American has increased 6.9 years over the last 40 years, i.e., life expectancy at birth is increasing by one year every six years (source: National Vital Statistics Report, BTN Research).

National Debt, Annual Deficit — For fiscal year 2017 (the 12 months that ended Sept. 30, 2017), the United States increased its national debt by $671 billion to $20.245 trillion. For fiscal year 2017, the United States is expecting a $668 billion budget deficit with a final deficit number to be released this week (source: Treasury Department, BTN Research).

Growing — The U.S. economy has been growing for the last 99 months (i.e., no recession), an expansion exceeded in length only twice since 1900 (source: National Bureau of Economic Research, BTN Research).

 

WEEKLY FOCUS – Don’t Let Unexpected Expenses Derail Your Retirement

While it’s natural to look ahead to a leisurely retirement, it’s prudent to prepare for expenses that catch many retirees by surprise. In a recent survey, nearly one-third of retirees reported they faced at least four unforeseen expenses during retirement. Here are some of the most common:
Inflation: Over the past 10 years, inflation has averaged 3.22 percent. Even at a more modest rate, the price of some goods and services may double over the next 20-30 years. To guard against inflation, retain some investments that will continue to grow your money, or your retirement funds will lose their purchasing power over time.

Home Expenses: You’ll need to budget for more than the occasional paint job during retirement. A recent study shows 28 percent of retirees and 34 percent of retired widows paid for major home repairs and upgrades during retirement.* Repairs may not be the only drain. If the value of your house declines dramatically, like many homes did in 2008, you may not be able to sell it without a loss. To protect yourself from another big drop in the housing market, pay off your mortgage or downsize before you retire.

Social Security and Other Taxes: Paying taxes into Social Security doesn’t stop when you start collecting benefits. Up to 85 percent of Social Security benefits are taxable, and the income threshold that triggers taxes is low – just $32,000 for a married couple. All that pre-tax money you put into your 401(k) or traditional IRA is taxed at your top ordinary-income tax rate when you withdraw those funds. To mitigate the impact of taxes, consider withdrawing from those accounts earlier or put money into a Roth IRA, which has no required minimum withdrawals and can be tapped without paying taxes.

Living Longer: The good news is people are living longer. The bad news is many aren’t financially prepared. When planning for retirement, expect to live longer than your parents and grandparents did and plan accordingly. To ensure you have a reliable stream of income, consider purchasing one of the many retirement vehicles that provide guaranteed payments for life.

Retirement is something most of us look forward to. Ensure your plans aren’t derailed by these unexpected expenses and others. Make sure you’re on the right track. Contact our office for a review of your financial situation and an evaluation of your goals.

*http://www.thinkadvisor.com/2016/05/26/17-unexpected-expenses-in-retirement?page_all=1&slreturn=1508275949

*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 October 2017. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI# 1929625.1

For the Week of October 16, 2017

The Markets

After several upbeat economic reports buoyed investor confidence, the three indexes rose, and the Dow and S&P 500 saw their fifth week of gains. Data revealed retail sales rose in September; consumer prices increased; and inflation remained muted. According to a University of Michigan report, consumer sentiment was the highest since January 2004. For the week, the Dow rose 0.43 percent to close at 22,871.72. The S&P gained 0.17 percent to finish at 2,553.17, and the NASDAQ climbed 0.24 percent to end the week at 6,605.80.

Returns Through 10/13/17	1 Week	YTD	1 Year	3 Year	5 Year
Dow Jones Industrials (TR)	0.43	17.92	29.54	14.76	14.22
NASDAQ Composite (PR)	0.24	22.71	26.71	16.17	16.76
S&P 500 (TR)	0.17	15.86	22.21	13.20	14.72
Barclays US Agg Bond (TR)	0.48	3.48	0.85	2.48	2.10
MSCI EAFE (TR)	1.63	21.84	24.41	7.35	8.68

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.

 

The World’s Biggest — The U.S. economy was $19.25 trillion in size as of June 30, 2017. Ten years ago (2007), the economy was worth $14.48 trillion. Twenty years ago (1997), it was worth $8.61 trillion. Thirty years ago (1987), it was worth $4.87 trillion (source: Commerce Department, BTN Research).

High After High — During its 103 month-long bull market, the S&P 500 has set 169 all-time record closing highs including its most recent on Thursday, Oct. 5, its sixth in the last seven trading days (source: BTN Research).

Rollin’ On — The S&P 500 gained 4.5 percent (total return) during the third quarter of 2017, its eighth consecutive gain in a quarter. It also marked the 18th of the last 19 quarters that have produced a total return gain (source: BTN Research).

 

WEEKLY FOCUS – The Start of Medicare Open Enrollment

Because Medicare Advantage and drug plans change from year to year, recipients should carefully review and compare policies during Open Enrollment (October 15 – December 7). It’s important to make sure their doctors and hospitals are in network, verify regular prescriptions are covered and check the policy ratings using the Medicare five-star ratings system inside the Medicare Plan Finder tool at Medicare.Gov.

During this time, enrollees have these options regarding their 2018 coverage:

• Keep their current medical and drug coverage.
• Switch their Advantage plan (a private plan that replaces Medicare Parts A and B, and usually includes a Part D drug plan).
• Switch from original Medicare to an Advantage plan or vice versa.
• Sign up for, drop or switch a Part D plan.

Enrollees can’t or may not be able to…

• Use Open Enrollment to enroll in Medicare Part A (hospital insurance) and/or B (medical insurance) for the first time.
• Buy or switch a Medigap plan (a private policy covering co-payments and deductibles not covered by original Medicare). Although federal law prohibits Medigap providers from rejecting an applicant with pre-existing health conditions during the six-month period surrounding their birthday, they may turn these individuals down later or charge them higher premiums.

Good and bad news. Expect increased costs for Part D. The initial deductible will increase $5; the initial coverage limit will increase $50; and the out-of-pocket threshold will increase $50. Expect better security. Medicare will stop using Social Security numbers for identification and will begin issuing new ID cards with Medicare beneficiary identifiers instead of Social Security numbers in April of 2018. This will allow seniors to protect their identity by not carrying or providing Social Security numbers unnecessarily.

Medicare premiums and other healthcare costs will continue to increase as a percentage of retirees’ living expenses. Contact our office for help in determining if your existing plan for your retirement allows sufficient funds for these expenses.

* 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 October 2017. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI# 1923451.1

For the Week of October 9, 2017

The Markets

After the Labor Department’s report showed the first monthly decline in nonfarm jobs in seven years, the Dow and the S&P 500 dipped into the red. However, the NASDAQ closed higher for the ninth day and squeezed into a record close. For the week, the Dow rose 1.70 percent to close at 22,773.67. The S&P gained 1.25 percent to finish at 2,549.33, and the NASDAQ climbed 1.45 percent to end the week at 6,590.18.

Returns Through 10/6/17	1 Week	YTD	1 Year	3 Year	5 Year
Dow Jones Industrials (TR)	1.70	17.42	27.78	13.08	13.64
NASDAQ Composite (PR)	1.45	22.42	24.18	13.94	16.01
S&P 500 (TR)	1.25	15.67	20.43	11.40	14.17
Barclays US Agg Bond (TR)	-0.15	2.98	0.45	2.48	2.08
MSCI EAFE (TR)	-0.06	19.89	19.50	5.75	7.88

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.

 

No Drops — The S&P 500 has experienced 10 drops of at least 5 percent during its bull market run that will reach 103 months in length this week (Oct. 9, 2017) but none since Feb. 11, 2016, or 19.5 months ago (source: BTN Research).

Last Quarter of the Year — Over the past 25 years (1992-2016), the S&P 500 stock index has gained an average of 4.9 percent (total return) over the final three months of the year. Twenty of the past 25 fourth quarters (80 percent) have produced a positive total return gain (source: BTN Research).

Just One Month to Go — With just September remaining in fiscal year 2017, the budget deficit to date is $674 billion. The last five Septembers have reported a budget surplus that has averaged $76 billion. The deficit from fiscal year 2016 was $587 billion (source: Treasury Department, BTN Research).

 

WEEKLY FOCUS – Preparing Financially for Natural Disasters

If you live in a part of the country prone to natural disaster, you’re probably prepared for an emergency. Extra water, flashlights, last year’s tax returns… Wait. Tax returns?

We hear about physical preparations for natural disaster but what about financial preparations?

When disaster hits, you might only have enough time to ensure the physical safety of your family. But once the immediate danger passes, you may need a Financial Emergency Kit for the recovery process.

What are some of the things you need to include in your Financial Emergency Kit?

• Cash and keys. Make sure there is enough ready cash for food, lodging and miscellaneous expenses. You can include an extra credit card, but cash is king during most emergencies. Pack an extra set of essential keys to cars, house and safe deposit boxes.
• Pre-storm photos or video of your home, both inside and out.
• A list of everything of value in and around your home, their approximate value and receipts, if possible.
• Copies of important documents like your homeowner’s insurance policy, mortgage agreement, deeds, health care proxies, bank statements, credit card bills and information needed to file tax returns.
• A list of telephone numbers and email addresses for family members and key medical, financial and business contacts.
• Personal identification: You may need to confirm your identity to file for disaster relief services and insurance claims or access property and financial assets.

There are four basic steps in being financially prepared for a disaster. Gather the contents for your kit, including important documents and contact information. Review insurance policies and financial papers to ensure they are accurate and up-to-date. Make sure paper and electronic copies of all files are stored in a safe, easy-to-access location. Schedule a regular meeting for updating it; pair it with your yearly financial planning review.

Don’t wait until disaster hits. Call our office today. We can help you come up with a practical pre-disaster/storm checklist for your Financial Emergency Kit.

* 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 October 2017. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#1917359.1