Weekly Market Notes – November 27, 2017

Weekly_Market_Notes

For the Week of November 27, 2017

The Markets

Wall Street broke several records during Friday’s half session. The S&P closed above 2,600 points for the first time. The NASDAQ ended at a record high and posted its best weekly performance since early September. The Dow also booked its first weekly gain in three weeks. For the week, the Dow rose 0.89 percent to close at 23,557.99. The S&P gained 0.93 percent to finish at 2,602.42, and the NASDAQ climbed 1.57 percent to end the week at 6,889.16.

Returns Through 11/24/17 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) 0.89 21.83 26.44 12.55 15.43
NASDAQ Composite (PR) 1.57 27.98 28.04 13.16 18.35
S&P 500 (TR) 0.93 18.36 20.45 10.23 15.46
Barclays US Agg Bond (TR) 0.19 3.39 3.65 2.38 2.10
MSCI EAFE (TR) 1.88 23.22 27.79 6.15 8.52

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 Federal Income Taxes — Of American taxpayers, 54 percent (49.8 million out of 92.4 million returns) who reported adjusted gross income less than $50,000 during tax year 2015 did not pay any federal income tax (source: Internal Revenue Service, BTN Research).
We Sell, They Buy — U.S. exports of goods and services to China have increased tenfold since 1999, rising from $17 billion in 1999 to $170 billion in 2016 (source: Commerce Department, BTN Research).

 

Standard of Living — China’s economy is the second largest in the world behind the United States, but China’s GDP per person is only $9,377 while the United States’ GDP per person is $61,687 (source: IMF, BTN Research).

 

WEEKLY FOCUS – Smart Giving Tips

Whether it’s due to the holiday spirit or taking advantage of tax deductions before it’s too late, one-fourth of all charitable donations are typically made in the last six weeks of the calendar year. That’s why your mailbox is likely filled with pleas from philanthropic organizations. Just as you try to be a mindful shopper who avoids impulse purchases, it’s important to be a careful giver who thoughtfully evaluates those emotion-tugging appeals. The following tips can help.

Plan ahead. You can’t buy gifts for every friend and relative, and you can’t donate to every worthy cause. So rather than waiting for organizations to come to you, consider what areas you’re most passionate about, thoroughly research prospective charities and choose groups who address your concerns most effectively and efficiently.

Check out national organizations on charity rating sites like GuideStar.org, CharityNavigator.org or the Better Business Bureau Wise Giving Alliance site, Give.org. Evaluate local nonprofits by reading their annual report, audited financial statement and IRS Form 990. Look for entities that spend 75 percent of their budgets directly on programs. You might even volunteer and observe their programming in action.

Concentrate support. After you’ve identified charities with reputations for performing well, narrow your choices. Although diversification works well when investing in stocks, it’s less effective when investing in charities. Giving more to fewer organizations allows them to spend less on fundraising, keep operating costs low and plan strategically.

Budget for giving. Once you’ve chosen your favorite nonprofits, decide how much you want to give and make room in your budget. See if you can make your gifts go farther by participating in a matching program through your employer or a generous donor.

Be tax smart. You can’t deduct donations unless you itemize your tax return and give to a 501(c)(3) tax-exempt entity. (To check whether a charity qualifies, visit the IRS webpage, https://apps.irs.gov/app/eos/). If you receive something in return for your gift (i.e., a dinner or a book), its value must be subtracted from your donation. A cancelled check or credit card statement is adequate for gifts under $250, but you’ll need a receipt for gifts above that.

For more information on targeting your charitable efforts, give our office a call. 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.

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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 November. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#1956937.1

Weekly Market Notes – November 20, 2017

Weekly_Market_Notes

For the Week of November 20, 2017

The Markets

Although the House of Representatives approved a tax cut package, early reports of resistance in the Senate dampened investors’ outlooks Friday. The S&P 500 and the Dow declined for the second week in a row. The NASDAQ also slipped. For the week, the Dow fell 0.19 percent to close at 23,358.24. The S&P lost 0.06 percent to finish at 2,578.85, and the NASDAQ rose 0.47 percent to end the week at 6,782.79.

Returns Through 11/17/17 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) -0.19 20.76 26.55 12.60 16.01
NASDAQ Composite (PR) 0.47 26.00 27.16 13.24 18.91
S&P 500 (TR) -0.06 17.27 20.33 10.41 16.08
Barclays US Agg Bond (TR) 0.24 3.20 2.97 2.40 2.00
MSCI EAFE (TR) -0.59 20.95 24.90 6.05 9.14

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.

 

Supply and Demand — The price of oil closed at $57.35 a barrel on Monday, Nov. 6, 2017, its highest close since oil finished at $59.01 a barrel on June 30, 2015, or more than 28 months ago (source: NYMEX, BTN Research).

Complete Cycle — The jobless rate in the United States was 5.0 percent in October 2005, then doubled to 10.0 percent by October 2009, and now has come full circle to 4.1 percent in October 2017. The last time we had an unemployment rate that was lower than 4.1 percent was in December 2000, or almost 17 years ago (source: Department of Labor, BTN Research).

Increase Everyone — Individual income taxes paid by American taxpayers would have to increase by 42 percent to eliminate our $666 billion deficit from fiscal year 2017 (source: Treasury Department, BTN Research).

 

WEEKLY FOCUS – November Is Long-Term Care Insurance Awareness Month

More than 50 percent of Americans will require long-term care (LTC) at some point in their lives. If you’re over 65, you stand a 66 percent chance of needing LTC. If you haven’t thought about it before, now is the time to consider preparing for that possibility. Many advisors recommend buying LTC insurance at age 50-65, although some suggest 30-40 to nail down lower premiums. Keep in mind, the older you are when you buy it, the more expensive it will be.

Here are some things to consider when looking at policies:

  • The elimination period, or how many days before your benefits begin after you start receiving care. The longer the elimination period, the lower your annual premium.
  • The benefit period, the length of time the policy continues to pay benefits, also affects the price of the premium.
  • Inflation riders allow an annual increase in the daily benefit to account for the rising cost of inflation. With an increasing elderly population, the costs of LTC could rise by five percent or more annually.
  • Daily benefits represent the amount the insurer pays to cover daily care. Keep in mind, a nursing home can be less expensive than the costs associated with in-home care, depending upon the level of care required.

 

LTC insurance has its drawbacks. The cost is climbing faster than the rate of inflation; not everyone is eligible; and it’s a use-it-or-lose-it product.

Are there alternatives? Yes. If you have enough liquid assets, you could consider cashing in investment products such as stock shares. You could also consider term or permanent life insurance policies with accelerated benefit riders.

Veterans and their spouses can take advantage of the Veterans Aid & Attendance Pension Benefit, which provides up to $1,794 per month to a veteran, $1,153 to a surviving spouse or $2,127 to a couple. The tax-free money can be used for in-home care, an assisted living community or private nursing home.

Call our office today. We can help you explore your options in LTC coverage to provide peace of mind.

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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 November 2017. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI# 1953391.1

Weekly Market Notes – November 13, 2017

Weekly_Market_Notes

For the Week of November 13, 2017

The Markets

As investors worried about the future of corporate tax cuts after Republican lawmakers unveiled dueling tax plans, Wall Street ended lower on Friday with losses in Apple and Intel. For the week, the Dow fell 0.35 percent to close at 23,422.21. The S&P fell 0.14 percent to finish at 2,582.30, and the NASDAQ fell 0.20 percent to end the week at 6,750.94.

Returns Through 11/10/17 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) -0.35 20.99 27.60 12.78 15.67
NASDAQ Composite (PR) -0.20 25.41 29.61 13.22 18.37
S&P 500 (TR) -0.14 17.33 21.57 10.51 15.77
Barclays US Agg Bond (TR) -0.40 2.95 2.01 2.36 1.95
MSCI EAFE (TR) -0.40 21.67 24.72 6.17 8.83

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.

More and More Renters — The 111.4 million households that existed in the United States on Sept. 30, 2009 were split between 75.3 million owners and 36.1 million renters. The 119.1 million households in the United States on Sept. 30, 2017 were split between 76.2 million owners and 42.9 million renters (source: Census Bureau, BTN Research).

Long Time Without Work — As of Oct. 31, 2017, 24.8 percent of unemployed Americans have been out-of-work for at least 27 weeks, i.e., jobless for more than six months. On April 30, 2010, or 7.5 years ago, 45.5 percent of unemployed Americans had been out-of-work for at least 27 weeks (source: Department of Labor, BTN Research).

Tight Budget — 34 percent of American households headed by seniors at least age 65 receive 90 percent or more of their annual income from their Social Security retirement benefits (source: Government Accountability Office, BTN Research).

 

WEEKLY FOCUS – Honoring and Supporting Caregivers

November has been proclaimed National Family Caregivers Month to honor those who selflessly care for loved ones who need help with daily tasks. Caregivers include millennials helping parents or grandparents, parents supporting disabled children and senior-aged spouses caring for their partners. Twenty-five percent of adults ages 45 to 64 care for a senior adult, a figure sure to grow among our aging population.1 If you aren’t a caregiver now, you may be soon, and you’ll need to balance the demands of the role and your own needs.

Recognize your limits. While caregiving can be one of the most rewarding things you will ever do, it can be costly. In addition to physical and emotional strains, caregivers often leave jobs or reduce their work hours. This results in lost wages, reduced retirement savings and Social Security benefits, and lost employer-provided healthcare benefits. That’s why it is imperative to safeguard your own well-being and future security by carefully determining what you can and can’t do.

Communicate your limits. It’s important to talk frequently, openly and about different possibilities with your loved one. Don’t make promises you may not be able to keep. Meet with other family members to discuss what needs to be done now, what might eventually be needed and the parts everyone can play.

Get help. Caregiving doesn’t have to be all or nothing. There are multiple options to address needs you and other family members may be unable to provide. Perhaps the person to be cared for can retain independence with a visiting nurse, aid or homemaker. If they can’t live alone, they might move in with you but attend an adult day care while you’re at work. If you must travel during the week, you may be able to find a loving adult foster care provider they can stay with and bring them home over the weekends.

There are multiple sites to help you gather information and locate professionals or services to help. Family Caregiver Alliance’s website, caregiver.org, includes a directory of resources by state. The Eldercare locator on eldercare.gov provides a searchable database of services for older adults and families. Elderlawanswers.com provides free explanations of legal issues and government benefits affecting seniors and a search function to find elder law attorneys.

We can work with you to assess the impact of becoming a caregiver and suggest options for easing the burden on your finances. Call our office at any time. We’re ready to help.

1http://www.pewresearch.org/fact-tank/2015/11/18/5-facts-about-family-caregivers/

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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 November 2017. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#1947869.1

Weekly Market Notes – November 6, 2017

Weekly_Market_Notes

For the Week of November 6, 2017

The Markets

Apple shares helped push major Wall Street indices up Friday while investors also assessed a mixed U.S. labor market report. For the week, the Dow rose 0.45 percent to close at 23,539.19. The S&P gained 0.29 percent to finish at 2,587.84, and the NASDAQ climbed 0.94 percent to end the week at 6,764.44.

Returns Through 11/03/17 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) 0.45 21.42 34.51 13.49 15.28
NASDAQ Composite (PR) 0.94 25.66 33.73 13.40 17.80
S&P 500 (TR) 0.29 17.50 26.43 10.96 15.26
Barclays US Agg Bond (TR) 0.44 3.36 1.01 2.48 2.10
MSCI EAFE (TR) 0.92 22.16 24.79 6.63 8.47

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

 

Search for Yield – Today, less than 5% of investment-grade global fixed-income securities have a current yield greater than 4%. Before the 2008 global real estate crisis began, 80% of investment-grade fixed-income securities worldwide had a current yield greater than 4% (source: International Monetary Fund, BTN Research).

Little Experience – Just three members of Congress, i.e., 3 out of 535 House and Senate members, had securities licenses (selling stock and bonds) before their election to Congress (source: CRS, BTN Research).

Jobs for Jobless – In August 2009, the United States had 6.4 out-of-work Americans per job opening. In August 2017, the United States had 1.2 out-of-work Americans per job opening (source: Labor Department, BTN Research).

 

WEEKLY FOCUS – For Your Family’s Sake, Put Final Wishes in Writing

In life, rock ‘n’ roll icon Tom Petty reached countless fans with a musical career that spanned four decades. But in many ways, he sent an even more powerful message with his death on Oct. 2.

After the 66-year-old was rushed to a hospital in cardiac arrest, his family had him removed from life support, a request Petty had made in a do-not-resuscitate (DNR) order he had shared with his loved ones.

Because Petty had made his wishes known ahead of time, his family was spared from making an agonizing decision. While it may be difficult to face your own mortality, making arrangements for your care in an emergency where you are unable to speak for yourself is critical to your estate planning. If you’re an adult child, you may also need to speak with your parents about their desires should something tragic happen to them.

Because spending in the last year of life averages about $18,000, having a plan in place ahead of time can save your family from having to cover costly medical bills.

Some items you should prepare while you’re still healthy include:

  • A DNR or a do-not-intubate (DNI) order. Both a DNR and a DNI need to be signed by a doctor. A DNR instructs health-care professionals not to perform CPR. A DNI tells them you do not wish to have any tubes inserted into your body.
  • A health-care proxy. Also known as a power of attorney, this legal document allows a family member or friend to make health-care decisions for you if you are unable to make them yourself.
  • A living will or advance care directive. This document gives clear and specific instructions to your health care proxy and physicians regarding the use of life support, a feeding tube or intravenous fluids.
  • Funeral plans. By preplanning all the details of your funeral, you can spare your loved ones from having to take care of arrangements during what is sure to be a difficult time for them.

Once you have all your planning documents complete, store them in a safe place where your health-care proxy and family members can easily retrieve them.

While it may seem uncomfortable to make plans regarding the end of your life, by getting your plans down in writing, you can be comforted knowing your loved ones will not be burdened with difficult decisions.

It can be difficult to know where to start building a plan for an unexpected medical emergency. Call us today to discuss how we can help.

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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 November 2017. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI# 1941457.1

November 2017 Monthly Outlook – ‘Tis the Season’

As the calendar turns to November ‘Tis the Season’ to get ready for the holiday season.  November also starts the best 6 month period for the stock market.

‘Tis the SeaSon’ is also a Jimmy Buffett album for you summertime folks!

With the US stock markets (S&P, Nasdaq, Dow) all near all-time highs, the question begs where do we go from here?

I agree with the following analysis, courtesy of Drill Capital Management:

In the face of political and geopolitical headwinds, US stocks continue their climb into record territory, supported by powerful financial and economic forces, including:

  • Historically low indicators of financial market stress, as reported by the Chicago Fed’s National Financial Conditions Index (see below)
  • Low real interest rates
  • Low core inflation and well-anchored inflationary expectations, helping to restrain any rapid rise in bond yields
  • Healthy balance sheets in the corporate/household/banking sectors, acting as buffers against financial accidents
  • A global synchronous economic expansion for the first time in ten years, with unemployment in the developed world near 40-year lows
  • Real global growth of 3.6% in 2017 and 3.7% in 2018, as forecast by the IMF, the best growth rates since the Great Recession
  • Plentiful liquidity and readily available credit
  • In the US, no recession in sight, despite an economic expansion that is nine years old
  • Rising corporate earnings in the US and in most overseas markets

The Chicago Fed’s National Financial Conditions Index (NFCI) provides a comprehensive weekly update on U.S. financial conditions:

Readings above 0 generally indicate tighter/stressed financial conditions, while readings below 0 generally indicate looser/calmer financial conditions.

11.6.2017_MONTHLY_OUTLOOK_CHART1

My primary concern right now is the increasing bullish sentiment about the stock market, from both individual and institutional investors.  I try to remember Warren Buffett’s saying “be fearful when people are greedy and be greedy when people are fearful”.  I use the CNN Money Fear & Greed Index, which looks at 7 different financial market indicators, to glean where investor sentiment is as the moment.  We recently moved into the Greed category, up significantly from 1 year ago.

11.6.2017_MONTHLY_OUTLOOK_CHART2

As such my approach right now is remain positive but cautious.

Special thanks: the best compliment I can receive is a referral from a client or colleague.

I want to extend a special thanks to clients & colleagues who have recently referred me to family and friends:

Swikar P.      Carmen D.

Anna P.         Kevin W.

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

  • November is National Family Caregivers Month.   Please consider reaching out to a family member or friend who is caring for a loved one. Why not offer to give them a day off.

 

November 1st               Healthcare open enrollment – runs through 12/15/17  – for coverage starting Jan 1, 2018  

Note: Medicare open enrollment started 10/15/17 and end 12/7/17

November 7th           Election Day

November 11th         Veterans Day – says thanks a Vet

November 16th         Great American Smokeout – encourage a smoker to quit

November 23rd        Thanksgiving – have a wonderful holiday 

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

Sources: Drill Capital Management, Raymond James & Associates, CNN-Money.

 

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.