For the Week of January 29, 2018

The Markets

Positive earnings reports and ongoing dollar weakness led to record closings for the three major indexes, which all closed their best four-week run since 2016. For the week, the Dow rose 2.09 percent to close at 26,616.71. The S&P gained 2.23 percent to finish at 2,872.87, and the NASDAQ climbed 2.31 percent to end the week at 7,505.77.

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.

Bull Market Stats — Since bottoming on March 9, 2009 (just short of nine years ago), the S&P 500 has gained 401 percent (total return), an annualized 19.9 percent per year, and produced 198 all-time record closing highs. The most recent record close was on Friday, Jan. 19, 2018 (source: BTN Research).

Fewer College Students — There were 18.8 million college students during the fall of 2017 (both undergraduate and graduate students), the sixth consecutive year (2012-2017) that the total number of students declined on a year-over-year basis (source: National Student Clearinghouse Research Center, BTN Research).

Missing Out — Forty-six percent of Americans have no money invested in stocks today, either through the ownership of individual stocks, equity mutual funds or holdings inside a pretax retirement plan (source: Gallup, BTN Research).

WEEKLY FOCUS – A S.M.A.R.T. Financial New Year’s Resolution

We do it every year. Resolve to eat less, read more, stop spending or start meditating. How did 2017’s financial resolutions work out for you? Since only 8 percent of people meet their goals, chances are you didn’t accomplish everything you set out to do. Of course, it wasn’t for lack of good intentions. Maybe life got in the way. Maybe you just bit off more resolutions than you could chew. Maybe this year you should take a more streamlined approach to your financial resolution.

It may be the end of January, but it’s not too late. Put some time aside to really reflect on last year’s financial resolutions before you settle on one for 2018. What went right? Where did things go wrong? Chances are, you’ll find some areas that could use a little attention. But to maximize your chances of success, narrow your focus. Rather than five resolutions (and five ways to fail), choose just one, Specific, Measureable, Attainable, Realistic and Time-framed goal (S.M.A.R.T.).

Let technology help you achieve your resolution. If your goal is to save a specific amount for a vacation or major purchase, automate your account to transfer so much per paycheck or month into a savings account set up just for that goal. Make sure your goal can be achieved within a designated time frame and your regular withdrawals work with your budget. Having a single goal shaped by S.M.A.R.T. framing dramatically improves your odds of making it part of your lifestyle and achieving your purpose. And tell your family and friends about your goal; accountability helps keep you on track.

Financial lifestyle habits are less complex than many financial goals, but they’re important to your overall financial health as well. Some habits to consider making a regular part of your life include:

• Checking your credit score at least quarterly
• Scheduling periodic family financial meetings
• Saving 15 percent of your gross income
• Using a credit card that offers the best rates
• Monitoring your retirement savings progress

When tackling larger, more complex goals, be sure to choose just one and follow the S.M.A.R.T. guidelines. Be consistent when making financial lifestyle changes.

Call our office today. We can help you focus on your financial goals and maximize your chances for success.

* 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 2018. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#2009050.1

For the Week of January 22, 2018

The Markets

The Dow Jones surpassed 26,000 for the first time last week. Despite the threat of a government shutdown, all three major indexes ended Friday higher. For the week, the Dow rose 1.08 percent to close at 26,071.72. The S&P climbed 0.88 percent to finish at 2,810.30, and the NASDAQ gained 1.04 percent to end the week at 7,336.38.

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.

Bear — Marc Faber, editor of the “Gloom, Boom & Doom Report,” predicted on Aug. 9, 2016, that the S&P 500 was “set to crash 50 percent.” From an Aug. 9, 2016, close of 2,182, the index rose 26 percent to 2,743 by Jan. 5, 2018 (source: CNBC, BTN Research).

Time in the Market — Since 1950 (i.e., 1950-2017), the S&P 500 index has been up 54 percent of 17,110 trading days, 60 percent of 816 months, 66 percent of 272 quarters and 74 percent of 68 years. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value-weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).

Oil — With oil at $44 a barrel on Sept. 5, 2016, RBC’s global head of commodity strategy Helima Croft predicted the price of oil would rise to $60 in 2017. Oil closed at $60.12 a barrel on Dec. 29, 2017, its high for the year (source: CNBC, BTN Research).

WEEKLY FOCUS – The Roth IRA Turned 20 This Month

The Roth IRA celebrated its 20^th birthday this month. Although more households (35 million) own the 43-year-old traditional IRA, the younger Roth is growing faster. Nearly 22 million households now own Roth accounts.

A large segment of the latter group is made up of young investors who expect their incomes to increase over time and appreciate the fact that money they invest will never be taxed again. Pre-retirees relish the fact that Roth IRAs are not subject to required minimum distributions.

Contributions to Roth IRAs are made in three ways. The most common is a direct contribution. For 2018, maximum direct contributions are the same as 2017: $5,500 for those under 50 or $6,500 for anyone 50 or older. Contributions for 2017 can be made until April 17, 2018.

To make a direct contribution, your income must fall within limits, which are slightly higher for 2018. If you’re single, you can now contribute the full amount if your income falls below $120,000. You can contribute a reduced amount if your income is $120,000 or more – provided it’s under $135,000. For married couples who file jointly, the phase-out range is $189,000 to $199,000 of combined income.

The second way to contribute is by rolling a 401(k) or 403(b) plan into a Roth, often done when parting from an employer. The terms of an employer’s qualified plan may restrict the ability to roll money into a Roth while still employed. There aren’t any limits to the amount that can be rolled over in a given year, but you’ll pay taxes when converting a pre-tax account to a Roth.

The last way to contribute is by converting a traditional IRA to a Roth. High-income earners who don’t qualify to open a Roth IRA can contribute post-tax dollars to a traditional IRA and then convert it.

Owners of a traditional IRA created with pre-tax dollars will pay taxes on the amount converted. In the wake of the new tax law, it’s particularly important to have adequate funds on hand to cover taxes. Prior to the law, you could undo the conversion by Oct. 15 of the following year. This strategy, sometimes called recharacterization, is no longer available for 2018.

We can work closely with your tax professional to help you determine whether a Roth IRA should be part of your investment strategy. Call our office today. 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 January 2018. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#2001317.1

For the Week of January 15, 2018

The Markets

Wall Street’s rally continued Friday, thanks in part to solid bank performances and positive retail sales in fourth-quarter earnings reports. The indexes closed at records. The Dow and the S&P saw their second straight weekly gain. For the week, the Dow rose 2.02 percent to close at 25,803.19. The S&P climbed 1.61 percent to finish at 2,786.24, and the NASDAQ gained 1.74 percent to end the week at 7,261.06.

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.

Oil — With oil at $44 a barrel on Sept. 5, 2016, RBC’s global head of commodity strategy Helima Croft predicted the price of oil would rise to $60 in 2017. Oil closed at $60.12 a barrel on Dec. 29, 2017, its high for the year (source: CNBC, BTN Research).

Going Away — In July 2017, Dr. James Canton, CEO of the Institute of Global Futures in San Francisco, predicted these six things will no longer exist within a decade: keys, parking meters, cash, brick-and-mortar banks, televisions and telephones (source: NBC News MACH, BTN Research).

Not Crazy at All — With the Dow at 12,500 in June 2012, Seth Masters, the chief investment officer at Bernstein Global Wealth Management, predicted the 30-stock index would cross 20,000 by 2020. The Dow first closed above 20,000 on Jan. 27, 2017, and closed at 25,296 on Friday, Nov. 5, 2017. (Source: Wall Street Journal, BTN).

WEEKLY FOCUS – Smart Things to Do With a Year-End Bonus

Last month, CNBC reported 63 percent of firms planned to give employees bonuses for 2017. If you work for one of those companies, it is wise to come up with a thoughtful plan for the extra cash. If you need more time to consider your options, deposit the money in a savings account. It will be harder to chip away at it if it’s not connected to your debit card. Here are a few other suggestions.

Increase your bonus’ value. Contributing the maximum allowed to a pretax employer retirement plan can make your bonus go farther than using it as after-tax dollars, especially if your employer matches the contributions. If your income falls within IRS guidelines, you may be able to make pretax contributions to your 401(k) AND a traditional IRA or add post-tax contributions to a Roth IRA – that will grow tax-free. Depending on your health insurance policy and your employer’s offerings, you may also be able to contribute pretax dollars to a Flexible Spending Account or a Health Savings Account.

Build your emergency fund. Everyone should have liquid savings available to cover six months’ worth of living expenses when the unexpected occurs. If you keep your fund in a savings account, be sure to shop around for the best rates.

Put your money to work. Sometimes it is more efficient to rebalance your portfolio by introducing new money than by selling stocks off. You can also reduce the amount of interest you’ll pay on your home loan by making an extra payment to the interest.

Invest in yourself. Many of the most successful people continually pursue knowledge and increase their skills. You might take a coding course, learn a language, hire a health coach, pay for a professional certification or enroll in a professional speaking program.

Enjoy an experience. Recent research indicates great memories often provide more satisfaction than purchases. And shopping for a summer vacation now while everyone else is recovering from Christmas can be a good way to find deals on flights and hotel rooms.

Enrich others. If you have a child or grandchild, you can contribute up to $15,000 to their 529 plan (combined with all other gifts to the same beneficiary in 2018). Or you can help others in need or further your favorite cause. If you need more time to choose a charitable organization, you might consider opening a donor-advised fund now and make your decision later.

We’re here to help you reap the rewards of your success and build a brighter tomorrow. Call our office to schedule time to discuss what you want to accomplish in 2018 and beyond.

* 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 2018. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI# 1994388.1

For the Week of January 8, 2018

The Markets

The three major indexes posted record gains Friday. Following the Monday holiday, the three benchmarks enjoyed their strongest first four trading days of a year for more than a decade. For the week, the Dow rose 2.37 percent to close at 25,295.87. The S&P gained 2.63 percent to finish at 2,743.15, and the NASDAQ climbed 3.38 percent to end the week at 7,136.56.

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.

Shift in Type — In 1975, defined contribution plans outnumbered defined benefit plans two to one, i.e., 207,700 to 103,300. Forty years later in 2015, defined contribution plans outnumbered defined benefit plans 14 to one, i.e., 648,300 to 45,600 (source: Government Accountability Office, BTN Research).

For the Entire Year — The S&P 500 was positive on a total return basis during all 12 months in calendar year 2017, gaining 21.8 percent for the year. The raw index rose 19.4 percent, and the impact of reinvested dividends made up the difference (source: BTN Research).

Foreign Stocks — The international stock index EAFE gained 25 percent (total return) in 2017. EAFE is an unmanaged index generally considered representative of the international stock market. These international securities involve additional risks including currency fluctuations, differing financial accounting standards and possible political and economic volatility (source: BTN Research).

WEEKLY FOCUS – Tax Cuts and Jobs Act Changes

Last month, President Trump signed the first major tax overhaul since Ronald Reagan was in office. The Congressional Budget Office forecasts the 500-page legislation will add $1.5 trillion to the national debt over the next decade. With sweeping changes come questions and concerns. Below is an overview of the major changes you will encounter when filing taxes for 2018.

• The 10 and 35 percent tax brackets remain the same, while the 15 percent bracket drops to 12 percent, the 25 to 22, the 28 to 24, the 33 to 32 and the 39.6 to 37. Income thresholds for the tax brackets above the new 22 percent bracket are raised. However, all individual tax cuts are scheduled to go away after 2025.
• The standard deduction almost doubles, increasing to $12,000 for individuals and $24,000 for married couples. This will lead less people to itemize their taxes.
• The personal exemption is eliminated.
• The state and local tax deduction now has a cap of $10,000.
• The threshold for estate taxes is doubled. Individuals can bequeath up to $11 million tax-free ($22 million for married couples) in 2018.
• The child tax credit doubles to $2,000 for children under 17, and its income threshold was raised so more parents can claim the entire credit. There’s also a new $500 credit for non-child dependents, like elderly parents.
• The mortgage interest deduction decreases from $1 million to $750,000.
• Up to $10,000 a year per student can be used out of a 529 education savings account on primary and secondary education costs. Before, they could only be used for post-secondary education.

Other big changes: The corporate tax rate is now 21 percent, down from 35 percent, the largest corporate tax cut in U.S. history. The corporate alternative minimum tax (AMT) is removed, and fewer people will have to pay the individual AMT. One of the most significant changes for business owners is you can deduct 20 percent of your income tax-free if you’re eligible for the pass-through deduction. However, some exclusions apply, and these changes expire after 2025.

This new law is complex. I encourage you to check with your tax advisor, and I am always happy to talk with you and answer any questions you may have about your finances. Call or email our office today.

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 January 2018. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI# 1987432.1

For the Week of January 2, 2018

The Markets

Last week, Wall Street closed a year that brought a series of record highs. The three major indexes achieved their best yearly performance since 2013. But there was little celebration Friday with stocks ending lower, thanks to losses in financial and technology stocks. For the week, the Dow fell 0.14 to close at 24,719.22. The S&P lost 0.33 percent to finish at 2,673.61, and the NASDAQ dropped 0.81 percent to end the week at 6,903.39.

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.

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

In and Out — The U.S. imports 22 percent less oil than it did just a decade ago. Oil imports averaged 7.9 million barrels a day in 2016, down from 10.1 million barrels a day in 2006. Total petroleum exports from the U.S. have quadrupled over the last decade, rising from 1.3 million barrels a day in 2006 to 5.2 million barrels a day in 2016 (source: Department of Energy, BTN Research).

Building New Homes — Permits for the construction of 6.14 million single-family homes were issued during the four years of 2003-2006. Permits for the construction of 6.08 million single-family homes were issued during the 10 years of 2007-2016 (source: Joint Center for Housing Studies of Harvard University, BTN Research).

WEEKLY FOCUS – The Benefits of a Family Meeting

Now that you have prepared your estate plan, have you considered having a family meeting to discuss it? A UBS Investor Watch report found 83 percent of benefactors surveyed have a will, but only 54 percent have had a meeting to discuss their plans with their heirs.

This may be one reason behind some troubling statistics. According to a study by the Williams Group Wealth Consultancy, 70 percent of wealthy families lose their wealth by the second generation, and 90 percent lose it by the third generation. It appears family members often lack sufficient knowledge and wisdom to use their inheritance responsibly. That is why a growing number of advisors are working to educate and empower future generations through family meetings.

The primary goal of this type of meeting is to create an awareness of estate planning choices you have made, and most importantly, the reasoning behind your decisions. It took time and planning to prepare your financial affairs, and sharing them can encourage unity within your family by building bridges across sensitive topics, such as life, death, wealth and taxes. Equipping loved ones with knowledge brings understanding and acceptance.

A family meeting brings you and your heirs together to talk about the careful plans you have made. It’s an opportunity to provide a high-level review of your will, explain any trusts you’ve set up, discuss who you’ve designated as executor and why, and share contact details for your attorney and the location for important documents. It often covers your health care directives, long-term care desires and your durable and health care power of attorney. This equips loved ones with the information they will need when you are no longer available or mentally capable to provide it.

Beyond that, you can foster the success of future generations by sharing principles that helped you accumulate wealth, lessons you learned, the importance of investing at an early age and how you hope your heirs might use their inheritance. Having this conversation is the best measure you can take to equip your heirs to continue your legacy to the second generation and beyond.

As your trusted advisor, I am happy to facilitate a conversation about your legacy plan and educate your family members on essential financial concepts. Why not contact our office today to arrange a family meeting at your convenience?

* 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 2018. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI# 1981955.1