For the Week of June 24, 2019

The Markets

Trading was choppy on Friday. The S&P 500 briefly reached a record high but fell by closing. All three of the major indexes fell for the day but logged strong weekly gains after the Federal Reserve indicated it may cut rates later this year. For the week, the Dow rose 2.41 percent to close at 26,719.13. The S&P gained 2.22 percent to finish at 2,950.46, and the NASDAQ climbed 3.01 percent to end the week at 8,031.71.

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.

Was Bad, Now Best — The worst performing stock in the S&P 500 in 2018 lost 67.1 percent. That same stock was up 107 percent YTD as of the close of trading on Friday, June 14, 2019, making it the best performing stock in the index through 24 weeks of 2019 (source: BTN Research).

Budget Review — During the first eight months of fiscal year 2019, i.e., through May 31, 2019, tax receipts were up 2.3 percent from the previous year to $2.27 trillion, while outlays were up 9.3 percent to $3.01 trillion (source: Treasury Department, BTN Research).

They Make Things — U.S. manufacturers employed 12.8 million workers as of Dec. 31, 2018, almost identical to the 12.9 million manufacturing jobs in the country as of Dec. 31, 1941. However, 264,000 new manufacturing jobs were added during 2018, the greatest annual increase since 1997 (source: Department of Labor, BTN Research).

WEEKLY FOCUS – Time to Review Your Insurance Policies?

You probably schedule regular physicals, dental checkups and auto inspections. Are you as vigilant in reviewing your insurance policies? There are good reasons to evaluate your homeowner’s, life and auto insurance coverage each year.

Homeowner’s insurance: Has your home increased in value? Your current policy might not provide full replacement value. Have you started a home business? It may not be covered. Have you added a pet, built a pool or bought a trampoline? Associated liabilities may not be covered. Have you added a security or water leak detection system? You may be entitled to a discount. Have you purchased valuables? You may need to add a rider. And be sure to check with your insurer if you add a roommate or occasionally rent your home out.

Life insurance: Has your family’s status changed because of a birth, marriage, divorce or job loss? You may need to add or reduce benefits or change your beneficiaries. Has your income grown? You might want to increase your coverage, so your loved ones can maintain their lifestyle if you die. Have you recently purchased a home? Make sure your coverage is sufficient to pay off a mortgage. Have you improved your health regime? You may be eligible for discounts. Have you lost your group life insurance because you changed jobs? You may need to increase your personal plan.

Auto insurance: Did you add a driver? Insurers want to know about everyone in your household who drives, although most won’t increase premiums if you only lend your vehicle to someone occasionally. Have you added a vehicle? If you don’t notify your company, they could refuse to cover a claim or renew your policy. Have you moved? Make sure your company has your current address, since many companies still mail their most important correspondence for legal reasons.

General: Aside from changes in your situation, reviewing all your policies may help you discover discounts, features or services for which you now qualify. If you have several policies with different companies, bundling a few with the same company may provide significant savings. On the other hand, if payments are automatically deducted from your bank account, you may not notice an unacceptable rate increase.

Call our office if you’d like help reviewing your financial situation or determining how much coverage you need.

* 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 June 2019. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#2611905.1

For the Week of June 17, 2019

The Markets

Stocks closed lower Friday amid pressure on tech shares, continued trade issues, Middle East tensions and disappointing Chinese economic data. Improved retail sales data fueled speculation the Federal Reserve would hold off on cutting interest rates. For the week, the Dow rose 0.46 percent to close at 26,089.61. The S&P climbed 0.53 percent to finish at 2,886.98, and the NASDAQ gained 0.70 percent to end the week at 7,796.66.

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.

Money — The top 10 percent of taxpayers received 47 percent of the $10.2 trillion of adjusted gross income (AGI) earned nationwide in tax year 2016. The bottom 90 percent of taxpayers received the other 53 percent of AGI (source: IRS, BTN Research).

Who’s Buying Now? — Since Janet Yellen announced on Sept. 20, 2017, a plan to shrink the Fed’s balance sheet by having bonds mature without reinvesting the principal into newly issued bonds, the securities held outright by the Fed have declined by $575 billion to $3.7 trillion (source: Federal Reserve, BTN Research).

10 Years — June marks the 120th consecutive month of an economic expansion for the United States, tying the record set between March 1991 and March 2001. The nation has maintained records on the country’s business cycles since 1854 (source: National Bureau of Economic Research, BTN Research).

WEEKLY FOCUS – Buying or Renting After Downsizing

Just as few empty nesters still drive the minivans that once transported their kids and their kids’ teammates to soccer games, many no longer need or want their four- or five-bedroom home. But should they buy or rent when they downsize? That depends…

While ownership itself and the freedom to make a home uniquely their own remains important to many, baby boomers are one of the fastest growing groups of renters. There are a variety of reasons. Some want to break free from yard work, snow removal and maintenance chores. Others want to travel without worrying about their home while they’re away.

Making a choice based on emotional preference is fairly simple. Comparing financial pros and cons is complicated. For instance, it can be hard to predict rent increases in coming years. Having a home that is paid for or has a fixed monthly mortgage payment would seem to make expenses predictable – until the furnace gives out or a pipe breaks. It’s also tough to know how much property taxes and home insurance premiums will go up.

Financial commentators differ on whether buying a smaller home or renting and investing the proceeds from a home sale in stocks make more sense. There are no guarantees with either. But the value of both typically rises if held for an extended period. If the home is kept for less than 10 years, realtor fees, closing costs, moving expenses and remodeling expenses could make comparable stock investments a more attractive financial decision. Therefore, retirees moving cross-country might be wise to rent before purchasing a home to ensure they enjoy their new location. And pre-retirees and retirees should consider whether a prospective home will allow them to age in place.

Whether a home proves to be a good investment depends on multiple factors, including the original cost of the home, the national economy and the local real estate market. If it’s purchased during a real estate boom, the bubble may burst in the future. Recently, an acute shortage of affordable homes nationally has driven prices up faster than inflation and wage growth.

Unsure of whether you would like to buy or rent for your golden years? We can help you identify what is most important to you and what makes the most sense for your financial 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 June 2019. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#2598432.1

For the Week of June 10, 2019

The Markets

Stocks jumped Friday. A weak job report appeared to fuel optimism the Federal Reserve would increase interest rates in the near future. Although economists anticipated 180,000 new jobs in May, the Labor Department reported 75,000 jobs were added. Positive sentiment pushed the Dow to its biggest weekly gain since November. For the week, the Dow rose 4.77 percent to finish at 25,983.94. The S&P gained 4.46 percent to finish at 2,873.34, and the NASDAQ climbed 3.88 percent to end the week at 7,742.10.

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.

Gotta Start Somewhere — An estimated 40 percent of this year’s college graduates will be underemployed with their first job, i.e., they will take a job for which they are academically overqualified (source: Strada Institute for the Future of Work, BTN Research).

Are You Better on Your Own? — The average American worker who retires in 2020 will have paid $135,000 in Social Security taxes during their working lifetime, less than the $193,000 in Social Security retirement benefits they are projected to receive (source: Urban Institute, BTN Research).

Debt-Free — Forty percent of U.S. homeowners own their home free and clear of any mortgage debt or home equity loan. Of the 60 percent of homeowners with an outstanding debt balance, the median debt total is $126,000 (source: American Housing Survey, BTN Research).

WEEKLY FOCUS – A Living Trust Can Help Your Assets Live On

With baby boomers passing the fruits of their labor to the next generation, we are witnessing the largest transfer of wealth in history. But many boomers are concerned about how that wealth will be used once it changes hands. A living trust is one way to protect your estate assets and provide clear direction on how you would like them disbursed after your death. In addition, a living trust can eliminate the time and expense of probate, which can take years and cost thousands of dollars.

A living trust has many advantages. It prevents your assets and their disposition from becoming part of the public record during a probate settlement. Your assets will be collected and distributed from a single point using your predetermined terms and conditions. It can be used while you’re alive to control, coordinate and distribute your assets if you become disabled, ill or mentally impaired. And it can be amended anytime during your lifetime.

Because everyone’s estates and final wishes are different, there are many different types of living trusts.

• Revocable trusts are flexible, can be amended or revoked at any time and allow you to shift your trust assets around.
• Irrevocable trusts cannot be changed and cannot be revoked, but the assets in the trust are protected from creditors.
• Asset protection trusts are established for a specified time. During that period, those assets cannot be accessed by creditors. Once the trust expires, the assets that go undistributed are returned to the trust holder.
• Charitable trusts benefit a specific charity or your favorite cause. Because they help lower or bypass estate and gift taxes, they can also provide significant tax benefits.

To set up a living trust, you’ll need to hire an estate attorney. You don’t need a will to set up a living trust. However, a will can ensure assets not covered by the trust are also distributed according to your wishes.

If you would like to discuss in more detail how you and your loved ones can benefit from a living trust, call us to schedule an appointment. We would be happy to meet with you and your estate attorney.

* 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 June 2019. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI# 2582085.1