Weekly Market Notes – November 18, 2019

Weekly_Market_Notes

For the Week of November 18, 2019

The Markets

All three major indexes hit record highs Friday after White House economic adviser Larry Kudlow said current China-US negotiations are “very constructive.” The Dow hit 28,000 for the first time ever. The S&P 500 and the NASDAQ also broke records. For the week, the Dow rose 1.24 percent to close at 28,004.89. The S&P gained 0.94 percent to finish at 3,120.46, and the NASDAQ climbed 0.77 percent to end at 8,540.83.

Returns Through 11/15/19 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) 1.24 22.64 13.43 16.70 12.40
NASDAQ Composite (PR) 0.77 28.72 17.66 17.42 12.74
S&P 500 (TR) 0.94 26.69 16.63 14.97 11.13
Barclays US Agg Bond (TR) 0.54 8.31 10.79 3.78 3.12
MSCI EAFE (TR) 0.08 18.25 12.72 9.66 4.58

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.

 

That Would Hurt — Individual income taxes paid by American taxpayers would have to increase by 57 percent to eliminate our $984 billion deficit from fiscal year 2019 (source: Treasury Department, BTN Research).

Old and Still Owing Money — In 2016, 46 percent of American homeowners ages 65-79 had outstanding mortgage debt on their primary residence, almost double from the 24 percent of this age bracket that had mortgage debt 30 years earlier (source: Joint Center for Housing Studies of Harvard University, BTN Research).

Double in Length — The current bull market for the S&P 500 reached a new closing high for the index on Friday, Nov. 8, extending the bull run to 10.67 years. The average length for all 11 bull markets that have taken place since 1950, including the current bull, is 5.33 years (source: BTN Research).

 

WEEKLY FOCUS – Relocating in Retirement

The newfound freedom retirees experience and pre-retirees anticipate often leads to thoughts of relocating to be closer to grandchildren, live in an appealing climate or cut expenses. Because moves – particularly out-of-state moves – are costly, it’s important to weigh many factors, such as:

Cost of living. Research the cost of housing, healthcare, long-term care, food, services and taxes in a prospective community. Does the state tax income, sales and/or Social Security? What does it charge for auto sales and license renewals? How high is real estate tax in the area? Auto insurance? What are typical costs for heating and cooling a home? Are estate taxes favorable?

Job availability. According to an Employee Benefit Research Institute survey, 80 percent of workers expect to work for pay in retirement. If that option matters to you, rule out cities with high unemployment rates or limited jobs that would interest you. If you plan to work from home, remember some remote areas or small towns may only offer slow dial-up service.

Attractive lifestyle. Will you like the local culture? Will you fit in? Does the community offer civic events and leisure activities you’ll enjoy? Perhaps there’s a university that lets retirees audit courses at no charge or attend performances or sporting events at reduced prices. Is the city walkable? Does it provide adequate public transportation if you no longer want to drive? What is the crime rate? Are hospitals and health systems highly rated? Do they have a wide range of specialists? Is the housing market stable – in case you decide to sell your home at some point?

Before you move: Relocating is costly – and a major upheaval. So, it’s important to make sure you get it right. On top of thoroughly researching the factors above, subscribe to a local paper or magazine and join a community Facebook group to learn about the area’s social scene and crime rate and see what residents are discussing. And consider making one or more trial runs by renting a home for a week or two at different times of year.

Where you live – and the cost of living there – greatly impact how long your retirement assets will last. If you’re considering a retirement relocation, call our office. We can help you analyze the financial impact of your choices.

DWM Plan Well logo

* 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 2019. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI# 2830702.1

Weekly Market Notes – November 11, 2019

Weekly_Market_Notes

For the Week of November 11, 2019

The Markets

Stocks closed higher Friday despite losses earlier in the day after President Trump told reporters he had not agreed to reduce tariffs on Chinese imports. All three major indexes still closed at record highs and ended higher for the week. For the week, the Dow rose 1.37 percent to close at 27,681.24. The S&P gained 0.93 percent to finish at 3,093.08, and the NASDAQ climbed 1.06 percent to end the week at 8,475.31.

Returns Through 11/08/19 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) 1.37 21.15 8.29 17.47 12.23
NASDAQ Composite (PR) 1.06 27.73 12.54 17.73 12.84
S&P 500 (TR) 0.93 25.52 12.48 15.36 11.03
Barclays US Agg Bond (TR) -0.87 7.74 10.60 2.98 3.01
MSCI EAFE (TR) 0.53 18.15 9.70 9.15 4.75

Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. The NASDAQ is based on price return, which is the capital appreciation of the portfolio, excluding income generated by the assets in the portfolio in the form of interest and dividends. (TR) indicates total return. (PR) indicates price return. MSCI EAFE returns stated in U.S. dollars.

 

Three in a Row — The Fed lowered short-term interest rates on Wednesday, Oct. 30, its third consecutive meeting that has resulted in a rate cut. That’s the first time the Fed has reduced rates over three straight meetings since Dec. 16, 2008 (source: Federal Reserve, BTN Research).

Procrastinate — 37 percent of 2,003 Americans surveyed in the first quarter of 2019 had less than $5,000 accumulated in pretax retirement accounts (source: Northwestern Mutual Planning & Progress Study, BTN Research).

Owners and Renters — The 111.2 million households in the United States on Sept. 30, 2009, were split 68/32 between 75.2 million owners and 36.0 million renters. The 122.7 million households in the United States on Sept. 30, 2019, were split 65/35 between 79.5 million owners and 43.2 million renters (source: Census Bureau, BTN Research).

 

WEEKLY FOCUS – November Is National Caregivers Month

With the graying of the baby boomers, more adult children juggle with new and unexpected responsibilities as caregivers for one or more of their aging parents. Boston College research has found that about 17 percent of adult children now provide some level of care for a parent and spend an average 77 hours each month looking after relatives. And an AARP study, “Family Caregiving and Out-of-Pocket Costs,” revealed 78 percent of family caregivers spent an average $6,954 (20 percent of their income) on care-related expenses in 2016.

In caring for a loved one, caregivers face social, emotional, medical and financial challenges. The following tips could guide you through some of the financial challenges you may face when caring for an aging loved one.

  1. Pick a point of contact. One sibling or other close relative should be in charge of communicating with doctors, with health care power of attorney.
  2. Find a family-friendly primary doctor. Your loved one may receive care from multiple specialists. Choose one to serve as a primary medical resource. If you’re caring from a distance, consider asking their doctor if they are willing to communicate via email.
  3. Create a central storage place for vital documents, including medical records, Social Security numbers and health insurance policy information. You don’t want to dig through decades of old files to find what you need in a hurry. Make duplicates of hard copy documents and store them in at least two fireproof and waterproof locations. Digital imaging and storage services are a convenient way to access files remotely.
  4. Talk to your parent about long-term care insurance. Nursing home costs continue to rise faster than inflation and can quickly deplete savings. If your loved one is healthy enough to qualify, paying premiums for them could help safeguard your savings from their future healthcare expenses.
  5. Discuss finances. The point-of-contact relative or another relative equipped to deal with financial matters should have financial power of attorney. They should know the location of key accounts and policies, and the names and phone numbers for key advisors.

Call our office today. We can help you prepare for the responsibilities of caring for your loved one and ensure your financial plans are ready if, or when, needed.

Weekly_Market_Notes

* 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 2019. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI# 2819607.1

 

November 2019 Monthly Outlook – Fool Me Once ….. Won’t Get Fooled Again!

The equity markets ended October and have begun November on a high note.  This is mostly due to positive comments about a  US/China trade deal.  While I am hopeful that a deal can be struck, I will reserve judgement until ink is on paper.  Recall there was talk of a trade deal back in March 2019.  The equity markets rallied to a new all-time high in April, only to fall almost 7% in May after the trade talks broke down and both US and China imposed additional tariffs.   There was more “happy” talk about a deal in July, leading the stock market to rally to a new, even higher all-time high only to – you guessed it- have the talks break down and the market fall roughly 6.2% into August.  The recent talk of a “phase-one” deal has fueled the market to again climb to new all-time highs.  Perhaps the 3rd time is a charm, but I remain leery that we have a repeat of the two earlier setbacks in the talks.  Our administration is extremely unpredictable and China has also shown to be playing games.

In other news, the US economy continues to be resilient.  Growth has slowed somewhat but remains in the 2% annual GDP growth range, which is reasonable given all the variables.  The consumer continues to spend, supported by a solid job market.  This is offsetting manufacturing, which continues to decline, mostly impacted by trade.  The chart below shows that several recession indicators are flashing red but several others remain positive. The US economy will definitely fall back into a recession – the question is when, not if, and how severe will it be. If US / China trade tensions ease or at least remain at a truce, then I expect the US economy to avoid a recession until late 2020 or early 2021.  If trade tensions escalate then the likelihood of recession moves closer in time.

11.5.2019_MONTHLY_OUTLOOK_CHART_1

Our approach has always been to stay diversified and adjust as economic and market conditions dictate.  In years like 2019, diversification can feel disappointing but investing isn’t a 1 year game, it’s a long-term process and diversification generally wins in the long run. The results highlighted below are for a typical 60% equity 40% fixed income and cash portfolio,  and reasonably reflect how our investment philosophy has performed.

11.5.2019_MONTHLY_OUTLOOK_CHART_2

We will continue to follow our philosophy, while monitoring markets for opportunities and threats.

We hope you find this information helpful.  Please feel free to share it with family, friends and colleagues.

 

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.  This hits home for Eloise and I this year as we have been caring for my mom since August 2019 and her Uncle since May 2018.  Sadly Uncle CS passed away on November 1st.

 

November 1st           Healthcare open enrollment – runs through 12/15/18  – for coverage starting Jan 1, 2018  

                                    Note: Medicare open enrollment started 10/15/18 and end 12/7/18

November 3rd           Set those clocks back

November 5th           Election Day  – be sure to vote

November 11th         Veterans Day – says thanks a Vet

November 21st         Great American Smokeout – encourage a smoker to quit

November 28th        Thanksgiving – have a wonderful holiday 

 

 

P.S. Thank you for your referrals. They are making a big difference in my practice. Feel free to share my name with your friends on Facebook or LinkedIn

 

Sources:  BlackRock, Blackstone Investment Group

 

 

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.

 

 

Weekly Market Notes – November 4, 2019

Weekly_Market_Notes

For the Week of November 4, 2019

The Markets

Stocks rose sharply during November’s first session. The S&P 500 and the NASDAQ surged to new records after a reassuring jobs report. The Labor Department estimated the U.S. added 128,000 new jobs in October and raised its estimate of employment growth for September and August. For the week, the Dow rose 1.44 percent to close at 27,347.36. The S&P gained 1.49 percent to finish at 3,066.91, and the NASDAQ climbed 1.74 percent to end the week at 8,386.40.

Returns Through 11/01/19 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) 1.44 19.51 10.38 17.64 12.18
NASDAQ Composite (PR) 1.74 26.39 12.81 17.62 12.61
S&P 500 (TR) 1.49 24.36 14.23 15.54 10.99
Barclays US Agg Bond (TR) 0.47 8.68 11.25 3.22 3.21
MSCI EAFE (TR) 1.18 17.53 10.99 8.70 4.43

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.

 

It Doesn’t Last Long — A study involving 2,500 wealthy families over decades of wealth transfers across generations found, on average, only 30 percent of the original family fortune remained at the end of the second generation, and only 10 percent remained at the end of the third generation (source: Williams Group, BTN Research).

No Work — 37 percent of American seniors report they retired earlier than planned as a result of health problems, buyout packages, layoffs, grandchildren or caring for an aging parent (source: Health and Retirement Study, BTN Research).

Live Within Your Means — 41 percent of American households make less than $50,000 of adjusted gross income (AGI) per year. Only 8 percent of American households make at least $200,000 of AGI (source: Census Bureau, BTN Research).

 

WEEKLY FOCUS – November Is Long-Term Care Awareness Month

Although the cost of long-term care is a huge concern for retirees, sales of traditional long-term care (LTC) insurance policies have fallen dramatically since the early 2000s. For several reasons. Amid longer lifespans and rising healthcare costs, many insurers have shortened the period of benefits, reduced the daily amount they will pay and/or cut their inflation-protection benefit.

Some companies now offer policies that require a co-pay for LTC services, and one is adding a co-pay option to existing policies. But the least popular change insurers have made is raising existing customers’ policy premiums – by as much as 100 percent.

Even if traditional LTC insurance is less popular than it once was, it’s important to prepare financially for the likelihood that future care will be needed. Here are some additional avenues to consider:

Life insurance with an accelerated death benefit rider that can be used for LTC or with a LTC rider. Unlike traditional LTC insurance, if you don’t use it, you will still leave a tax-deferred death benefit to your heirs. (These options aren’t usually available on term policies.)

Some annuity products, designed for accumulation or income, may also carry some LTC benefits.

Self-funding future LTC. This method requires discipline and time to build wealth. Maximizing yearly contributions to HSA and IRA accounts and letting them grow tax-deferred throughout your career is a good start. Other possible sources could be your Social Security payments, selling your home or getting a reverse mortgage if a spouse is still living in the home.

Here’s what NOT to do: rely on the government. With a few exceptions, Medicare primarily pays for short-term nursing home care following hospitalization. Medicaid only pays for LTC after nearly all your assets have been depleted – and limits the assets a spouse can retain. If you rely on Medicaid, you will probably not have access to a private room and will have fewer facilities to choose from. Many states do not pay for in-home, assisted living or adult day care.

While it’s great to hope you never need long-term care, it’s best to plan for the unplanned. I would be happy to meet with you to review your plan for long-term care funding and discuss changes you might consider to better prepare for this possibility.

 

DWM Plan Well logo

* 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 2019. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#2810044.1