Coronavirus Update
On Friday, January 17 – after a spectacular 40% runup that started the day after Christmas 2018 – the Standard & Poor’s 500-Stock Index closed at 3,329.62. Two weeks later to the day – last Friday, January 31 – the Index closed a little over three percent lower, at 3,225.52. (Indeed, more than half that damage was done on Friday.) Financial media suspects that the blended value of 500 of the largest, best financed, most profitable businesses...
The SECURE Act
Long-established retirement account rules change. Provided by Sheri Winegardner, CFP®, CPWA® The Setting Every Community Up for Retirement Enhancement (SECURE) Act is now law. With it, comes some of the biggest changes to retirement savings law in recent years. While the new rules don’t appear to amount to a massive upheaval, the SECURE Act will require a change in strategy for many Americans. For others, it may reveal new opportunities. Limits on Stretch IRAs. The legislation “modifies” the required minimum distribution rules...
A Game Changer
By Jennifer Hutchins, CFA and Martin Landry, CFA, CFP®, CAIA, CIMA®, CIPM, CTFA, AIF® The end of the tentative trade truce between the world’s two largest economies triggered a sell-off on global stock markets and sent investors scurrying into safe-haven assets. On Monday, August 5, the Dow Jones Industrial Average fell 767 points (about 2.9%) and the S&P 500 Index fell 87 points (about 3%). Around the globe, international markets felt the pain as well with the...
Fed at the Mercy of the Markets (and a Trade War)
By Martin E. Landry, CFA, CFP®, CAIA, CIMA®, CIPM, CTFA, AIF® Manager of IMRG and Senior Portfolio Manager In a dramatic shift in monetary policy, the U.S. Federal Reserve (Fed) cut short-term interest rates by a 0.25 percent at the conclusion of the July 31 Federal Open Market Committee (FOMC) meeting. The reduction in interest rates by the U.S. central bank is the first since December 2008, a time when the world’s economies were reeling in a freeze up of liquidity...
Quarterly Economic Update: A review of Q2 2019
Sheri Winegardner, CFP®, CPWA® In this Q2 recap: stocks rise, fall, and then soar, as the Federal Reserve shifts its thinking and new chapters unfold in the ongoing U.S.-China trade dispute. THE QUARTER IN BRIEF The S&P 500 certainly rollercoastered during the second quarter of 2019, but it also gained 3.8% across those three months. U.S.-China trade negotiations unwound, but as the quarter ended, they showed signs of resuming. The Federal Reserve grew dovish. Yields on...
Don’t Let Trade Concerns Cause Your Portfolio to Run a Deficit
By Jennifer Hutchins, CFA Portfolio Manager, Investment Management Research Group With a very strong start at the beginning of 2019, the market has hit a few bumps recently, with most of the additional volatility being attributed to China/US trade relations. Nevertheless, all major indices remain positive both domestically and internationally through the end of April. Volatility is a normal part of a standard business cycle. In fact, since the low point of the Great Recession was struck in March 2009, the...
Factors to Consider When Buying a Home
Purchasing a home is the largest financial decision that most people will ever make. According to Consumer Reports, many Americans qualify for larger mortgages than they can actually afford. If the bank pre-qualifies you for a loan, does it mean you should take it? Many financial planners recommend limiting the amount you spend on your home to 25 percent of your income.1 However, the Bureau of Labor Statistics says the average couple spends over 31 percent of their...
Keys to Making Wise Investment Decisions
In the wealth management business, behavioral finance is the study of the influence of psychology on the behavior of investors and the subsequent impact on the markets. It’s an important topic for discussion because of its explanatory power of irrational investment decisions. We are constantly bombarded with news and live in a culture of information overload. Fortunately, we can use some of this information in our favor when making investment decisions. What if there were...
A Recipe for Achieving Your Goals
Does thinking about investing leave a bad taste in your mouth? With all the jargon that gets tossed around — headwinds/tailwinds; beta versus smart beta; portfolio under- and over-weightings; Brexit, Grexit and even Texit — investors are often left feeling like they have egg on their face when they try to make sense of it all. Here’s some food for thought: think of your investments like ingredients for a recipe. Just as there are seemingly endless...
Managing Volatility through Diversification
It’s impossible to time the market perfectly or completely avoid market fluctuations, and every year, there is significant rotation on which of the asset classes at right perform well or poorly. So how can long-term investors not only endure market fluctuations but plan for them in their journey to achieve their financial goals? The way an asset class’s performance rises and falls over time is known as volatility. In 1952, Nobel Laureate and 1st Global’s strategic...
Is the World More Uncertain than We Think?
By Joan Alexandre Investment Analyst, Investment Management Research Group at 1st Global When What You See Is All There Is In 2011, Nobel laureate and research psychologist Daniel Kahneman published “Thinking, Fast and Slow”. This New York Times bestseller written with frequent collaborator Amos Taversky¹ encapsulates decades-long research into the factors governing human judgment and decision making. A particular focus of their research is how human judgment in practice runs counter to the notion decision-making always seeks to...
A Strong Economy or Looming Recession?
Impending signs of “doom” lurking around the corner sent U.S. stock markets into a tailspin this week, falling roughly 4 percent at their lowest intra-day point. Volatility and downward pressure has been a relatively consistent theme for the Dow Jones Industrial Average, the S&P 500 index and the Nasdaq Composite Index in recent weeks as oil prices have taken a dive, the U.S. and China continue to negotiate trade and tariffs, and whispers of recession...
How the Tax Reforms Will Take Effect
Some of the impact of the Tax Cuts & Jobs Act will be felt later than January 1. Provided by Sheri Winegardner, CFP®, CPWA® President Donald Trump signed the Tax Cuts & Jobs Act into law on December 22, and on January 1, some key details of the Internal Revenue Code will abruptly change.1 There will be night-and-day change, both figuratively and literally. On January 1, the federal estate tax exemption will double; the standard federal income...
What Should You Keep?
Even with less itemizing, there are still tax documents you want to retain for years to come. Provided by Sheri Winegardner, CFP®, CPWA® Fewer taxpayers are itemizing in the wake of federal tax reforms. You may be one of them, and you may be wondering how many receipts, forms, and records you need to hold onto for the future. Is it okay to shred more of them? Maybe not. The Internal Revenue Service has not changed its...
Avoid These Life Insurance Missteps
Shop wisely when you look for coverage. Provided by Kathie Sulick, CPA/PFS Are you about to buy life insurance? Shop carefully. Make your choice with insight from an insurance professional, as it may help you avoid some of these all-too-common missteps. Buying the first policy you see. Anyone interested in life insurance should take the time to compare a few plans – not only their rates, but also their coverage terms. Supply each insurer you are considering with...
Why Life Insurance Will Always Matter in Estate Planning
With or without the estate tax, it addresses several key priorities. Provided by Sheri Winegardner, CFP®, CPWA® Every few years, predictions emerge that the estate tax will sunset. Even if it does, that will not remove the need for life insurance in estate planning. Why? The reasons are numerous. You can use life insurance proceeds to equalize inheritances. If sizable, illiquid assets make it difficult to leave the same amount of wealth to each heir, then the cash...
The Importance of a Life Insurance Audit
Is it time to review your policy? Provided by Sheri Winegardner, CFP®, CPWA® Life insurance is hard. It’s hard to know if you have the right kind. It’s hard to know if you have enough. And it’s hard to know if you need any at all. The insurance companies have made it even harder by coming up with bewildering names: whole life, term life, universal life. Some life insurance policies have a cash value, while others do not....
Will You Avoid These Estate Planning Mistakes?
Too many wealthy households commit these common blunders. Provided by Sheri Winegardner, CFP® Many people plan their estates diligently, with input from legal, tax, and financial professionals. Others plan earnestly, but make mistakes that can potentially affect both the transfer and destiny of family wealth. Here are some common and not-so-common errors to avoid. Doing it all yourself. While you could write your own will or create a will or trust from a template, it can be...
Should You Apply for Social Security Now or Later?
When should you apply for benefits? Consider a few factors first. Provided by Kathie Sulick Now or later? When it comes to the question of Social Security income, the choice looms large. Should you apply now to get earlier payments? Or wait for a few years to get larger checks? Consider what you know (and don’t know). You know how much retirement money you have; you may have a clear projection of retirement income from other potential...
Keeping This Correction in Perspective
After 20 months of relative calm, this volatility needs to be taken in stride. Provided by Sheri Winegardner, CFP® Are you upset by what is happening on Wall Street? It may help to see this pullback within a big-picture context. Corrections have become so rare as of late that when one occurs, emotion threatens to influence investment decisions. So far, February has been a rough month for equities. At the close on February 8, the Dow Jones Industrial...
Life Insurance Products with Long Term Care Riders
Are they worthwhile alternatives to traditional LTC policies? Provided by Sheri Winegardner, CFP® The price of long-term care insurance has really gone up. If you are a baby boomer and you have kept your eye on it for a few years, chances are you have noticed this. Last year, the American Association for Long-Term Care Insurance (AALTCI) noted that married 60-year-olds would pay between $2,000-3,500 annually in premiums for a standalone LTC policy.1 Changing demographics and low interest...
Who Needs Estate Planning?
Why it is so important and not just for the rich. Provided by Sheri Winegardner, CFP® You have an estate. It doesn’t matter how limited (or unlimited) your means may be, and it doesn’t matter if you own a mansion or a motor home. Rich or poor, when you die, you leave behind an estate. For some, this can mean real property, cash, an investment portfolio, and more. For others, it could be as straightforward as the $10...
Tax-Loss Harvesting
A useful year-end move to counteract capital gains. Provided by Sheri Winegardner, CFP® It looks like 2017 will end up being a very good year for the stock market. Consequently, you may realize short-term capital gains. What will you do about them? You could do what many savvy investors do – you could “cash in your losses” and practice “tax-loss harvesting.” Selling losers to offset winners. Tax-loss harvesting means taking capital losses (selling securities worth less than what...
Have a Plan, Not Just a Stock Portfolio
Diversification still matters. One day, this bull market will end. Provided by Sheri Winegardner, CFP® In the first quarter of 2017, the bull market seemed unstoppable. The Dow Jones Industrial Average soared past 20,000 and closed at all-time highs on 12 consecutive trading days. The Nasdaq Composite gained almost 10% in three months.1 An eight-year-old bull market is rare. This current bull is the second longest since the end of World War II; only the 1990-2000 bull...
Questions After the Equifax Data Breach
Consumers may be at risk for many years. Provided by Sheri Winegarder, CFP® How long should you worry about identity theft in the wake of the Equifax hack? The correct answer might turn out to be “as long as you live.” If your personal data was copied in this cybercrime, you should at least scrutinize your credit, bank, and investment account statements in the near term. You may have to keep up that vigilance for years to...
Debt Ceiling Showdown Redux: A Default by Any Other Name
In a September 2013 “Fact Checker” column for The Washington Post, Glenn Kessler suggested that “generally, raising the debt ceiling has been routine and not especially controversial…although fiscal conservatives in Congress at times have used the debt limit as a way to force concessions by the executive branch on spending.” It depends on what is “controversial” to its author. To read the whole article, please visit cpawealthenterprise.com.
Why You Should Stay Invested Through Tense Times
Crises pass, and markets eventually regain equilibrium. Provided by Sheri Winegardner, CFP® We have seen some uneasy times lately. Uneasiness impacts the financial markets. When it does, we all need to keep some long-term perspective in mind. Those who race to the sidelines and exit equities may regret the choice when crises pass. Wall Street loves calm. Traders literally want “business as usual,” every day. If breaking news disrupts that calm, it can rattle the market – but...
Social Engineering Attack Methods
While computer system breaches are often done through means of technology, there are certain methods hackers can use to gather information through other forms of manipulation — especially social engineering. To read the whole article, please visit cpawealthenterprise.com.
Reducing the Risk of Outliving Your Money
What steps might help you sustain and grow your retirement savings? Provided by Kathie Sulick, CPA/PFS and Sheri Winegardner, CFP® “What is your greatest retirement fear?” If you ask retirees that question, “outliving my money” may likely be one of the top answers. Retirees and pre-retirees alike share this anxiety. In a 2014 Wells Fargo/Gallup survey of more than 1,000 investors, 46% of respondents cited that very fear; 42% of the respondents to that poll were making...
Protecting Your Business When Employees Leave
While it’s always important to take a variety of measures to ensure you are protecting your company from data breaches, this prevention becomes even more imperative when employees who were privy to secure information leave the company. To read the whole article, please visit cpawealthenterprise.com.
Fixed-Income Strategies for a Rising-Rate Environment
by Rick Spencer, CFA Fixed Income Trader Interest rates have begun to trend higher after bottoming in July 2016. After reaching a low of 1.36 percent last year, the 10-year Treasury yield recently hit 2.6 percent and currently rests at a 2.56-percent yield, as of March 8, 2017. Higher interest rates have benefited bond buyers with higher starting yields but will become a source of concern if rates continue to climb. To read the full article, please visit www.cpawealthenterprise.com.
Stay Alert: Tax Season Fraud
Last year, fraud rose to unprecedented levels. IRS estimates indicate a 400% increase in phishing and malware incidents during the 2016 tax season. In his an article for CPA Wealth Enterprise, compliance specialist Shawn Baxter cautions taxpayers to stay vigilant. Criminals are finding more and more ways to sidestep the safeguards put in place. Here are some fraud attacks to stay alert for: IRS-Impersonation Telephone Scams Malware Schemes Email Phishing Scam: "Update your IRS e-file" ...
What is asset allocation, and why is it essential to smart investing?
Asset allocation is the practice of diversifying your portfolio into a variety of different types of assets. Some of these assets could include stocks from U.S. and foreign companies, bonds from governments and corporations, and cash or money-market funds. Perhaps your portfolio will be comprised of safer, more conservative assets, but you include some assets that are riskier but have a potential for greater return. Risk can never be eliminated entirely, but with the right...