In the Learning Center, we discuss the issues important to your financial well-being. We think these pieces exemplify our thought process at HIGHLAND Financial Advisors—if our approach appeals to you, please contact us to see how we can apply this approach to your life.
After a historically calm September in which the S&P 500 didn’t drop 1% on a single day for the entire month, the S&P 500 dropped more than 1% on consecutive days to start the month of October. This certainly wasn’t the start of the fourth quarter investors were looking for. In fact, this is the first time in history the S&P 500 fell at least 1% on consecutive days to start the fourth quarter and represented the worst start to the fourth quarter since 2009.
Stop me if you have heard this before. Uncertainty regarding trade and monetary policy are weighing on markets and the economy. These issues have held investors hostage for a number of quarters, and just when we think a resolution is within reach, there is a new disruption that serves to further increase uncertainty. I’ll address each one of these issues individually and explore how both are impacting markets and the economy.
As a financial planner, I like to be as prepared as possible for the unknowns in life. This allows me to have peace-of-mind knowing that major issues have already been addressed. As life evolves, no one can be certain about the future, but one aspect you can control is your legacy through a comprehensive estate plan. A comprehensive estate plan can be comprised of a variety of documents, but the base estate plan should include a last will and testament, durable power of attorney, and medical power of attorney and directive. These documents guide your appointed agent(s) to ensure your medical and financial wishes are taken care of and your financial legacy passes in accordance with the guidelines laid out as smoothly as possible. Having an estate plan in place prior to a life changing event, cognitive issues, or death can help ensure that the decisions made by the individual are honored.
The attacks on Saudi Arabian state-owned oil facilities that sent oil prices surging were the story for financial markets for the first half of last week, until the Fed announced it was once again cutting interest rates.
On Saturday, September 14, coordinated drone strikes on two Saudi Arabian state-owned oil facilities disrupted more than half of the country’s oil production, or 5.7 million barrels a day. Saudi Arabia’s Interior Ministry confirmed the drone strikes on the oil-processing facility in Abqaiq and an oil field in Khurais, which are both owned by state-owned Saudi Aramco. The facility in Abqaiq is both Saudi Aramco’s largest oil processing facility and the largest crude oil stabilization plant in the world.
Inflation has been a popular topic of late.
In his press conference to announce the Fed’s decision to cut interest rates following its July meeting, Fed Chair Powell cited “muted inflation pressures” as justification for action.
However, retaliatory tariffs between the U.S. and China have raised concerns this could spark inflationary pressures as consumers are forced to pay higher prices.
When Congress passed the Federal Reserve Act in 1913, it established the Federal Reserve System with the initial objective of supporting a fragile banking system. In the over 100 years since it was first established, the responsibilities of the Federal Reserve System (or the Fed for short) have expanded to include several broader responsibilities, such as fostering a sound banking system and a healthy economy. One thing that hasn’t changed is the Fed is an independent government agency that is accountable to the public and Congress to act as the Central Bank of the United States.
Interest rates on savings accounts are on the decline. In the past few months a number of banks have lowered interest rates on savings accounts in anticipation of the Fed cutting interest rates in the future. This is because short-term interest rates typically follow the federal funds rate.
The Free Application for Federal Student Aid (FAFSA) collects demographic, income, and asset information from student applicants and their families. This information is used to calculate a student’s eligibility to receive any financial aid for college expenses based on the Expected Family Contribution (EFC). The EFC is calculated according to a formula that is established by the federal government and is a measure of a family’s financial strength. Schools consider the EFC as one of several factors to determine the amount, if any, a student may be awarded for that school year. Simply put, students are eligible to receive need-based student aid if the sum of their EFC and other estimated financial assistance is less than the total cost of attendance.
I am always hesitant when writing about large market drops. It’s a delicate line to walk. In writing something that will calm your nerves and add perspective to what’s happening in the markets, am I calling attention to something that you may not have been aware of? Now that a few days have passed and the markets have rebounded a little, I think it’s safe to address the events that unfolded last week.
Earlier this month, President Trump announced the United States will impose a new 10% tariff on $300 billion worth of goods imported from China. The new tariffs, which are set to take effect on September 1st, could have a more direct impact on U.S. consumers because the list of target goods include clothes, toys, cell phones, electronics, and other retail items. Up until this point, tariffs levied by the U.S. against Chinese imports have targeted goods that are used mainly as inputs in the manufacturing process, such as steel and aluminum. Those tariffs affected the costs for U.S. companies, but those increases were not necessarily passed through to the consumer. These newest tariffs could hurt consumer’s wallets.
In a widely anticipated, yet highly debated, move, the Federal Reserve (Fed) announced this past Wednesday it is cutting interest rates. The Fed lowered the federal funds target rate range by 0.25%, from 2.25%-2.50% to 2.25%-2.00%. This marks the first time the Fed has cut interest rates since 2008. So, why was the Fed’s decision so controversial?
With the fall semester fast approaching, there are many last-minute decisions and preparations being made for the next wave of freshman students. However, one decision that may have fallen to the wayside is health insurance for the incoming student. An important question to ask is “will my child be covered under my medical insurance once they go off to college?”
A unicorn is a mythical creature that is often depicted as a horse with a large, pointed, spiraling horn projecting from its forehead. A unicorn can also be defined as something that is highly desirable but difficult to find.
It’s often said there are two things that are guaranteed in life: death and taxes. While there have been many who have expanded this list to include other certainties life has to offer, one that often doesn’t make the list is recessions. As much as we hope and plead that economic expansions will last forever, we know the inevitable truth. The economy is cyclical. It goes through periods of expansion and contraction. Recessions happen as a result.
Markets had a great first half of the year. Major stock indexes, including the S&P 500, reached new highs. However, global economic growth is slowing. Investor concerns about a recession have increased and unresolved trade negotiations with China have created even more uncertainty. Slowing economic growth, rising recession risk, and tariff uncertainty doesn’t sound like a recipe for a stock and bond rally, does it? So, what has spurred stocks and bonds higher?
Things can change quickly. If I was writing this post one month ago, it would be a completely different topic with a much different tone.
Following four straight months of positive performance to start the year, the S&P 500 posted a -6.35% return in May. This was the third time in eight months the S&P 500 had a monthly loss of more than 6%. Fears of a full-blown trade war were reemerging as trade negotiations with China soured and it looked like fresh tariffs would be imposed against Mexico. The trade wars would put downward pressure on an already slowing global economy, putting even more pressure on central banks to ease monetary policy.
Everyone, young and old alike, can be a target for fraud. In 2018, the Federal Trade Commission collected 1.4 million fraud reports. People reported losing a whopping $1.48 billion to fraud in 2018, which is an increase of 38% from 2017. Of people that included their age in reports, those aged 20-29 reported the loss of money in 43% of reports compared to 15% for those aged 70-79. However, the loss amount reported was nearly twice as high for ages 70-79.
It’s not every day a “Jeopardy!” contestant becomes a household name and makes one of the longest running television game shows must watch TV. But that’s exactly what happened during James Holzhauer’s 32-game winning streak. Throughout Holzhauer’s dominant run, it seemed to be only a matter of time before he became the highest-winning contestant in “Jeopardy!” history, a record held by Ken Jennings. Jennings amassed a total of $2,520,700 over his 74-game winning streak in 2004. However, Holzhauer was defeated in his 33rd game, coming just $58,484 shy of Jennings’ record.
The U.S. economy is on the verge of breaking the record for the longest stretch of economic expansion in U.S. history. Since the U.S. economy hit bottom in June 2009 following the Great Recession, it has been on a slow and steady recovery that has it on the brink of surpassing the expansion from March 1991 to March 2001 as the longest in U.S. history.
The American Dream consists of baseball, warm apple pies, and homeownership. As I near the end of my mid-twenties, many of my peers are trying to realize the American Dream of purchasing their perfect starter home. Over the years, my cohorts have casually been looking to find the deal of the century in a move-in-ready starter home at a low price. But even the starter homes that require major renovations and improvements have come with lofty price tags.
For the past 18 months, two hot button issues for investors have been the Fed and trade negotiations between the U.S. and China. These two issues were the catalysts for two market corrections in 2018, the latter of which nearly approached bear market territory. However, for the first five months of this year fears of a Fed misstep were alleviated and reported positive progress towards a trade deal between the U.S. and China spurred markets to new all-time highs.
On Friday, Uber went public in the what is the biggest initial public offering (IPO) so far this year. Earlier this month, Beyond Meat went public with less hype and saw its price skyrocket 163% in its first trading day, making it the best-performing first-day IPO in nearly two-decades. Beyond Meat is a producer of plant-based meat substitutes founded in 2009. The company’s Beyond Burger is sold at Whole Foods and restaurants chains around the country.
At HIGHLAND, one of the cornerstones of our investment approach is that securities offering higher expected returns share particular attributes, which we refer to as the dimensions of higher expected returns (or dimensions for short). These dimensions are based on economic theory, backed by Nobel Prize winning academic research, and supported by decades of real-world historical data. Dimensional Fund Advisors is an investment management firm with a long history of applying academic research to practical investing and is one of our preferred investment managers. Dimensional Fund Advisors defines a dimension as a return difference between two assets or portfolios “that is sensible, empirically robust in the data, and cost-effective to capture in well-diversified portfolios.”
When Tiger Woods won the 2019 Masters earlier this month, it capped off one of the greatest comebacks in golf history, if not one of the best comebacks in the history of all sports. Woods’s last Masters tournament victory came in 2005 and his last major tournament win was back in 2008. In this 11-year span between major wins, Woods faced a very public divorce, was arrested for driving under the influence, and battled a number of injuries. With his latest Masters win, Woods has 15 major tournament wins and is now three behind Jack Nicklaus for most of all time.
HIPAA stands for Health Insurance Portability and Accountability Act and was enacted by Congress in 1996. The original purpose of HIPAA was to simplify and unite a fragmented health care system, enabling health information to be electronically shared between providers and prevent healthcare fraud.
When the calendar turned from March 31st to April 1st, the U.S. economic expansion turned 117 months old. Should the expansion continue through July, it would become the longest economic expansion in U.S. history. Given that the U.S. economic expansion is starting to show signs of its age, many have been questioning how much longer until the next recession.
It’s been an eventful few months. After posting its worst quarterly return since the fourth quarter of 2008, the S&P 500 rebounded strongly in the first quarter of 2019 to post its best quarterly return since the third quarter of 2009. The S&P 500 has now recovered much of its fourth quarter losses as oversold signals have faded and investor optimism has been buoyed by a favorable shift in monetary policy by the U.S. Federal Reserve.
The changes made to the tax code by the Tax Cuts and Jobs Act (TCJA) of 2017 are now being felt full fledge, and despite early fears, some filers have been pleasantly surprised by their tax returns for 2018. Historically, one of the more loathsome tax rules over the years was the Alternative Minimum Tax (AMT) which disproportionately impacted earners in the Northeast and West Coast where wages and cost of living are higher. In 2018, the rules around AMT have changed increasing the amount of income you must earn to be impacted by the tax.
The Federal Reserve held their March meeting this past week and indicated no more interest rate hikes will be coming in 2019 as a result of concerns over slower growth and the potential for a bump in the unemployment rate. This is a significant shift from three months ago when the Federal Reserve announced two interest rate hikes would be appropriate for 2019.
Nobody likes paying taxes. Even though taxes are necessary to keep our schools open, communities safe, roads clean, and governments running, it’s not a fulfilling experience to see a percentage of your hard-earned income or investment gains vanish into thin air. With that being said, there’s no way of escaping taxes (without risking legal repercussions, of course), but that doesn’t mean there aren’t things we can do throughout the year to reduce the amount of taxes you ultimately end up paying.
Author Nancy Hatch Woodward once wrote, “Snow brings a special quality with it – the power to stop life as you know it dead in its tracks.” Anyone who lives in the Northeast knows this all too well.
On Thursday, November 15, 2018, the New Jersey/New York area was hit with one of the more notable November snowstorms in history. Parts of Northern New Jersey and New York City received upward of six inches of snow, with some areas getting hit with as much as ten inches.
The story of the millionaire next door has been told at nauseum. Since authors Thomas J. Stanley and William D. Danko first released their book “The Millionaire Next Door: The Surprising Secrets of America’s Wealthy” in 1996, the book’s themes have been used as an attempt to promote good savings habits.
In closing 2018, the S&P 500 posted its worst December since 1931, during the Great Depression, and its worst quarter since 2008, during the Great Recession. The good news is we didn’t have to wait long for the bounce back. To start 2019, the S&P 500 posted its best January since 1987. As of Friday’s market close, the S&P 500 is 5.0% below its high on September 21, 2018, but is 19.0% above its low on December 26, 2018.
A retirement calculator is a great tool for most investors. It lets you input a number of variables such as current age, planned retirement age, annual salary, annual savings, current retirement savings balance, and expected annual return and the calculator computes your estimated accumulated retirement account balance at retirement. Some calculators will even translate that lump-sum balance into an annual withdrawal amount. This is a straight-forward way to see if you are on track to meet your retirement goals and compare what you have with what you will need. If you don’t like your results, you can play with the inputs to determine what changes you should make.
Over the past few weeks most of our posts have focused on putting the recent stock market volatility in perspective and subduing concerns about the strength of the U.S. economy.
One of the important points we have stressed is the importance of remaining disciplined to your investment strategy because capital markets have rewarded long-term investors. One of the graphics we often show to illustrate this point is the chart included below. This chart shows the growth of $1 from January 1, 1926 through December 31, 2018 had you invested in US small cap stocks, US large cap stocks, long term corporate bonds, long term government bonds, and cash.
The National Football League (NFL) season reached its conclusion yesterday when the New England Patriots defeated the Los Angeles Rams 13-3 at Mercedes-Benz Stadium in Atlanta, Georgia to win the Super Bowl. While New England Patriots Fans are busy celebrating their sixth Super Bowl win in the past eighteen years and Los Angeles Rams fans are licking their wounds, some investors are looking to the final score to get a sense of how the stock market is likely to perform for the rest of the year.
I’ve gotten into the habit of annually updating the chart below that shows the calendar year returns for a number of different asset classes commonly used by investors to construct diversified portfolios. I call this chart the periodic table of annual returns.
How often in the past month have you received a credit card offer with a large sign-up bonus and lofty on-going rewards? Sign-up bonuses can be a flat dollar amount, say $500, or a promise to match any cash back rewards you may earn within the first 3 months. On-going rewards can be cash, points, or travel perks. No matter your need there is sure to be a credit card issuer out there trying to entice you to sign up for their card. Some people accept the sign-up bonus and on-going rewards and don’t think twice about it. Others, though, see these offers and wonder, “What’s the catch?”
Over the past few months, market participants have focused on the yield curve and its history of predicting an economic recession. As the chart below shows, the yield curve has inverted prior to every recession dating back to 1962. With predictive power like this, it’s no wonder investors have been vigilantly monitoring its movement in an attempt to gauge when a recession may occur.
At HIGHLAND, we continue to support the efforts by our staff to develop personally and professionally. We have a commitment to providing excellent service and guidance to clients. Each member of our team has an intellectual curiosity and belief that what they do really matters to our clients’ lives. With this in mind, we have some exciting news to share about the HIGHLAND team.
It’s a new year and I can’t think of a better time to highlight cost of living adjustments affecting dollar limitations for retirement-related items and social security benefits for 2019.
The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the Federal government’s Thrift Savings Plan increased from $18,500 to $19,000. The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the Federal government’s Thrift Savings Plan remains unchanged at $6,000.
What a difference a year makes. This time last year we were highlighting a picture-perfect year for global stocks. In 2017, both the S&P 500 and the MSCI All Country World Index ex USA were positive for all twelve calendar months. This was the first time either index accomplished this feat and it happened with near-record low volatility while enduring geopolitical tensions, political dysfunction, massive natural disasters, and tighter monetary policy. 2017 was defined by synchronized global expansion whereby most global economies were getting stronger, with the United States leading the charge.
From its close on September 20th to its close on December 24th, the S&P 500 Index declined 19.8%, including a greater than 7% one-week (December 14-21) fall that had not been seen since the Global Financial Crisis of 2008-09. The generally accepted technical definition of a bear market is a decline of 20% or more. While the S&P 500 barely avoided the official bear market designation, it sure felt like one.
In the 1950s psychologist Solomon Asch conducted a series of experiments to investigate the extent to which social pressure from a majority group could affect a person to conform. Asch’s experiments were simple vision tests. A group of eight male college students were placed in a room, shown a card with a line segment on it, and then shown another card with three line segments labelled A, B, and C. One of the line segments on the second card was the same length as the line segment on the first card, while the other two line segments were clearly of a different length. Participants were asked to write down their answers and then give their answers aloud. Seems like a pretty straight forward experiment, but there was a twist.
December tends to bring holiday spirits and positive stock returns. In fact, no month has a higher average return or has been higher more often than December since 1950. Additionally, since 1950, the S&P 500 has never had its lowest monthly return in December.
Over the past 80 days, the US stock market has declined about 11%, and over the last 365 days, it is down about 1%. Foreign stock markets have declined about 9% over the last 80 days and are down about 10% for the last 365 days as well. The US bond market, typically a good hedge to the risk of stocks, hasn’t delivered much protection during the same time periods, being up about 1% in the last 80 days and down about 1% for the last 365 days.
This past week we experienced a 4.6% decline in the US stock market. Foreign stocks fared better with a 2.06% decline. With the US market is down over 10% since late September, about half of the recent loss occurred just last week.
Prior to the passing of the Tax Cut and Jobs Act (TCJA) in December of 2017 you likely enjoyed the tax deduction that came with your charitable contributions – no matter the size of the donation. If you lived in a state where you paid state income taxes and had high property taxes you were probably itemizing your deductions (See NJ, NY, CT, and MA – just to name a few).
Earlier this month I had the opportunity to attend the 29th annual SRI Conference in Colorado Springs, Colorado. The SRI Conference is the premier annual gathering of sustainable, responsible, and impact investment professionals working to direct the flow of investment capital toward a truly sustainable future.
Over the past few weeks the focus of our weekly posts has been on the volatility in the global equity market. We have sought to provide some insight into what’s driving global stocks lower and provide perspective on how frequently drawdowns like the one we are currently mired in occur. We hope these insights and perspectives have been valuable for you and helped to give you peace of mind.
It goes without saying, this has been a challenging year for investors. Every asset class has experienced significant loss at one point or another – International Equities, US Bonds, and recently, US Equities. As much as we say uncertainty and risk of loss is the cost of realizing long-term capital returns, times like this can make even the most rational long-term investor fear the future.
The recent stock market volatility has induced fears that the stock bull market that started in March 2009 following the Global Financial Crisis may be coming to an end. And these fears have only been stoked by the financial media. See some of the headlines below.
After a long stretch of relatively calm and steady stock market gains, volatility has reared its ugly head over the past four weeks. Last week we detailed how interest rates have contributed to the recent stock market slump. While interest rates may be the driving force behind the quick and dramatic drop in stock prices, there are other factors at play. Trade tensions between the U.S. and its global trade partners are running high. There is uncertainty around the upcoming midterm elections. There is nervousness as companies are beginning to announce third quarter earnings. Housing sales are starting to slow. Geopolitical pressures are mounting in light of the murder of Jamal Khashoggi in Saudi Arabia. All of these issues have played a role in the recent market volatility that has seen the S&P 500 decline in 15 of the 19 trading days in October.
Last year, there were eight trading days where the S&P 500 moved up or down by at least one percent. So far this year, there have been forty-one such trading days. Further, five of the last eight trading sessions have seen the S&P 500 move up or down by at least one percent. With the recent volatility in the stock market has some asking what’s next for the stock market and the U.S. economy.
Last Wednesday, October 10th, U.S. stocks suffered their worst losses in eight months. The Dow Jones Industrial Average declined 3.2% and the S&P 500 declined 3.3%, both notching their worst losses since February 8th. The S&P 500 also posted its first six-day losing streak since November 2016, although a bounce back on Friday stopped that slide.
At HIGHLAND, we continue to support the efforts by our staff to develop personally and professionally. We have a commitment to providing excellent service and guidance to clients. Each member of our team has an intellectual curiosity and belief that what they do really matters to our clients’ lives. With this in mind, we have some exciting news to share about the HIGHLAND team.
Just like in sports, there are always going to be winners and losers in business. The ability to evolve and adapt usually will dictate which side of the fence you land on. (See Kodak and Apple – one evolved and the other didn’t.)
This past quarter was filled with notable events and anniversaries. At the market’s close on August 22nd, the S&P 500 bull market became the longest ever. The S&P 500 managed to avoid a decline of 20% or more on a closing basis for 3,453 calendar days, a streak that began in March 2009 following the Great Recession. This current bull market surpassed the previous longest bull market that lasted from 1990 to 2000. Since that point, the S&P 500 has continued to reach new all-time highs. It’s ironic that we celebrated the longest running bull market nearly10-years removed from the collapse of Lehman Brothers on September 15, 2008 that shook the financial markets and preceded the Global Financial Crisis. It may feel like a lifetime ago, but we are not far removed from that historic event.
Over the recent past, more individuals have been taking advantage of Health Savings Accounts (HSAs) offered in tandem with high deductible health plans (HDHPs). It is estimated that deposits into HSAs will increase by 22% to $53.2 billion from 2017 to 2018 with direct employer relationships being the leading driver of new account growth.
Midterm elections occur every four years at the midpoint of the four-year presidential term. With about one month until Election Day on November 6th, midterm elections are at the forefront of many individual’s thoughts for both the political and investment implications.
Last November I was rear-ended on my drive home from work. I was stopped at a red light when the driver behind failed to stop. Luckily, I was not injured in the accident, but it was scary nonetheless. Less than one month later, I was driving down the highway to return the rental car I needed while my car was at the body shop getting repaired and I was once again rear-ended. Not being at fault, I was lucky to escape the accident with no physical injuries.
Exchange-traded products (ETPs) have been lauded by investors and investment professionals for helping to democratize investing. The most popular type of ETP is the exchange-traded fund, better known by its acronym ETF. Exchange-traded notes (ETNs) are a lesser known type of ETP. ETNs differ from ETFs in that ETNs don’t hold underlying securities, like stocks or bonds. Rather, they are unsecured debt instruments issued by a bank that promises to pay the performance of an underlying investment, typically an index or basket of securities.
On September 21, 2018, the Global Industry Classification Standard (GICS) sector structure will experience the biggest change in its history. Specifically, the Telecommunication Services sector will be broadened to include companies from the Consumer Discretionary and Information Technology sectors and renamed Communication Services.
Whether you are a first time home buyer or a seasoned mover, there are many intricate details involved with taking out a mortgage. If you are purchasing or refinancing a home, there may be an opportunity to lower the interest through buying mortgage points. Although a lower interest rate sounds appealing, there may be drawbacks depending on your unique situation.
When the closing bell rang on Wednesday, August 22, 2018, many media outlets were quick to celebrate the longest bull market in United States history. However, there are many investment professionals and historians who beg to disagree with this notion. You’re probably asking yourself how can there be a disagreement on whether this bull market is the longest ever? It either is or isn’t. It’s black or white. Day or night. Unfortunately, it’s not that simple.
The MSCI Emerging Markets Index looks significantly different today than it did at its inception thirty years ago. For one, the market capitalization of emerging markets companies has increased from $52 billion in 1988 to $5.3 trillion as of May 31, 2018. This underscores the ability of emerging markets countries to contribute to the global economy, especially as global markets have expanded.
When the calendar turned from July to August, the United States economy celebrated its 109th consecutive month of expansion. This current period, which began in June 2009 following the Great Recession, is the second longest economic expansion in the history of the United States. While this current economic expansion is one for the record books, it sure hasn’t felt that way for a range of Americans who still don’t feel financially secure. As the chart below shows, annualized real gross domestic product (GDP), which is a measure of economic growth, is the lowest of any economic expansion since 1950.
Protecting yourself and your family is top priority for most, and households purchase different types of insurance to ensure that they are properly covered from unforeseen events.
A very important form of insurance that people frequently overlook is Excess Personal Liability, which is commonly referred to as Umbrella insurance. Umbrella insurance provides additional liability coverage above the limits established through other basic liability policies like auto and homeowner’s/ renter’s. Umbrella insurance is designed to help guard against large and potentially devastating liability claims or judgments caused from bodily injury, property damage, lawsuits, libel, and slander.
General Electric has long been one of the most prestigious companies in the United States. In fact, General Electric is the only one of the original twelve members of the Dow Jones Industrial Average created in 1896 by Charles Dow still around today. This speaks to the company’s ability to innovate and adapt.
Since the start of the U.S. stock bull market following the Great Recession in 2009, consumer discretionary and technology have been the best performing sectors of the S&P 500. In the first half of 2018, that trend continued. It is not uncommon for market sectors to experience long periods of strong performance, but what has some in the financial media buzzing is that the same handful of technology companies continue to be among the best performers.
The first two articles in the series, “Understanding Your Federal Student Loans”, provided an introduction to student loans, how to evaluate your loan options, and incentives associated with Federal loans. The final article, Part 3, in this series will explore the alternatives to traditional, federal student loans.
Every couple has its own unique way of divvying up the household’s financial chores. This may mean one spouse is in charge of investments and one spouse is in charge of paying the bills, or one spouse could assume all the financial responsibilities. In the latter case, the responsible spouse effectively assumes the role of the family’s chief financial officer (CFO).
On Monday of last week, the Dow Jones Industrial Average snapped a 501-day trading streak by falling below its 200-day moving average. According to Bespoke Investment Group, the 501 consecutive day streak above the 200-day moving average is the Dow’s third longest since 1952.
In the final days of 2017, Congress enacted sweeping changes to the federal tax code as a part of the Tax Cuts and Jobs Act. Among these changes is a provision that we believe unfairly disadvantages you as an investor: deductibility of advisory fees.
For parents looking to save for their child’s future educational expenses, 529 college savings plans are highly regarded as the best way to save. A 529 account allows you to invest and grow assets free from federal and state taxes, as well as tax-free withdrawals for qualified educational expenses.
With the recent changes made through the Tax Cuts and Job Act (TCJA) of 2017, there has been a concern by many charitable organizations that people’s philanthropic nature will be stunted going forward.
China is one of the fastest growing economies in the world and is home to some of the best-in-class businesses, particularly in the technology industry. However, most investors domiciled outside of China have had limited access to these Chinese companies. China’s capital markets are not fully open to foreign investors because the Chinese government does not allow the free flow of capital into or out of mainland China.
For many investors, the word risk has a negative connotation. However, risk is a normal and required part of investing. While it can sometimes be uncomfortable to take risk, if you didn't accept some risk, the potential to achieve higher returns would not be possible.
Sector investment strategies have been around for decades and the proliferation of exchange-traded funds, or ETFs, have made these investment strategies available to the masses at a relatively low cost. The problem with sector investment strategies is that while businesses change with technological advancements, the traditional sector classification system has remained unchanged.
I am not a fan of basketball, but one story this year caught my attention. The Philadelphia 76ers, who were far and away the worst team in the National Basketball Association over the past few seasons, surprised many fans and basketball insiders alike when they won 52 games en route to the number 3 seed in the Eastern Conference playoffs. For the 76ers players and fans, the mantra “trust the process” served as a rallying cry for the team throughout the season and into the playoffs.
No - we haven't changed our minds. This is still not a good idea and a viable long-term strategy.
The financial media loves to write articles about how much money you would have if you invested $1,000 in a particular stock on a particular date. Often times the authors of these articles will reference the best performing stock of the year and trace the history back to the stock's initial public offering, or IPO.
According to the US Department of Agriculture's most recent annual estimate, it will cost a middle-income family $233,610 to raise a child to age 18, ignoring college and inflation. This is a staggeringly high number, but the cost to raise a child with special needs can exceed that number by 5 or 10 times, depending on the child's condition.
It’s no secret that health care costs have risen dramatically in the last decade. This has major implications for retirees or those workers approaching retirement age. In general, health care expenses tend to increase with age.
There has been a lot of talk in the financial media lately about the shape of the U.S. Treasury yield curve.
The first article in the series, “Understanding Your Federal Student Loans: Part 1,” provided an introduction to student loans and how to organize the pertinent data to evaluate your loan options. This article outlines the different incentives that are provided with Federal Loans.
The markets took a tumble last Thursday – the Dow Jones Industrial average falling more than 700 points, or about 3.0%. This marks the worst day in the market since February 8th. Yes, February 8th of 2018 – doesn’t seem like we are making history here.
Net worth is the most common measure used to assess wealth. Your personal net worth is relatively easy to calculate; it is the combination of what you own (assets) less what you owe (liabilities). A person’s net worth can be comprised of many different assets and liabilities.
In the past few weeks, there has been an increase in volatility in stock markets around the globe. The first bout of volatility spanning the last week of January and first week of February was caused by concern the Federal Reserve would raise interest rates at a faster pace than the markets were anticipating.
On December 22nd, the Tax Cuts and Jobs Act of 2017 signed into law changed the tax landscape for individuals and corporations. Although there are many modifications to the tax code that will affect all Americans, the mortgage interest itemized deduction directly affects current and future homeowners.
Talk of inflation has heated up in the last few weeks, with fears that higher than expected inflation could cause the Federal Reserve to raise interest rates at a faster pace. This was one of the contributing factors to the recent volatility in the stock market and has driven U.S. Treasury yields higher.
Certain aspects of the tax bill signed into law at the end of last year have received significant attention from investors, and rightfully so. The final version of the Tax Cuts and Jobs Act lowered corporate tax rates, realigned personal tax rates, and capped or eliminated certain deductions (i.e. state and local tax deductions).
Having raised five children, if there was one piece of wisdom I could pass on to them (beyond the need for a spiritual foundation), it would be that in life you will not always be able to control what happens to you, but you can control how you respond to what happens to you.
I spent last week at the TD Ameritrade national conference in Orlando, Florida. Having the markets decline rapidly while at a conference with over 2,000 advisors was a pretty interesting experience – you would expect panic. Instead, it seemed the market downturn brought advisors a sigh of relief. Why?!
If you are a parent with a child in college or paying off debt yourself, you probably are all too familiar with the astounding costs of a college education. With the average annual cost of a four-year private college at $49,320, it’s important to be realistic about how much of the tuition will be funded by student loans.
Last year I wrote an article titled “The Shortcomings of Income Only Spending in Retirement,” which detailed the shortfalls of the popular strategy of spending only the income generated by a portfolio in retirement. In summary, the main drawback of income only spending is the tendency to increase portfolio risk when yields are low in order to generate more income.
It is Monday morning and the world's stock markets are falling drastically. Starting in Asia overnight and then hitting the US markets in the morning. The news is all doom and gloom.
With over 22 years practicing as a CERTIFIED FINANCIAL PLANNER™ Professional, I have seen too many prospective clients come to our office after having been the victim of bad advice.
There is no reason to pay more than your fair share of taxes and there are ways that a financial advisor can help you minimize the amount of tax you pay.
Do you know how to find a financial advisor that's right for your needs? Do you know what your needs include?
What are some of the most important financial planning tips everyone can use, and some of your most financially savvy friends are using right now?
As humans our biology often works against us by getting in our way of our ability to assess risk.
A Google search about planning for retirement provides a plethora of articles. Most of which touch on the subject of that "magic number" that determines when you can retire happy.
It's no secret. There is a massive shift happening in the financial advisement industry. There are so many great opportunities opening up for young investors with smaller portfolios to have access to the same investment advisors and funds that millionaires have access to.
There have been numerous articles in recent years touting the benefits of delaying taking Social Security until a certain age.
The national average annual long term care costs of a nursing home stay is over $95,000 and ever-increasing. The survey below puts the cost in the NY metro area at more than $155,000 per year.