Last week we were interviewed and subsequently quoted in Investment News magazine regarding estate planning for celebrities. The article focused on the untimely passing of Whitney Houston. Like many celebrities before her, she left behind an estate planning mess. As we mentioned in the article, estate planning is an easy thing to put off for “tomorrow”. However, sometimes tomorrow shows up sooner than expected. So we encourage you to always have your estate plan in order. This typically includes a will and a revocable living trust. Celebrities and high net worth individuals may have more complex estate planning needs related to 2 issues:
The good economic news continued last week as household incomes nationwide jumped sharply. The inflation adjusted median income increased 4 percent between August and December. That is the fastest increase in 4 years. This coincides with a decreasing unemployment rate which surprised everyone by dropping .8 percent in the last 6 months. In other good news, Greece passed the necessary budget cuts in order to get the next round of bailout funds from the European Union. This will ensure that the Europe’s economies will not go down in flames (at least for a while longer). Lastly, retail sales continue to grow as the U.S. economy picked up steam from a 1 percent growth rate in the first half of 2011 to a 2.8 percent rate in the second half.
Speaking of retail sales; The USA Today reports that those celebrating valentine’s day will spend an average of $126. Men outspend women by 2 to 1 on this holiday. Unfortunately, it is too late to order gifts online. So get out there and start shopping.
Have a great week.
| Posted in Weekly Insight | Posted on 14-02-2012
The stock market had its best January in many years and there seems to be a new sense of optimism. There are still plenty of things to be concerned about (i.e. Europe, the depressed housing market, unsustainable budget deficits, etc.). However, the actual economic figures continue to beat expectations. The latest example is the December Jobs number in which we found out that the economy added 243,000 jobs. That was about 90,000 more than most economists expected. In addition, the jobs growth was across the board, including 50,000 new manufacturing jobs. In other good news, the top 20 retailers reported revenue growth of 4.2 percent in 2011. The expectation was only a 2 percent increase.
| Posted in Weekly Insight | Posted on 06-02-2012
Last week the Fed announced plans to keep interest rates extremely low thru 2014. This has been (and will continue to be) very challenging for retirees who keep a large portion of their investible assets in CD’s and other fixed income investments. This was the topic of Paul Sullivan’s column in the New York Times this past Saturday which featured SureVest and one of our clients (the McNulty’s).
| Posted in Weekly Insight | Posted on 31-01-2012
We hope everyone’s 2012 is off to a good start. The stock market seems to like this year better than last. Both domestic and international markets are up over 5 percent so far this month. In typical fashion, the markets that lagged last year are leading this year (e.g. India, down 20 percent last year, but up 9 percent so far this year).
In addition to stocks, many people are interested in what is happening in the residential real estate market. Nationally, prices continued their decline last year and are not expected to hit bottom until 2013. However, last year we had the fewest new homes were built since they began to keep record. That is a good sign (unless you are a homebuilder). Also, mortgage rates hit their lowest level ever last week, 3.88 percent for the average conforming 30 year fixed.
| Posted in Weekly Insight | Posted on 24-01-2012
2011 turned out to be a record year for volatility. US stock markets finished the year virtually unchanged from where they began. This masked much of the carnage that was experienced in global markets such as Europe and Asia which experienced declines of 12 to 20%. The Global Dow, which is a broad based index of the top global corporations, declined nearly 14%. This index holds many of the stocks we invest in and is the closest benchmark to the equity portion of our portfolios. Our risk management discipline and positive returns from our individual stock picks served us well in 2011 with our core portfolios experiencing only minimal declines.
| Posted in Market Commentary, Weekly Insight | Posted on 18-01-2012
Last week the two big stories were volatility in certain commodities and the credit downgrade of several European countries. First, in the commodities area, Natural Gas prices continued to collapse hitting a new multi-year low $2.55 (per metric cubic foot). The price decline is the result of a mild winter, high inventory levels and record production made possible largely by newer drilling technology. The low prices are good for consumers but bad for utilities and drilling companies. The other commodity in the news was orange juice futures, which hit a 5 year high before falling 11 percent in 2 days. There are concerns about frost damage in Florida and drought in Mexico, not to mention the FDA researching fungicide that was found (in safe quantities) in some orange juice on retail shelves.
The bigger story of the past week was that Standard & Poors cut the ratings of Italy, Spain, Portugal and Cyprus by two notches and France, Austria, Malta, Slovakia and Slovenia by one notch each. The markets were prepared for this, so the reaction was calm. In fact, it eliminated some uncertainty regarding how dramatic the rating cuts might be. Some market watchers were surprised to see all of the major European stock indexes up slightly yesterday. Yields on French debt were slightly lower yesterday, another good sign.
| Posted in Weekly Insight | Posted on 16-01-2012
Happy New Year,
Within a week, we will be sending out our 4th quarter commentary to clients and also posting it on this BLOG. Instead of recapping all of the events of 2011 we will just provide a couple thoughts here:
| Posted in Weekly Insight | Posted on 04-01-2012
The book is called “A Good Financial Advisor Will Tell You..” We strongly encourage everyone to read this book. It will give you a solid background in the psychology of investing, how to invest like the pros, how to manage risk in your investment portfolio, and important insights on generating inflation adjusted lifetime income, planning your legacy and working with a financial advisor. If you do not yet have a copy of the book, you can see a preview of it at www.agoodfinancialadvisor.com
The book is now available on Amazon.com, BN.com and can be ordered from over 25,000 bookstores.
| Posted in Weekly Insight | Posted on 27-12-2011
The big story of the past week is whether or not congress is going to extend the 2 percent payroll tax cut. They probably will ultimately approve it since neither party wants to be blamed for a tax increase in an election year. The two parties are bickering over whether to pass a temporary 2 month extension or extend it right now for another year. This tax cut saves the average family of four $1,000 a year. If it is not extended, the tax increase will certainly be a drag on the economy, which could result it little to no economic growth in 2012.
