Hixon Zuercher January 2016 Monthly Video Update

Stocks Drive Higher Amid Uncertainty – Weekly Update for February 1, 2016

Image courtesy of FreeDigitalPhotos.net/Pansa

Image courtesy of FreeDigitalPhotos.net/Pansa

Stocks experienced another volatile week with high daily swings in value. Despite the lingering uncertainty, stocks ended the week higher on the back of better-than-expected earnings reports and higher oil prices. For the week, the S&P 500 gained 1.75%, the Dow grew 2.32%, and the NASDAQ added 0.50%.[i]

Fourth-quarter earnings season is in full swing and will continue to play a role in stock performance in future weeks. With reports in from 201 S&P 500 members, overall earnings are down 3.2% on 3.6% lower revenues from Q4 2014. The overall picture so far is one of growth challenges from a slowing global economy, a strong U.S. dollar, and weak commodity prices. However, despite the challenges, 72.5% of firms have been able to beat their earning targets, indicating that managers are doing a good job of managing expectations.[ii] On the other hand, reports show that the headwinds that dogged earnings last year will affect performance in 2016 as well.

We also got our first look at fourth-quarter economic growth, which showed that the economy grew at a lukewarm 0.7% pace in the final months of 2015. Low consumer spending weighed on growth, suggesting that Americans are pocketing gasoline savings instead of spending them.[iii] We certainly can’t fault folks for financially prudent behavior, but consumer spending accounts for 70% of economic activity. While we can attribute some of the slow economic growth to seasonal factors like an unusually warm winter, analysts will be closely watching data releases in the weeks ahead for signs of deeper weakness.

After meeting for the first time in 2016, the Federal Reserve declined to raise interest rates last week but gave no indication that it intends to abandon rate hikes later this year. Predictably, talking heads exploded on all sides. Some believe that the Fed made a mistake by not raising rates and giving markets more confidence in the economy. Others believe that the Fed is being appropriately cautious given the market turmoil and concerns about economic growth. What’s clear is that the Fed is telling investors: “We’re aware of the uncertainty and we’re keeping an eye on many indicators.”[iv]

Bottom line: In our view, market volatility will remain with us for the foreseeable future. While investors appear to be cheerful about earnings that are consistently beating expectations, sentiment could turn on a dime.  We’re keeping an eye on fundamentals and are suggesting prudent changes where we deem necessary.

Looking ahead, we expect attention to remain on earnings releases as well as a raft of economic reports that could show whether the economy is slowing or not. Traders will be especially interested in seeing if Friday’s January jobs report shows sustained strength in the labor market.



Monday: Personal Income and Outlays, PMI Manufacturing Index, ISM Mfg. Index, Construction Spending

Tuesday: Motor Vehicle Sales

Wednesday: ADP Employment Report, ISM Non-Mfg. Index, EIA Petroleum Status Report

Thursday: Jobless Claims, Productivity and Costs, Factory Orders

Friday: Employment Situation, International Trade



Consumer confidence edges up. A measure of consumer optimism about the economy improved slightly in January, indicating that Americans are (so far) brushing off concerns about financial markets.[v]

Durable goods orders slump. New orders for long-lasting factory goods plummeted 5.1% in December, showing that the manufacturing sector slowed considerably last quarter.[vi]

Weekly jobless claims fall. The number of Americans filing new claims for unemployment benefits fell sharply after reaching a six-month high two weeks ago, suggesting that labor market growth remains strong.[vii]

China set growth target for 2016. For the first time, Chinese leaders set economic growth targets of 6.5-7.0% for this year as they attempt to support a transition to a more modest pace of growth.[viii]

[i] http://finance.yahoo.com/q/hp?a=00&b=25&c=2016&d=00&e=29&f=2016&g=d&s=%5EGSPC%2C+&ql=1



[ii] http://www.zacks.com/commentary/69841/q4-earnings-season-all-around-growth-challenges

[iii] http://www.foxbusiness.com/markets/2016/01/29/weak-4q-gdp-temporary-dip-or-is-u-s-recession-bound.html

[iv] http://www.cnbc.com/2016/01/27/the-fed-holds-rates-unchanged.html

[v] http://www.foxbusiness.com/markets/2016/01/26/consumer-confidence-edges-up-in-january.html

[vi] http://www.cnbc.com/2016/01/28/market-reacts-to-sharp-decline-in-durable-goods-orders.html

[vii] http://www.foxbusiness.com/markets/2016/01/28/weekly-jobless-claims-fall-by-16000.html

[viii] http://www.cnbc.com/2016/01/29/china-set-to-adopt-65-7-percent-growth-target-range-for-2016-sources.html

Stocks End Choppy Week Higher – Weekly Update for January 25, 2016

Image courtesy of FreeDigitalPhotos.net/steafpong

Image courtesy of FreeDigitalPhotos.net/steafpong

After a volatile week, markets regained some steam, helped by a recovery in oil prices and some upbeat earnings reports. For the week, the S&P 500 gained 1.41%, the Dow grew 0.66%, and the NASDAQ added 2.29%.[i]

Though the headwinds that roiled markets since the beginning of the year remain, investors found their footing last week and closed out a positive week for the first time in 2016. What caused the uptick in investor sentiment?

Oil prices rebounded to settle at their highest close since the first week of January. While oil is likely to remain volatile, a rally helped investors settle their nerves.[ii] Markets also got some help from the European Central Bank, which hinted at further stimulus measures to boost the European economy.[iii]

We’re also in the early stages of U.S. earnings season, which is stealing attention away from China and oil prices. So far, with 73 members of the S&P 500 reporting in, earnings are already up 1.4% on 0.8% higher revenues. While those aren’t stellar results, 71.2% of reporting firms beat earnings estimates, suggesting that corporate leaders set expectations low enough to be able to beat them amid challenging conditions.[iv]

However, the overall fourth-quarter earnings picture is likely to be less rosy. U.S. companies are struggling to achieve growth goals in a shaky global business environment, and analysts expect overall Q4 earnings to come in below Q4 2014 levels.[v] What do these challenges spell for investors? Volatility. While we can’t predict the future, we think that the first few months of 2016 are likely to be rocky for equities.

Looking ahead, the Federal Reserve’s January meeting will take center stage this week, though economists expect them to hold pat on interest rates. Though it’s possible that Fed economists may vote to raise rates further, a raft of weak data and ongoing concerns about global growth are likely to trigger a wait-and-see approach.

The first look at Q4 economic growth will be released on Friday, and it’s likely to show weak growth in the last three months of the year.[vi] Earnings season will also continue, and investors will be looking forward to reports from heavy-hitters like Apple [AAPL], Facebook [FB], and Ford [F].[vii]

Will stocks be able to hold the gains and move out of the pullback? We’ll see. The news has been negative for several weeks, and it’s possible that investors are poised to jump on any positive surprises.



Monday: Dallas Fed Mfg. Survey

Tuesday: S&P Case-Shiller HPI, Consumer Confidence

Wednesday: New Home Sales, EIA Petroleum Status Report, FOMC Meeting Announcement

Thursday: Durable Goods Orders, Jobless Claims, Pending Home Sales Index

Friday: GDP, International Trade in Goods, Employment Cost Index, Chicago PMI, Consumer Sentiment



Housing starts drop in December. Groundbreaking on new houses fell 2.5% last month and permits fell 3.9%, adding to concerns about economic growth in the fourth quarter.[viii]

Existing home sales surge. Home resales skyrocketed in December by a record 14.7%, boosted by warmer weather and a stronger labor market that is supporting household formation.[ix]

Consumer prices fall in December. A measure of inflation fell last month as lower gasoline prices weighed on energy costs. Tepid inflation could delay further interest rate hikes by the Federal Reserve.[x]

Winter storm Jonas slams East Coast. A blizzard covered large swathes of the East Coast in historic levels of snow. The economic disruption of short-lived storms are usually minor, and Jonas may be a win for grocery stores, though it could be a loss for hourly workers.[xi]

[i] http://finance.yahoo.com/q/hp?s=%5EGSPC&a=00&b=18&c=2016&d=00&e=22&f=2016&g=d



[ii] http://www.cnbc.com/2016/01/22/us-markets.html

[iii] http://www.bbc.com/news/business-35373365

[iv] http://www.zacks.com/commentary/69041/q4-earnings-season-spotlights-growth-challenges

[v] http://www.zacks.com/commentary/69041/q4-earnings-season-spotlights-growth-challenges

[vi] http://www.bloomberg.com/news/articles/2016-01-21/fed-meeting-u-s-gdp-home-data-tennis-week-ahead-jan-23-30

[vii] http://www.zacks.com/commentary/69041/q4-earnings-season-spotlights-growth-challenges

[viii] http://www.foxbusiness.com/markets/2016/01/20/u-s-housing-starts-permits-fall-in-december.html

[ix] http://www.foxbusiness.com/markets/2016/01/22/existing-home-sales-surge-record-14-7.html

[x] http://www.foxbusiness.com/markets/2016/01/20/december-consumer-prices-fall-slightly.html

[xi] http://www.forbes.com/sites/samanthasharf/2016/01/22/economics-of-a-blizzard-winter-storm-jonas-is-a-win-for-whole-foods-but-a-loss-for-hourly-workers/#63366ed5384a

Stocks End Rocky Week Down – Weekly Update for January 19, 2016

Image courtesy of FreeDigitalPhotos.net/Vlado

Image courtesy of FreeDigitalPhotos.net/Vlado

Stocks closed down again Friday ahead of the long holiday weekend after disappointing earnings, more China worries, and plunging oil prices added to fears about slowing global growth. For the week, the S&P 500 dropped 2.17%, the Dow fell 2.19%, and the NASDAQ lost 3.34%.[i]

It’s certainly been a rough start to the year with multiple weeks of losses and several indexes pushing into 10%+ correction territory. During some market declines, a single culprit is responsible and attention can quickly shift to other issues. In this pullback, multiple factors are contributing to weakness:

Persistent lows in oil prices due to the combination of a supply glut and slowing global demand for oil. After plummeting for more than a year, oil prices have now hit 12-year lows below $30/barrel.[ii] Cheap oil is a boon to consumers who pay less at the pump, but it hits oil producers and ancillary sectors hard.

A Chinese economy in transition from a manufacturing and export-led high-growth period to a more stable, mature model based on services and domestic consumption.[iii] We’ve never seen a hybrid economy quite like it – halfway between Communism and Capitalism – undergo such a shift. The issues at stake are serious: Can Chinese leaders usher in a new period of growth without sending the economy into recession? Can China’s immature financial sector keep up? Answers will come eventually, but we can expect a lot of uncertainty along the way.

We should also keep in mind that markets have enjoyed multiple years of fairly reasonable volatility. Since volatility events tend to occur in clusters, it’s not so surprising that we’re seeing back-to-back events in financial markets.[iv]

Have stocks hit bottom? We can’t know for sure. This week, we’ll probably see more poor data out of China that could continue to rattle markets.[v] However, it’s possible that earnings season may help turn the tide. While Q4 profits are expected to be down on lower revenues, the bar may already be set so low that earnings surprises could give stocks a boost.[vi] When negativity is already baked into stock prices, even small surprises can shift investor sentiment.

Bottom line: Market corrections happen. They can be stressful and can test your resolve as an investor, but they are normal and healthy. We don’t know how long this correction will last or how low markets will go, but we are continually monitoring markets and will suggest prudent changes to investing strategies as necessary. If you have questions or concerns about your portfolio, please reach out to us, we’d love to hear from you.



Monday: U.S. Markets Closed for Martin Luther King, Jr. Holiday

Tuesday: Housing Market Index, Treasury International Capital

Wednesday: Consumer Price Index, Housing Starts,

Thursday: Jobless Claims, EIA Petroleum Status Report, Philadelphia Fed Business Outlook Survey

Friday: PMI Manufacturing Index Flash, Existing Home Sales


Gasoline prices drop below $1 per gallon. Residents in some parts of Michigan officially became the first Americans to buy gas for less than a dollar in over a decade. High oil supplies and low demand may lead to more cheap gas this year.[vii]

Retail sales disappoint. December retail sales slumped unexpectedly as warmer weather cut into sales of winter gear and cheap gasoline weighed on service station business. After a 0.4% rise in November, sales dipped by 0.1% in December.[viii]

Consumer sentiment ticks upward. Despite stock market pullbacks and global worries, Americans’ view of the economy and their financial prospects improved slightly in January. Hopefully, that optimism will translate into more spending this quarter.[ix]

Business inventories fall. U.S. businesses sold through their stockpiles rather than replenishing as sales slipped. The decline in inventories could weigh on economic growth in the fourth quarter.[x]

[i] http://finance.yahoo.com/q/hp?s=%5EGSPC&a=00&b=8&c=2015&d=00&e=15&f=2015&g=d



[ii] http://www.cnbc.com/2016/01/17/stock-futures-fall-anew-suggesting-more-weakness-in-major-markets.html

[iii] http://blog-imfdirect.imf.org/2015/10/05/managing-chinas-economic-transition/

[iv] http://www.proba.jussieu.fr/pageperso/ramacont/papers/clustering.pdf

[v] http://www.cnbc.com/2016/01/18/china-gdp-the-elephant-in-the-market.html

[vi] http://www.zacks.com/commentary/68003/weak-earnings-backdrop-for-stocks

[vii] http://abc7.com/news/price-for-gas-hit-47-cents-in-michigan-/1163995/

[viii] http://www.foxbusiness.com/markets/2016/01/15/u-s-retail-sales-end-2015-with-whimper.html

[ix] http://www.foxbusiness.com/markets/2016/01/15/consumer-sentiment-ticks-slightly-higher-in-january.html

[x] http://www.myfoxboston.com/news/us-business-stockpiles-and-sales-fall-in-november/21455657

Special Update: 2015 in Review – Weekly Update for January 4, 2016

Image courtesy of FreeDigitalPhotos.net/sscreations

Image courtesy of FreeDigitalPhotos.net/sscreations

Now that 2015 is in the rear-view mirror, let’s take a look at some of the factors that influenced markets last year. Though markets closed essentially flat, it’s important to realize what a small miracle that is given the many challenges that markets faced in 2015. For the year, the S&P 500 lost 0.73%, the Dow lost 2.23%, and the NASDAQ gained 5.73%.[i]

market events

Let’s review some of the major events of last year:

The Federal Reserve Raised Interest Rates

After months of anticipation, the Fed finally pulled the trigger and raised interest rates in mid-December for the first time since 2006.[ii] After years of near-zero rates to stimulate business spending and economic activity, the Fed is finally confident enough to raise rates to keep prices from rising too fast.

How will the Fed’s move affect bond yields? Short-term rates will likely start inching up, which we will hopefully see reflected in higher bond and CD rates, but long-term bonds are much harder to predict. Overall, bond yields should head higher if the Fed continues its stable, predictable process of raising rates.

Oil Plummeted to Historic Lows

2015 was another volatile year for oil prices and continued weakness highlighted concerns about global growth. At the end of December, Brent Crude closed at $37.08, down nearly 70% from a high of $115.19 in mid-June 2014.[iii] Weak global demand and high supply volume battered oil prices, even as the total number of oil rigs fell.

Cheap oil is a mixed bag for the market.  On the one hand, it’s a win for consumers who benefit from low gasoline prices and cheaper goods; on the other hand, oil-producing countries, energy companies, and ancillary industries have been hard hit by prolonged lows in oil prices. Weak demand for oil is also seen as another sign of the global economic slowdown.

Global Jitters Contributed to Volatility & Pullbacks

As the U.S. continued to improve economically in 2015, markets were dogged by the realization that much of the rest of the world isn’t faring so well. It has become very clear that Europe, China, and many emerging markets are struggling with protracted economic weakness.

Emerging market economies like Brazil, Turkey, and South Africa benefited from years of low interest rates, during which investors flooded their markets looking for higher returns. Now that the easy money party is ending, these investors are pulling their money out. Emerging market countries are dealing with the one-two punch of higher interest rates (increasing their borrowing) and debts that are denominated in a strengthening dollar, making it harder to pay back existing loans.[iv]

These global worries came to a head in August when the Chinese central bank shocked the world by devaluing the yuan.[v] By making the Chinese currency cheaper against other currencies, central bankers hope to boost demand for Chinese goods. The move was widely viewed as an admission that the world’s second-largest economy is in trouble, and markets reacted by plummeting. Between August 10th and August 25th, the S&P 500 dropped over 11%, officially entering correction territory.[vi]


However, markets didn’t stay there; investors quickly regained their optimism and bought the dip, sending the S&P 500 up nearly 9.5% by the end of the year.[vii] The lesson? Corrections are normal, healthy parts of the market cycle. While the sky can seem like it’s falling at times, taking a deep breath and looking at underlying fundamentals is key to avoiding emotional reactions.


The U.S. Economy Continued to Improve

Though the global economy struggled in 2015, the U.S. economy continued to do well, even after a rocky start to 2015. Though economic growth slowed, hampered by global headwinds, the economy turned out respectable second- and third-quarter growth. Though we don’t have fourth-quarter data yet, economists project that the economy grew 2.2% in the final three months of the year.[viii]

The labor market also continued to make progress last year. Overall, the economy is projected to have gained 2.5 million new jobs in 2015 and trimmed the unemployment rate to 5.0%. After 2014’s 3.1 million new jobs, we can say that 2015 ends the best two-year period for the labor market since the dot-com boom days of 1998-1999. Though wage growth still isn’t spectacular, hourly earnings increased 2.3% over the year. [ix]

Comparing the jobs growth to the previous year’s total might suggest that the labor market growth slowed down in 2015. However, the rate of voluntary “quits” increased in 2015, indicating that people feel comfortable enough in their prospects to leave their jobs for greener pastures.[x] All told, the labor market did a lot to boost the economy last year.

Headwinds and Tailwinds in 2016

While we have been largely optimistic about markets in past years, we’re shifting to a more guarded stance for 2016. Many of the headwinds that dragged on market performance last year are still with us; while the “plow horse” U.S. economy is projected to grow moderately this year, global challenges remain.[xi]

Overall, Wall Street is also cautious about stocks in 2016. A poll of top Wall Street analysts forecasted an average S&P 500 gain of 6.28% growth in 2016.[xii] As always, it’s best to treat these predictions with caution as projections this early in the year are always nebulous. What we can do right now is take a look at fundamentals and think about how these factors might play out in market performance.

In the coming weeks, investors will be looking hard at fourth-quarter numbers to see how U.S. companies performed in the final months of the year. In the week ahead we’ll see the December jobs report and learn more about the Fed’s decision-making process around rates. We’ll also see whether higher interest rates affected demand for vehicle sales and other big-ticket items at the end of the year.[xiii]

As always, if you have any questions about markets or your personal situation, please give us a call. We are honored by the trust you place in us and look forward to serving you in 2016.



Monday: PMI Manufacturing Index, ISM Mfg. Index, Construction Spending

Tuesday: Motor Vehicle Sales

Wednesday: ADP Employment Report, International Trade, Factory Orders, ISM Non-Mfg. Index, EIA Petroleum Status Report, FOMC Minutes

Thursday: Jobless Claims

Friday: Employment Situation



Consumer confidence rebounds in December. A measure of consumer optimism rose at the end of the year, indicating that the improving labor market is giving Americans more confidence in their prospects.[xiv]

Jobless claims jump sharply. The number of Americans filing new claims for unemployment benefits jumped by 20,000, likely because of seasonal holiday factors.[xv]

Midwestern manufacturing slips. A measure of the manufacturing industry in the Midwest indicates that December activity fell to the lowest level since mid-2009. While seasonal factors could affect the data, it could indicate sustained weakness in the factory-heavy region.[xvi]

Puerto Rico makes bond payments. The U.S. territory, which has been struggling to make debt payments, will make full bond payments on its General Obligation (GO) bonds in January.[xvii]

[i] http://finance.yahoo.com/q/hp?s=%5EGSPC&a=11&b=28&c=2015&d=11&e=31&f=2015&g=d



[ii] http://www.cnbc.com/2015/12/16/fed-raises-rates-for-first-time-since-2006.html

[iii] https://research.stlouisfed.org/fred2/series/DCOILBRENTEU#

[iv] http://www.ibtimes.com/us-fed-rate-hike-worried-investors-emerging-markets-prepare-impending-turmoil-2227581

[v] http://fortune.com/2015/08/19/what-chinas-currency-devaluation-means-for-the-worlds-trade-deals/

[vi] Source: Yahoo Finance. S&P 500 price performance between 8/10/15 and 8/25/15.

[vii] Source: Yahoo Finance. S&P 500 price performance between 8/25/15 and 12/31/15.

[viii] http://projects.wsj.com/econforecast/#ind=gdp&r=20

[ix] https://research.stlouisfed.org/fred2/series/PAYEMS#



[x] https://research.stlouisfed.org/fred2/series/JTSQUR

[xi] http://projects.wsj.com/econforecast/#ind=gdp&r=20

[xii] http://www.marketwatch.com/story/wall-streets-forecast-for-2016-worse-than-last-year-2015-12-28

Average S&P 500 return calculation: 2,063.36 12/31/15 close to 2,193 average 2016 price target

[xiii] http://www.foxbusiness.com/economy-policy/2015/12/29/week-ahead-december-jobs-report-auto-sales/?intcmp=bigtopmarketfeatures

[xiv] http://www.foxbusiness.com/industries/2015/12/29/consumer-confidence-rebounds-more-than-expected-in-december/

[xv] http://www.foxbusiness.com/economy-policy/2015/12/31/weekly-jobless-claims/

[xvi] http://www.foxbusiness.com/economy-policy/2015/12/31/midwest-manufacturing-slips-deeper-into-contraction/

[xvii] http://latino.foxnews.com/latino/news/2016/01/01/puerto-rico-begins-to-make-payments-on-debt-due-in-early-january/

16 Financial Resolutions for 2016

1As the end of 2015 approaches, it’s time to start thinking about how to make 2016 a success for you and your loved ones. Though there’s little consensus about their origins, we know that Americans have been making New Year’s resolutions since at least the 1770s. [i] In 2015, 31% of Americans made financial resolutions.[ii]

Here are 16 financial resolutions to help make 2016 healthy, happy, and successful:

1. Create emergency savings

Life is full of unexpected emergencies, and some extra cash can help a serious illness, home repair, or other sudden financial need from derailing your finances. Prepare for unpredictable expenses by putting aside six to eight months of expenses in an easily accessible cash-equivalent account.

  1. Make a monthly budget and stick to it

Budgets may sound like a lot of unnecessary work, especially if you’re financially comfortable, but it’s quite easy to let your spending go off the rails if you’re not tracking it in some way. Set a budget and work on sticking to it for a couple of months. Don’t aim for perfection; instead, try for incremental improvement.

  1. Save more for the future

Are you on track for retirement and other goals? Most Americans could stand to put more money away for the future. We recommend keeping separate “buckets” of savings for short-, medium-, and long-term goals and leveraging tax-advantaged accounts where possible. Let us know if you’d like help saving for specific goals so that we can help ensure you have the right strategy for your needs and timeline.

  1. Make retirement plan contributions regularly (instead of all at once)

We believe that “time in the market” is critical to long-term investing success. Instead of waiting until the last minute to make your annual contributions, give your money more time to grow by making automatic contributions to your accounts every month.

  1. Maximize your retirement plan contributions

Tax-managed retirement accounts are one the most powerful ways to save for a more comfortable retirement. Make the most of them by contributing as much as you can each tax year. We usually recommend maxing out employer-sponsored plans first to take advantage of any matching contributions your employer may offer. Give us a call if you need help understanding your retirement account options.

  1. Pay down high-interest debt

High-interest debt can make it very hard to get ahead financially. If you’re carrying a lot of debt, make paying it down a priority. Contact us for help managing expenses and getting on top of your debt.

  1. Set goals for the future and work with a professional to help you achieve them

In our experience, people who set goals for themselves and create strategies to pursue them are much more likely to see success. One study found that investors who leveraged specific financial strategies saw greater long-term financial success.[iii] Sit down with your loved ones to discuss your financial goals; when you’re ready to discuss your thoughts, call our office to schedule a no-obligation consultation.

  1. Create a powerful legacy for the world

We believe that a rich life is about more than financial success and a comfortable lifestyle. Whether you want to leave something to your loved ones, or contribute to causes close to your heart, take some time to think about the legacy you will leave for the future.

  1. Review your estate planning and legal documents

Your core legal documents should be regularly reviewed to make sure that they keep up with your life. If it’s been a few years since you took a look at your documents, dust them off and make sure that they still represent your wishes.

  1. Review the beneficiaries of your financial accounts and insurance policies

When is the last time you updated your beneficiaries? Since beneficiary provisions are independent of your will or other estate provisions, it’s critical to keep them current. Contact us for assistance with gathering account documents and making needed updates.

  1. Stay on top of your health

Healthcare is a major expense for most Americans, especially when serious illness strikes. Take steps to protect your health (and your wallet) by building a healthy lifestyle and being proactive about preventative care.

  1. Protect your credit and identity

Identity theft and financial fraud are serious threats that can compromise your financial wellbeing. Protect yourself by reviewing financial statements and bills carefully for unauthorized activity. Check your credit report for free each year at www.annualcreditreport.com.

  1. Review your tax strategies for potential savings

Recent changes to tax laws mean that your tax burden may have increased. Give us a call to discuss tax strategies that may help you reduce your tax burden.

  1. Involve your loved ones in your finances

If you (or your spouse) don’t get involved in the family finances, it’s time to start. Work together to make financial decisions and make sure that each of you understands the overall game plan for your finances. At minimum, make sure that your loved ones know how to access financial accounts and understand your wishes.

  1. Identify your goals for 2016

What do you want to accomplish in 2016? Whether you want to get a raise, go on a wonderful vacation, or spend more time with your family, take a moment now to write them down.

  1. Keep your resolutions!

One study found that people keep just 8% of the New Year’s resolutions they make.[iv] Improve the chances that you will keep your resolutions by making your goals simple, concrete, and actionable. Instead of saying: “I will save more for the future in 2016,” say: “I will contribute $4,500 to my retirement accounts by December 31, 2016” or “I will pay off $2,000 of credit card debt by April 15.”

As 2015 draws to a close, we would like to extend our thanks for the trust and confidence you’ve placed in our firm. You’ve made this year one to remember, and we are sincerely grateful for the privilege and opportunity to serve. We look forward to serving you and yours for many years to come.

If you have questions about your future or would like some support in keeping your financial resolutions, please give us a call. Together, let’s make 2016 a success.


[i] http://articles.courant.com/2013-11-19/community/hcrs-82240-wethersfield-20131115_1_christmas-open-house-christmas-traditions-santa-claus

[ii] https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/2015-new-year-resolutions-fact-sheet.pdf

[iii] http://corporate.morningstar.com/ib/documents/PublishedResearch/AlphaBetaandNowGamma.pdf

[iv] http://www.forbes.com/sites/dandiamond/2013/01/01/just-8-of-people-achieve-their-new-years-resolutions-heres-how-they-did-it/

Qualified Charitable Distributions From IRAs Have Been Permanently Extended

The Consolidated Appropriations Act, signed into law on December 18, 2015, includes a provision, effective immediately, that permanently extends the ability of individuals at least age 70½ to take qualified charitable distributions (QCDs) from Traditional, Rollover, or Roth IRAs for payment directly to a qualifying charitable organization.

The following restrictions apply to QCDs:

  • A qualifying charitable organization is a public charity as described in IRC 170(b)(1)(A), but does not include donor-advised funds, supporting organizations, or private foundations.
  • Only outright gifts are eligible; contributions to charitable gift annuities, charitable remainder trusts, pooled income funds, or other split-interest entities do not qualify.
  • The amount of the distribution can be excluded from income up to a maximum amount of $100,000 per year.
  • The entire amount must otherwise be includable in income.
  • The entire amount must otherwise be tax deductible as a charitable contribution.
  • The amount of the distribution cannot also be taken as a charitable deduction.
  • The amount distributed to the charity counts toward meeting the required minimum distribution for the year distributed.

For more information about the Consolidated Appropriations Act, 2016, refer to https://www.gpo.gov/fdsys/pkg/BILLS-114hr2029enr/pdf/BILLS-114hr2029enr.pdf

Stocks Close Mixed on Low Holiday Volume Weekly Update – November 30, 2015

Stuart Miles

Image courtesy of FreeDigitalPhotos.net/Stuart Miles

Stocks closed out the short week mixed on very low volume as investors stayed home for the holidays. For the week, the S&P 500 grew 0.04%, the Dow lost 0.14%, and the NASDAQ gained 0.44%.[i]

The data we got last week suggests that the economy is still chugging along. Investors got their second look at third-quarter Gross Domestic Product and were cheered to learn that the economy grew 2.1% last quarter instead of the 1.5% originally estimated. The revised data shows that businesses spent more than expected.[ii]

The holiday shopping season kicked off with Black Friday, and the news so far suggests that retailers may have seen less business than last year. However, a sluggish start to the retail season isn’t all bad news. National shopping trends suggest that the Black Friday weekend is becoming less important to retailers, especially as more consumers move to online shopping; industry projections indicate that retailers may see a 2.4% increase in holiday sales this year.[iii]

However, despite the improving labor market and economy, Americans may be less eager to open their wallets this year. Overall consumer spending data suggests that Americans are curbing their spending and padding their savings accounts. While we certainly won’t argue that prudent financial behavior is a bad thing, flat consumer spending may be a headwind for economic growth.[iv]

The week ahead is packed with important economic events, including the November jobs report, which is the last major employment data the Federal Reserve will review before they meet in mid-December to make a decision about interest rates. If the jobs report shows evidence of continued momentum in the labor market, it could sway the Fed toward raising interest rates for the first time in nine years.[v] Fed chairwoman Janet Yellen will also give several speeches, though it’s unlikely that she’ll give us too many hints ahead of the December meeting.


Monday: Chicago PMI, Pending Home Sales Index, Dallas Fed Mfg. Survey

Tuesday: Motor Vehicle Sales, PMI Manufacturing Index, ISM Mfg. Index, Construction Spending

Wednesday: ADP Employment Report, Productivity and Costs, EIA Petroleum Status Report, Janet Yellen Speaks 12:25 PM ET, Beige Book

Thursday: Jobless Claims, Janet Yellen Speaks 10:00 AM ET, Factory Orders, ISM Non-Mfg. Index

Friday: Employment Situation, International Trade



Durable goods jump in October. Orders for long-lasting manufactured goods like autos, airplanes, and appliances, soared 3.0% in October. The increase suggests that demand may be increasing in the last months of the year.[vi]

Consumer confidence declines in November. A measure of American sentiment about the economy unexpectedly fell in November as Americans became concerned about their job prospects.[vii]

New home sales soar. Sales of newly constructed homes skyrocketed by 10.7% in October, and inventories rose to the highest level in 2010. The increased activity could blunt concerns about a slowing housing market.[viii]

Mortgage applications fall as rates increase. A rise in mortgage rates over the last month caused application volume to drop 3.2% last week. However, applications are still up 4.0% over the same period last year.[ix]

[i] http://finance.yahoo.com/q/hp?s=%5EGSPC&a=10&b=23&c=2015&d=10&e=27&f=2015&g=d



[ii] http://www.cnbc.com/2015/11/24/us-preliminary-q3-2015-gdp.html

[iii] http://www.cnbc.com/2015/11/28/black-friday-sales-slip-from-year-prior-shoppertrak.html

[iv] http://www.cnbc.com/2015/11/25/personal-income-.html

[v] http://www.foxbusiness.com/economy-policy/2015/11/27/week-ahead-november-jobs-report-fed-speeches/

[vi] http://www.foxbusiness.com/economy-policy/2015/11/25/durable-goods-order-rosefell-xx-in-october/

[vii] http://www.foxbusiness.com/economy-policy/2015/11/24/consumer-confidence-unexpectedly-declines-in-november/

[viii] http://www.foxbusiness.com/economy-policy/2015/11/25/new-home-sales-rise-xx-in-october/

[ix] http://www.cnbc.com/2015/11/25/mortgage-applications.html

Stocks Finish Strong on Surprising Jobs Report Weekly Update – November 9, 2015

Image courtesy of FreeDigitalPhotos.net/jscreationzs

Image courtesy of

Markets ended last week on a high note, marking the sixth straight week of gains and the longest winning streak for the major averages since late 2014.[i] For the week, the S&P 500 grew 0.95%, the Dow gained 1.40%, and the NASDAQ grew 1.85%.[ii]

Since August’s pullback, the S&P 500 has regained 12.40%.[iii] While headwinds still exist, and we don’t think that stock investors should breathe a sigh of relief yet, we’re happy to see that markets have regained some lost ground.

Underpinning the renewed investor optimism are some strong domestic fundamentals. After a lousy September report, a surprisingly strong October employment report showed that the economy gained 271,000 jobs. The number came in well above expectations of 180,000 and shows that the labor market continues to improve. Even better, wages grew 2.5% from a year ago – the highest year-over-year increase since 2009.[iv] The strong jobs report gave immediate rise to speculations about interest rate hikes.

In a speech before the House, Federal Reserve Chair Janet Yellen said that a December rate hike is still on the table. Will pulling the trigger roil markets? Maybe. Though the past can’t predict the future, we can look back and see that investors have often reacted nervously to any move (or expectation of a move) by the Fed. While a rate increase is a vote of confidence in the economy, it’s also a source of worry for some economists. China’s slowing growth and fragility among other emerging market economies mean that raising borrowing costs could have ripple effects across the global economy.

In her testimony, Yellen emphasized that the U.S. economy is growing well, though she indicated that soft global trade and exports are potential headwinds. Overall, it looks like the Fed isn’t committing to a date for a rate hike yet and will wait to see what the data shows in the coming weeks.[v]


Tuesday: Import and Export Prices

Thursday: Jobless Claims, JOLTS, EIA Petroleum Status Report, Treasury Budget

Friday: PPI-FD, Retail Sales, Business Inventories, Consumer Sentiment



Productivity grows slowly in Q3. Third-quarter output per worker grew 1.6%, possibly indicating why wage growth remains stubbornly weak. Labor productivity grew 3.5% in the second quarter.[vi]

Sluggish demand drags on China. New data highlights China’s decelerating economy as imports fall 16% and exports fall 3.6% in October. Trade dropped 9% overall, marking the eighth straight month of decline.[vii]

Manufacturing brakes in October. A measure of factory activity showed that the sector slowed last month to the lowest level since 2013. However, a rise in new orders offers hope for the fourth quarter.[viii]

Construction spending rises in September. Spending on new construction skyrocketed, growing faster than expected. September activity reached the highest level since 2008, suggesting that third-quarter economic growth might be higher than originally estimated.[ix]

[i] http://www.cnbc.com/2015/11/06/us-markets.html

[ii] http://finance.yahoo.com/q/hp?s=%5EGSPC&a=10&b=2&c=2015&d=10&e=6&f=2015&g=d



[iii] Source: Yahoo Finance. S&P 500 price return between August 25, 2015 and November 6, 2015


[iv] http://www.foxbusiness.com/economy-policy/2015/11/06/us-adds-271000-jobs-in-october-strong-upside-surprise/

[v] http://www.theguardian.com/business/2015/nov/04/janet-yellen-december-rate-hike-still-on-table

[vi] http://www.reuters.com/article/2015/11/05/usa-economy-idUSL1N1301N520151105

[vii] http://www.foxnews.com/world/2015/11/08/as-prices-drop-and-demands-slump-china-october-import-and-export-fall/

[viii] http://www.foxbusiness.com/economy-policy/2015/11/02/us-manufacturing-sector-growsslows-more-than-expected-in-october/

[ix] http://www.foxbusiness.com/economy-policy/2015/11/02/us-manufacturing-sector-growsslows-more-than-expected-in-october/

Special Update: New Budget Deal Affects Social Security Strategies Weekly Update – November 2, 2015

Image courtesy of freedigitalphotos.net/Stuart Miles

Image courtesy of freedigitalphotos.net/Stuart Miles

Facing down another government shutdown, the House and Senate passed a new budget deal last week that suspends the debt limit until 2017 and increases funding levels for a number of federal programs. President Obama is expected to sign the deal into law early this week.[i]

Unfortunately, though the deal averts a debt default and reduces the risk of a December government shutdown, it includes provisions that may cut into Social Security benefits for millions of Americans. By negotiating the deal in secret, lawmakers have prevented affected retirees from having their say. To say that we’re disappointed is an understatement.

The new regulations will prevent retirees from using two advanced Social Security claiming strategies: file-and-suspend and applying for a restricted claim for spousal benefits. Both of these strategies are designed to increase lifetime income for retirees and are being counted on by many Americans.

Here’s what we know so far:[ii]

  • As of May 1, 2016, spousal or child benefits will no longer be payable unless the primary earner is also collecting Social Security benefits. Spouses will also no longer be able to file restricted claims for spousal benefits at their full retirement age.
  • Workers and spouses who are currently using these strategies (e.g. have already filed and suspended claims) are grandfathered in under the deal and will not be affected.[iii]
  • Retirees who will be age 62 or older by December 31, 2015 may still be able to file a restricted application for spousal benefits.
  • Retirees who will be age 66 or older before May 1, 2016 may still have time to file and suspend and trigger benefits for their spouse or dependents.

If you are eligible to file and suspend before May 1, 2016, please contact us to discuss your situation.

As always, we will update you as we know more in the coming weeks.


Monday: PMI Manufacturing Index, ISM Mfg. Index, Construction Spending

Tuesday: Factory Orders

Wednesday: ADP Employment Report, International Trade, Janet Yellen Speaks 10:00AM, ISM Non-Mfg. Index, EIA Petroleum Status Report

Thursday: Jobless Claims, Productivity and Costs

Friday: Employment Situation


HEADLINES:Notes: All index returns exclude reinvested dividends, and the 5-year and 10-year returns are annualized. Sources: Yahoo! Finance and Treasury.gov. International performance is represented by the MSCI EAFE Index. Corporate bond performance is represented by the DJCBP. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly.

Q3 GDP shows slow growth. Our first look at third-quarter economic growth showed that Gross Domestic Product grew a paltry 1.5%. This is just a preliminary report, and economists will revise the data several more times; however, we can see that weak business spending affected growth last quarter. [iv]

Consumer spending misses in September. Personal spending data showed that Americans increased their spending at the slowest rate since January, indicating they may be cautious about economic turmoil.[v]

Consumer confidence rebounds in October. After a weak September reading, consumer confidence jumped in October as lower-income households grew more optimistic. Wealthier households were less confident due to concerns about financial markets.[vi]

Pending home sales drop in September. The number of contracts on previously owned homes fell unexpectedly in September in a potential warning sign about the

[i] http://www.cnn.com/2015/10/30/politics/senate-budget-agreement-rand-paul/index.html?iid=EL

[ii] http://www.investmentnews.com/article/20151030/FREE/151039996/advisers-rethink-retirement-plans-amid-social-security-changes

[iii] http://www.bloomberg.com/news/articles/2015-10-28/are-you-about-to-lose-50-000-in-future-social-security-benefits-

[iv] http://www.cnbc.com/2015/10/29/us-q3-gross-domestic-product-oct-29.html

[v] http://www.foxbusiness.com/economy-policy/2015/10/30/personal-spending-income-miss-expectations/

[vi] http://www.foxbusiness.com/economy-policy/2015/10/30/consumer-sentiment-unexpectedly-declines-in-october/