2017 – The Year in Review

2017 – The Year in Review

2017 Year in Review Early Predictions

Heading into 2017, many analysts were predicting a modest year for investors. Fresh off the end of 2016 where stocks rallied strong in the fourth quarter to finish up almost 12% (S&P 500) for the year, both Credit Suisse and Goldman Sachs were predicting an S&P 500 return for 2018 of less than 3%. Further, many analysts were also predicting a rough ride for the bond market, where it was widely believed that rising interest rates would cause most bond returns to be flat or negative for the year. The S&P 500 posted a total return of 21.31% for 2018, its best year since 2013. And, although the Fed (FOMC committee) raised short-term interest rates three times in 2017, the long end of the interest rate yield curve (as indicated by the 10 Year US Treasury Rate) actually declined slightly during 2018, starting the year at 2.45% and finishing 2018 at 2.40%. The US Bloomberg Barclays Aggregate Bond Index finished 2017 with a respectable 3.54% return. If the last two years have taught us anything, it is that forecasting elections or market returns is a fool’s errand.
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Forth Quarter 2017 Overview

Forth Quarter 2017 Overview

Market Overview

Amidst a backdrop of unusually low volatility, United States and a broad swath of world equity markets rose sharply during 2017, based upon the expansion of 45 separate global
economies. The US broad market advanced 20.52% for the year, 6.2% coming during the final quarter. Developed international and emerging international markets climbed 25% and 37% respectively during 2017, while posting end of quarter gains of 4.23% and 7.44% respectively.
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Explaining “Backdoor Roth IRAs”


Learn how higher income earners can contribute to a Roth IRA

ROTH IRAS ARE A POWERFUL WAY TO SAVE FOR RETIREMENT

Contributions into a Roth IRA are not tax deductible. However, the earnings in the account accumulate tax deferred, and can be distributed completely tax free after age 59½, provided 5 years have elapsed since the tax year of your first Roth contribution. Many investors who might otherwise contribute to a Roth IRA find themselves constrained by the IRS income limits which restrict their ability to contribute to a Roth IRA based on their adjusted gross income (AGI).
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Third Quarter 2017 Overview

Third Quarter 2017 Overview

Market Overview

Global markets continued their broad advance during the third quarter 2017. Thus far 2017 has been a year where all major asset classes have advanced with international equities leading the field. Could we now be at an inflection point?
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CRA Financial Hosts Annual Client BBQ

On July 13, CRA Financial hosted a barbecue at the Atlantic City Aquarium, catered by Nobil Foods. Starting with a tour of the aquarium, a delicious barbecue and cocktails followed outside overlooking Clam Creek, with a performance by Strawberry Jam Band. Clients of all ages enjoyed the summer night of fun.

CRA Financial, LLC is a comprehensive wealth management firm whose primary objective is to assist clients in accumulating and preserving wealth. They are committed to providing value-added, wealth- enhancing services in a cost-effective manner that remains consistent with their philosophy of putting their clients’ best interest first. These services encompass six comprehensive areas of financial planning: investment, tax, insurance, retirement, education, and estate planning.

This article was originally published in the Summer Edition of NJ Lifestyle. Photos by Eric Weeks.

Mid-year Market Overview: Will the rally continue?

Mid-year Market Overview: Will the rally continue?

rallyRALLY: The markets are off to a great start so far in 2017. The S&P 500 closed the second quarter with a strong year-to-date gain of 9.34% (Total return including dividends). Investors saw a market that remained resilient in the face of uncertainty and volatility was kept at bay. Corporate earnings remained strong, global economies have been improving, and major central banks across the world have continued support. Markets shrugged off repeated global terrorist attacks and a seemingly stalled presidency as a gridlocked Congress wrangled with the questions of the government’s appropriate role in the U.S. health care system.
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HSA Benefits: Health Savings Account = A great retirement tool

HSA Benefits: Health Savings Account = A great retirement tool

Health Savings Account = A great retirement toolA Health savings Account (HSA) is a tax-advantaged savings account for individuals and families enrolled in a high-deductible health plan. Contributions to an HSA are tax deductible and can be made via payroll deductions, as well as from outside contributions. Withdrawals used to cover qualified medical expenses are not subject to federal taxes. These plans are designed to provide a tax break for the out-of-pocket medical costs associated with a higher deductible health plan, however they also can be used as a great vehicle to save for retirement.
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Market Timing: How far will the market continue to move higher, before the drop arrives?

Market Timing: How far will the market continue to move higher, before the drop arrives?

How far will the market continue to move higher, before the drop arrives?The 10 bear markets since 1929 combine for an average market drop of 45% over an average duration of 25 months. The bull markets that have preceded/followed those 10 bears have generated an average return of 154% over an average duration of 54 months. The current bull market, which began on March 2009, is well above those averages. The bulls just celebrated the 8th anniversary, and have cheered market gains of 231% through the end of 2016. With the market continuing to post impressive gains to start 2017, many investors are increasingly worried that a “pullback” is on the horizon. This increasing pessimism has many investors asking; “Is it possible to time the market?”
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Second Quarter 2017 Overview

Second Quarter 2017 Overview

Market Overview

Global stock and bond prices broadly advanced during the first half of the year during a period absent of volatility. Investors attribute the rally’s breadth to strengthening corporate earnings, improving economies and continued support from Japanese and European central banks. Markets shrugged off repeated global terrorist incidents, while a seemingly stalled presidency and gridlocked Congress wrangled with the question of the government’s appropriate role in the US health care system. After soaring to a 14 year high right after the Trump election, the US dollar has now weakened, declining by 5.6% over the last six months against other major currencies.
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The Year in Review: A recap of 2016 and an optimistic outlook for 2017

The Year in Review: A recap of 2016 and an optimistic outlook for 2017

EARLY SIDE

2016 began as 2015 ended with oil prices and stock prices falling. Oil (WTI Crude Oil) began 2016 at $37.13 a barrel and bottomed on February 11th at $26.21, a decline of 29% in just six weeks. The S&P 500 began the year at 2044 and fell to 1829 by February 11th (yes, the same day oil bottomed), a decline of 11 %. Fortunately, both the oil market and the stock market stabilized quickly and both had reached their beginning of the year levels by the second week of March.

BREXIT

The referendum in Great Britain in June 2016 whether or not Great Britain would remain in the European Union or vote to exit was viewed as either a solidifier of the EU or the first step to its demise. All polls showed a major advantage to the stay vote, but as we would find out more than once in 2016, pollsters did not have the pulse of the voters. The citizens in Great Britain voted against the establishment, against the recommendation of their Prime Minister, and against staying in the European Union. The stock market sold off 6% in two days, but then recovered fully within three days, to finish up just over 4% year-to-date through June 30.

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