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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Annual 2016 Market Overview

Annual 2016 Market Overview

Annual 2016 Market Overview

December 31, 2016

During 2016, the US stock market posted its best performance since 2013 after shaking off a horrific start of the year that concluded with the DJIA dropping to a two-year low of 15,660 on February 11th. The index of 30 Blue chip stocks would ultimately end the year plus 26% from that low watermark and closed the year with an annual gain of 13.42%.

Reversing course from the previous year the energy sector was the biggest gainer of the S&P 500 advancing 27.36 % during 2016 after experiencing 2 years of declines. Financial stocks
(+ 22.80%) also performed very well particularly in the latter part of the year benefiting from the prospect of less regulation coupled with a more aggressive plot of higher interest rates going forward after the Federal Reserve finally raised rates in December, for only the second time in the last 9 years.

The Russell 2000 was up 19.48% in 2016, far outpacing gains for the Dow and S&P 500, trading on the thesis that its components are more focused on the US economy, which at the moment, looks more promising than companies operating abroad.

Equity Markets 4th Quarter

The small cap Russell 2000 was the best performing equity asset class in the 4th Qtr. with a return of 8.43%. The DJIA was a close

second at 7.94%. The NASDAQ lagged with a return of just over 1.34% as the S&P Value Index clearly outperformed the S&P Growth Index by a notable 9.17% during 2016.

International Developed had a 2016 calendar year loss of (-1.88%) as well as (-1.04%) quarterly loss respectively. Facing the headwind of a stronger US $ Emerging markets continued to struggle losing (-4.56%) in the 4th quarter, but did advance 8.58% for
the year due to an early year rally.

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Tax Loss Harvesting: Don’t Miss Out on the Opportunity

Tax Loss Harvesting: Don’t Miss Out on the Opportunity

NOBODY LIKES TO SELL AN INVESTMENT AT A LOSS. However, using a strategy of realizing losses to reduce taxable gains, referred to as tax loss harvesting, can help you enhance the after-tax returns of your portfolios. Tax loss harvesting can not only save an investor taxes in the current year, but if done properly, can provide tax savings for years to come. Many investors avoid tax loss harvesting because they want to avoid selling something at a loss and possibly missing a rebound. We advise our clients to maintain their equity exposure even while tax loss harvesting. You can do this by simultaneously selling your asset that has an unrealized loss and purchasing a similarly correlated asset to the one just sold.

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Third Quarter 2016 Market Review

Third Quarter 2016 Market Review

 

Capital Markets marked time and fluctuated largely sideways after posting sharp gains in the first month (July) of the 3rd Quarter.

Fixed Income
3qtr1

The 10-year US Treasury yield crept up to 1.6% after falling to 1.36% earlier in the quarter. The longer end of the curve remained less steep with the 30 Year note yielding just 2.32%. It began the quarter yielding 2.29%, so it hardly budged. Municipal bond prices moderately declined during the quarter but traded down less than -0.31%. Inflation Protected Treasuries advanced 1.42% and is now up 6.58% year to date. The US Aggregate bond advanced by .46% and ended the quarter with a 5.80% year to date gain. Comments from the Federal Open Markets Committee suggest a rate hike is in play by the end of year.  Read more