Getting Your Fiscal House in Order

Getting Your Fiscal House in Order

 

fiscal-houseBecause it is always a timely topic, we thought we would discuss household fiscal responsibility and try to provide readers with some tips for getting their fiscal house in order. As financial planners and CPA’s, we interact with people from all across the financial spectrum. Our experience has taught us that whether a household is in good financial condition or not has less to do with household income and more to do with household spending (Sound familiar, can you say federal government?). We see families who make more than $500,000 annually who can’t borrow a nickel because they are so maxed out with debt. We also see families who make $60,000 annually who have a house, two cars and no debt other than a mortgage. What it comes down to is simple math. You can’t spend more than you make indefinitely. You can do so in the short-term by borrowing to fund the difference, but at some point that option runs out. So, why do so many families find themselves in a financial mess? We believe there are three main reasons:

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Retirement Planning 2016 – Part 2

Retirement Planning 2016 – Part 2

Retirement Planning is by far one of the most important areas of financial planning and one that we allocate a good portion of our time and resources to address. We break retirement planning up into two distinct phases:

  1. Accumulation Phase
  2. Distribution Phase

The accumulation phase is simply the phase in which you are still working and gathering assets to fund the second phase, which is the distribution phase. Clients in the distribution phase are typically either retired or semi-retired and are supplementing their pre-retirement income with distributions from their portfolios. In the last newsletter we addressed the accumulation phase. This article is part two of our two-part series on retirement planning and will address the distribution phase.
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Second Quarter 2016 Market Review

Second Quarter 2016 Market Review

 Market Overview – Markets move past Brexit!

World Capital Markets quickly reversed after a knee-jerk sharp two day sell off from Friday, June 24th to Monday, June 27th in the aftermath of the UK vote to exit the European Union. However, the DJIA average recouped the two-day 871-point route ending the quarter plus 790 points in the final four trading days. Including July 1st, the US markets had their best week of the year. However, the story of the 2nd quarter and that of 2016 thus far is the action in the bond markets. The 10-year US Treasury note briefly fell below its lowest level ever at 1.385% on the first day of trading in the third quarter. The market is now firmly of the belief that Brexit collateral damage uncertainty will exert pressure on world central banks to pump even more stimulus to world economies. Brexit has put a downward trajectory on the British Pound sterling, and sparked additional demand for US Treasuries and the US dollar. Gold has caught a bid. Recent events suggest that The Federal Reserve may remain in a holding pattern as well.
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Retirement Planning 2016 – Part 1

Retirement Planning 2016 – Part 1

Retirement PlanningElegantly dressed couple of pensioners

Retirement Planning is by far one of the most important areas of financial planning and one that we allocate a good portion of our time and resources to address. We break retirement planning up into two distinct phases:

  1. Accumulation Phase
  2. Distribution Phase

The accumulation phase is simply the phase in which you are still working and gathering assets to fund the distribution phase. Clients in the distribution phase are usually either retired or semi-retired, and are supplementing their pre-retirement income with distributions from their portfolios. This article is Part 1 of a two-part series on retirement planning and will address the Accumulation Phase of retirement planning.
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Taxation of Investment Income

InvestmentNot all investment income is taxed the same. Thanks to the IRS, the tax code regarding your investments is constantly changing, and keeping up with these changes is important to optimize the tax efficiency of your portfolio. Remember, it’s not what you make but what you keep that counts.

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First Quarter 2016 Market Review

First Quarter 2016 Market Review

Market Overview
If an investor were to look at just the starting and ending index values for equities, it would show a quiet quarter with equities posting a very modest gain for the 1st quarter. The S&P 500 finished up 0.77% on a price only return basis. Looking deeper, however, reveals that investors were taken on a very wild ride, driven by fears of both a global and domestic recession, which saw equity markets sell off substantially and enter correction territory.
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Fourth Quarter 2015 Market Review

Fourth Quarter 2015 Market Review

Market Overview

During 2015 the US stock market posted its worst overall performance since the financial crisis of 2008. That being said, the DJIA decline of (2.23%) and the S&P 500 decline of (.73%) were modest compared to the 40% decline registered during that time. A global commodity drop led by a 30% drop in oil a year following a 50% decline in 2014 is cited as a major reason for the poor performance. The Energy sector was the biggest decliner of the S&P 500 falling (24%) during 2015. The steep drop in oil and commodity prices also spilled over into the bond markets, as energy and miner credits weakened. Much of this year’s gains were concentrated in a small number of primarily consumer discretionary individual stocks.
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Third Quarter 2015 Market Review

Third Quarter 2015 Market Review

Even with multiple positive revisions noting US economic expansion in the second quarter and pegging US 2nd quarter growth at an annual rate of 3.9%, the US stock market could not shake off the global turmoil primarily related to the reported slow-down in China. In addition, The FOMC (Federal Open Market Committee) did not increase short term interest rates despite telegraphing multiple signals that they would be raising and that left investors confused and uncertain on the actual state of the US economy. Today’s disappointing jobs report will only add to that uncertainty with a reported addition of 140,000 jobs, well below the 200,000 consensus estimate. World markets including the US were very volatile during the third quarter. The fourth quarter looks to be more of the same. Today’s Dow tape went from a decline of 260 points to up 200.
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2015 – The Year in Review

2015 – The Year in Review

As Published in the Winter 2016 Edition of NJ Lifestyle

Volatility was the overall theme of the stock market in 2015, but despite the wild swings to the upside and downside, the market finished roughly flat for the year, posting a price only return of -0.73%. The market finally experienced the “inevitable correction” that investors and analysts had been calling for since mid 2013. In May, the S&P 500 hit an all-time intraday high of 2,134. In August, the S&P fell to an intra-year low of 1867, representing a drop in value of 12.5%. After an initial September rally that faded back to market lows, October rewarded investors with a 13% rally, hitting 2116 in early November, before sliding back to 2043 to end the year.
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Second Quarter 2015 Market Review

Second Quarter 2015 Market Review

Market Overview – June Gloom!

Equity markets slumped during the final 5 trading days of the quarter ending June 30th, and the US market endured its worst single day performance of 2015 on June 29th when the DJIA lost 350.33 points. Most point to the uncertainty and the media magnified headlines of Greece, China and Puerto Rico as the main culprits. To those whom have been paying attention, all this news separately would be of no surprise and almost a non-event, but when highlighted repeatedly and bolted together by the media, you have all the makings of a mini panic heading into a long holiday weekend, all the while providing undisciplined nervous participants multiple reasons to sell. The month ended in the red for both domestic and international equities, as well as all bond classes. The exception was the Russell 2000, which eked out a monthly gain of .60%. – Nothing to write home about.
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