Recent Articles

Market Recap

Stocks rose solidly in the 1st quarter of 2017 as momentum from November’s presidential election kept the rally going. Led by the technology sector, which had done very little after the election, equities started the year with very strong gains. Despite backing off of all-time highs, the Dow rose 4.6% to close at 20,663, marking its sixth straight quarter of gains.

The year 2016 started out tough for investors and brought with it many surprises.  Looking only at the year’s final numbers, one may never have never known how much of a bumpy ride it was for both equity and bond investors. During the 4th quarter, stocks surged, extending the bull market that is now almost eight years old.  The election of Donald Trump had investors thinking about lower taxes, less regulation, pro-­business initiatives, and what could be a very bumpy ride while unwinding many of the Obama administration’s policies. 

Investing & Economic Commentary

The same populist sentiment that created Brexit earlier this year in Britain carried through in the American general elections yesterday. Very few polls had given Donald Trump any chance of winning the presidency, yet as the night wore on, it became increasingly obvious that America was voting for a dramatic change in course and against the status quo of American politics.
This morning, the government reported that the economy grew at an annual rate of 2.9% last quarter. This is a little stronger, but in line with, what we expected. We had said earlier that the slowdown experienced in the first half of the year appeared to be due to temporary factors, and that the bulk of the indicators we look at were pointing towards an acceleration in the second half of the year.

Financial Planning

The struggle to save for retirement is real with most families failing to save much, if any, for their golden years. To incentivize citizens, Congress has written several retirement plans into place that offer varying levels of tax benefits. The most common are 401(k) plans and IRAs. These give the saver an immediate tax deduction for saving, the earnings are not currently taxed, and everything is then taxed at distribution in retirement. The Roth plans (named after Senator William Roth) started in the 1990s with the advent of the Roth IRA, which expanded a decade later to include Roth 401(k) plans, Roth 403(b), and Roth 457 plans. These plans offer no tax benefit up front but earnings grow tax deferred and qualifying distributions in retirement are tax free.
The retirement savings problem in America rarely hinges upon having access to a savings vehicle; it is largely grounded in a refusal to begin saving – whether we blame the government, our employers, inflation, or some other scapegoat. I think Larry Fink, head of Blackrock, hit the nail on the head in a recent interview he had with Bloomberg: