Bond Market Update: Lions, Tigers and BEARS…Oh, My!

After the longest bond market rally in history (4,571 days) from January 2000 until late July 2012, the US long bond is quickly approaching bear market territory for the first time in over 13 years.  By standard definition, a bear market is a decline of over 20% that was preceded by a rally of at least 20%.  As shown in the chart below, there have been six BOND bull markets and five BOND bear markets since 1980.  Since its peak on July 24th 2012, the long bond is currently down almost 15% … well on its way towards full bear market territory Investors need to be aware that while bonds are a core part of any diversified portfolio they can have bear markets just like stocks!  We have encountered tailwinds for bonds (meaning when rates go down, values go up) since the 1980’s when mortgages were at 14% and you could purchase 30 year treasury bonds with 15% interest.  Interest rates have been cut to zero by the Federal Reserve.  Below is another fantastic chart visualizing long bond bull markets Read on! →

College Savings Strategies

My colleague, Cheryl Sherrard, recently wrote a piece on what parents should consider before sending their children off to college for the first time.  A Health Care Power of Attorney (HCPOA) and Health Insurance Portability and Accountability Act (HIPAA) waiver are critical for a child that is 18 or older yet still dependent on their parent(s) for assistance.  If you are not yet at the point of sending your child off to college, but rather are at the stage of considering how you will fund higher education for your young children, there are some basics you should consider now, before time gets away from you. Some Basics[1]: Projected tuition and fees at Public In-State university is $108,100 (4 years, enrolling 2030) Projected tuition and fees at Private college is $362,800 (4 years, enrolling 2030) Average annual increase in cost is between 4% and 5% These costs are substantial.  If you prepare early, the impact of these costs on your annual budget can be reduced.  The key is starting early and saving consistently.  There are many ways to save but this Read on! →

Market-View 2nd Quarter 2013

After some hair-raising summers over the past several years, calm, almost boring, trading has settled in on Wall Street – at least for the time being.  2nd Quarter 2013 earnings season has passed its peak and results have largely been better than expected on the bottom line (earnings), while top-line results (revenues) have been less impressive, but good enough for the drifting stock market to maintain an upward bias. Perhaps the best takeaway has been the positive view of the domestic side of the ledger, while international results have largely disappointed. US Economic Outlook Mixed economic data has been good enough to help corporate earnings, yet weak enough to prevent the Fed from acting aggressively.  We have had a domestic bias for some time now, and we believe the US continues to be an attractive place for investors with sustainable slow GDP growth, low interest rates and inflation, and improving unemployment.  Although the gains in equities seen in the first half of the year shouldn’t be expected in the second half, we remain positive on the potential for further upside. Read on! →

Life and Death in Assisted Living

I recently watched a PBS special entitled “Life and Death in Assisted Living” produced by Frontline.  It focused on Assisted Living communities, specifically Emeritus Senior Living, which is the industry’s largest chain, at just over 40,000 members nationwide.  The show discussed the role assisted living plays in the lives of seniors today, the lack of regulation over this level of care, and highlighted various lawsuits against Emeritus for negligence, wrongful death and other situations. What I came away with after watching the special was the following: I had a renewed sense that the search for appropriate care as we age is neither an easy one nor is it a standardized one.  We should not be sending family members out to take tours of facilities by themselves and expecting that they can adequately assess the pros and cons of each facility.  The tours are given by sales professionals and their end goal is to sell. Care received in these facilities varies widely.  This can be due to inadequate training, insufficient staffing, wrong hires, and even the higher mandate by management to Read on! →

College Checklist for Parents

If you are preparing to send a child off to college for the first time this month, you are likely feeling a bit overwhelmed and under-funded.  Speaking as a parent who is currently sending child number 5 to college, I understand your angst.  However, as a Financial Advisor, there are a few items that you cannot afford to neglect as you get ready for this momentous day. Essential protections for the parent Believe it or not, at 18 years of age, your children are considered adults and are therefore protected by the privacy laws.  This means that you no longer have full access to their information. For Medical Emergencies – You should prepare Health Care Power of Attorney (HCPOA) and HIPAA waiver documents for your 18+ year olds as these legal documents determine who is entitled to have access to medical records and act on their behalf in the event of a medical emergency.  Imagine you live in North Carolina and your college student who attends school in New York is taken to the emergency room. Because your student is Read on! →