Newsletters

MARKET-VIEW 4TH QUARTER 2013 – January 2014 Newsletter

After a great year for the equity market in 2013, investors are looking to 2014 and wondering what to expect in the year ahead.  The economy appears to be gaining momentum as we head into 2014 and may soon enter “escape velocity” – meaning our recovery moves into expansion and does not require excess monetary stimulus (no quantitative easing) which could bring the expectations of tighter monetary policy into investors’ minds.  A secular bull market is likely intact but the risk of a 5-10% correction this year is elevated. These gains came in the face of ongoing macro challenges, illustrating again that stocks often like to climb a “wall of worry”.  The past year started with a government crisis and an agreement regarding the fiscal cliff.  Throughout the following months we saw political problems in Europe, an international crisis in Syria, another US government shutdown, a botched rollout of the Affordable Care Act and the word “taper” entering our investment lexicon.  Stocks kept powering higher however, with only brief pauses along the way. This bull market is now the 6th Read on! →

Year-end Reflections and a Look Ahead

As 2013 comes to a close, it is a good time to reflect on the many things that have transpired.  For us, the year brought the start of a new firm and the opportunity to place new emphasis on our clients and the comprehensive nature of our work.  We are grateful to our clients and to the professionals who showed support during the year.  We look forward to providing many years of dedicated service and working together to navigate the numerous financial needs that will arise throughout the course of our relationship. Equity markets continued to show strength in 2013 and portfolios benefited as a result.  We remained diligent, yet cautious throughout the year.  Diligence came in the form of keeping fixed income and hybrid investments at targets.  Caution was exhibited by seeking quality, valued oriented equity investments and by keeping higher than normal levels of cash.  The result was moderate, yet steady growth in portfolios with reasonable downside protection when markets retreated.  Growth is more uncertain in 2014.  Interest rates remain low, but tapering by the Federal Reserve seems Read on! →

What really drives our financial decisions? – November 2013 Newsletter

All of us like to think we are rational beings, weighing the pros and cons of a situation and then making a well-informed decision.  What we sometimes don’t realize is there are forces at work in our subconscious which can sway us toward irrationality at precisely the wrong time.  However, if we take the time to examine what those forces are and how they affect our decision-making, we should be able to recognize and avoid some of the misdirection in our lives. Behavioral finance is a study in both finance and human behavior and seeks to understand how people make financial decisions, what factors influence them, and how to help them make better decisions.  These forces, or biases can skew our decision-making and act in such subtle ways that we may not even know they are at work.  Biases in the financial realm are particularly fascinating, as they can move entire markets or simply prevent one individual from taking the next critical step in securing their financial future.  These may be deep-rooted in our family history, cultural or religious based, Read on! →

MARKET-VIEW 3RD QUARTER 2013 – October 2013 Newsletter

While fears over Federal Reserve (the Fed) tapering and some uneven economic data hurt stocks earlier in the quarter, September was a surprisingly strong month for equities. The Fed’s decision to keep its quantitative easing program going, combined with moderating tensions in Syria, helped stocks to easily outperform bonds for the third quarter.  Three other market themes emerged during 3rd Quarter 2013:  cyclical stocks outperformed defensive stocks, the equity market rally widened its focus to include international stocks and emerging markets, and corporate and municipal bonds outperformed Treasuries.  Despite a mediocre jobs market, retailers and other consumer discretionary stocks continued to outperform. US Economic Outlook As we enter the fourth quarter, the debate over funding for the federal government and the need to increase the debt ceiling are leading to risks in US credibility on the fiscal front.  Just two years after Congress led America to a fiscal cliff that prompted Standard & Poor to downgrade the United States’ long-term credit rating; we now appear poised to repeat the same fiasco. Despite the political dysfunction in Washington, the private sector Read on! →

Taxing Times – September 2013 Newsletter

While you may not want to begin thinking about it in September, there are some “taxing” issues that you need to be aware of for 2013 and on the horizon for 2014.  As you may recall from early January, the Fiscal Cliff law resulted in a number of federal income tax changes, some permanent and others just extended for one year. Medicare Surtax Net Investment Income Tax (NIIT) Tax Rate Changes for High Income Earners Roth Conversion Opportunities Expanded Temporary Tax-related Extensions for 2013 A 2014 Tax Preview for North Carolina Residents Medicare surtax For high earning individuals, you may already have noticed a slight decline in your take home pay, for as you surpassed $200,000 in wages, your employer was required to begin deducting an additional 0.9% on your Medicare-eligible wages.  This is in addition to the 1.45% you are already paying in Medicare taxes. While this new surtax will result in automatic additional withholding for an individual with earnings above $200,000, the tax can also be triggered by combined earnings of spouses, or the combination of wage earnings Read on! →