Daily Archives: December 3, 2013

Heads Up!

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Five financial moves to make before year-end:

1.   Boost your 401(k)
contribution – a particularly smart move if you are expecting a bonus of some
kind.

2.   Fund 529 accounts – the accounts allow funds to grow tax-free as
long as they are used for qualified education expenses.  Pennsylvania residents can deduct contributions
from their Pennsylvania taxable income up to $14,000 per beneficiary per year.
Married couples can deduct up to $28,000 per beneficiary per year, provided
each spouse has taxable income of at least $14,000

3.   Take the required minimum distribution from your IRA.  For those turning 70 ½ this year, there is
some tax planning for taking your first payment – you have the option to take
it before New Year’s or you can delay it until April 1, 2014.

4.    Harvest capital losses on stocks, bonds, and mutual funds – you
can use capital losses to offset any capital gains; plus, you can deduct  $3,000 against your wages, interest,
dividends, pensions, and social security income.

5.   Bunch
together your tax deductible expenses in the years when out-of-pocket medical
payments are high.

The “Heat Map”

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Most
of the time the U.S. stock market looks to 3 factors (call them the “pillars”
that support the stock market) to support its upward trend – let’s grade each
of the pillars. 

CONSUMER SPENDING:  I grade this factor a C (neutral).

THE FED AND ITS POLICIES:  I continue to grade this factor an A+ (extremely favorable) because the
FED cannot do much more than it is doing to support the stock market and asset
prices.

BUSINESS PROFITABILITY:  I continue to grade this factor an A (very favorable). 

 NOTE:  the above grades are unchanged from last
week.

The Economy

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Recent
economic reports indicate the U.S. economy continues to show improvement.  Home prices as measured by Case-Shiller rose
1% month over month and 13.3% year over year in September as all 20 cities
surveyed saw gains. Jobless Claims fell another 10,000 to the lowest level
since early October.  Manufacturing
activity is rebounding after the government shutdown in many parts of the U.S.  Consumer confidence increased just in time
for the all important holiday shopping season.

On
the negative side, Durable Goods orders remained sluggish.

The Numbers

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Last week, U.S. Stocks, Foreign Stocks, and Bonds all increased.  During the last 12 months, STOCKS outperformed BONDS.

Returns through 11-29-2013

1-week

Y-T-D

1-Year

3-Years

5-Years

10-Years

Bonds- BarCap Aggregate Index

    .1

 -1.5

-1.6

  3.0

 5.3

4.7

US Stocks-Standard & Poor’s 500

    .4

29.1

30.3

17.7

17.6

7.7

Foreign Stocks- MS EAFE Developed Countries

    .8

17.8

21.4

  7.2

10.1

4.7

Source:
Morningstar Workstation. Past performance is no guarantee of future
results. Indices are unmanaged and cannot be invested into directly.
Three, five and ten year returns are annualized excluding dividends.


“Your Financial Choices”

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“Your Financial Choices”   The show airs on WDIY
Wednesday evenings, from 6-7 p.m. The show is hosted by Valley National’s
Laurie Siebert CPA, CFP®, AEP®.  This
week, Laurie welcomes guest Benjamin M. Tenaglia, III, Vice President and Portfolio Manager at Valley National Financial Advisors to discuss what it means to be a fiduciary and fiduciary investing in a trust environment. 

This show will be broadcast at the regular time.
WDIY is broadcast on FM 88.1 for reception in most of the Lehigh Valley; and,
it is broadcast on FM 93.9 in the Easton and Phillipsburg area; and, it is
broadcast on FM 93.7 in the Fogelsville and Macungie area – or listen to it
online from anywhere on the internet.  For more information, including how
to listen to the show online, check the show’s website www.yourfinancialchoices.com
and visit www.wdiy.org. 


Personal Notes

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“And he is taking new patients”,   somewhat excitedly replied my close relative
when he described his search for a cardiologist.  This remark hit me – I suspect many U.S.
healthcare consumers in the future will be using this term (hopefully) as they
search for medical professional to handle their needs.  With the current trend in healthcare, I
reckon many in the U.S. will be searching for healthcare professional at the
same time many healthcare professionals will be closing their practice to new
patients.  Conversationally, the American
population will use the phase, “taking new patients” or “not taking new
patients” more and more frequently.

The Markets This Week

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‘Tis the season for stock-market gains.

How else can yet another all-time market high be
explained in a week lacking any obvious catalyst beyond the start last Thursday
of the holiday season, a traditionally auspicious time for equities.


Though prices
closed off highs, stocks rose 0.1% in a shortened trading week. Many pros are
looking—maybe hoping—for a sizable stock-market pullback before year end, even
a minor one, but that’s increasingly looking like a low-probability event
against the powerful upward inertia seen all year. Apart from those few
investors who remain short, few will find lumps of coal from Santa this year.


In the eighth-straight week of gains, the Dow Jones
Industrial Average rose 22 points, or 0.1%, to 16,086.41. The Standard &
Poor’s 500 index rose one point, to 1,805.81, down slightly from Wednesday’s
record close of 1,807.23.  The Nasdaq
Composite index picked up 68 points, or 1.7%, to 4,059.89.


It’s hard to see anything other than seasonal bias
and inertia behind the latest rise, says Mark Luschini, chief investment
strategist at Janney Montgomery Scott. The market has defied the ubiquitous
correction warnings, “forcing investors to commit long for fear of being
trampled” by the well-known holiday predilection, he adds (Source:  Barrons Online).