Daily Archives: February 19, 2019

Valley National News

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APRIL 15th APPROACHES!
Hard to believe there are less than eight weeks remaining before the IRS deadline for personal income taxes.

Our team is hard at work preparing tax returns for our clients and their families as part of our one-stop planning relationships. Although you may still be waiting for one or two forms, it is helpful to submit the bulk of your 2018 tax documents and details to your preparer soon so he/she can get started on data input and analysis. If you have any questions for us, you can e-mail tax@valleynationalgroup.com or complete our Tax Inquiry Form on the Tax Services page of our website. Or you can always just give your service team a call!

In addition to our digital forms, we have posted a collection of resources, reminders, videos and articles on our website at valleynationalgroup.com/tax for our clients. Please feel free to share these items with others to help them navigate their own tax preparation experience.

The Numbers & “Heat Map”

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THE NUMBERS

Sources: Index Returns: 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. Interest Rates: Federal Reserve, Freddie Mac

US ECONOMIC HEAT MAP
The health of the US economy is a key driver of long-term returns in the stock market. Below, we grade 5 key economic conditions that we believe are of particular importance to investors.

CONSUMER SPENDING

A

We have downgraded our consumer spending grade to A from A+ following weaker than expected December retail sales data and some declines in consumer confidence surveys. However, monthly data can be volatile and we still believe that the US consumer is in a healthy position.

FED POLICIES

C-

The Federal Reserve implemented its fourth interest rate hike of the year in December. Rising interest rates tend to reduce economic growth potential and can lead to repricing of income producing assets.

BUSINESS PROFITABILITY

B+

Corporate earnings remain strong, but we anticipate earnings growth will taper off in 2019. We are also beginning to see a higher number of companies reducing forward earnings guidance, a sign that earnings growth may have reached its peak in 2018.

EMPLOYMENT

A+

The US economy added 304,000 new jobs in January, soundly beating estimates for the second straight month. The labor market is one of the strongest components of the economic backdrop at this time.

INFLATION

B

Inflation is often a sign of “tightening” in the economy, and can be a signal that growth is peaking. The inflation rate remains benign at this time, but we see the potential for an increase moving forward. This metric deserves our attention.

OTHER CONCERNS

INTERNATIONAL RISKS

5

The above ratings assume no international crisis. On a scale of 1 to 10 with 10 being the highest level of crisis, we rate these international risks collectively as a 5. These risks deserve our ongoing attention.

The “Heat Map” is a subjective analysis based upon metrics that VNFA’s investment committee believes are important to financial markets and the economy. The “Heat Map” is designed for informational purposes only and is not intended for use as a basis for investment decisions.

Did You Know…?

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by Laurie Siebert, CPA, CFP®, AEP®, Senior Vice President
I attended the Estate Planning Council of the Lehigh Valley’s recent “Estate Planning in a World of Rapidly Advancing Technology” seminar. What I learned is that you cannot ignore the implications of technology in the way we hold, access, retain, share and use it for financial or personal transactions and storage. Assuming that your personal representatives will have the ability to manage your internet of “things” may be costly. In any number of ways, accounts that may be accessible by user identification and passwords, may no longer be accessible if the account is closed. This could happen when credit cards linked to the accounts are notified of the death and they become frozen. Work with your attorney to make sure that your personal representatives will have the required permissions or strategies to manage your digital world.  Leave a roadmap of your online footprint for your personal representatives as well.  We strongly encourage everyone to take an inventory of the way you use technology, how to access it, what information or monetary value may be buried and on what devices. 

The Markets This Week

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by Connor Darrell CFA, Assistant Vice President – Head of Investments
U.S. stocks posted positive returns for the eighth straight week despite unexpectedly disappointing retail sales data. Stocks were primarily supported by optimism that the U.S. and China might make progress on a trade agreement before U.S.-imposed tariffs are set to more than double on March 1. Bond yields jumped higher to start the week but reversed course following the weak retail sales data released on Thursday. Bonds ended the week relatively flat as a result.

Starting Point Matters
We have consistently warned of the potential perils of attempting to time the market, and the past few months have only served to lend further credence to those warnings. But that doesn’t mean that investors should not consider point-in-time analyses when evaluating their long-term strategy.  Following the tumultuous end to 2018, markets have rebounded considerably, and risks now look evenly balanced.  We continue to believe that while recent economic data has sent mixed signals to investors, the probability of a U.S. recession in the near-term remains low. However, the reality is that we find ourselves in what is very likely to be the latter stages of the economic cycle, and this fact carries long-term implications for investors. Given the stage of the cycle in which we currently find ourselves, investors need to be aware that the long-term expected returns across asset classes look quite a bit lower than they did in the past. The successful implementation of an investment plan is a dynamic process that responds to the market environment. As such, in an environment where market returns will be lower, investors may need to consider saving more or spending less in order to stay on track.

“Your Financial Choices”

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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 and her guest Attorney Charles Stopp, from the law firm of Steckel and Stopp, will discuss: “Special Situations and Elections in Inheritance Tax Filings.”

Laurie and Attorney Stopp will take your calls on this or other topics at 610-758-8810 during the live show, or via yourfinancialchoices.com. Recordings of past shows are available to listen or download  at both yourfinancialchoices.com and wdiy.org.