Tax Law Changes
If previously implemented tax cuts are allowed to expire at year-end, taxes will increase for almost everyone in the U.S., beginning on January 1, 2011. To prepare financially for the upcoming changes, it is important to understand which taxes will be affected.
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July Market Recap
Markets enjoy a strong month
Equity markets posted a significant turnaround in July, erasing all of June’s losses. The S&P 500 Index returned 7.01 percent, though it is still slightly negative for the year, down 0.11 percent. The Dow Jones Industrial Average gained 7.23 percent for the month and moved into the black for the year, up 1.87 percent.
Markets have experienced back and forth trading for much of 2010, though July’s rally was welcomed by investors. International markets had a strong month, with the MSCI EAFE Index returning 9.48 percent, as investors moved their focus beyond the government debt issues that have weighed heavily on European markets.
This year, markets have seemed to reflect one of two mindsets: embrace risk and drive equities higher or avoid risk and push equities lower. Recently, the focus has been on the former.
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2nd Quarter – Market Commentary
In a very simple form, markets are a measure of their participant’s collective fear and greed. When market participants are greedy, stocks rise, often times beyond justifiable levels; when participants are fearful, stocks are volatile, often finding their way to lower levels. Investors become fearful not because they feel they are on the precipice of disaster, but because they are simply uncertain. Uncertain about the future of interest rates, uncertain about the sustainability of the global recovery, and uncertain about how much risk they are undertaking by continuing to be invested. It is easy to tell we are in a fearful period. A major part of our job, however, is overcoming fear and developing a sound, well-reasoned position on the health of the markets and our place in them.
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What is an ETF?
Exchange Traded Funds (ETFs) started trading in the market in 1993. At the end of 2009, ETF assets totaled over $791 billion. In 2009 alone, assets increased by 47%1. So what is this new phenomenon?
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1st Quarter – Market Commentary
Although the market experienced a correction in late January, our forecasts have been fairly accurate with the stock market continuing to trend higher for the first half of the year. In the first quarter, the S&P 500 earned 4.9% and outperformed many areas of the world. US stocks led the way for one primary reason, the appreciation of the dollar. A rising dollar hurts international investments and a falling dollar helps international investments. In the first quarter, the dollar appreciated by 6% versus the Euro, as a result of the ongoing problems in Europe.
Over the past quarter, we have been asked many times why the market continues to go up, considering the problems with the economy and the ongoing disagreements in Washington. Essentially, there are two primary reasons for the current market strength.
