Low Rates Likely to Persist

A surge in global bond yields is contributing to the rotation into riskier assets. As little as a week ago, however, bond investors and traders were once again dealing with volatility across the maturity spectrum.  Yields plummeted in the wake of Brexit and the fall continued through last week.  Generally, when yields fall (bond prices rise), it is a sign of risk aversion as investors pile into the safety of government backed securities.  This time around, stock prices rallied simultaneous with bonds.  This is an interesting divergence and one that warrants our full attention.  Additionally, spillover investing from other countries is part of the low yield continuation.

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The S&P/Case-Shiller National Home Price Index for January 2016 showed that prices gained 5.4% year-over-year for the month, the 43rd consecutive month of year-over-year growth since prices turned up in June 2012. The January growth rate was in line with the December rate and slightly higher than the average rate over the past year. Looking ahead through 2016, we anticipate home prices rising in the 4.5%-5.5% range.

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S&P/Case-Shiller Home Price Indices, arguably the leading measure of U.S. home prices released data today for June 2015. The results show that home prices have continued their rise across the country over the last 12 months. Comprised of nine U.S. census divisions, the latest numbers show a slightly higher year-over-year gain with a 4.5% annual increase in June 2015 versus a 4.4% increase in May 2015. The 10-City Composite showed a marginally lower gain of 4.6% year-over-year and the 20-City Composite was virtually unchanged, rising 5.0% year-over-year.

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Housing
The S&P/Case-Shiller Home Price Index of 20 major U.S. markets is one of the most respected and closely watched barometers of the housing market.  Recent data showed average home prices rising 4.9% year-over-year in April, the 32nd consecutive month of year-over-year growth since June 2012. The April rate was slightly lower compared to March, but solidly ahead of rates posted in late 2014.

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Divorce among people 50 years and older has become so commonplace, the pundits have even coined a phrase for it, “Grey Divorce”.
Historically, people and especially older people disdained divorce.  In 1960, for example, only about 1.5% of those older than 65 years had been divorced at least once, according to Census data.  Today, close to 20% of those older than 65 have dissolved at least one marriage, again according to Census data.

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Whether amicable or contentious, going through a divorce can be extremely tense, and the process can impact every dimension of your life. Often, finances, especially in times of emotional turmoil, are not a main concern.  A lot of opportunities are missed and a lot of mistakes are made.  If you are considering a divorce, it is vital to plan for the dissolution of the financial partnership in your marriage.  Such dissolution involves dividing the financial assets you have accumulated during the years of marriage.

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“Do what you can, with what you have, where you are.”—Theodore Roosevelt
“After his humiliating election defeat in 1912, Roosevelt embarked on the most punishing physical challenge he could find, the first descent of an unmapped, treacherous, and extremely dangerous tributary of the Amazon.  Together with his son Kermit and Brazil’s most famous explorer, Cândido Mariano da Silva Rondon, Roosevelt accomplished a feat so great that many at the time refused to believe it.  In the process, he changed the map of the western hemisphere forever.

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Self-employed individuals face a number of challenges independent of “running their business”.    One of the greatest challenges is selecting a retirement plan that meets the unique needs of their company.  Until recently, self-employed workers were limited in the ways they could shelter their income and save for future goals.  Most would choose to use a Simplified Employee Pension (SEP) as it was easy to establish and the most popular amongst their peers.  In recent years, however, a compelling alternative to the SEP has emerged, the Individual 401(k).

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The fact is, neither is necessarily best but the good news is that both are good; the type you select should be determined by individual circumstances and retirement objectives.
For example, most people are aware that contributions made to a Traditional IRA are Federal Income Tax deductible, subject to specific limits. Most people, however, fall within the limitations and can contribute tax free dollars to a Traditional IRA. The money must remain in the IRA until the investor reaches age 59 ½.

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In recent years Equity-Indexed annuity sales have hit record levels. That’s a result of investors pur-chasing these annuities without fully understanding the complexities of their contract. Given the scars of past market volatility, the promise of principal protection with potential for growth is appealing to many people. Insurance companies which issue these Equity-Index annuities spend millions of dollars on high end marketing materials in an effort to promote the upside potential with little to no explana-tion of risks and complexities of the contract. Nor do they mention the high level of compensation paid to the insurance agents who sell these products.

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