Is College Worth It?

Is College Worth It?

With college debt at an all-time high and first jobs challenging to find, you may be wondering about the ROI of a college education. The decision to attend – or not – is intensely personal. But, if college lies in your future or the future of someone you love, it is important to start the planning process as soon as possible. Grab a copy of our new eBook now to begin to understand the costs and benefits of attending http://bit.ly/2GRy4JH.

Is College Worth It?2018-03-29T10:40:47-04:00

Stocks Drop as Tariffs Rise

The Weekly Update

Week of March 26, 2018
By Christopher T. Much, CFP®, AIF®

Markets experienced significant declines last week. The S&P 500 lost 5.95%, the Dow dropped 5.66%, and the NASDAQ declined 6.54%. With these losses, all 3 domestic indexes had their worst weekly performance in more than 2 years. International stocks also declined, with the MSCI EAFE giving back 2.64%.

What caused markets to stumble in this way? While various economic reports came out and the Federal Reserve raised rates again, another topic triggered the declines: trade war concerns.

Weekly Focus: Analyzing Tariffs and Trade Wars

What happened?

Last week, President Trump approved new tariffs on China as a punishment for taking American intellectual property. The tariffs could affect as much as $60 billion in Chinese imports—and Trump called this the “first of many” trade actions against the country.

China indicated that it may retaliate and is “looking at all options” on how to respond. Apparently, everything is on the table—including targeting 128 American products, no longer purchasing U.S. Treasuries, and taking legal action through the World Trade Organization.

How did investors respond?

The new China-specific tariffs combined with Trump’s steel and aluminum tariffs earlier this month create growing concerns about a trade war. The market declines we experienced last week are largely a reaction to these fears.

What might happen next?

These new tariffs have the potential to create 2 very different results:

  1. A trade war that stifles global growth
  2. A more even playing field for American companies

A trade war: If the U.S. and China go back-and-forth adding punitive tariffs to each other’s products, our economy could suffer. We could experience inflation, slower economic development, and higher interest rates, making expansion and growth harder for U.S. businesses.

A more even playing field: If the tariffs are successful, U.S. industries could benefit. Some U.S. steel producers are already boosting their production and hiring as the first round of tariffs goes into effect.

Where do we go from here?

The potential for a full-blown trade war exists, which could negatively affect the global economy. But this worst-case scenario is far from certain, and many opportunities exist to calm the rising tension. For now, we will continue analyzing exactly what is happening with tariffs and how different countries react.

In the meantime, if you have questions about how these geopolitical changes could affect your financial life, we are always here to talk.

ECONOMIC CALENDAR:
Tuesday: Consumer Confidence
Wednesday: GDP, International Trade in Goods
Thursday: Jobless Claims, Consumer Sentiment
Friday: U.S. Markets Closed for Good Friday

Past performance is no guarantee of future results. Data collected from Investors FastTrack software.
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=SPX&region=usa&culture=en-US
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=%21DJI&region=usa&culture=en-US
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=@CCO
https://www.reuters.com/article/us-usa-stocks/wall-street-nosedives-as-investors-flee-on-trade-war-fears-idUSKBN1GZ1O8
https://www.msci.com/end-of-day-data-search
https://www.cnbc.com/2018/03/23/us-stock-markets-set-for-a-sharp-fall-at-the-open-amid-trade-war-fears.html
https://www.cnbc.com/2018/03/22/trump-moves-to-slap-china-with-50-billion-in-tariffs-over-intellectual-property-theft.html
https://www.reuters.com/article/us-usa-stocks/wall-street-nosedives-as-investors-flee-on-trade-war-fears-idUSKBN1GZ1O8
https://www.cnbc.com/2018/03/23/us-stock-markets-set-for-a-sharp-fall-at-the-open-amid-trade-war-fears.html
https://www.cnbc.com/2018/03/22/trump-moves-to-slap-china-with-50-billion-in-tariffs-over-intellectual-property-theft.html
https://www.cnbc.com/2018/03/23/us-stock-markets-set-for-a-sharp-fall-at-the-open-amid-trade-war-fears.html
https://www.cnbc.com/2018/03/24/china-development-forum-heres-what-experts-are-saying.html
https://www.inc.com/zoe-henry/trump-steel-and-aluminum-tariffs-ripple-effects-your-business.html
https://www.zacks.com/stock/news/296710/trump-tariff-amp-steel-industry-the-good-the-bad-amp-the-ugly
https://www.cnbc.com/2018/03/19/signs-growing-for-global-trade-war-that-could-trigger-recession-deutsche-bank.html
Stocks Drop as Tariffs Rise2018-03-26T14:04:11-04:00

A Look Back

The Weekly Update

Week of March 19, 2018
By Christopher T. Much, CFP®, AIF®

Markets were up on Friday, but domestic stocks lost ground for the week as political turmoil and potential trade wars weighed on investors’ minds. The S&P 500 dropped 1.24%, the Dow gave back 1.54%, and the NASDAQ decreased 1.04%. International stocks in the MSCI EAFE barely avoided losses with a 0.13% gain.

1. Mixed Performance Results

Overall, we received a variety of mixed data last week:

  • Down
    • Housing starts missed expectations and fell 7%.
    • Retail sales were lower than expected.
  • Up
    • Consumer sentiment hit its highest reading since 2004.
    • Domestic factory production beat expectations.

But data reports were not the only detail worth noting last week. We also marked the 10-year anniversary of Bear Stearns’ collapse.

2. A Look Back

For 85 years, Bear Stearns was a respected institution that became one of the world’s largest investment banks. When the housing market crashed in 2007, the firm realized it had taken on far more risk than planned. As a result, the firm ran out of cash, and on March 16, 2008, JPMorgan bought the previously valuable company for only $2 a share. In retrospect, Bear Stearns’ collapse was the first real glimpse of the pending Great Recession.

Less than a year later, markets hit bottom on March 9, 2009. In the years since, stocks have corrected multiple times, losing over 10%. But, they have never lost 20% to push into a bear market—meaning we’re in the midst of the 2nd-longest bull market since World War II.

Time can make some memories fade, but we doubt that anyone who experienced the Great Recession forgets how challenging and scary it felt.

Here’s what headlines were telling us:

Source: http://www.businessinsider.com/what-the-headlines-looked-like-at-the-height-of-the-2008-financial-crisis-2017-3

Despite the market losses and economic turmoil, the Great Recession was also a powerful reminder of Warren Buffett’s advice: “Be fearful when others are greedy and greedy when others are fearful.”

While the markets seemed to be in a free-fall, allowing emotion to dictate investing choices was easy. But anyone who escaped the markets’ bottom missed an incredible growth opportunity.

Nine years after the S&P 500 hit its low, the index was up 390%—and was 122% higher than its record close before the Great Recession began. So, while the collapse was painful, stocks weathered the storm, sailing far beyond where they were before. The economy is also in a very different place than it was a decade ago.

Where We Are Now

  • Job Growth: February was the 89th-straight month where the economy added jobs.
  • Unemployment: The current unemployment rate remains at its lowest level in 17 years.
  • Gross Domestic Product: The U.S. economy has expanded every year since 2010.

Of course, we recognize that the economy is not perfect and still has room to improve. But, we also want to remind you of how far we’ve all come since the Great Recession first began. If you’d like to take a closer look at your own progress or future plans, we are always here to talk.

ECONOMIC CALENDAR:
Wednesday: FOMC Meeting Announcement, Existing Home Sales
Thursday: Jobless Claims
Friday: Durable Goods Orders, New Home Sales

Past performance is no guarantee of future results. Data collected from Investors FastTrack software.
https://www.cnbc.com/2018/03/16/us-stock-futures-dow-data-and-politics-on-the-agenda.html
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=SPX&region=usa&culture=en-US
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=%21DJI&region=usa&culture=en-US
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=@CCO
https://www.msci.com/end-of-day-data-search
https://www.cnbc.com/2018/03/16/us-stock-futures-dow-data-and-politics-on-the-agenda.html
https://www.bloomberg.com/news/articles/2018-03-15/asia-stocks-face-mixed-friday-dollar-strengthens-markets-wrap
https://www.cnbc.com/2018/03/16/us-stock-futures-dow-data-and-politics-on-the-agenda.html
https://www.bloomberg.com/news/articles/2018-03-15/asia-stocks-face-mixed-friday-dollar-strengthens-markets-wrap
https://www.investopedia.com/terms/b/bear-stearns.asp
https://www.reuters.com/article/us-financial-crisis2008-banks/ten-years-after-jpmorgan-bear-stearns-deal-banks-may-have-already-seen-biggest-gains-idUSKCN1GS0DM
http://www.chicagotribune.com/business/sns-bc-us–financial-markets-bull-market-birthday-20180309-story.html
https://www.investopedia.com/articles/investing/012116/warren-buffett-be-fearful-when-others-are-greedy.asp
https://www.marketwatch.com/story/in-the-bull-markets-ninth-year-winning-stocks-hide-lingering-pain-2018-03-09
http://money.cnn.com/2018/03/09/news/economy/february-jobs-report/index.html
https://www.thebalance.com/us-gdp-by-year-3305543
A Look Back2018-03-19T14:24:03-04:00

Tax-Time Planning

Tax-Time Planning

While the word “taxes” may not be on the top of everyone’s list of favorites, April 15th will be here before we know it. With some forward-looking preparations, managing your taxes doesn’t have to be such a drag. Finish off your 2017 return and strategize for 2018 with our latest presentation, Tax Time Planning.

Tax-Time Planning2018-03-13T11:24:54-04:00

Goldilocks Returns

The Weekly Update

Week of March 12, 2018
By Christopher T. Much, CFP®, AIF®

Domestic stocks leapt ahead last week as the latest jobs report inspired renewed confidence in our economic standing. The S&P 500 added 3.54%, and the Dow gained 3.25%. The NASDAQ erased its losses from February’s market correction to hit a new record close while growing 4.17% for the week. International stocks in the MSCI EAFE increased by 1.79%.

In addition to solid stock growth, Friday, March 9, also brought a significant milestone in the markets: the 9th anniversary of our current bull market. The Dow is now amid its longest-ever bull run, and the S&P 500’s bull market is its 2nd-longest and -largest ever.

To put the recovery in perspective, 9 years ago, the S&P 500 closed at only 676.53. By market’s close last Friday, the index was at 2,786.57—more than 4 times its value at the bull market’s start.

What drove last week’s market performance?

While talk of tariffs on aluminum and steel imports affected stocks last week, a major jobs report was arguably the biggest market mover. The Bureau of Labor Statistics released its latest jobs report on Friday, and the numbers relieved many investors’ inflation concerns. The data showed that the economy added 313,000 jobs in February—far more than what analysts expected.

At the same time, wages only grew by 2.6% from this time last year, below the prediction.

What does this data mean?

Bloomberg called the labor report a “‘Goldilocks’ scenario,” because it indicates that the economy is neither too hot nor too cold. The data reveals that many people are returning to the workforce, but wages are not increasing fast enough to trigger significant inflation.

This jobs report also contrasts with last month’s data, which showed wages rising faster than expected. That report contributed to February’s market correction.

Ultimately, some analysts believe the latest data implies that inflation is less of a concern, and the Fed may only increase interest rates 3 times this year.

Later this month, Federal Reserve leaders will meet to determine whether to raise interest rates and will also provide their latest economic projections. Looking ahead, we will continue to analyze the interplay between labor, inflation, and interest rates—and how these forces may affect your financial life.

ECONOMIC CALENDAR:
Tuesday: Consumer Price Index
Wednesday: Retail Sales
Thursday: Jobless Claims, Housing Market Index
Friday: Housing Starts, Industrial Production, Consumer Sentiment

Past performance is no guarantee of future results. Data collected from Investors FastTrack software.
https://www.cnbc.com/2018/03/09/us-stock-futures-dow-data-nonfarm-payrolls-and-politics-on-the-agenda.html
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=SPX&region=usa&culture=en-US
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=%21DJI&region=usa&culture=en-US
https://www.bloomberg.com/news/articles/2018-03-09/nasdaq-takes-just-one-month-to-recoup-worst-losses-in-two-years
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=@CCO
https://www.msci.com/end-of-day-data-search
https://www.cnbc.com/2018/03/08/the-bull-market-just-turned-9-years-old-heres-how-the-stock-surge-compares-with-past-runs.html
https://www.cnbc.com/2018/03/09/us-stock-futures-dow-data-nonfarm-payrolls-and-politics-on-the-agenda.html
http://abcnews.go.com/Business/wireStory/us-bull-market-hits-ninth-birthday-2nd-longest-53632885
https://www.cnbc.com/2018/03/09/us-stock-futures-dow-data-nonfarm-payrolls-and-politics-on-the-agenda.html
https://www.cnbc.com/2018/03/09/nonfarm-payrolls-february.html
https://www.bloomberg.com/news/articles/2018-03-09/it-s-market-deja-vu-jobs-beat-wages-miss-and-stocks-rally
https://www.cnbc.com/2018/03/09/us-stock-futures-dow-data-nonfarm-payrolls-and-politics-on-the-agenda.html
https://www.cnbc.com/2018/03/09/us-stock-futures-dow-data-nonfarm-payrolls-and-politics-on-the-agenda.html
http://wsj-us.econoday.com/byshoweventfull.asp?fid=481816&cust=wsj-us&year=2018&lid=0&prev=/byweek.asp – top
Goldilocks Returns2018-03-12T13:10:06-04:00

Volatile Markets Continue

The Weekly Update

Week of March 5, 2018
By Christopher T. Much, CFP®, AIF®

Volatility continued last week as markets posted their 1st weekly loss in 3 weeks. Despite some recovery on Friday, the S&P 500 dropped 2.04%, the NASDAQ slipped 1.12%, and the Dow lost 3.05% for the week. Internationally, the MSCI EAFE fell 2.91%.

Last week’s ups and downs began with continued questions over whether the Fed will raise interest rates. By the week’s end, however, rumors of an international trade war dominated the attention of investors.

Fed Suggests Raising Interest Rates

New Fed Chair Jerome Powell testified on Tuesday that inflation and a strong economy may lead to interest rate hikes sooner than expected. Whether the Fed will impose a 4th hike this year caused investor uncertainty and led to mid-week market drops. Powell noted, however, that increased market volatility will not influence the Fed’s decisions regarding rate increases.

Trump Announces Tariffs on Imports

Investor attention shifted on Thursday as President Trump announced plans to impose a 25% tariff on steel and a 10% tariff on aluminum imports. While the move could protect American metal workers, some analysts worry it may also trigger a possible trade war.

Countries around the world reacted to the news, with some announcing their own plans for U.S. tariffs in response. Over the weekend, the President reacted by noting possible tariffs on imported autos, where the U.S. has a deficit. Some analysts worry this could further hurt an already negative trade gap in our Gross Domestic Product (GDP).

Signs of Strength

Despite the developments with tariffs and rising interest rates, we did receive encouraging economic reports:

  • Strong Consumer Sentiment: Last month’s consumer sentiment report hit its 2nd highest recording in over 10 years. Upon the approved tax bill, companies gave nearly $30 billion in bonuses, boosting consumer incomes and attitudes.
  • Outstanding Jobless Claims: Last week’s reported jobless claims were the lowest in 49 years. A healthy demand for labor and few layoffs have helped keep unemployment numbers low.

What’s ahead?

Expect more market volatility going forward as investors follow the Fed’s interest rate plans to keep potential inflation in check. The President has also promised to announce specific details concerning the proposed new tariffs this week. If you have questions concerning how these developing economic policies may impact your financial life, we are always here to help.

ECONOMIC CALENDAR:
Monday: ISM Non-Mfg Index
Tuesday: Factory Orders
Wednesday: ADP Employment Report
Thursday: Jobless Claims

Past performance is no guarantee of future results. Data collected from Investors FastTrack software.
https://www.cnbc.com/2018/03/02/us-stock-futures-dow-data-earnings-fed-and-politics-on-the-agenda.html
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=SPX&region=usa&culture=en-US
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=@CCO
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=%21DJI&region=usa&culture=en-US
https://www.msci.com/end-of-day-data-search
https://www.usatoday.com/story/money/markets/2018/03/02/world-markets-fret-over-trade-war-after-trumps-tariff-vow/388182002/
https://www.usatoday.com/story/money/markets/2018/02/28/fed-chiefs-rate-talk-puts-stocks-bind/378755002/
https://www.cnbc.com/2018/02/27/fed-chairman-powell-market-volatility-wont-stop-more-rate-hikes.html
https://www.usatoday.com/story/money/markets/2018/03/02/world-markets-fret-over-trade-war-after-trumps-tariff-vow/388182002/
https://www.cnbc.com/2018/03/01/forex-markets-focus-on-dollar-moves-after-trump-tariff-decision.html
https://www.reuters.com/article/us-usa-trade/trade-wars-are-good-trump-says-defying-global-concern-over-tariffs-idUSKCN1GE1PM
https://www.bloomberg.com/news/articles/2018-03-02/trump-opens-door-to-trade-war-as-eu-threatens-iconic-u-s-brands
https://www.bloomberg.com/news/articles/2018-03-02/trump-opens-door-to-trade-war-as-eu-threatens-iconic-u-s-brands
http://wsj-us.econoday.com/byshoweventarticle.asp?fid=492771&cust=wsj-us&year=2018&lid=0&prev=/byweek.asp#top
https://www.bloomberg.com/news/articles/2018-03-02/consumer-sentiment-in-u-s-at-second-highest-level-since-2004
http://wsj-us.econoday.com/byshoweventfull.asp?fid=485207&cust=wsj-us&year=2018&lid=0&prev=/byweek.asp#top
https://www.reuters.com/article/us-usa-trade/trade-wars-are-good-trump-says-defying-global-concern-over-tariffs-idUSKCN1GE1PM
Volatile Markets Continue2018-03-05T13:38:20-05:00