Articles & perspectives

Economic Charts Still Trending Positive

The latest economic charts suggest the economy overall maintains an upward trajectory.  Nonetheless, it appears we are pushing further towards the late-cycle stage.  Even so, this last stage in the cycle may take years to play out before the economic and markets once again significantly contracts due to mounting debt, unfavorable demographics, disruptive technology, and monetary policy stimulus unable to provide enough accommodation for the economy.   Unemployment Rate Overlayed with the S&P 500     Unemployment Claims Overlayed with the S&P 500   Houses Sold – New One Family Overlayed with the S&P 500  

Atlanta Fed Predicts Dismal Q1 2019 GDP at 0.2%

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2019 is 0.2 percent on March 11, down from 0.5 percent on March 8. After this morning’s retail sales report from the U.S. Census Bureau, the nowcast of first-quarter real personal consumption expenditures growth declined from 1.5 percent to 1.0 percent. Source:  Atlanta Fed

Market Update & Outlook for 2019

  January 2, 2019 Market Update & Outlook for 2019 Earnings and economic data remained positive in the U.S. throughout 2018, posting an annual growth rate of 3.4% as of September 2018.  Global growth began to slow in late spring of 2018, but still posted a 1.6% growth rate for the Eurozone and approximately 6% for China. Despite the backdrop of strong economic data, 2018 experienced widespread negative market performance that hit virtually all asset classes except cash and short-term Treasuries. (see table below)  The dismal performance from both US and global stocks, bonds, real estate and commodities in 2018 was a result of slower US and global growth, rising interest rates, rising debt levels, significant policy errors from the US, China and central banks, and overly optimistic and unrealistic expectations by investors who pushed valuations

One Last Leg Up For Stocks, Then Watch Out Below

  Stocks are likely to maintain their longer-term upward trend until the end of the year, and possibly until the summer of 2019. The US Economy remains strong and it is likely that a path towards a trade agreement between China/US trade will surface on or around the G20 meeting on November 30th. However, monetary tightening and rising interest rates will eventually become a drag on corporate earnings, economic growth and credit expansion. This will likely lead to the end of the bull market that investors experienced over the last 9 years, with equities peaking sometime between early- to mid-2019.   Investor Challenge #1: Rising Interest Rates, Fading Effects From Fiscal & Monetary Stimulus & Tax Cuts Will Cause Growth to Slow The expansion of credit is a primary factor driving economic growth. As rates continue to rise,

Frequently Asked Roth 401(k) Questions

Is it better to contribute to a traditional 401(k) or a Roth 401(k)? That depends on your personal situation and priorities. For example, because Roth 401(k)s allow tax-free withdrawals, they might be more appropriate for workers who expect to be in a higher income tax bracket during retirement. High-income earners who make too much to contribute to a Roth IRA may also find the Roth 401(k) attractive, as there are no income limitations for Roth 401(k) participation. Traditional 401(k)s, on the other hand, may be more appropriate for workers who want a tax break now and/or who expect to be in a lower income tax bracket during retirement. A financial advisor can help you determine which account may be right for your needs.     Can I contribute to both a Roth 401(k) plan and

Emerging Market Earnings Stable While Equities Tank; Expect a Rebound

Only marginal declines in Emerging Market earnings suggest that fears of an imminent crisis are overblown There is a relatively strong correlation between the direction of earnings forecasts and the short-term relative performance of equity markets. Over the last 12m, US markets have outperformed peers as Trump’s corporate tax reductions and fiscal stimulus have provided a tailwind for US earnings. In the UK, although weighted earnings forecasts have risen, UK stocks have trailed behind, impacted in our view by the negative domestic sentiment in terms of Brexit. Similarly, in continental Europe, market sentiment has been impacted by international and domestic political events. Intriguingly, the median emerging market forecast has only fallen by 2% since the Q1 peak, similar to the UK and Europe, suggesting fears of an imminent crisis are not at present feeding through

The Next Major Market Downturn’s ETA – One Year From Now

      As we step into the final growth stage of our economic cycle, which has been one of the longest in modern history now in its ninth year, the yield curve once again seems to have a high likelihood of predicting the next market peak and crash.  The trajectory of the yield curve, along with a few other contributing factors discussed below, suggests a market top and subsequent crash will take place exactly one year from now. Currently, the US is expected to surpass 3% GDP growth in Q2 2018, according to the AtlantaFed GDP Now, and economic conditions are extremely strong, better than we have had for over a decade.  Even so, headwinds are mounting and the tailwinds are waning.  At the moment, we are benefiting from lower taxes, the increased spending

With rates on the rise, now is the time to invest in…

With rates on the rise, now is the time to invest in… Current Yield = 6.00% Approximate NAV = $25 Minimum Purchase Amount = $2,500* Custodian: TD Institutional Share Class Purchased Through Blue Pacific Wealth Management = I Shares (Institutional Shares) Are you tired of taking on increasing interest rate and credit risk while only getting a mere 2% – 4% yield in fixed-income?  Are you invested in individual bonds, bond mutual funds or bond index funds that have a high risk and low return potential?  If you are currently invested in traditional corporate or high-yield mutual funds or index funds, you are currently being confronted with multiple headwinds, including rising rates and rich valuations due to the Fed’s multiple stimulus programs since 2009 that have expanded credit.  What’s more, it is likely we are entering the

Benefits & Types of Alternative Investments

  The Main Benefits of Alternative Investments Include: Income – An investment strategy that seeks to provide a steady stream of current income, or yield, over time. Investors have varying needs for dependable current income, whether to meet monthly expenses or achieve long-term financial goals. Especially during periods of low interest rates, some alternatives may offer higher yields than traditional investments. Diversification – A risk management technique that mixes a wide variety of investments within a portfolio. A diversified investment portfolio that includes stocks, bonds and alternatives can help smooth the impact of market volatility and may generate higher returns relative to their levels of risk over time. Many alternative investments tend to have lower correlations to traditional investments. As a result, they can potentially reduce overall portfolio volatility and help mitigate extreme swings in investor sentiment

Bryan’s Market Update – April 10th 2018: Volatility Resurfaced, But Markets Maintain A Long-term Upward Trend

April 10th, 2018 In this issue!  –  Market Update –  Current Investment Considerations –  Forecasting The Next Recession –  Featured Charts –  Featured Alternative Institutional Investment Offerings –  Proprietary Asset Class Rankings for US & Global Markets Interested in setting up a meeting?  I’d love to connect.  Here’s my calendar link to schedule a time.   Markets have had a wild ride so far this year.  In my last letter after the new year, I mentioned markets would have a spike in volatility.  We have seen this increase in volatility coinciding with two sharp drawdowns in just the first three months of the year with subsequent recoveries.  After remaining below 14 on the VIX (Volatility Index) for most of 2017, the VIX spiked to 50 in February and maintained an elevated level over 16 so far for most of

10 popular stocks that would be hit hard if Trump started a trade war

Apple, Caterpillar and Wynn Resorts are businesses that could be especially hurt if other countries or trade blocs retaliate. President Trump’s discussion on tariffs has the capacity to initiate a trade war. Surely there’ll be plenty of commotion, as is customary with Trump, and in our investigation, the likelihood of a trade war with dire consequences isn’t large. Nonetheless, it’s only prudent to take preventative actions. Let’s explore using a graph, I shall share the titles of 10 popular stocks which would be in danger if there’s a trade warfare. Read:Here is why the stock exchange is accepting the Trump tariffs so challenging ( Chart Click here here ( to your annotated chart of S&P 500 ETF (SPY). Similar conclusions could be drawn from the graphs of Dow Jones Industrial Average , DJIA ETF (DIA) and

Frequently Asked Retirement Income Questions

When should I start considering tapping my retirement resources and how should I go about doing this? The response to this question is dependent upon if you expect to retire. A set of meetings with a financial adviser might assist you in making important decisions like how your portfolio ought to be spent, once you’re able to afford to retire, and just how much you’ll have the ability to draw yearly for living expenses. Should you expect retiring before, or appreciating a longer working life, you might have to change your preparation threshold so. How much yearly income am I going to need? While studies suggest that a lot of men and women are very likely to need between 60 percent and 80 percent of the final operating year’s earnings to keep their lifestyle after

Impact Of The New Tax Law On Financial Planning And Retirement in 2018

Those working in retirement as sole-proprietors or LLCs can deduct 20% of their business income but their full income will count against the Medicare PartB premium threshold. The new year provides a package of changes to federal income tax laws which go into effect. Here are the salient changes which impact financial planning and retirement. Unless you’ve been consumed in of the bowl games, you’re likely aware there are no longer $ 4,050 exemptions to your partner, you and your kids, although the deduction has approximately doubled to $ 24,000 for joint filers. There is a2,000 per child tax credit with a at $400k AGI, and the era deductions still apply. If you’ve been itemizing and live in a high tax state, property tax deduction and your joint state income is capped at $10,000. The

Trump Tax Plan – Key Points

Trump Tax Plan – 8 Key Income Tax Provisions: 1) It eliminates personal exemptions which could result in families with many children paying higher taxes 2) It eliminates most itemized deductions such as moving expenses, alimony payments, etc. 3) It limits the deduction on mortgage interest to the first $750K of the loan and interest on home equity line of credits can no longer be deducted 4) Taxpayers can deduct up to $10K in state and local taxes.   They must choose between property taxes, and income or sales taxes. 5)  It expands the deduction for medical expenses 6)  It repeals Obamacare tax on those without health insurance in 2019 7) it doubles the estate tax exemption from 11.2 million to 22.4 million and  it keeps the alternative minimum tax but increases the exemption 8) it

Life Happens. Here’s What To Do With Your Finances If You Divorce.

Getting divorced checklist Managing the financial aspects of a divorce might be as dealing with the feelings as essential. Transactions and accounts that are financial Split all bank accounts balances as called for in the divorce arrangement Cancel concerted checking, savings and revolving credit accounts, including credit cards Establish personal accounts in your name for ATMs, checkingaccount, savings and credit cards Permit your utility businesses know if you are assuming responsibility for the invoices or if your title ought to be removed in the accounts. Be certain that you upgrade the account for heating , electrical, gas, sewer, water, cable/satellite tv, phone and Internet. Responsibilities for any co-op or condominium fees. Convert household programs to individual contracts, if appropriate Notify all your creditors of your varied conditions and duties, such as change of address if

Predictions for 2018

2017 was a good year for the buy-and-hold investor where broad-based gains were captured across all major US & global equity markets. In addition, volatility hit historically low levels, which was a far step away from the past several years where investors have been bombarded with above-average volatility. As we enter 2018, practically all major US and global economic indicators are positive and no signs of recession exist in the near future. The good news is that the US & global economies are expanding, the bad news is that all this positive news is already priced into the markets. Therefore, 2018 will likely experience higher volatility than 2017 with one or two corrections possibly up to 15%. However, I do believe we will likely end the year higher in the US markets and especially emerging
US Dollar & Small Caps Could Surge With Tax Reform Being Passed

US Dollar & Small Caps Could Surge With Tax Reform Being Passed

US Dollar has been flatlined for 3 years and steadily declining throughout 2017. The House has currently passed their version of a reform bill and the Senate Finance Committee passed its bill on to the full Senate for a likely vote this week. Indications are that the Senate will pass its bill, triggering the reconciliation process between the two Houses of Congress.  It is expected that this process will be difficult, but many experts believe a compromise bill will be passed during the first quarter of 2018. If so, this may thrust the US Dollar above its 12-month resistance and head higher.       In addition, the passing the Tax Reform bill may also push small caps higher, especially if the US Dollar appreciates.  Coincidentally, small-caps just broke above their 10-year rising resistance level,