Do Our Attitudes About Money Help or Hurt Us?

We may need to change them to better our financial prospects.

Provided by Benjamin Bogetto

 

Our relationship with money is complex & emotional. When we pay a bill, go to the mall, trade in a car for a new one, hunt for a home or apartment, or pass someone seemingly poor or rich on the street, we feel things and harbor certain perceptions.

 

Are our attitudes about money inherited? They may have been formed when we were kids. We watched what our parents did with their money, and how they managed it. We were told how important it was – or, perhaps, how little it really mattered. Parental arguments over money may be ingrained in our memory.

This history has an effect. Some of us think of money, finance, investing, and saving in terms of getting ahead, in terms of opportunity. Others associate money and financial matters with family struggles or conflicts. Our family history is not responsible for our entire attitude about money – but it is, undoubtedly, an influence.

Our grandparents (and, in some cases, our parents) were never really taught to think of “retirement planning.” Just a century ago, the whole concept of “retiring” would have seemed weird to many Americans. You worked until you died, or until you were physically unable to do your job. Then, Social Security came along, and company pensions for retired workers. The societal expectation was that with a company pension and Social Security, you weren’t going to be impoverished in your “old age.”

  

Very few Americans can make such an assumption today. Many are unaware of the scope of retirement planning they need to undertake. An alarming 54% of pre-retiree respondents to a 2016 Prudential Financial survey had no clue how much they needed to save for retirement. Additionally, 54% had balances of less than $150,000 in their workplace retirement plans. Have they been lulled into a false sense of security? Did they inherit the attitude that when you retire in America, Social Security and a roof over your head will be enough?¹

How can pessimistic attitudes about money, saving, & investing be changed? Perhaps the first step is to recognize that we may have inherited them. Do they stem from our own experience? Or are we simply cluttering our minds with the bad experiences and negative assumptions of years ago?

   

One example of this leaps readily to mind. Earlier this year, Bankrate surveyed investors per age group and learned that just 33% of millennials (Americans aged 18-35) owned any equities, while 51% of Gen Xers did. (That actually represented a dramatic increase: in 2015, only 26% of millennials were invested in equities.)^2,3

College loan debt and early-career incomes aside, millennials watched equity investments, owned by their parents, crash in the 2007-09 bear market. Some are quite cynical about the financial world. A 2015 Harvard University study showed that a mere 14% of respondents aged 18-29 felt that Wall Street firms "do the right thing all or most of the time” as they conduct business.³

 

How do you feel about money? What were you taught about it when you were growing up? Did your parents look at money positively or negatively? These questions are worth thinking about, for they may shape your relationship with money – and saving and investing – here and now. 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Securities offered through First Heartland Capital, Inc. Member FINRA/SIPC

Bogetto Financial is not affiliated with First Heartland Capital, Inc.  

Bogetto & Associates does not provide legal or tax advice.  These topics are discussed in conjunction with your CPA, Tax Advisor and Attorney.

Citations.

1 - businessinsider.com/reasons-for-americas-retirement-crisis-2016-11 [11/29/16]

2 - ibtimes.com/should-you-invest-stock-market-why-millennials-might-be-missing-out-when-it-comes-2389589 [7/6/16]

3 - thestreet.com/story/13135109/1/why-millennials-dont-trust-wall-street-or-investing-in-stocks.html [5/2/15]

Financial Health...For Now & Tomorrow

Contact us Today

Website - www.bogettoandassociates.com

Telephone - 314-858-1602

Email - peter@bogettoandassociates.com

10805 Sunset Office Drive, Ste. 202

St Louis, MO 63127

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What if You Find a Mistake in Your Retirement Plan?

How common is this? How can you try to correct it if it occurs?

Provided by Benjamin Bogetto

Your latest retirement plan account statement arrives in your email inbox. You take a look at it – and something seems amiss. “That can’t be right,” you say to yourself. There must be some kind of mistake. Who should you talk to about this? Who can fix it?

  

Mistakes do happen with retirement plans. As a consultant to these programs told the trade journal PLANSPONSOR, they are “ubiquitous.” In fact, they are so prevalent that the Internal Revenue Service devotes more than 20 web pages to helping employers fix them over at irs.gov.^1,2

 

A small business has much on its collective mind, and sometimes its retirement savings program may get short shrift. Errors may occur regarding ongoing salary deferral amounts, plan participant loans, or company matches when an employee’s pay is boosted by tips or bonuses. In the case of traditional pension plans, an employer may even pay the retired worker too much.

How can you detect mistakes? Look at your paystubs consistently to make sure your account balance reflects your contributions. This will not be a direct relationship because of compound interest and yield over the years, but if something is really off, it should be evident. If you happen to have taken a loan from your plan, check to see that the balance reflects this. If you have changed your investment mix or the percentage of salary you defer into the plan per paycheck, examine your account statements over the next several months or year to confirm that these changes are carried out. 

   

How can you try to fix these errors? You should turn to the plan sponsor (your employer) first. Approach your employer’s human resources department according to procedure. Read the rules for addressing such mistakes within the summary plan description (the booklet about the plan that you should have received at or shortly after your enrollment) and bring your account statements with you. Your employer will want to know about any potential mistake, because if it is not corrected, it could mean trouble with the IRS.^1,3

 

About 40% of all workplace retirement plans in America are sponsored by companies with less than 10 employees. In such cases, your human resources contact may, effectively, be your boss. How should you bring up such a delicate matter to him or her?³

One, meet with your boss privately and be very polite. Maintain a pleasant attitude. Avoid appearing disgruntled. The conversation could awaken your boss to the need for better administration, better supervision of the plan.

 

If the answers you get at work don’t seem adequate, then contact the plan provider (the investment firm that furnishes the plan for your employer). You could also ask the financial professional who consults you to look into the matter on your behalf.

If you have retired after participating in a pension plan and you wish to challenge what you feel is a mistake, you may want to contact the Pension Rights Center at 888-420-6550 or via its website, pensionhelp.org.⁴

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Securities offered through First Heartland Capital, Inc. Member FINRA/SIPC

Bogetto Financial is not affiliated with First Heartland Capital, Inc.  

Bogetto & Associates does not provide legal or tax advice.  These topics are discussed in conjunction with your CPA, Tax Advisor and Attorney.

Citations.

1 - plansponsor.com/Plan-Sponsors-Should-Be-Aware-of-Common-Errors/ [6/1/15]

2 - irs.gov/retirement-plans/plan-sponsor/fixing-common-plan-mistakes [9/15/16]

3 - thefiscaltimes.com/Articles/2014/01/08/How-Convince-Your-Employer-Fix-Your-401k [1/8/14]

4 - marketwatch.com/story/what-happens-when-theres-a-mistake-in-your-401k-2016-10-24 [10/24/16]

Financial Health...For Now & Tomorrow

Contact us Today

Website - www.bogettoandassociates.com

Telephone - 314-858-1602

Email - peter@bogettoandassociates.com

10805 Sunset Office Drive, Ste. 202

St Louis, MO 63127

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If Interest Rates Rise, What Happens to Bonds?

Investors in longer-term Treasuries could really be punished.

Provided by Benjamin Bogetto

Are bond investors facing the possibility of major losses? Recently, bond yields have climbed. From November 1-23, the 2-year Treasury yield went from 0.83% to 1.12%, while the yield on the 10-year note rose from 1.83% to 2.36%.¹

 

Quality bonds have a place in a portfolio, but many investors are moving their money elsewhere. They see a federal stimulus ahead in 2017, one that could potentially strengthen the economy and lead the Federal Reserve to gradually tighten interest rates. Assuming that happens and appetite for risk remains strong, what will happen to bonds and bond funds when rates begin to climb?^1,2,3

The impact of rising rates will vary. Bonds and bond funds are different animals; some might even call them different asset classes.

   

In a rising-interest-rate environment, bond fund investors commonly see principal values decline until rates level off or dip again. The more intermediate-term and long-term bonds a fund holds, the bigger the hit it may take. A diversified bond fund will reinvest interest payments into new bonds with higher coupons, however – meaning investors will see larger returns with time.^2,3

  

Long-term bonds tend to be hit harder by higher rates. They may lose market value, but eventually the higher rates will result in extra income for the patient investor.^2,3,4

   

How about short-term and intermediate-term bonds? Some analysts warn against purchasing short-duration Treasuries and municipal and corporate bonds, contending that these debt securities might be hurt the most should the pace of rate hikes quicken. Others disagree.^2,3,4

   

Higher rates have not always imperiled the bond market. Before December 2015 (when the Fed decided to raise rates again), the economy had seen six rising interest rate environments in 40 years. Those periods lasted from two to five years, with T-bill rates rising between 2.3-11.9%. In those six instances, the total annual return for the Barclays U.S. Aggregate Bond Index (the S&P 500 of the bond market) ranged from 2.6-11.9%, with most of the total annual returns at between 4-6%. In short, no disaster for a bond investor.^2,4

   

Still, if the federal funds rate rises 3% over a period of a few years, a longer-term Treasury might lose as much as a third of its market value as a consequence – and if bulls happen to run on Wall Street with only brief retreats between now and 2025, how attractive will a short-term or intermediate-term Treasury be?

   

What if you want or need to stay in bonds? Some bond market analysts see merit in exploiting short-term bonds with laddered maturity dates. The trade-off: accepting lower interest rates in exchange for a potentially smaller drop in the market value of these securities if rates rise. If you are after higher rates of return from short-duration bonds, you may have to look to bonds that are investment-grade, but without AAA or AA ratings.^2,3,4  

  

If interest rates begin heading north soon, exploiting short maturities could position you to get your principal back in the short term. That could give you cash, which you could reinvest as interest rates presumably go up further. If you primarily see pain ahead for bond owners, you could consider limiting yourself to small positions in government bonds, investment-grade corporate bonds, and bond funds with durations of 10 years or less.^2,3,4

  

Bonds still belong in the big picture. In a bull market, putting money into an investment returning 1.5% for 10 years may seem nonsensical. It may make more sense in light of the goal of portfolio diversification and the need for consistent returns.^3,4

 

If interest rates rise continually during the next few years, current owners of long-term bonds might find themselves losing out in terms of their portfolio’s potential. On the other hand, bonds have never lost half their value; stocks have.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Securities offered through First Heartland Capital, Inc. Member FINRA/SIPC

Bogetto Financial is not affiliated with First Heartland Capital, Inc.  

Bogetto & Associates does not provide legal or tax advice.  These topics are discussed in conjunction with your CPA, Tax Advisor and Attorney.

Citations.
1 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield [11/23/16]
2 - thestreet.com/story/13393037/1/how-to-invest-in-bonds-as-interest-rates-start-rising.html [12/20/15]
3 - money.cnn.com/2015/04/29/retirement/bonds-investing/ [4/29/15]
4 - marketwatch.com/story/how-your-bond-portfolio-can-survive-higher-rates-2015-04-23 [4/23/15]

Financial Health...For Now & Tomorrow

Contact us Today

Website - www.bogettoandassociates.com

Telephone - 314-858-1602

Email - peter@bogettoandassociates.com

10805 Sunset Office Drive, Ste. 202

St Louis, MO 63127

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Bogetto & Associates Presents: MONTHLY ECONOMIC UPDATE

December 2016

THE MONTH IN BRIEF
November was certainly newsworthy, presenting investors with three historic moments. First, Donald Trump won the presidency in a stunning upset that confounded political analysts. Next, the stock market rallied spectacularly after receiving that unanticipated news – the Dow Jones Industrial Average repeatedly closed at all-time peaks, advancing 5.41% on the month. Finally, OPEC nations agreed to reduce oil output for the first time since 2008, a development that sent crude prices soaring. On the whole, the latest U.S. economic indicators looked good. Existing home sales maintained their pace, even as mortgage rates climbed. A December interest rate hike by the Federal Reserve looked more and more likely.^1,2

   

DOMESTIC ECONOMIC HEALTH
Consumers spent significantly in October. The latest reports from the Department of Commerce showed personal spending up 0.3% in the tenth month of the year, and both headline and core retail sales advancing 0.8%. Personal incomes increased by an impressive 0.6% in October.^3,4

 

Consumer confidence surged in November. The Conference Board’s monthly index hit 107.1, jumping 6.3 points from its October reading; analysts polled by MarketWatch felt it would rise to 102.5. The University of Michigan’s November consumer sentiment gauge rose to 93.8.³

On the hiring front, companies added 161,000 net new workers in October. (The Department of Labor also revised August and September hiring totals upwards by a combined 44,000.) Unemployment was at 4.9%; the U-6 rate (which also counts the underemployed) was at 9.5%. Yearly wage growth reached a six-and-a-half-year peak at 2.8%.⁵

The manufacturing and service sectors appeared healthy, according to the latest key U.S. purchasing manager indexes. The Institute for Supply Management’s globally watched factory sector PMI rose 0.4 points to 51.9; its service sector PMI fell 2.3 points to 54.8, but was still well above 50, the number delineating expansion from contraction. In other news relating to manufacturing, hard goods orders rose 4.8% in October (core orders were up but 0.4%), and the federal government’s second estimate of Q3 GDP improved to 3.2% from an initial 2.9%.^3,6

 

Inflation pressure did increase for consumers in early fall. The Consumer Price Index showed a 0.4% October gain, leaving it up 1.6% annually. Core consumer prices had risen 2.1% in 12 months. Affected notably by fuel costs, the Producer Price Index was flat in October and only up 0.8% year-over-year.^3,4

         

On November 17, Federal Reserve chair Janet Yellen sent a strong signal that an interest rate adjustment was near. She commented that a rate hike could occur “relatively soon,” as monetary policy appeared to be only “moderately accommodative.” Only “gradual increases in the federal funds rate” might be needed to meet an oncoming inflation threat, she noted.⁷

GLOBAL ECONOMIC HEALTH
OPEC countries formally agreed to decrease oil output on November 30, surprising those who thought that its tentative summer accord would never be finalized. Saudi Arabia and Iran agreed to major production cuts, and while Russia does not belong to OPEC, word came that it would also agree to cut output if OPEC set per-nation production quotas. In the wake of the deal, Morgan Stanley analysts commented that oil prices might rise by as much as $5 a barrel.²

     

An encouraging economic sign emerged from Europe. Yearly euro area inflation ticked up to 0.6% in November, with annualized core inflation at 0.8%. As last month ended, European investors waited to see if the European Central Bank would choose to extend its current bond-purchase program beyond March. Bloomberg reported that the euro area jobless rate remained at 10.0% in October.⁸

The Philippines appeared to displace China as Asia’s fastest growing economy. According to Reuters, its GDP reached 7.1% in the third quarter. China’s official Q3 GDP reading came in at 6.7%.⁹

India suffered through a cash crunch last month as Prime Minister Nandrenda Modi shockingly decided to outlaw the country’s 500-rupee and 1,000-rupee notes. The move instantly took 86% of India’s money supply out of circulation. Modi was combating the country’s "black money” problem – wealthy households secreting portions of their incomes in pursuit of tax savings. He announced that new currency would quickly be issued, but former Prime Minister Manmohan Singh denounced the tactic as a “monumental management failure” and “a case of organized loot and legalized plunder of the common people.”¹⁰

   

WORLD MARKETS
Foreign stock benchmark performance in November can be summed up in a convenient phrase: all over the place. Russia’s MICEX led the way, going +6.21%. Close behind were the Nikkei 225 at +4.94% and the Shanghai Composite at +4.71%. Australia’s All-Ordinaries went +2.45; Canada’s TSX Composite, +2.01%; and the MSCI World index, +1.25%. European gains included the CAC-40 at +0.65% and the FTSE Eurofirst 300 at +0.36%.^11,12

 

Several major indices lost ground in November. They included the DAX at -0.52%, the Hang Seng at -0.72%, the FTSE 100 at -3.04%, Brazil’s Bovespa at -3.71%, India’s NFTE 50 at -4.65%, the MSCI Emerging Markets at -4.67%, Spain’s IBEX 35 at -5.58%, and Mexico’s Bolsa at -5.61%.^11,12

       

COMMODITIES MARKETS

Gold futures sank in November as investors ran back to equities. The yellow metal lost 7.93% for the month to a COMEX close of $1,172.00 on November 30. Silver futures mirrored that descent, sinking 7.44% to a month-end close of $16.48. While platinum fell 6.92%, copper (a base metal) absolutely took off, rising 19.07%.¹³

 

Boosted by news of the OPEC deal, light sweet crude finished the month with a flourish, rallying sharply to leave its monthly advance at 4.75%. Oil futures closed at $48.98 on the NYMEX November 30. Natural gas gained 12.28%; heating oil, 5.12%; unleaded gasoline, 2.21%. As for crops, cotton rose 4.49%; soybeans, 3.02%; corn slipped, 4.51%; wheat, 7.47%; coffee, 9.96%; and sugar, 10.88%. The U.S. Dollar Index rose 3.25% month-over-month to a November 30 settlement of 101.47.^13,14

  

REAL ESTATE
New and existing home sales went opposite ways in October. Resales increased 2.0% by the estimate of the National Association of Realtors, while the Census Bureau reported a 1.9% reduction in the pace of new home buying. During the year ending in October, the median sale price for an existing home rose 6.0% to $232,200, while the median sale price for a new home went 1.9% higher to $304,500.¹⁵

 

The average interest rate on a conventional home loan rose half a percent during November, with the bond market expecting greater infrastructure spending (and greater inflation) in the near future. Freddie Mac’s November 23 Primary Mortgage Market Survey (its last of the month) showed the 30-year FRM averaging 4.03% interest; average interest on the 15-year FRM and 5/1-year ARM was, respectively, at 3.25% and 3.12%. On October 27, the numbers were: 30-year FRM, 3.47%; 15-year FRM, 2.78%; 5/1-year ARM, 2.84%.^15,16

  

Looking at some of the other real estate reports issued in November, the 20-city S&P/Case-Shiller home price index was up 5.5% year-over-year in its September edition, improved from 5.2% a month earlier. Issuance of building permits increased just 0.3% in October, but housing starts advanced 25.5%. Finally, the NAR reported an 0.1% October gain for pending home sales.^3,4

              

LOOKING BACK…LOOKING FORWARD
Small caps had a phenomenal month. The Russell 2000 gained 11.02% as investors sensed its member firms would especially benefit from presumed increases in defense and infrastructure spending. The Dow’s 5.41% November gain outdistanced the 3.41% advance of the S&P 500 and the 2.62% improvement of the Nasdaq. The November 30 closing settlements: DJIA, 19,123.58; NASDAQ, 5,323.68; S&P, 2,198.81; RUT, 1,322.34. The CBOE VIX ended the month down at 13.33.^1,14

November certainly did not play out according to expectations. Who thought Wall Street’s benchmarks would rally to all-time highs, especially with the way they slumped before the election? Perhaps, December will pleasantly surprise us as well. Assuming the Federal Reserve raises the federal funds rate, can stocks retain some of their impressive momentum through the end of the year? In the near term, possibly. Some of the investing and economic factors that garner the most attention – GDP, consumer spending, consumer confidence, hiring, and earnings growth – have been quite positive recently. (In fact, the earnings recession is now over. As November ended, 98% of S&P 500 firms had reported quarterly results according to FactSet, with Q3 earnings for the S&P up by 3.2%.) So, yes, this bullishness may persist through the end of the year. On the horizon, there is the fear that accelerating inflation (and corresponding tightening) could keep the bulls in check. That could be something to worry about as 2017 unfolds.²⁰

UPCOMING ECONOMIC RELEASES: After the December 2 release of the Department of Labor’s November jobs report, the December roll call of scheduled news items proceeds as follows: the November ISM service sector PMI (12/5), October factory orders (12/6), December’s preliminary consumer sentiment index from the University of Michigan (12/9), a Federal Reserve interest rate decision, November retail sales, the November PPI and November industrial output (12/14), the November CPI (12/15), statistics on November groundbreaking and building permits (12/16), November existing home sales (12/21), the November PCE price index, November durable goods orders and the final estimate of Q3 growth (12/22), November new home sales and the final December University of Michigan consumer sentiment index (12/23), the year’s last consumer confidence index from the Conference Board plus October’s S&P/Case-Shiller home price index (12/27), and then November pending home sales (12/28). The November personal spending report will be issued in early January.

Securities offered through First Heartland Capital, Inc. Member FINRA/SIPC

Bogetto Financial is not affiliated with First Heartland Capital, Inc.  

Bogetto & Associates does not provide legal or tax advice.  These topics are discussed in conjunction with your CPA, Tax Advisor and Attorney.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. MarketingPro, Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is not a solicitation or recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The CBOE Volatility Index® (VIX®) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. The MICEX 10 Index (Russian: Индекс ММВБ10) is an unweighted price index that tracks the ten most liquid Russian stocks listed on MICEX-RTS in Moscow. Nikkei 225 (Ticker: ^N225) is a stock market index for the Tokyo Stock Exchange (TSE). The Nikkei average is the most watched index of Asian stocks. The SSE Composite Index is an index of all stocks (A shares and B shares) that are traded at the Shanghai Stock Exchange. The All Ordinaries (XAO) is considered a total market barometer for the Australian stock market and contains the 500 largest ASX-listed companies by way of market capitalization. The S&P/TSX Composite Index is an index of the stock (equity) prices of the largest companies on the Toronto Stock Exchange (TSX) as measured by market capitalization. The MSCI World Index is a free-float weighted equity index that includes developed world markets, and does not include emerging markets. The CAC-40 Index is a narrow-based, modified capitalization-weighted index of 40 companies listed on the Paris Bourse. The FTSEurofirst 300 Index comprises the 300 largest companies ranked by market capitalisation in the FTSE Developed Europe Index. The DAX 30 is a Blue Chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. The Hang Seng Index is a freefloat-adjusted market capitalization-weighted stock market index that is the main indicator of the overall market performance in Hong Kong. The FTSE 100 Index is a share index of the 100 companies listed on the London Stock Exchange with the highest market capitalization. The Bovespa Index is a gross total return index weighted by traded volume & is comprised of the most liquid stocks traded on the Sao Paulo Stock Exchange. The Nifty 50 (NTFE 50) is a well-diversified 50-stock index accounting for 13 sectors of the Indian economy. It is used for a variety of purposes such as benchmarking fund portfolios, index-based derivatives and index funds. The MSCI Emerging Markets Index is a float-adjusted market capitalization index consisting of indices in more than 25 emerging economies. The IBEX 35 is the benchmark stock market index of the Bolsa de Madrid, Spain's principal stock exchange. The Mexican Stock Exchange commonly known as Mexican Bolsa, Mexbol, or BMV, is the only stock exchange in Mexico. The US Dollar Index measures the performance of the U.S. dollar against a basket of six currencies. The PHLX Utility Sector Index is composed of geographically diverse public U.S. utility stocks. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Citations.

1 - google.com/finance?q=INDEXDJX%3A.DJI&ei=NVU_WJnQNsP12Abo6r2QCQ [11/30/16]

2 - bloomberg.com/news/articles/2016-11-30/opec-decision-day-as-ministers-meet-to-salvage-deal-on-oil-cuts [11/30/16]

3 - marketwatch.com/economy-politics/calendars/economic [11/30/16]

4 - investing.com/economic-calendar/ [11/30/16]

5 - tinyurl.com/hmn5mnb [11/4/16]

6 - instituteforsupplymanagement.org/ISMReport/NonMfgROB.cfm [11/3/16]

7 - marketwatch.com/story/yellen-says-fed-may-hike-interest-rates-relatively-soon-2016-11-17 [11/17/16]

8 - bloomberg.com/news/articles/2016-11-30/euro-area-inflation-accelerates-before-key-ecb-decision-on-qe [11/30/16]

9 - reuters.com/article/asia-economy-gdp-idINL4N1DF2BO [11/16/16]

10 - tinyurl.com/gvz6l29 [11/28/16]

11 - markets.on.nytimes.com/research/markets/worldmarkets/worldmarkets.asp [11/30/16]

12 - msci.com/end-of-day-data-search [11/30/16]

13 - money.cnn.com/data/commodities/ [11/30/16]

14 - barchart.com/stocks/indices#/viewName=performance [11/30/16]

15 - usatoday.com/story/money/business/2016/11/23/economy-manufacturing-durable--goods-jobless-claims/94329992/ [11/23/16]

16 - freddiemac.com/pmms/archive.html?year=2016l [11/30/16]

17 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F30%2F15&x=0&y=0 [11/30/16]

17 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F30%2F15&x=0&y=0 [11/30/16]

17 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F30%2F15&x=0&y=0 [11/30/16]

17 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F30%2F11&x=0&y=0 [11/30/16]

17 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F30%2F11&x=0&y=0 [11/30/16]

17 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F30%2F11&x=0&y=0 [11/30/16]

17 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F30%2F06&x=0&y=0 [11/30/16]

17 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F30%2F06&x=0&y=0 [11/30/16]

17 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F30%2F06&x=0&y=0 [11/30/16]

18 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [11/30/16]

19 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [11/30/16]

20 - marketwatch.com/story/get-ready-for-a-big-buying-opportunity-if-us-stocks-falter-2016-11-30/ [11/30/16]

Financial Health...For Now & Tomorrow

Contact us Today

Website - www.bogettoandassociates.com

Telephone - 314-858-1602

Email - peter@bogettoandassociates.com

10805 Sunset Office Drive, Ste. 202

St Louis, MO 63127

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Your Year-End Financial Checklist

Seven aspects of your financial life to review as the year draws to a close.

Provided by Benjamin Bogetto

 

The end of a year makes us think about last-minute things we need to address and good habits we want to start keeping. To that end, here are seven aspects of your financial life to think about as this year leads into the next...

   

Your investments. Review your approach to investing and make sure it suits your objectives. Look over your portfolio positions and revisit your asset allocation.

  

Your retirement planning strategy. Does it seem as practical as it did a few years ago? Are you able to max out contributions to IRAs and workplace retirement plans like 401(k)s? Is it time to make catch-up contributions? Finally, consider Roth IRA conversion scenarios, and whether the potential tax-free retirement distributions tomorrow seem worth the taxes you may incur today. If you are at the age when a Required Minimum Distribution (RMD) is required from your traditional IRA(s), be sure to take your RMD by December 31. If you don’t, the IRS will assess a penalty of 50% of the RMD amount on top of the taxes you will already pay on that income. (While you can postpone your very first IRA RMD until April 1, 2017, that forces you into taking two RMDs next year, both taxable events.)¹

   

Your tax situation. How many potential credits and/or deductions can you and your accountant find before the year ends? Have your CPA craft a year-end projection including Alternative Minimum Tax (AMT). In years past, some business owners and executives didn’t really look into deductions and credits because they just assumed they would be hit by the AMT. The recent rise in the top marginal tax bracket (to 39.6%) made fewer high-earning executives and business owners subject to the AMT – their ordinary income tax liabilities grew. That calls for a closer look at accelerated depreciation, R&D credits, the Work Opportunity Tax Credit, incentive stock options, and certain types of tax-advantaged investments.²

  

Review any sales of appreciated property and both realized and unrealized losses and gains. Take a look back at last year’s loss carry-forwards. If you’ve sold securities, gather up cost-basis information. Look for any transactions that could potentially enhance your circumstances.

 

Your charitable gifting goals. Plan charitable contributions or contributions to education accounts, and make any desired cash gifts to family members. The annual federal gift tax exclusion is $14,000 per individual for 2016, meaning you can gift as much as $14,000 to as many individuals as you like this year tax-free. A married couple can gift up to $28,000 tax-free to as many individuals as they like. The gifts do count against the lifetime estate tax exemption amount, which is $5.45 million per individual and $10.9 million per married couple for 2016.³

    

You could also gift appreciated securities to a charity. If you have owned them for more than a year, you can deduct 100% of their fair market value and legally avoid capital gains tax you would normally incur from selling them.⁴

 

Besides outright gifts, you can plan other financial moves on behalf of your family – you can create and fund trusts, for example. The end of the year is a good time to review any trusts you have in place.

 

Your life insurance coverage. Are your policies and beneficiaries up-to-date? Review premium costs, beneficiaries, and any and all life events that may have altered your coverage needs.

 

Speaking of life events...did you happen to get married or divorced in 2016? Did you move or change jobs? Buy a home or business? Did you lose a family member, or see a severe illness or ailment affect a loved one? Did you reach the point at which Mom or Dad needed assisted living? Was there a new addition to your family this year? Did you receive an inheritance or a gift? All of these circumstances can have a financial impact on your life, the way you invest and plan for retirement, and how you wind down your career or business. They are worth discussing with the financial or tax professional you know and trust. 

 

Lastly, did you reach any of these financially important ages in 2016? If so, act accordingly.

 

Did you turn 70½ this year? If so, you must now take Required Minimum Distributions (RMDs) from your IRA(s).

Did you turn 65 this year? If so, you are likely now eligible to apply for Medicare.

Did you turn 62 this year? If so, you can choose to apply for Social Security benefits.

Did you turn 59½ this year? If so, you may take IRA distributions without a 10% penalty.

Did you turn 55 this year? If so, you may be allowed to take distributions from your 401(k) account without penalty, provided you no longer work for that employer.

Did you turn 50 this year? If so, you can make “catch-up” contributions to IRAs (and certain qualified retirement plans).^1,5

 

The end of the year is a key time to review your financial “health” & well-being. If you feel you need to address any of the items above, please feel free to give me a call.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Securities offered through First Heartland Capital, Inc. Member FINRA/SIPC

Bogetto Financial is not affiliated with First Heartland Capital, Inc.  

Bogetto & Associates does not provide legal or tax advice.  These topics are discussed in conjunction with your CPA, Tax Advisor and Attorney.

Citations.

1 - fool.com/retirement/general/2016/04/11/required-minimum-distributions-common-questions-ab.aspx [4/11/16]

2 - nerdwallet.com/blog/taxes/income-taxes/federal-income-tax-brackets/ [9/8/16]

3 - turbotax.intuit.com/tax-tools/tax-tips/Tax-Planning-and-Checklists/The-Gift-Tax-Made-Simple/INF12127.html [11/7/16]

4 - marketwatch.com/story/what-to-know-when-deducting-charitable-donations-2016-02-23 [2/23/16]

5 - merrilledge.com/Publish/Content/application/pdf/GWMOL/retirement-deadlines-checklist.pdf [11/7/16]

Financial Health...For Now & Tomorrow

Contact us Today

Website - www.bogettoandassociates.com

Telephone - 314-858-1602

Email - peter@bogettoandassociates.com

10805 Sunset Office Drive, Ste. 202

St Louis, MO 63127

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