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Update ter 2014

 

Quarterly Economic Update Fourth Quarter 2014

   

Michael L. Schwartz, RFC, CWS, CFS, a registered principal offering securities and advisory services through Independent Financial Group, LLC  Member FINRA‐SIPC. Schwartz Financial and Independent Financial Group are unaffiliated entities 

 Note: The views stated in this letter are not necessarily the opinion of Independent Financial Group, LLC., and should not be construed, directly or indirectly, as an offer to buy or sell any securities mentioned herein. Investors should be aware that there are risks inherent in all investments, such as fluctuations in investment principal. With any investment vehicle, past performance is not a guarantee of future results. Material discussed herewith is meant for general illustration and/or informational purposes only, please note that individual situations can vary. Therefore, the information should be relied upon when coordinated with individual professional advice. This material contains forward looking statements and projections. There are no guarantees that these results will be achieved. There is no guarantee that a diversified 

portfolio will outperform a non‐diversified portfolio in any given market environment. All indices referenced are unmanaged and cannot be invested into directly.  Unmanaged index returns do not reflect fees, expenses, or sales charges. Index 

performance is not indicative of the performance of any investment.  Past performance is no guarantee of future results.  The Standard and Poors 500 index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy.  Through changes in the aggregate market value of 500 stocks representing all major indices. The Dow Jones Industrial average is comprised of 30 stocks that are major factors in their industries and widely held by individuals 

and institutional investors. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their 

accuracy or completeness cannot be guaranteed. In general, the bond market is volatile, bond prices rise when interest rates fall and vice versa. This effect is usually pronounced for longer‐term securities. Any fixed 

income security sold or redeemed prior to maturity may be subject to a substantial gain or loss. Sources: yahoo.com; Wall Street Journal, Barron’s; WealthManagement.com; Bloomberg.com© 

prices] will go,” said Ed Morse, global head of commodities research for Citigroup Inc. Oil prices and their fluctuations can create market disruption and uncertainty. Oil prices will be on the list of items that we will monitor in 2015.

(Source: Bloomberg.com, 1/2015)

International Concerns

For many market strategists, the bullish case for equities includes a stronger European economy and the end of the current recession in Japan. Most analysts feel that the European Central Bank will follow the Federal Reserve’s example and provide Quantitative Easing and an asset buying program. These measures allow the European Central Bank to bolster their countries’ money markets.

(Source: Barron’s, 12/2014)

Russia and China also present concerns for investors. Russia “is in bad shape, due to lower oil prices, but it wants to remain relevant on the world stage,” according to John Praveen of Prudential International Investment Advisors. He and others also caution that China will be another concern—investors will need to see if the Chinese central bank can provide sufficient stimulus to help their economy continue its expansion in 2015.

(Source: Barron’s, 12/2014)

U.S. Politics

As we head into 2015, the political landscape in the U.S. has changed dramatically. Following six years of gridlock and brinksmanship, 2015 could prove to be a very interesting one, with Republicans taking control of both the House and the Senate. Analysts are predicting an active year in Washington. President Obama only has 24 months remaining to cement his legacy. Analysts feel that comprehensive tax reform, especially closing some loopholes and revamping corporate taxes, could prove to be a big win for investors.

(Source: Barron’s, 1/2015)

Conclusion: What Should an Investor Do? Although the U.S. stock market isn’t filled with bargains, most analysts see the potential for U.S. stock market gains in 2015. Jurrien Timmer, Director of Global Macro in Fidelity's Global Asset Allocation Division, encourages investors to “continue to view the U.S. market as the best house on the street. As we all know, the best house is usually the most expensive, and for good reason.” While many analysts are predicting growth for U.S. stocks, that growth might not come easily. In the last three years the S&P 500 has risen from a humble 11.7 times next-four-quarter earnings estimates to an ambitious 16.5 times. Investors might be best served structuring their portfolios to weather stock market turbulence.

(Source: Barron’s, 12/2014)

Continue to be watchful. Even the most optimistic investors need to be aware of some of the warning signs. Focus on your own personal objectives. During confusing times it is always wise to create realistic time horizons and return expectations for your own personal situation and to adjust your investments accordingly. Understanding your personal commitments and categorizing your investments into near-term, short-term and longer-term can be helpful. Be cautious with income investments. While some income investors did well in 2014, this year the menu could be less attractive. With the Federal Reserve and interest rates in the spotlight, this is a good time to understand your true income and cash flow needs. Don’t try to predict the market. Investment decisions driven by emotion can cause problems for investors. Discipline and perspective can help investors remain committed to their long-term investment programs through periods of market uncertainty.

 

Quarterly Economic Update Fourth Quarter 2014

 

Retirement Planning Strategies · IRA/Roth IRA · Pensions/Profit Sharing · SIMPLE Plans · SEP-IRA Plans · 401(k)/403(B)

Insurance Services · Life · Annuities · Long Term Health Care · Disability

College Savings Analysis · Educational IRA · 529 Plans · Custodial Accounts

Investment Services · Stocks · Corporate Bonds · Municipal Bonds · Mutual Funds · Real Estate Investment Trusts · Variable Insurance / Annuities · Private Equity

Estate Analysis · Estate Tax Analysis · Creation · Estate Conversion Strategies · Tax and Distribution Analysis · Legacy Planning

Quarterly Economic Update Fourth Quarter 2014

In this quarterly review:

A Year in Review 2014 Market Returns Office Happenings

- Tax Season - Save the Date

Looking Ahead to 2015 - Interest Rates - Oil Prices - International Concerns - U.S. Politics

An Outlook of 2015 Client Advocacy Program Conclusion: What Should an Investor Do?

Schwartz Financial Services Comprehensive Wealth Management & Retirement Planning

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