Fact vs. Fiction: I don’t need disability insurance


Fact vs. Fiction

We understand that it can be tricky navigating through the world of financial services. Everyone seems to have an opinion, and it can become difficult knowing what to believe. We’ve created this series, “Financial Fact vs. Fiction,” as a way to present and debunk some of the most popular financial myths. 


Fiction: I don’t need disability insurance; I will rely on workers’ comp. 

Fact: Both policies typically pay a portion of your lost income, but workers’ compensation only covers injuries that occurred on the job. If you are disabled due to an accident or illness that is not work-related, workers’ comp will not pay! That is why disability insurance is so important, as it will provide you with cash to replace lost wages and pay medical bills.

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What Might the Sequester Mean for You?


What Might the Sequester Mean for You?

Attention-grabbing headlines on the sequester abound, and, if you’re like many people, you’re wondering how the spending cuts may affect you. Our latest article, “The Sequester and What It May Mean for You,” discusses the potential impact of the cuts, both on the economy and on your personal financial picture.

As always, our focus is on keeping you informed and helping you stay on track toward your long-term financial goals, no matter the challenges the economy may face. If you have questions about anything in the attached article, please don’t hesitate to contact our office.

As always, our focus is on keeping you informed and helping you stay on track toward your long-term financial goals, no matter the challenges the economy may face. If you have questions about anything in the attached article, please don’t hesitate to contact our office.

The Sequester and What It May Mean for You

Presented by Christian Rezapour

As headlines announce a possible sequester, many people are wondering what the budget cuts will mean for the economy—and for their own finances. Here, we address several of the key questions that may be on your mind.

What is the sequester?

The sequester is a package of mandatory federal spending cuts that, barring further action by Congress, will take effect on March 1, 2013. It would result in a macro-level spending reduction of $85 billion this year, with additional cuts in subsequent years. These cuts would affect virtually every program that receives federal funding, including national defense, education, and law enforcement programs.

At this point, it seems unlikely that Congress will act to stop the cuts. Instead, the debate in Washington now centers on how, exactly, the cuts will be made, and whether or not there should be tax increases in order to offset them.

What would it mean for the economy?

While $85 billion sounds like a lot of money to the average consumer, it is a relatively small portion of the overall federal budget. Indeed, unlike the tax increases that recently took effect, the spending cuts should have a relatively muted impact on the economy. The best estimates at this point suggest a drag on economic growth of about 0.5 percent of gross domestic product (GDP). With current growth rates estimated at around 1.5 percent to 2.5 percent for the year, a 0.5-percent drag represents a real headwind, but not one that would tip the economy into a recession.

Further, while the spending cuts would undoubtedly have an initial impact, they would be a one-time event. The economy would take a hit in the first quarter and possibly the second, as it did from the tax hikes at the start of the year, but then carry on. Plus, even as federal spending declines, state and government spending is expected to start to recover, which could offset much of the damage.

What would it mean for you?

Government spending cuts can have real consequences for the average citizen, especially for federal employees, members of the military, and teachers. Airport personnel may be furloughed, resulting in delays for passengers. National parks may slash their budgets, affecting visitor experiences. As the cuts are slated for nearly every federal program, they stand to touch your life in some way, big or small.

When it comes to your financial bottom line and your tax bill, however, the sequester isn’t likely to have a significant effect.

The final word

The upshot is that, unlike the fiscal cliff situation at the end of last year, the political incentives favor letting the sequester hit. Fortunately, also unlike last year, the damage is likely to be moderate rather than severe. Many believe that cuts like these have to happen, and the developing consensus that we should let them happen now may actually be a long-term positive for the economy, despite the short-term pain.

As always, we’re here to keep you informed and best positioned for whatever challenges the economy may face. If you have specific concerns about the sequester and how it may affect your personal financial objectives, please do not hesitate to contact us.

Christian Rezapour is a financial advisor at Wealthmark Financial Services, LLC located at 808 Valley Forge Rd, Suite 104, Phoenixville, PA 19460. He offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. He can be reached at 610.400.1111or at mailbox@wealthmark.net.

© 2013 Commonwealth Financial Network®

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Retirement Income Planning: Finding the Best Approach for You


If you’re like most working Americans, you have just one primary source of income: your job. But when you retire, you’ll likely rely on various income sources, such as social security, retirement accounts, and pensions, to provide a steady income stream.

What’s the best way to manage your various sources of retirement income? Our latest article, “Retirement Income Planning: The Total Return Approach Vs. the Bucket Approach,” compares these popular investment strategies and explains the benefits of each. We hope you’ll find it helpful as you consider how you’ll pursue your retirement dreams.

If you have questions about the attached article, please don’t hesitate to contact our office either by phone at 610.400.1111 or by email at mailbox@wealthmark.net.

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Retirement Income Planning: The Total Return Approach Vs. the Bucket Approach

Presented by Christian Rezapour

Most working Americans have only one source of steady income before they retire: their jobs. When you retire, however, your income will likely come from a number of sources, such as retirement accounts, social security benefits, pensions, and part-time work. When deciding how to manage your various assets to ensure a steady retirement income stream, there are two main strategies to consider: the total return approach and the investment pool—or bucket—approach.

The total return approach

With the total return approach, you invest your assets in a diversified portfolio of investments with varying potential for growth, stability, and liquidity. The percentage you allot to each type of investment depends on your asset allocation plan, time horizon, risk tolerance, need for income, and other goals.

The objective of your investment portfolio generally changes over time, depending on how close you are to retirement:

  • Accumulation phase. During the accumulation phase, your portfolio’s objective is to increase in value as much as possible, with a focus on investments with growth potential.
  • Approaching retirement-age phase. As you near retirement, your portfolio becomes more conservative, moving toward more stable and liquid assets in order to help preserve your earnings.
  • Retirement phase. Once you retire, the idea is to withdraw from your portfolio at an even rate that allows you to enjoy a sustainable lifestyle.

Traditionally, a widely quoted withdrawal rate for the first year of retirement has been 4 percent. Ideally, that 4 percent should be equal to the amount left over after you subtract your yearly retirement income (e.g., pensions, social security, and so on) from your total cost of living, including investment management fees. Each year, you will most likely increase your withdrawal percentage to keep up with inflation. Keep in mind, however, that the appropriate withdrawal rate for you will depend on your personal situation as well as the current economic environment.

The bucket approach

The bucket approach also begins with a diversified portfolio, following the total return approach throughout most of the accumulation period. Then, as retirement approaches, you divide your assets into several smaller portfolios (or buckets), each with different time horizons, to target specific needs.

There is no “right” number of buckets, but three is fairly common. In a three-bucket scenario:

  • The first bucket would cover the three years leading up to retirement and the two years following retirement, providing income for near-term spending. It would likely include investments that have historically been relatively stable, such as short-term bonds, CDs, money market funds, and cash.
  • The second bucket would be used in years three through nine of retirement. Designed to preserve some capital while generating retirement income, it would include more assets with growth potential, such as certain mutual funds and dividend-paying stocks.
  • The third bucket, designated to provide income in year 10 and beyond, would contain investments that have the most potential for growth, such as equities, commodities, real estate, and alternatives. Although the risk profile of this bucket is typically higher than the other two, its longer time horizon can help provide a buffer for short-term volatility.

As you enter the distribution phase, you draw from these buckets sequentially, using a withdrawal rate based on your specific lifestyle goals in a particular year.

The big picture

Many people are familiar with the total return approach, but the bucket approach has been gaining popularity recently, thanks in large part to its simplicity. It also accounts for different time periods during retirement, potentially allowing you to allocate money more effectively based on your personal situation.

Perhaps the greatest benefit of the bucket approach is that it can help provide a buffer during times of market volatility. For example, if the value of the investments in buckets two and three suddenly fluctuates due to market conditions, your immediate cash income is coming from bucket one, which is likely to be less volatile. This may also alleviate the need to sell investments that have lost money in order to generate retirement income.

Of course, while the bucket approach has its advantages, some investors simply feel more comfortable using the total return approach. Remember, the best strategy for your retirement is unique to you and your personal preferences and needs. However you choose to pursue your retirement dreams, it’s important to work with a financial professional who can help you create the most appropriate strategy based on your goals and situation.

Contact us today to learn more about the different paths you may take to pursue a sustainable and enjoyable retirement.

Diversification does not assure against market loss, and there is no guarantee that a diversified portfolio will outperform a non-diversified portfolio. 

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Christian Rezapour is a Financial Advisor for Wealthmark Financial Services, LLC located at 808 Valley Forge Rd, Suite 104, Phoenixville, PA 19460. He offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. He can be reached at 610.400.1111 or at mailbox@wealthmark.net.

© 2013 Commonwealth Financial Network®

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Understanding the 2013 Medicare Tax


Our latest article, “Understanding the 2013 Medicare Tax,” explores the new tax in detail and offers suggestions for mitigating its impact.

If you have questions about the attached article, please don’t hesitate to contact our office at 610.400.1111 or send us an email at mailbox@wealthmark.net

Presented by Christian Rezapour

In 2010, the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act were passed into law. One of their important provisions is a new Medicare tax designed to help pay the cost of health care reform. The new tax is effective in 2013, so it’s important to start planning now if you haven’t done so already.

What’s changing?

Medicare contribution tax. The 2.90-percent Medicare tax will continue to be applied to wages and net self-employment income. Half of the tax (1.45 percent) is picked up by the employer and the other half (1.45 percent) by the employee. Effective in 2013, an additional 0.90-percent tax will be levied on wages and self-employment income above certain thresholds.

Wages or net earnings above $200,000 (single), $250,000 (married), or $125,000 (married but filing separately) will be taxed at an overall rate of 3.80 percent. The 0.90-percent rate increase applies only to the employee’s (or self-employed taxpayer’s) share of the Medicare tax. Unlike the social security tax, which has a “wage base” ceiling, there is no compensation limit. Each dollar is subject to the Medicare tax.

Example: Tom earns $300,000 and Janet earns $150,000. Tom’s employer will withhold 0.90 percent (or $900) on the $100,000 earned in excess of $200,000. Janet’s employer will not withhold any additional Medicare tax. Rather, the additional Medicare tax will be computed based on the couple’s combined wages over the $250,000 threshold for married taxpayers (or $200,000), resulting in a tax of $1,800. This would leave them with an additional $900 tax when filing their return, over and above the $900 that Tom’s employer withheld.

Tax on investment income. Higher-income taxpayers will also be subject to a 3.80-percent tax on most net investment income over the thresholds, in addition to any other applicable tax. The exceptions are distributions from retirement accounts—including pensions, 401(k)s, and IRAs—and income generated from municipal bonds. Keep in mind, however, that distributions from retirement accounts can push your adjusted gross income over the threshold, thus subjecting you to a 3.80-percent tax on your other investment income.

The following types of investment income will be affected:

  • Taxable interest
  • Capital gains
  • Dividends
  • Nonqualified annuity distributions
  • Royalties
  • Rental income

In addition, the new Medicare tax on investments will affect homeowners with appreciation greater than $250,000 ($500,000 if married) on their personal residences. The new law will also apply to estates and most trusts. The threshold for estates and trusts is currently $11,950, the amount at which their highest tax bracket begins.

Calculating the tax

For individuals, the 3.80-percent Medicare tax is applied to the lesser of net investment income or the excess of modified adjusted gross income (MAGI) over the applicable threshold ($200,000 for single filers, $250,000 for married filers, and $125,000 for married filing separately).

Example: Mark and Sue have earnings from wages of $175,000 and investment earnings of $100,000. The couple’s total wages and investment earnings (MAGI) equal $275,000. According to the rule, the 3.80-percent Medicare tax will be applied to the lesser of net investment income ($100,000) or the excess of MAGI over the applicable threshold ($25,000). In Mark and Sue’s case, then, only $25,000 will be subject to the Medicare tax. The entire $100,000 in investment income will be subject to either capital gains or ordinary income tax, depending on the nature of the income.

How will the new Medicare tax affect you?

If you believe that your income tax rate will be higher in the future than it is today, you may want to consider taking some kind of action to minimize the impact. One possibility might be a Roth IRA.

Roth IRA conversions. Roth IRAs have become popular alternatives to traditional IRAs. Not only does money held in a Roth IRA grow tax-deferred for federal income tax purposes, but distributions are also tax-free if certain requirements are met. (Please note: State tax treatment of Roth IRAs differs. Consult your tax advisor about your state’s rules.) Another advantage is that no minimum distributions are required upon reaching age 70½. Thus, you may avoid having retirement distributions increase your adjusted gross income over the threshold and exposing other income to the new Medicare surtax.

If a Roth IRA makes overall financial sense for you, you can convert a traditional IRA to a Roth IRA. When you convert to a Roth IRA, you pay income tax on the taxable dollars that are converted. These taxes are due in full in the year of conversion. Paying taxes on the conversion today may allow future distributions to escape scheduled tax increases later. It is generally better to pay these taxes with funds from another account; using IRA assets will typically result in more taxes and may involve early withdrawal penalties, depending on your age.

For more information on how the new tax will impact you and your family, please speak with your financial advisor.

This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a tax preparer, professional tax advisor, or lawyer.

IRS CIRCULAR 230 DISCLOSURE:

To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.

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Christian Rezapour is a financial advisor located at Wealthmark Financial Services, LLC at 808 Valley Forge Rd, Suite 104, Phoenixville, PA 19460.  He offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. He can be reached at 610.400.1111 or at mailbox@wealthmark.net.

© 2013 Commonwealth Financial Network®

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What the American Taxpayer Relief Act May Mean for You


Presented by Christian Rezapour

As you may know, President Obama signed the American Taxpayer Relief Act of 2012 into law in early January. The act makes significant changes to the tax code that will primarily affect upper-income taxpayers. Now that we have some finality, it’s important to take a look at the changes to understand how they may impact you.

Our latest article, “What the American Taxpayer Relief Act May Mean for You,” explores the new provisions in detail and looks at how you may be affected by the itemized deduction phaseout, the higher capital gains tax, and other changes.

If you have questions about the attached article, please don’t hesitate to contact our office. 

 

What the American Taxpayer Relief Act May Mean for Your

 

On January 2, 2013, President Obama signed the American Taxpayer Relief Act of 2012 into law. The act makes significant changes to the tax code that will primarily affect upper-income taxpayers. Now that we have some finality, it’s important to take a look at the changes to understand how they may impact you.

Itemized deductions phaseout

Under the act, itemized deductions will be phased out for taxpayers whose income exceeds certain thresholds. For married taxpayers filing jointly, the phaseout begins at $300,000 of adjusted gross income (AGI). Taxpayers filing single will have a threshold of $250,000 of AGI. Beyond these thresholds, allowable itemized deductions will be reduced by 3 percent of the amount by which the taxpayer’s AGI exceeds the threshold amount. The reduction cannot exceed 80 percent of previously allowable itemized deductions.

For example, Jim and Sandy are a married couple filing jointly. With a combined AGI of $750,000, they have exceeded the threshold for their filing status ($300,000) by $450,000. Therefore, their allowable itemized deductions will be reduced by $13,500 ($450,000 x 0.03, with a maximum 80-percent reduction).

Where it might really count. Charitable donations are one of the five biggest categories of itemized deductions. If you are a high-income taxpayer who has historically made large charitable contributions, you may be surprised by how the new phaseout affects your deduction. Assume a married taxpayer has an AGI of $2,500,000 and contributes $100,000 to charity. Because this taxpayer is $2,200,000 over the threshold, his $100,000 deduction is reduced to just $34,000.

New 10-percent floor on medical expenses. The medical expense deduction is also one of the five biggest itemized deductions. Because the floor is now 10 percent of AGI, you’ll want to be cognizant of expenditures like dental work and eyeglasses. For example, if you can push the purchase of a new pair of glasses into a tax year when you know you are scheduled for expensive medical procedures, you may be able to bundle these costs to take advantage of the deduction.

The effect on capital gains

Taxpayers with taxable income above $400,000 (individual) and $450,000 (married filing jointly) will see an increase in their long-term capital gain and qualified dividend tax rates, from 15 percent to 20 percent. It’s important to note that this significant increase will be compounded by legislation that takes effect in 2013; see “The Medicare surtax” below.

The only real way to manage this tax increase is to minimize your taxable income or take gains in years when you have not exceeded the threshold. Look to maximize contributions to your retirement accounts, as well as other above-the-line deductions, to reduce taxable income.

The Medicare surtax

The Patient Protection and Affordable Care Act of 2010 extends a 3.8-percent Medicare surtax to the lesser of net investment income or the excess of modified adjusted gross income (MAGI) over $200,000 (individual) or $250,000 (married filing jointly). It also adds a 0.9-percent surtax on earned income above $200,000 (individual) or $250,000 (married filing jointly). Net investment income includes net rental income, dividends, taxable interest, net capital gains from the sale of investments, the sale of second homes and rental properties, royalties, and passive income from investments in which the taxpayer does not actively participate, including partnerships and the taxable portion of nonqualified annuity payments.

For example, Robert and Emma are married taxpayers filing jointly, with a MAGI of $400,000. Of this, $350,000 is wages and $50,000 is net investment income. Their MAGI is $150,000 over the $250,000 threshold for married couples filing jointly, so they’ll owe 3.8 percent on their $50,000 in net investment income, as it is less than $150,000. They’ll also owe 0.9 percent on the $100,000 by which their wages exceed the $250,000 earned income threshold for married couples filing jointly. The couple’s total Medicare surtax will be $2,800—3.8 percent of $50,000 ($1,900) plus 0.9 percent of $100,000 ($900).1

What to consider in planning around the surtax. As mentioned above, pay attention to when you take capital gains. If you can spread gains over different tax years or take them in years when your earned income is lower or under the threshold, you may be able to minimize your tax liability. Also consider your unearned income and how it is affected by the surtax. If the tax hit is substantial, you may want to consider tax-free income sources like municipal bonds.

New top individual rate higher than corporate rate

Because the American Taxpayer Relief Act has added a new 39.6-percent income tax bracket, the top individual income tax rate is now higher than the top corporate tax rate, which is 35 percent. If you are self-employed, you may want to revisit your business entity selection. Depending on your income level, the choice of entity could result in a net tax savings. 

Be aware that determining whether C corporation status makes sense from a tax perspective will require an in-depth analysis of the business. If you find yourself exposed to the new 39.6-percent individual income tax bracket, seek the advice of a tax expert who specializes in this area to help you decide on the best course of action.

Defer income, if possible

Considering the impact a higher individual income tax bracket can have on your financial situation, you may want to explore income deferral strategies to help reduce your taxable income. You may already be contributing to a qualified retirement plan, such as a 401(k), but if your employer offers a nonqualified deferred compensation plan, that may be worth considering as well.

Nonqualified deferred compensation plans provide an opportunity for taxpayers to defer income on a pretax basis, and accumulated investment earnings will grow tax-deferred, much like they do in a qualified retirement plan. There are also no IRS limits on contributions. The idea is to defer the income while you are in a higher tax bracket and then have it pay out when you move into a lower bracket, such as during retirement.

What hasn’t changed?

Gift tax exemption. In 2012, many wealthy taxpayers took advantage of the $5,125,000 gift tax exemption to pass assets to the next generation. Fear that the exemption would revert to $1,000,000 and the top estate tax rate would jump to 55 percent was the catalyst for many of these transactions. In a somewhat surprising move, the American Taxpayer Relief Act made the $5,000,000 exemption permanent and indexed it for inflation. The 2013 exemption amount has increased to $5,250,000 per individual, while the top estate tax rate has increased to 40 percent from 35 percent. The annual exclusion amount has also increased, to $14,000 per donee in 2013.

Although the gift tax exemption is now permanent, it continues to be a strategy you should consider today. As Congress searches for deficit-reducing revenue, the exemption will remain a target, and it’s always possible that future legislation will reduce the exemption amount. Also, because future appreciation of gifted assets has now been removed from the estate, you may want to consider the impact of appreciation when deciding which assets to gift.

GRATs and dynasty trusts. The last few years have been fraught with proposed legislation designed to limit the benefits of grantor-retained annuity trusts (GRATs) and dynasty trusts. Fortunately, the act didn’t incorporate any of those proposals. GRATs remain a viable planning tool in this historically low-interest-rate environment. And there continues to be no limitation on the length of dynasty trusts. That said, there may be a shelf life on these planning techniques if previous legislative proposals resurface, so it would be wise to consider them now.

Life insurance. Another product that hasn’t been affected by the American Taxpayer Relief Act is life insurance—and in today’s environment, its potential tax advantages may offer a more compelling argument than ever before. Life insurance can be used to provide supplemental retirement income; it’s a viable way to achieve tax-deferred cash value accumulation and to create a tax-free stream of income during retirement. If you recently found yourself in a new top tax bracket, you may be looking for a hedge against future tax increases. This strategy, which avoids the income phaseouts and contribution limitations of more traditional retirement savings vehicles, may be the answer.

The American Taxpayer Relief Act has resulted in numerous changes to our country’s tax code, and it’s important to understand when and how you may be affected. Be sure to seek the advice of your tax advisor or lawyer to help ensure that you are properly positioned to both minimize your tax burden and take advantage of new opportunities.

1Fidelity, “The new Medicare tax and you,” January 4, 2013.

This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Investors should consult a tax preparer, professional tax advisor, and/or a lawyer.

IRS CIRCULAR 230 DISCLOSURE

To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax information contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code; or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.

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Christian Rezapour is a financial advisor located at Wealthmark Financial Services located at 808 Valley Forge Rd, Suite 104, Phoenixville, PA 19460.  He offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. He can be reached at 610.400.1111 or at mailbox@wealthmark.net.

© 2013 Commonwealth Financial Network®

 

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QE3 Distinctly Different From Its Predecessors


On September 13, Federal Reserve Chairman Ben Bernanke announced that the Fed would embark on its third round of large-scale bond purchases since the beginning of the financial crisis five years ago–Quantitative Easing 3 (QE3).What’s different this time? The Fed has changed up its strategy in hopes of improving the outcome for QE3. Here are three key components of this latest initiative:

  • Unlike QE1 and QE2, the Fed did not set a limit on the ultimate amount it would buy or how long the program would last.
  • The focus will be on purchasing $40 billion per month of agency mortgage-backed securities rather than U.S. Treasuries.
  • The Fed expects to continue its near-zero interest-rate policy until mid-2015.

What does this mean for investors?

Payson Swaffield, Chief Income Investment Officer at Eaton Vance, offers his take on QE3 along with investment strategies to consider in the latest Eaton Vance Income Market Insight.
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Take time to deliberate; but when the ti


Take time to deliberate; but when the time for action arrives, stop thinking and do it. ~ Andrew Jackson

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“Second guessing whether…


“Second guessing whether or not to buy is a human emotional response. The best way to navigate the markets is by utilizing the data available and allowing market prices to determine decisions.”

Quote | Posted on by

To Everyone I Know During This Election | Ramble Ramble


To Everyone I Know During This Election | Ramble Ramble.

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Bernake’s Comments


Bernanke’s comments signaled that he has no intention of allowing interest rates to significantly rise over the foreseeable future if economic growth doesn’t strongly accelerate. This suggests that high-quality bonds should continue to lack big yield advantages over dividend-paying stocks. On the other hand, Bernanke singled out housing, federal and state fiscal policies, and stresses in the credit and financial markets as headwinds to the economic recovery.

If this sounds like a mixed message for investors, it is. The chairman is unhappy with the pace of economic growth, but he didn’t suggest that another round of stimulus was in fact forthcoming.

The continued low interest rate environment is helping corporations borrow and refinance at attractive rates. This reduces interest costs and frees up cash flow, which is positive for shareholders. We would rather see stronger economic growth, since that would drive revenues and earnings higher (leading to higher cash flows). As investors, however, we have to invest in the market and economy we’re given, not the one we want.

 

Source: AAII

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