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Entries for 2017

The Special Earnings Test

 March 20 2017     Anna Pfaehler
A client recently received a 5-figure bill from Social Security requesting that he pay back all benefits paid to him last year within 30 days. Such a notice will make anyone apoplectic. Luckily, we were able to sort out the confusion and eliminate the client’s bill.  According to the Social Security administration, our client had violated the earnings test. If you are under full reti...

GDP Growth Above 3% Is Attainable

 March 19 2017     David Templeton
One component of the Trump administration policies is to improve the growth rate of the economy through an infrastructure spending policy, reducing taxes and regulations and increasing spending on rebuilding the military. While campaigning he stated his policies would return the economic growth rate, GDP, to 3%. A number of economists, along with the Federal Reserve, indicate moving the growth rat...

Market Advance May Have Stalled On Concerns Around Timing Of Tax Reform

 March 12 2017     David Templeton
For the first few trading days in March, the equity market seems to be consolidating the gains achieved in February. Sideways or small market pullbacks have been a common pattern for the market since the election. For the most part the market has corrected over time (sideways movement) versus a steep contraction during the post election advance. This type of market pattern can be frustrating to in...

Better Investing Members Net Sellers Of Apple

 March 5 2017     David Templeton
Periodically I provide a review of what individual members of Better Investing are purchasing. My last review or update was in August last year and BI members reported their top purchase was Apple (AAPL). Another purchase back in August was Southwest Airlines (LUV), so BI members seemed to be ahead of Warren Buffett's interest in airline stocks. In regards to Apple, BI members are reporting they a...

Time To Reduce One's Equity Exposure?

 March 1 2017     David Templeton
The U.S. stock market has been on a steady climb higher since the November election. From 11/8/16 to 3/1/17 the S&P 500 Index has moved higher by 11.96%. This double digit return in a short period of time has some investors asking if this is an appropriate time to reduce equity exposure.An initial action investors can benefit from at this point in time is to evaluate the overall asset allocation i...

Sentiment In An Elevated Market

 February 26 2017     David Templeton
With the weekend nearly over and any research or reading completed, most investors now know the Dow Jones Industrial Average has been on a rare eleven day winning streak. What makes this more amazing is this is occurring as the market hits new highs with each close. One conclusion drawn from this seems to be the market is nearing a correction or consolidation point and I will be the first to admit...

The Significance Of The S&P 500 Yield Falling Below The 10-Year Treasury Yield

 February 20 2017     David Templeton
For most of 2016 the dividend yield on the S&P 500 Index was greater than the yield on the 10-year U.S. Treasury. Historically, this has served as a positive sign for forward stock price returns. With the strong equity market returns in 2016 and the move higher since the election, the S&P 500 yield is now lower than the 10-year Treasury. In addition to the move higher in stocks, bond prices have d...

A Use for Intra-Family Loans

 February 15 2017     Anna Pfaehler
As mentioned in my previous post, borrowing from The Bank of Mom and Dad can be very attractive for a child mostly because of the low interest rates. However, the strategy does benefit the parents too, especially when trying to achieve the nearly universal goal of those with a taxable estate – reduce Uncle Sam’s inheritance as much as possible.  The IDGT The income tax c...

Recent Outperformance Of Low Volatility A Sign Of Risk Off Ahead?

 February 12 2017     David Templeton
Since the election in the U.S. it has been a 'risk on' environment for stock investors. Last week though, the Powershares Low Volatility ETF (SPLV) broke out of a sideways trading range to the upside. At the same time, the Powershares High Beta ETF (SPHB) remains trapped in a sideways range. Might the move higher in the low volatility ETF be a signal there is underlying action by some investors to...

Positive Sentiment And Fundamentals Rests On Positive Political Expectations

 February 11 2017     David Templeton
I believe there are two broad issues at play that are having a positive influence on equity prices. The first issue is a fundamental one and related to a much improved corporate earnings picture. Looking solely at companies in the S&P 500 Index, Thomson Reuters publishes a weekly report summarizing the quarterly earnings reports of companies. Friday's report notes,Q4 '16 earnings are expected to i...
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