‘Sell in May and Go Away’ is a trading maxim which,
according to Investopedia, encourages an investor to “sells his or her stock
holdings in May and get back into the equity market in November...” Traders who
adhere to that adage may be pondering averages and exceptions right now. During
the first two weeks of the month, the Dow Jones Industrials Average, the
Standard & Poor’s 500, and the Russell 2000 Indices all reached new highs. The
Dow passed 15,000, the S&P reached 1,600, and the Russell 2000 hit 968.
Bulls are in the majority among investors, although there
is some bearish sentiment, according to the Bull and Bear Wise Index. Investors’
changing expectations are reflected in CNNMoney’s Fear & Greed Index which showed
investor sentiment has shifted from ‘fear’ one year ago to ‘extreme greed’ last
week. The premise of the index, which measures seven indicators, is investors
are driven by two emotions: fear and greed. When investors are fearful, stock
markets may fall more than they should; when investors are greedy, markets may
be pushed higher than they should be.
Investors’ inclination toward
stocks may be one of the reasons for declines in the value of gold and
commodities last week.
Although there was little of it, economic
news generally was positive last week. The U.S. Labor Department announced the number
of Americans filing initial claims for jobless benefits dropped unexpectedly. Approximately
323,000 people filed for unemployment benefits which was about the same number
that filed each week before the recession started in December 2007. According
to Bloomberg, investors took the news as a sign the U.S. economy is improving
which helped push yields on 10-year Treasuries higher.
Perceived economic strength in the
U.S. caused the U.S. dollar to gain against many of the 16 major world currencies
last week, as well as the 24 emerging countries’ currencies tracked by
Bloomberg.com.
Data as of 5/10/13
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
|
Standard &
Poor's 500 (Domestic Stocks)
|
1.2%
|
14.6%
|
20.3%
|
12.1%
|
3.1%
|
5.6%
|
|
10-year Treasury
Note (Yield Only)
|
1.9
|
N/A
|
1.9
|
3.5
|
3.8
|
3.6
|
|
Gold (per ounce)
|
-2.9
|
-15.8
|
-10.8
|
6.0
|
10.1
|
15.1
|
|
DJ-UBS Commodity
Index
|
-0.9
|
-5.1
|
-3.0
|
0.4
|
-9.3
|
1.2
|
|
DJ Equity All REIT
TR Index
|
0.8
|
16.0
|
22.4
|
17.4
|
7.0
|
12.3
|
Notes: S&P 500, Gold, DJ-UBS Commodity Index
returns exclude reinvested dividends (gold does not pay a dividend) and the
three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR
Index does include reinvested dividends and the three-, five-, and 10-year
returns are annualized; and the 10-year Treasury Note is simply the yield at
the close of the day on each of the historical time periods.
Sources: Yahoo! Finance,
Barron’s, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results.
Indices are unmanaged and cannot be invested into directly. N/A means not
applicable.
Where will you live during
RETIREMENT? As with many of life’s
important questions, the answer depends on you and, possibly, your partner or
spouse. Before you make a decision and decide to retire to wherever your
grandchildren live (or in your favorite vacation spot) you might want to take a
moment and consider the tax implications of your decision.
If your grandchildren live in Alaska, Nevada, Wyoming,
Mississippi, or Georgia, you’re probably okay. Each year, Kiplinger.com reviews
the tax rules of each of the 50 states, giving special consideration to states which
offer attractive tax incentives to retirees and then provides a list of those
states it deems most tax-friendly for retirees. For 2012, Kiplinger reported the
five states listed above were the most tax-friendly. According to the article,
“All of these tax havens exempt Social Security
benefits from taxation (and some impose no state income tax at all). Many of
them exclude government and military pensions from income taxes, and some
exempt private pensions, too. A few offer blanket exclusions up to a specific
dollar amount of retirement income from a wide variety of sources, which is
important if you depend on distributions from IRAs and 401(k) plans rather than
traditional pensions. Review all of your sources of income before you decide
which state may be the best fit for your retirement home.”
Kiplinger.com
reported the least tax-friendly states included Connecticut, Vermont, Rhode Island,
Montana, and Minnesota, which have one or more of the following:
·
Estate or
inheritance taxes
·
High property
taxes
·
No tax breaks on
Social Security benefits
·
No special
treatment for various types of retirement income
Source: Kiplinger.com
No matter where you decide to settle, it’s important
to evaluate all of the factors which may affect your income during retirement.
Weekly Focus – Think About It
“Every saint has a past and
every sinner has a future.”
--Oscar Wilde, Irish writer and
poet
Value vs. Growth Investing (5/3/13)
|
1.42
|
15.69
|
3.18
|
8.15
|
23.35
|
14.89
|
6.18
|
|
|
1.16
|
15.11
|
2.99
|
8.24
|
22.52
|
14.54
|
5.40
|
|
|
1.10
|
19.02
|
3.32
|
10.70
|
28.60
|
15.97
|
7.46
|
|
|
1.28
|
12.22
|
3.63
|
6.88
|
16.80
|
14.61
|
5.83
|
|
|
1.10
|
14.59
|
2.02
|
7.38
|
22.92
|
13.19
|
2.74
|
|
|
2.04
|
17.66
|
3.88
|
8.25
|
25.77
|
15.95
|
7.64
|
|
|
2.21
|
17.21
|
3.56
|
8.07
|
25.21
|
17.78
|
8.81
|
|
|
2.51
|
15.40
|
4.12
|
6.87
|
21.22
|
15.45
|
5.46
|
|
|
1.41
|
20.46
|
3.95
|
9.85
|
31.20
|
14.53
|
8.61
|
|
|
2.33
|
16.06
|
3.18
|
6.98
|
24.90
|
15.01
|
9.27
|
|
|
2.53
|
16.66
|
3.30
|
7.90
|
25.17
|
13.87
|
8.43
|
|
|
2.48
|
14.41
|
3.65
|
5.89
|
22.21
|
16.46
|
8.38
|
|
|
1.98
|
16.98
|
2.61
|
7.02
|
27.37
|
14.75
|
10.91
|
|
|
1.44
|
18.46
|
3.37
|
9.92
|
27.71
|
16.25
|
7.94
|
|
|
1.61
|
12.99
|
3.73
|
6.82
|
18.00
|
14.98
|
5.97
|
|
|
1.22
|
15.93
|
2.46
|
7.86
|
24.85
|
13.57
|
4.48
|
©2004
Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is
proprietary to Morningstar; (2) is not warranted to be accurate, complete or
timely. Morningstar is not responsible for any damages or losses arising from
any use of this information and has not granted its consent to be considered or
deemed an “expert” under the Securities Act of 1933. Past performance is no
guarantee of future results. Indices are
unmanaged and while these indices can be invested in directly, this is neither
a recommendation nor an offer to purchase.
This can only be done by prospectus and should be on the recommendation
of a licensed professional.
Office Notes:
3-7-3-4
Did you know that for 2013,
there are:
3 new tax laws... that create
7 ways taxes are affected... based on
3 different income levels... figured
4 different
ways?
How will this affect you,
give our office a call for additional information at 215-886-2122.
Regards,
,
Michael L. Schwartz, RFC®, CWS®, CFS
P.S. Please
feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list,
please reply to this email with their email address and we will ask for their
permission to be added.
Michael L. Schwartz, RFC®, CWS®,
CFS, offers securities through First Allied Securities, Inc., A
Registered Broker/Dealer, Member FINRA-SIPC. Advisory Services offered through First
Allied Advisory Services, A Registered Investment Advisor.
Schwartz
Financial Service is not an affiliate of First Allied Securities, Inc.
This information is provided for
informational purposes only and is not a solicitation or recommendation that
any particular investor should purchase or sell any security. The information
contained herein is obtained from sources believed to be reliable but its
accuracy or completeness is not guaranteed.
Any opinions expressed herein are subject to change without notice. An Index is a composite of securities that
provides a performance benchmark.
Returns are presented for illustrative purposes only and are not
intended to project the performance of any specific investment. Indexes are unmanaged, do not incur
management fees, costs and expenses and cannot be invested in directly. Past performance is not a guarantee of future results.
* This newsletter was prepared by Peak Advisor Alliance. Peak Advisor
Alliance is not affiliated with the named broker/dealer.
* The Standard & Poor's 500 (S&P 500) is an unmanaged group of
securities considered to be representative of the stock market in general.
* The DJ Global ex US is an unmanaged group of non-U.S. securities
designed to reflect the performance of the global equity securities that have
readily available prices.
* The 10-year Treasury Note represents debt owed by the United States
Treasury to the public. Since the U.S. Government is seen as a risk-free
borrower, investors use the 10-year Treasury Note as a benchmark for the
long-term bond market.
* Gold represents the London afternoon gold price fix as reported by
the London Bullion Market Association.
* The DJ Commodity Index is designed to be a highly liquid and
diversified benchmark for the commodity futures market. The Index is composed
of futures contracts on 19 physical commodities and was launched on July 14,
1998.
* The DJ Equity All REIT TR Index measures the total return
performance of the equity subcategory of the Real Estate Investment Trust
(REIT) industry as calculated by Dow Jones.
* Yahoo! Finance is the source for any reference to the performance of
an index between two specific periods.
* Opinions expressed are subject to change without notice and are not
intended as investment advice or to predict future performance.
* Past performance does not guarantee future results.
* You cannot invest directly in an index.
* Consult your financial professional before making any investment
decision.
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