PEEK OF THE WEEK - FINANCIAL NEWS FROM
HAGEN FINANCIAL NETWORK, INC.
HAGEN FINANCIAL NETWORK, INC.
May 23, 2016
The
Markets
·
What is ‘Brexit?’ The United Kingdom will hold a referendum in June to decide whether it
should remain in the European Union. According to the BBC, opinion polls say the public is pretty evenly divided on the
issue. ‘Brexit’ stands for ‘British exit.’
·
How likely is a stock market swoon during the next six
months? A lot less likely than most
investors think, according to a three-decade study conducted by the National Bureau of Economic Research and
cited by Barron’s. The study asked
participants how likely it was the market would lose significant value – as
much as it did during the worst one-day drops in history (down 22.6 percent and
down 12.8 percent) – during the next six months:
“On average over the last three decades, respondents
believed there to be a 19 percent risk of such a daily plunge in the subsequent
six months…Given that there have been more than 32,000 trading sessions since
then, the judgment of at least this swath of history is that in any given six-month
period there is a 0.79 percent chance of a daily crash that severe.”
·
Which country is the biggest foreign buyer of U.S.
residential real estate? Here’s a
hint: It starts with the letter ‘C.’
If you guessed Canada, you are incorrect. Barron’s
reported China surpassed Canada as the biggest buyer of U.S. residential real
estate in 2015. U.S. commercial real estate is pretty popular with the Chinese,
too.
Here’s another question analysts
and economists have been pondering: Will the Federal Open Market Committee
raise rates in June? The probability jumped from 4 percent two weeks ago to 30
percent last week, according to CNBC.
Data as of 5/20/16
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
Standard &
Poor's 500 (Domestic Stocks)
|
0.3%
|
0.4%
|
-3.5%
|
7.2%
|
9.0%
|
5.0%
|
Dow Jones Global
ex-U.S.
|
-0.1
|
-2.7
|
-16.6
|
-3.4
|
-2.0
|
-0.4
|
10-year Treasury
Note (Yield Only)
|
1.9
|
NA
|
2.3
|
2.0
|
3.2
|
5.0
|
Gold (per ounce)
|
-0.9
|
18.1
|
3.6
|
-2.5
|
-3.5
|
6.8
|
Bloomberg Commodity Index
|
0.5
|
8.0
|
-17.6
|
-13.8
|
-12.2
|
-7.0
|
DJ Equity All REIT Total Return Index
|
-2.5
|
4.5
|
7.6
|
6.1
|
10.6
|
7.2
|
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg
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 Total Return 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.
as you approach
three score years and ten, don’t forget about required minimum distributions. Upon the occasion of his 70th birthday
party, Mark Twain (a.k.a. Samuel Clemens) commented, “We have no permanent
habits until we are forty. Then they begin to harden, presently they petrify…”
Whether Twain was right or not, the federal government
demands most IRA owners develop a new habit at age 70. They must begin taking
required minimum distributions, or RMDs, which are the minimum amount that must
be withdrawn from most types of IRAs the year the owner reaches age 70½, and
every year thereafter. Account owners can take more than the minimum, if they
choose. Regardless of how much is distributed, the amount usually will be
treated as ordinary income for tax purposes.
According to Kiplinger’s,
“…you have until April 1 of the year after you turn age 70½ for the first
withdrawal, then you must take required withdrawals by December 31 every year
after that.”
The exception to the rule is the Roth IRA. RMDs are
not required with Roth IRAs; however, designated Roth accounts, which hold Roth
contributions made to 401(k), 403(b), and 457(b) plans, are subject to RMDs.
It’s important to calculate RMDs carefully. There are
several variables to consider, including the age of your beneficiaries. The
consequences of a miscalculation can be expensive. Failing to take an RMD, or
taking too small an RMD, can result in a 50 percent penalty tax.
If you would like assistance determining the amount of
your RMD, please contact your financial professional.
Weekly Focus –
Think About It
“Let
us never forget that government is ourselves and not an alien power over us.
The ultimate rulers of our democracy are not a President and senators and
congressmen and government officials, but the voters of this country.”
--Franklin D. Roosevelt, U.S. President
Best
regards,
Leif M. Hagen
Leif M. Hagen, CLU, ChFC
LP Financial Advisor
Securities offered through LPL Financial Inc., Member FINRA/SIPC.
P.S. Please feel free to forward this commentary to family, friends, or colleagues.
P.S.S. Also,
please remind your friends and family members becoming Medicare eligible that
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their agent
For more information and resources visit our website at www.HagenFN.com
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* 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. You cannot invest directly in this index.
* The Standard & Poor’s
500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect
fees,
expenses, or sales charges.
Index performance is not indicative of the performance of any investment.
* 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
afternoon gold price as reported by the London Bullion Market Association.
The gold price is set twice
daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in
U.S. dollars per fine troy ounce.
* The Bloomberg 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
Total Return 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.
* Economic forecasts set
forth may not develop as predicted and there can be no guarantee that
strategies promoted will be successful.
* Past performance does not
guarantee future results. Investing involves risk, including loss of principal.
* You cannot invest directly
in an index.
* Consult your financial
professional before making any investment decision.
* Stock investing involves
risk including loss of principal.
* To unsubscribe from the
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Suite 203; Eagan, MN 55122.
Sources:
http://www.barrons.com/articles/stop-worrying-about-the-stock-market-crashing-1463743491?mod=trending_now_1 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/05-23-16_Barrons-Stop_Worrying_About_the_Stock_Market_Crashing-Footnote_3.pdf)
http://www.barrons.com/articles/chinese-u-s-real-estate-demand-tip-of-the-iceberg-1463706667?mod=trending_now_3 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/05-23-16_Barrons-Chinese_US_Real_Estate_Demand_Tip_of_the_Iceberg-Footnote_4.pdf)
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