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Monday, August 01, 2016

Best and Worst States for retirees!

Peek of the Week

August 1, 2016

Leif Hagen and Donna Roberts

The Markets

Here’s a brain tickler for you:

In July 2016, there were four.

In June 2016, there were 10.

Since 2008, there have been 673!

What are they?

If you guessed central bank rate cuts, you are on the money. Financial Times reported:

“In the eight years since the collapse of Lehman Brothers, the world’s top 50 central banks have, on average, cut rates once every three trading days…Despite a modest global recovery, central banks have barely had any time to breathe since the summer of 2008 – carrying out mass asset purchases and entering into negative rate territory. Britain’s decision to leave the EU, coupled with political instability across Europe, still subdued inflation, and concerns over Chinese indebtedness, have spurred central banks back into action.”

The latest downward adjustment came last week when the Bank of Japan (BOJ) took its key interest rate into negative territory, reported CNN Money. Negative rates are intended to promote bank lending and consumer spending. They also create a surreal situation in which banks pay customers to borrow and charge customers to keep money in their accounts.

The stimulus package that accompanied the BOJ’s rate cut was more subdued than many had expected. The Wall Street Journal said the less-than-robust stimulus prompted speculation the central bank had “run up against the limits of monetary policy” and bank leaders wanted to see more robust fiscal policy introduced by Japan’s government.

The United States has been pursuing a different course of action. The Federal Reserve has been raising rates; however, it left rates unchanged last week. More rate cuts may be ahead elsewhere, though. The Bank of England is expected to cut rates next week.

The Standard & Poor’s 500 Index finished the week slightly lower after the Commerce Department reported growth of gross domestic product (GDP) – a measure of all goods and services produced – was weaker than expected during the second quarter. GDP grew at an annualized rate of 1.2 percent during the period. Economists had expected GDP to grow by 2.5 percent, according to Bloomberg. In addition, first quarter’s GDP growth was revised downward from 1.1 percent to 0.8 percent.

Household consumption, which comprises about 70 percent of GDP, was up 4.2 percent during the second quarter, according to Bloomberg. However, those gains were offset by a decline in corporate spending on equipment, structures, and intellectual property (down 2.2 percent). That was an improvement on first quarter when corporate spending fell by 3.4 percent. Government spending declined during the second quarter, as well.

Data as of 7/29/16	1-Week	Y-T-D	1-Year	3-Year	5-Year	10-Year
Standard & Poor's 500 (Domestic Stocks)	-0.1%	6.3%	3.1%	8.9%	11.0%	5.5%
Dow Jones Global ex-U.S.	1.9	2.3	-6.7	-0.4	-0.8	0.0
10-year Treasury Note (Yield Only)	1.5	NA	2.3	2.6	2.8	5.0
Gold (per ounce)	1.6	26.3	23.1	0.3	-3.8	7.8
Bloomberg Commodity Index	-0.4	7.3	-9.4	-12.6	-12.3	-7.2
DJ Equity All REIT Total Return Index	0.5	18.4	23.1	13.9	13.1	7.5

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.

the envelope please... Every year, Kiplinger’s publishes a list of the best and worst states for retirees. The publication considers the share of each state’s population that is age 65 or older, as well as average income, average cost of living, and average healthcare costs for older Americans (relative to the national average). The economic health of each state and its citizens, and the taxes imposed on retirees also are considered.

For 2016, the best states for retirees include:

1. South Dakota

2. Utah

3. Georgia

4. Tennessee

5. Alabama

6. South Carolina

7. Washington

8. Florida

9. Arizona

10. Idaho

The worst states for retirees include:

1. New York

2. New Jersey

3. California

4. Connecticut

5. Illinois

6. Massachusetts

7. Rhode Island

8. Montana

9. Vermont

10. Wisconsin

Interestingly, taxes weren’t the most important factor in determining the states where retirees might be happiest. Just four of the most tax-friendly states in the nation made the list of best places to retire. Utah, Tennessee, Alabama, South Carolina, and Washington were all in the tax friendly category, while Idaho fell into the mixed group.

Weekly Focus – Think About It

“If a country is to be corruption free and become a nation of beautiful minds, I strongly feel there are three key societal members who can make a difference. They are the father, the mother and the teacher.”

--A. P. J. Abdul Kalam, Former President of India

Warm regards from Eagan,

Leif M. Hagen

Leif M. Hagen, CLU, ChFC

LP Financial Advisor

Securities offered through LPL Financial Inc., Member FINRA/SIPC.

www.FINRA.com

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P.S. Please feel free to forward this commentary to family, friends, or colleagues.

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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 “Peek of the Week”, please reply to this email with “Unsubscribe” in the subject line, or write us at: Hagen Financial Network, Inc. 4640 Nicols Road, Suite 203; Eagan, MN 55122.

Sources:

http://www.ft.com/fastft/2016/07/28/major-central-banks-have-cut-rates-672-times-since-lehman/ (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/08-01-16_FinancialTimes-Major_Central_Banks_have_Cut_Rates_672_Times_Since_Lehman-Footnote_1.pdf)

http://money.cnn.com/2016/01/28/news/economy/bank-of-japan-negative-interest-rate/

http://www.wsj.com/articles/has-boj-shifted-pressure-onto-japans-government-1469796930 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/08-01-16_WSJ-Modest_Stimulus_Measure_Signals_Possible_Retreat_at_Bank_of_Japan-Footnote_3.pdf)

http://www.bloomberg.com/news/articles/2016-07-29/u-s-economy-grew-a-less-than-forecast-1-2-in-second-quarter

http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

http://www.kiplinger.com/slideshow/retirement/T006-S001-worst-states-for-retirement-2016/index.html (Slide 17)

http://www.kiplinger.com/slideshow/retirement/T006-S001-best-states-for-retirement-2016/index.html (Slides 2-11)

http://www.kiplinger.com/slideshow/retirement/T006-S001-worst-states-for-retirement-2016/index.html (Slides 7-16)

http://www.brainyquote.com/quotes/quotes/a/apjabdu178502.html

#financialadvisorEaganMN #financialplannerEaganMN #wealthmanagementEaganMN

#hagenfinancialnetwork

Monday, July 25, 2016

Yipee!!! The markets are up after the Brits decided to leave the European Union.

Peek of the Week

July 25, 2016

Leif Hagen and Donna Roberts

The Markets

Like a cool breeze on a hot day, the post-Brexit market rally has soothed investors.

The CBOE Volatility Index (VIX), also known as the fear gauge, fell significantly during the past few weeks, according to CNBC.com. The VIX measures investors’ concerns about future volatility. The lower the Index is; the calmer investors are about the future. In late June, the VIX rose as high as 25.76. Last week, it hovered around 12.

Barron’s reported the latest advisory sentiment readings from Investors Intelligence showed bullishness at 54.4 percent, up two percentage points from last week. That’s the highest reading since April 2015 (just before the S&P 500 hit its previous record).

The relative serenity of investors has been good for markets. By the middle of last week, the Dow Jones Industrial Average (Dow) and the Standard & Poor’s 500 Index (S&P 500) were at record highs. Not everyone is convinced investor positivity is a good sign, however. Barron’s explained:

“After nearly two years of sideways trading, albeit with some large swings, the indexes finally gave what should be an important buy signal. But is it really? ...I am not talking about the simple divergence between price and volume during the June-July rally, although that certainly does not help the bulls. Nor am I considering the seasonal cycle, which teaches us to ‘Sell in May’ and sit out the usually weaker summer months. And I am not talking about any news from politics to Brexit to terrorism…What really bothers me is the lack of dissent in the bullish chorus.”

Contrarians, investors who use popular opinion as a gauge of what not to do, may find themselves leaning toward pessimism.

Data as of 7/22/16	1-Week	Y-T-D	1-Year	3-Year	5-Year	10-Year
Standard & Poor's 500 (Domestic Stocks)	0.6%	6.4%	2.9%	8.7%	10.1%	5.6%
Dow Jones Global ex-U.S.	0.0	0.4	-8.9	-1.4	-1.6	0.2
10-year Treasury Note (Yield Only)	1.6	NA	2.3	2.5	3.0	5.0
Gold (per ounce)	-0.5	24.3	21.3	-0.2	-3.8	8.1
Bloomberg Commodity Index	-2.4	7.7	-11.2	-13.3	-12.5	-6.9
DJ Equity All REIT Total Return Index	1.7	17.9	22.7	12.7	12.2	7.6

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.

Fake charities are on the list. Groups masquerading as charitable organizations to solicit donations from generous-minded individuals are among the twelve cons named in the Internal Revenue Service’s (IRS) ‘Dirty Dozen,’ a list of common scams targeting taxpayers.

Americans tend to be a generous bunch. During 2015, they gave more than $373 billion to charities, setting a record for the second year in a row, according to GivingUSA.org. People gave to all sorts of organizations including:

Religion ($119.30 billion)
Education ($57.48 billion)
Human Services ($45.21 billion)
Foundations ($42.26 billion)
Health ($29.81 billion)
Public-Society Benefit ($26.95 billion)
Arts/Culture/Humanities ($17.07 billion)
International Affairs ($15.75 billion)
Environment/Animals ($10.68 billion)

Millions more may have gone to groups pretending to be charities. The IRS offered some recommendations for avoiding scams. Before you give, get the exact name of the charity. Many fake charities use names that sound similar to those of legitimate charities.

Also, request the charity’s employer identification number and use the IRS’s Exempt Organizations Select Check search tool to review the organization’s tax status and filings. (While you’re at it, you may want to review how much the charity spends on fundraising versus programs to confirm it is spending donations judiciously.)

Once you’ve done your homework, don’t give cash. Making your donation by check or credit card provides a record for tax purposes and is more secure.

Finally, no matter how kind a charity’s representative seems on the phone or in person, do not give him or her personal financial information or other important identification data, like your Social Security number.

Weekly Focus – Think About It

“You are never too old to set another goal or to dream a new dream.”

-- C. S. Lewis, British novelist

Warm regards from Eagan,