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Posted on July 7, 2017

July Monthly Newsletter – Midyear Financial Checkup

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Six months ago, many Americans set realistic and achievable financial resolutions for 2017. Now that we’ve crossed the halfway point of 2017, it’s time for a financial checkup. Much like your biannual dentist appointment, it’s important to track your progress to determine if changes need to be made to your plan to achieve your financial goals and resolutions.

If you’re like most Americans – 90.8% of those who set New Year’s resolutions do not achieve their goal – you probably need to make some adjustments to become part of the 9.2% that report success in achieving their goals. The good news – there is still plenty of time left in 2017 to get to where you want to be financially by the end of the year. Reviewing your resolutions, reminding yourself why you set those goals, and developing an implementation plan will help you get your finances where you want them.

Whether you need help achieving your goals, or have already successfully completed your goals and are looking for new financial goals, summer – when life seems to slow down a bit — can be the perfect opportunity for review and reflection. Here are four common financial New Year’s resolutions and things to consider this summer to help achieve these goals:

1. Budget Review and Spending Plan
Are your spending habits aligned with your financial goals? Is your savings account growing? If not, take a step back and evaluate your recurring expenses to determine if all of them are necessary. You may find that you’re not using the services for some of your monthly automatic payments.

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2. 401(k) Contributions
Are you maximizing your 401(k) contributions? Or at the very least getting 100% of the employer match? If not, consider increasing your 401(k) contribution percentage by 1% or more. A small change now will have a negligible impact on your current cashflow and the potential to have a meaningful positive impact on your retirement savings.

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3. Update Estate Planning Documents
Does your current estate plan reflect your intentions with regards to the passing of your wealth after you pass? Has anything changed in the six months that could affect your plan? Are you comfortable with current Personal Representative, Executor, Trustee and Successor Trustee appointments? If not, schedule an appointment with your advisor or estate planning attorney to discuss your goals and make the appropriate changes.

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4. Evaluate Tax Status
Nobody likes paying taxes. But common and everyday life events can impact the amount of taxes you pay or the amount of exemptions you can claim. Take time to reflect on what has happened in your life the past six months. Did you welcome a new child to the world? Or have an adult child graduate college and move out of the house? Perhaps you got married or divorced this year? You may have even gotten a raise or developed a new income source. If any of these things happened to you, it’s important to consider the impact of these life events with your advisor or CPA.

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While this may not seem like the ideal summer break, taking time now to reflect on your goals should leave you enough time to implement the necessary changes to help you pursue your goals. There’s still plenty of time to meaningfully impact your finances this year. If you need help setting or pursuing your goals, contact your advisor today!

Monthly Investment Review: June 2017

Stocks continued their upward trend in June. The S&P 500 rose 0.6%. Global stocks also rallied, as the MSCI All Country World Index (ACWI) gained 0.3%. The US bond market, represented by the Bloomberg Barclays Capital Aggregate Bond slid 0.1% on concerns over higher rates. For the year, the S&P 500 is up 8.2%, the ACWI up 10.3%, and the bond aggregate has gained 2.3%

Central bankers cautioned investors that the period of easy money is ending. As expected, the Federal Reserve raised rates 0.25%. Subsequent announcements suggest the Fed is discounting recent indications that growth is slowing and expects to continue to raise rates steadily over the coming 18 months. Central bank heads from Europe, England, Canada, and Japan all spoke at a central bank conference and expressed a willingness to back their current accommodative policies.

The trend toward wide differences in asset class performance continued in June. Financials rallied 6.0% while technology stocks declined 2.6%. Even with performance, technology is still up 15.9% this year. Health care rallied 4.9% and are now up 16.3% in 2017, making health care the top performing sector this year. While the performance this year has been quite strong, the large dispersion between sectors can widen the performance between portfolios and their benchmarks.

As we move into the second half of the year, there are a number of key issues we are tracking closely. Earnings, European politics, and market volatility are high on that list for July. Below is a quick summary of what we are watching in each area:
• Earnings: US stock valuations remain above average and companies will likely need to produce healthy second quarter results for the market to increase in July
• European Politics: France has an opportunity to reform while Britain faces uncertainty after efforts to consolidate support around Theresa May backfired. May was forced to lead a coalition government rather than expanding her majority in advance of Brexit negotiations.
• Volatility: Easy monetary policies often have a smoothing effect on market performance. As the Fed and other banks slowly step away from the extreme measures to support the economy, expect greater volatility in the second half of the year.


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