Investors are Still More in Love with Bonds than Stocks

Impact of 401(k) Fees

Vantage Point UPDATE: Intermediate-Term and Long-Term Trend Analysis

On Friday, May 22, the S&P 500 closed @ 2126, and that was...
  
   +5.1% ABOVE its 12-Month moving average which stood @ 2022.
   +3.9% ABOVE its 40-Week moving average which stood @ 2046.
   +1.2% ABOVE its 10-Week moving average which stood @ 2101.


Therefore, the INTERMEDIATE-Term trend is NEUTRAL
and the LONG-Term trend is UP.

The Future of Social Security...

GDP Forecast: UGH!

The People Who Nailed The Horrific Q1 GDP Number Have Bad News About Q2 

The Atlanta Fed nailed US gross domestic product in the first quarter.

On Wednesday, we learned that the US economy grew by just 0.2%, far below the consensus forecast among economists for 1% growth. Of the 86 economists surveyed by Bloomberg, only four estimated that GDP growth would be 0.2% or lower.

The Atlanta Fed had long forecast 0.2% growth before revising it down to 0.1% after last Friday's durable goods report.

And just a day after the disappointing Q1 GDP release, the Atlanta Fed has news about Q2: the economy will grow by just 0.9%, according to their latest forecast. Here's what they wrote in a post on their website:

"The initial GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2015 was 0.9 percent on April 30. 

Real GDP grew 0.2 percent in the first quarter, according to the "advance" estimate from the U.S. Bureau of Economic Analysis, 0.1 percentage point higher than the GDPNow model nowcast."

Economists noted that the winter weather, West Coast port strikes, and lower energy prices slowed down the economy — all temporary factors.

Still, for a sense of how gloomy the Atlanta Fed's forecast is, Bank of America Merrill Lynch is forecasting 3.5% growth. Goldman Sachs is forecasting 3.0% growth.

Vantage Point UPDATE: Intermediate-Term and Long-Term Trend Analysis

On Friday, May 15, the S&P 500 closed @ 2123, and that was...
  
   +5.0% ABOVE its 12-Month moving average which stood @ 2022.
   +4.0% ABOVE its 40-Week moving average which stood @ 2042.
   +1.4% ABOVE its 10-Week moving average which stood @ 2094.


Therefore, the INTERMEDIATE-Term trend is NEUTRAL
and the LONG-Term trend is UP.

Americans Losing Confidence in The Economy

Americans Losing Confidence in The Economy

It's bad news when Americans lose confidence in the economy.

When confidence deteriorates, consumers become worried about their jobs and their paychecks, which in turn makes them want to spend less. And considering that personal consumption accounts for 68% of gross domestic product, the consequences can be huge.

During the week ending Sunday, Gallup's US Economic Confidence Index fell to -9, the lowest level since December.

"The recent dip in Americans' economic confidence — which is being dragged down largely by the lower economic outlook component — is likely the culmination of a variety of economic factors," Gallup's Justin McCarthy writes.

The prices Americans were paying for gas increased in the latter half of April, with the US Energy Information Administration reporting an increase of 17 cents per gallon over two weeks. Gallup has found that Americans' confidence in the economy is related to how much they pay at the pump.

"Additionally, the recent report that the nation's GDP grew a lackluster 0.2% in the first quarter — a disappointing figure compared with previous quarterly growth — may have dampened consumers' economic hopes."

But like most economists, Gallup is optimistic this downturn is a temporary blip.

"Unless the economic news continues to be bad, Americans may soon forget about the weak first-quarter GDP and rising gas prices, which, the EIA projects, will stabilize during the summer," McCarthy added.

"And even in the midst of last week's negative economic news, there were bright spots, including the federal government's reporting increases in consumer spending and a 15-year low in jobless claims. But last week, the bad news appeared to carry more weight in Americans' evaluations than the good news."

Gallup's survey included 3,542 responses from adults in all 50 US states and the District of Columbia.

Wage Growth Metric is Precisely Where It Was the Last Time the Fed Started Hiking Rates...

This Wage Growth Metric is Exactly Where It Was the Last Time the Fed Started Hiking Rates  Wage growth is here. On Thursday, we got the latest Employment Cost Index (or ECI), which climbed +0.7% in the first quarter, beating the estimate for a +0.6% gain. The index climbed +2.2% quarter-over-quarter, and +2.6% over the previous year. That led one economist to suggest that the economy is "beyond full employment."  And Steven Englander, Citi's global head of fixed income strategy, highlights something else that's remarkable about the ECI. "ECI wages and salaries (dark blue) are now exactly where they were when fed funds began to rise in 2004," Englander said. He highlighted this with a chart. Englander notes that while wages were falling then, they are rising now.  The sluggish pace of wage growth is one of the biggest things that has kept the Fed on hold. On Thursday, the ECI, as well as the lower-than-expected initial jobless claims print for last week, signalled more tightness in the labor market. To be clear, Citi's economists are not calling for the Federal Reserve to begin hiking rates in June. Englander only points to it as an "interesting" observation. However, Cleveland Fed president Loretta Mester, said a rate hike next month is still "on the table," according to Reuters.

Vantage Point UPDATE: Intermediate-Term and Long-Term Trend Analysis

On Friday, May 8, the S&P 500 closed @ 2116, and that was...
  
   +4.7% ABOVE its 12-Month moving average which stood @ 2021.
   +3.9% ABOVE its 40-Week moving average which stood @ 2037.
   +1.3% ABOVE its 10-Week moving average which stood @ 2089.


Therefore, the INTERMEDIATE-Term trend is NEUTRAL
and the LONG-Term trend is UP.

Does Hillary Clinton Have A Credibility Problem?

Seasonal Stock Market Rationale for "SELL in May and Go Away" (until November)...

The 6-month period from November-April has gained +548.3% for the S&P 500 since 1990, 8 ½ times the +65.1% return achieved during the 6 months from May-October.

Both numbers are aggregate total return performance results calculated for their respective 6-month periods beginning on 05/01/90 and continuing through 04/30/15. 

Source: BTN Research


 

Vantage Point UPDATE: Intermediate-Term and Long-Term Trend Analysis

On Friday, May 1, the S&P 500 closed @ 2108, and that was...
  
   +4.3% ABOVE its 12-Month moving average which stood @ 2021.
   +3.6% ABOVE its 40-Week moving average which stood @ 2036.
   +1.0% ABOVE its 10-Week moving average which stood @ 2088.


Therefore, the INTERMEDIATE-Term trend is NEUTRAL
and the LONG-Term trend is UP.

Estate Planning: Pros & Cons of Joint Ownership of Estates

Estate Planning: The Pros & Cons of Transfer On Death (TOD) and Payable On Death (POD) Authorizations

Pitfall to Avoid: Transfer on Death or Payable on Death not Matching Wills

A simple and easy way to help avoid probate is to name someone as a transfer on death (TOD) beneficiary or a payable on death (POD) beneficiary. 

The terms are essentially the same but apply to slightly different accounts. A TOD/POD beneficiary can be named on financial accounts, such as bank savings or checking accounts and investment accounts, vehicle titles, and––in some states––real property.

Despite their simplicity, one major issue with TOD/POD-titled assets is a lack of awareness or poor coordination with people’s overall estate planning strategies. 

Some might not realize that a TOD- or POD-titled asset overrides whatever is stated in a will. 

If a number of accounts are titled as TOD, a will can be rendered largely ineffective, and assets may not be distributed as intended.

“You could have a complex will with all sorts of trusts created for your children,” says Pamela Pirone-Benson, a Fidelity estate planning specialist. “But if the assets don’t pass by the terms of the will, then the will becomes an expensive paperweight.”

Lubar describes transfer on death as a “placeholder,” rather than an estate plan. “It’s a temporary bandage until you put a larger, more effective, comprehensive plan in place.”

Consider Susan, a hypothetical client with a brokerage account worth $1 million.

She names her husband as a TOD beneficiary of the $1 million account. Five years later, she does some estate planning and states in her will that the account’s assets be split evenly between her two daughters from a different marriage. 

Unfortunately, Susan doesn’t realize that her now ex-husband will receive the assets, because the TOD registration overrides the will.

Another problem with a TOD or POD could occur if parents name their children individually as TOD on each of two separate accounts. At the time the assets are titled, the value of the two accounts is equal. But no one tracks the value of the accounts over time.

Thirty years later, when the couple dies, one child could receive a much smaller sum than the other.

And estate taxes may be due on TOD assets and payable by the recipient, depending on, among other things, how the will is drafted.

“This can create an administrative nightmare for the executor of the will, who then needs to go and collect taxes from the recipients after they receive the assets,” says Pirone-Benson.

Vantage Point UPDATE: Intermediate-Term and Long-Term Trend Analysis

On Friday, April 24, the S&P 500 closed @ 2119, and that was...
  
   +5.5% ABOVE its 12-Month moving average which stood @ 2009.
   +4.4% ABOVE its 40-Week moving average which stood @ 2029.
   +1.5% ABOVE its 10-Week moving average which stood @ 2088.


Therefore, the INTERMEDIATE-Term trend is NEUTRAL
and the LONG-Term trend is UP.

Obama Corporate Tax Reform Would Cut 35% Rate To Only 34%

The statutory U.S. tax rate is the highest in the world.

The federal rate of 35% plus state taxes put the U.S. rate at 39.1% vs. a 25.1% average for other OECD countries, the Congressional Research Service says.

Unfortunately, that puts U.S. companies at a competitive disadvantage in the global market place.

Top 4 Estate Planning To Dos...

Vantage Point UPDATE: Intermediate-Term and Long-Term Trend Analysis

On Friday, April 17, the S&P 500 closed @ 2081, and that was...
  
   +3.9% ABOVE its 12-Month moving average which stood @ 2003.
   +2.8% ABOVE its 40-Week moving average which stood @ 2025.
   -0.2% BELOW its 10-Week moving average which stood @ 2086.


Therefore, the INTERMEDIATE-Term trend is NEUTRAL
and the LONG-Term trend is UP.

The Rationale Behind "Sell in May and Go Away"

The seasonal 6-month period from November-April has gained +520.9% for the S&P 500 since 1990, 8 times the +65.1% return achieved during the 6 months from May-October.

Both numbers are aggregate total return performance results calculated for their respective 6-month periods beginning on 5/01/90 and continuing through 10/31/14. 

source: BTN Research

Bull Market Reaches Its 74th Month...

The S&P 500 bull market that began on 03/09/09 is now in its 74th month.

The average bull market for the stock index since 1950 (including the current bull) has lasted 59 months. 

source: BTN Research 

Vantage Point UPDATE: Intermediate-Term and Long-Term Trend Analysis

On Friday, April 10, the S&P 500 closed @ 2102, and that was...
  
   +4.8% ABOVE its 12-Month moving average which stood @ 2006.
   +3.9% ABOVE its 40-Week moving average which stood @ 2022.
   +0.9% ABOVE its 10-Week moving average which stood @ 2083.


Therefore, the INTERMEDIATE-Term trend is NEUTRAL
and the LONG-Term trend is UP.

Since 1950, April has Been the Best Month for Stocks!

Today's chart presents the Dow's average performance for each calendar month since 1950 (blue columns). As today's chart illustrates, it is not unusual for the stock market to perform well during the early part of the year.

Looking forward, the averages favor a continued stock market rally as the calendar month of April has been the best month for stocks since 1950, averaging nearly +2.0 percent.

After that, however, things tend to get a little dicier.

Of the five calendar months that follow the strongest month of April, four rank as the weakest average calendar month performers since 1950.


Read more here...
http://www.chartoftheday.com/20150401.htm?H

ADP's March Private Payroll Job Report Weaker Than Expected...

Private employers added 189,000 jobs in March, processor ADP said, the smallest gain since January 2014.

It was well below expectations of a 230,000 read and suggests some downside risk for the Labor Department's March figures, which are expected to show 247,000 jobs added in March.

Vantage Point UPDATE: Intermediate-Term and Long-Term Trend Analysis

On Friday, April 3, the S&P 500 closed @ 2067, and that was...
  
   +3.3% ABOVE its 12-Month moving average which stood @ 2001.
   +2.3% ABOVE its 40-Week moving average which stood @ 2020.
   -0.2% BELOW its 10-Week moving average which stood @ 2072.


Therefore, the INTERMEDIATE-Term trend is NEUTRAL
and the LONG-Term trend is UP.

As Jobless Claims Continue Falling, Employment Improves...

Vantage Point UPDATE: Intermediate-Term and Long-Term Trend Analysis

On Friday, March 27, the S&P 500 closed @ 2061, and that was...
  
   +3.7% ABOVE its 12-Month moving average which stood @ 1988.
   +2.2% ABOVE its 40-Week moving average which stood @ 2017.
   -0.5% BELOW its 10-Week moving average which stood @ 2071.


Therefore, the INTERMEDIATE-Term trend is NEUTRAL
and the LONG-Term trend is UP.