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2015 Income Tax Forms Available

By February 16, 2016September 16th, 2023No Comments

Highlights of this Update:

  1. 2015 tax information now available on the Liberty website and hard copies mailed today.
  2. Book Review: “Thomas Jefferson and the Barbary Pirates”. A recommended read.
  3. Stocks still negative year-to-date.
  4. There may not be as much “panic” as you might be lead to believe. See why.
  5. Interest rates continue to fall, mortgage rates lower.
  6. What has caused the markets’ uncertainty so far in 2016?

READ ON FOR FUTHER DETAILS……………………………………………….


2015 Income Tax Information Now Available:

2015 income tax reports are now available on the Liberty system for your taxable accounts and hard copies of the reports were mailed out today.  REMEMBER:  There is a “CSV” (Excel) file available that can be used to download all transactions into most tax preparation software programs, including TurboTax.  This will save a great deal of time and money, and we are more than happy to provide this to your tax preparer at any time.  Please let us know if we can help with this information, as it is the most efficient use of data vs. manually entering in all the 2015 taxable transactions.  WE ARE HERE TO HELP.

Dog Sleeping in her Notebook after Studying

Book Review:

This month’s book review covers “Thomas Jefferson and the Tripoli Pirates” by Brian Kilmeade and Don Yeager.  If you like history written in an interesting fashion, then this might be a read for you.  This book covers the time in history when America was still a new and emerging Country facing obstacles posed by the pirates (terrorists?) that plundered Mediterranean commercial ships, kidnapping passengers and crew, often placing them into slavery and taking the ships and their contents.  “Purchased” peace treaties (briberies) were often made by nations wishing to trade across the Mediterranean, but easily and often broken by the tyrannical Barbary rulers at the time.  Being a new nation, the U.S. could not afford the amount of bribes that were demanded for safe passage of ships at the time, and crucial international trade was at stake for a growing new economy.  The Barbary States were a collection of North African Muslin States that included Morocco, Algiers, Tunis, and Tripoli.  They owed a loose allegiance to the Ottoman Empire at the time.  Thomas Jefferson was the first U.S. President to actually advocate military force against these countries’ pirates, rather than being subject to paying their bribes. It caused the creation of the U.S. Navy and Marine Corps ordered to patrol the waters in the Mediterranean in order to provide safe passage for U.S. merchant ships.  This is an interesting part of our history that we really don’t hear much about and is very similar to the current problems and issues we are having with terrorists in our day and time.  The book was a very good read and would recommend it as part of your reading list.

The Markets:

The drop in stocks since the start of the year has gotten plenty of play. While markets have been volatile in 2016, the selloff in the S&P 500 Index has been relatively modest so far – down just under 9% through last Friday.  The Dow Jones Industrial Average is also off 8.33% since the start of the year.  (MarketWatch)

Not the Panic You Would Expect-

With the first two weeks of January being the worst start to a New Year on record, and based on the current financial headlines, one would think we are at the brink of another market panic and collapse.  One indicator that measures stock market volatility and “panic” is the “VIX Index”.  The higher the number indicates more selling, volatility, and panic, and the lower the number, the more stability in the stock market.  As you can see by the chart below, the current reading for this indicator is only around 24, when it was at 40 just last fall (August/early September, 2015) when the last stock market decline of around 12% occurred.  If there was really a panic in the markets, we would expect this indicator to be more in the 30-40 range, or higher.  During the financial crisis in 2008-2009, this indicator reached the 80 range.


With the changes we made to portfolios for all risk levels in early January, we have been pleased with the relative results vs. actual risk as of last week.  It has been a challenging year so far, but we still don’t see the current downtrend to be anything like another 2008.  We did reduce overall stock/equity exposure as well as revised our criteria for both level one and level two stock models in an effort to reduce risk and volatility moving forward.  We will keep you advised.

 Interest Rates:

Interest rates have continued to fall this year, which has pushed mortgage rates lower.  The current rate for a 30 year fixed mortgage now ranges from around 3.375-3.875%, while the 15 year fixed rate is now 2.625-3.125%. (

Long Term 10 Year U.S. Treasury Yields

Interest Rates

In the chart above, we have included thin lines to indicate a potential change in the linear trend channel for the rate of the 10 year U.S. Treasury. If this were to hold, we could be moving closer to the 1% mark in the U.S. ten-year yield. We do not see this as likely, but anything is possible given what other Central Banks around the world are doing. At the least, we should be on the way to visiting recent lows under 1.5%. We have tried to stretch out duration/maturities in our bond fund holdings, although modestly, to take advantage of our current interest rate outlook. We still have some concerns with the potential for rates to spike higher at some point in the future, so we would rather approach bond/fixed income duration/maturities with caution and aim more for the middle range in client portfolios.

Regardless, the point for the chart above is to show the divergence from peaks in rates. We remain well below any interest rate peak level, based on the old and potentially new linear rate trend. This chart tends to make us believe that stocks will not be struck with an imminent collapse or the economy with a recession any time soon.

Reviewing Some of the Causes for Recent Market Volatility:

There has been no shortage of reasons to cite for the recent decline in stocks.

For starters, Fed Chief Janet Yellen offered up a cautious outlook in her testimony last week before two Congressional committees. While the sharp drop in oil prices is mostly due to excess supply, it’s adding to worries about a slowdown in the global economy.

Then you have the outsized drop in banking stocks this year (S&P Dow Jones Indices), lingering worries about China and its currency, too much debt in emerging markets, nascent worries about European banks, and more. That’s a mouthful. No wonder we’ve seen a repricing in stocks. But it has also created some buying opportunities we have not seen in several years.

While forces outside the U.S. are amplifying anxieties in the short term, historically, one of the biggest, if not the biggest long-term driver of stock prices, is corporate profits.  Many analysts forecasted a slowdown in corporate earnings moving into 2016.  Much of the decrease in earnings can be blamed on downgrades in the energy sector. (Thompson Reuters)

If we avoid an economic recession at home (and we feel the odds currently favor that will happen) and economic growth muddles along, profit growth will probably resume later in the year. That’s a positive.

Please be sure to call today to schedule your personal review if you have not yet done so we can start 2016 with an update of your long term plan as well as re-evaluating your personal risk level, portfolio performance, and holdings at the present time.  We appreciate the privilege to serve each and every one of you.

God Bless,

Your TEAM at F.I.G. Financial Advisory Services, Inc.



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