Highlights of this Quarter’s Review:
- Our “Family Billing” took effect this past quarter, reducing fees for qualified family groupings.
- Don’t’ forget to utilize the “CSV” (Excel) file for downloading 2015 taxable transactions.
- S. stock indices recover off the quarter’s lows to end basically flat so far in 2016.
- Interest rates continue low and oil prices stabilize.
- Our indicators gradually turn to the positive side after a more cautious start to the year.
- It’s time to update your personal plan and start utilizing MyWealth system to its fullest.
READ ON FOR FURTHER DETAILS……………………………………………………….
Family Billing Applied for 1st Quarter, 2016 Fee Calculations:
We are very pleased to notify all of you regarding a change in our quarterly billing practice for all of our client’s formal asset management accounts. Effective with the first quarter’s billing cycle, we will group the total asset values for all our clients in an immediate family, which would include accounts owned by clients, spouses, joint accounts, adult children of clients and their spouses. This will result in the total of all asset values at the end of each calendar quarter within the “family group” and applying our asset management fees at the appropriate billing level for all accounts, regardless of the individual value of any one account. This “grouping” will apply to our internal billing calculation only. Account titles, ownership, and privacy will remain the same for each account. This method of calculating our fee should result in lower overall asset management fees due to the tiered nature of our fee arrangement. This is a result of our continued effort to provide you with the best possible service and lower your portfolio expenses when possible. In the past, adult children of clients and their spouses were billed based on the asset values of their own accounts. If you have any questions regarding this change, please don’t hesitate to call.
If you have not yet had your 2015 income tax return prepared, please be sure to take advantage of the “CSV” (Excel) file that is available for download into most tax preparation software programs. We can send over all your pertinent tax data to your tax preparer for you when you are ready. Just provide us their name and email address and we will be more than happy to assist.
The major U.S. stock indices mounted a rebound in March after falling more than 10% earlier in the quarter. The Dow Jones Industrial average ended the first quarter up 1.48% at 17,685.09 after falling to 15,660.18 on February 11th. The broader based Standard & Poor’s 500 stock index was up 0.69% for the year through March 31st, after being down over 10.5% back on February 11th. The NASDAQ Composite ended the first three months of this year down 2.80%. The NASDAQ had been down as much as 14.8% in early February. (Google Finance)
Interest rates continued low during the quarter, with the yield for the 10 year U.S. Treasury ending March at 1.78%. This compares to 2.27% at the start of the year. (U.S. Treasury) Mortgage rates continue to remain low as well, with the average fixed rate for a 30 year mortgage now around 3.65%, and just 2.79% for 15 years. (Bankrate.com)
Oil prices firmed up during the first quarter, ending March at $38.11 per barrel for West Texas Intermediate Crude compared with $37.07 at the start of this year. Gold prices rose to $1,237.00 per ounce, compared with just $1,62.25 on December 31, 2015.
Our indicators have gradually been turning positive over the past month or so after taking a more cautious stance in early January. We have made some adjustments overall in all risk levels, and continue to monitor on a regular basis. We have increased equity/stock exposure in the “aggressive” risk level as of this date, and we look to do the same for all risk categories in the coming weeks if we continue to see improvement.
We would expect interest rates to stay flat with the FED in no hurry to raise the Fed Funds rate in the near future. We might see another rate hike or two before year-end, but we would expect that to occur in the second half in small increments, if at all.
Dollar stability raises the odds that dollar headwinds to revenues will subside when firms begin reporting first quarter earnings. Any favorable comments in relation to the U.S. currency would be welcome.
More importantly, a resumption of more moderate economic growth would go a long way in soothing investor anxieties. You’ll note in the chart above that positive earnings growth isn’t expected to return until the third quarter of 2016. The same holds true for corporate revenues (FactSet).
Also note that what’s happened to oil prices has had a significant effect on earnings of energy companies. According to FactSet, weakness in energy earnings in the first quarter of 2016 is forecast to shave almost five percentage points off S&P 500 earnings.
Still, expectations of a return to profit growth, even if they have been delayed until the third quarter, have helped create a more favorable environment for stocks. Of course, faster growth would raise the probability the Fed would boost interest rates (and for some investors, that would be welcome), but rates through the end of the year would likely remain near historically low levels. We will keep you posted.
We are looking forward to meeting with all of you again this quarter, either in person or by phone to review your portfolio as well as update your personal financial plan and long term goals. Our MyWealth system is currently providing valuable benefits to many of you and there are still some of you that are not taking full advantage of this new financial management/planning system. Call us today to schedule your personal review!
Your TEAM at F.I.G. Financial Advisory Services, Inc.
It is important that you do not use this e-mail to request or authorize the purchase or sale of any security or commodity, or to request any other transactions. Any such request, orders or instructions will not be accepted and will not be processed.
All items discussed in this report are for informational purposes only, are not advice of any kind, and are not intended as a solicitation to buy, hold, or sell any securities. Nothing contained herein constitutes tax, legal, insurance, or investment advice.
Stocks and bonds and commodities are not FDIC insured and can fall in value, and any investment information, securities and commodities mentioned in this report may not be suitable for everyone.
U.S. Treasury bonds and Treasury bills are guaranteed by the U.S. government and, if held to maturity, offer a fixed rate of return and guaranteed principal value. U.S. government bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government. Treasury bills are certificates reflecting short-term (less than one year) obligations of the U.S. government.
Past performance is not a guarantee of future performance. Different investments involve different degrees of risk, and there can be no assurance that the future performance of any investment, security, commodity or investment strategy that is referenced will be profitable or be suitable for your portfolio.
The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.
Before making any investments or making any type of investment decision, please consult with your financial advisor and determine how a security may fit into your investment portfolio, how a decision may affect your financial position and how it may impact your financial goals.
All opinions are subject to change without notice in response to changing market and/or economic conditions.
1 The Dow Jones Industrials Average is an unmanaged index of 30 major companies which cannot be invested into directly. Past performance does not guarantee future results.
2 The NASDAQ Composite is an unmanaged index of companies which cannot be invested into directly. Past performance does not guarantee future results.
3 The S&P 500 Index is an unmanaged index of 500 larger companies which cannot be invested into directly. Past performance does not guarantee future results.
5 New York Mercantile Exchange front-month contract; Prices can and do vary; past performance does not guarantee future results.
6 London Bullion Market Association; gold fixing pricing; Prices can and do vary; past performance does not guarantee future results.