In This Month’s Issue:

  1. The 2014 deadline for mailing out form 1099’s is February 18th.  Forms will be available again online as well as “hard copies” mailed out.  K-1 forms for many of you will still come in March.  Deadline is March 15th for K-1 forms.
  2. Super Bowl breaks all TV viewing records and a surprise domination by the Seattle Seahawks.
  3. Long Term Care costs are climbing and our aging population is making this area of long term planning crucial for us all.  Workshops will be held this year to address this and other issues.
  4. Stock markets start the New Year on a down note.  Is the correction we have been expecting starting to materialize?  With the Dow now down over 7% and the S&P 500 down over 5% through February 3rd, a downturn is in place.  Just how much further it might go is anyone’s guess.  World markets are also feeling the pressure, with the major Japanese index off over 14% already for the same period.
  5. Weaker economic numbers out of China have affected global markets, with worries over a decline in the growth rate for China might worsen.
  6. The FED continues on its path to “taper” by reducing bond buys by another $10 billion per month at the last meeting in January with Ben Bernanke at the helm.  They are still purchasing $65 billion of bonds each month as Janet Yellen officially takes over as the new chairwoman.

Read on for more details……………………………………………………………..

Income Tax Information:

The deadline this year for tax information to be mailed is February 18th.  1099 forms and tax information should be available online on that date for you to access and the Trust Company of America will also mail a “hard copy” to you on that date.  A “CSV” file will also be available again this year that can be used to download the transactions directly to certain tax preparation software, including TurboTax.  The file can also be sent to whoever prepares your taxes and can save a great deal of time in the overall preparation of your income tax return. There still may be some “K-1” forms for many of you that will most likely be mailed out sometime in March.  The deadline for K-1 mailings is March 15th.   CALL US IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE.

 Super Bowl XLVIII:

This year’s Super Bowl was a surprising domination by the Seattle Seahawks over the Denver Broncos.  The Broncos were a 2 point favorite prior to the game. (Sports Illustrated)  Denver fans were left wishing for more, while Seattle fans were ecstatic.  The snowstorm that hit the east coast on Monday left many fans for both teams stranded at the airports as they tried to return home.  The 2014 game was the most watched television show in history.  According to the Nielson ratings, there were 111.5 million viewers, and even though the game was never close, only 5% of the audience tuned out for the final hour of the game.  (Los Angeles Times)

 Long Term Care:

This is an issue most, if not all of us, will face at some point in our lives or the lives of a loved one.  We want to make an extra effort throughout this year in assisting all of you with your own personal long term care planning.  We will be conducting some special workshops addressing this topic as well as Social Security in 2014.  Knowing your options and how you can financially cover your needs is probably more important than ever before.  Be watching our email updates for the dates and times of these special F.I.G. University sessions.  If your are age 50 or older, you should try to attend one these meetings.

 The Markets:

Stocks tripped out the 2014 gates, snapping a four month winning streak, with the Dow Jones Industrial Average off 5.3% and the Standard & Poor’s 500 stock index down 3.6% for the month of January. (MarketWatch data).  The major U.S. stock indices have also started off February on a negative note, with the Dow now down 7.24% and the S&P 500 showing a 5.40% decline so far in 2014 as of February 3rd.  The Japanese stock market, as measured by the Nikkei 225 average, has had an even rockier start to 2104, now down 14.01% year-to-date. (Google Finance)

We have expressed our concerns regarding the overvaluation of stock prices for the past several months, and have been expecting a downturn for U.S. stocks.  So far in 2014, bonds and commodities, especially gold, have performed quite well relative to stocks and are showing positive returns while stock prices have declined.  Volatility in the stock market has also increased once again, and we would expect more to come in the months ahead.  Our portfolios have remained underweighted in our exposure to stocks/equities based on risk level, and we continue to monitor the markets and hope to take advantage of lower stock prices as we move forward.

Let’s look at the key themes that greeted investors in January.

First of all, there weren’t any strong catalysts to fuel a continued rise in stock prices.  Bonds, including Treasuries, which to the surprise of many, have performed admirably in January.  We had been expecting this for several months now.

Second, Concerns over various emerging market countries and currency fluctuations put nervousness throughout the global markets.

Third, weaker economic numbers coming in from China.  Notably, the latest bout of selling in U.S. markets can be traced to the January 23 release of the China Manufacturing Purchasing Manager’s Index by Markit Economics, which saw the preliminary reading fall from 50.5 to 49.6.   China is the world’s second largest economy behind the U.S. An investment boom last decade created an enormous surge in growth that supported developing economies around the world. Today, China’s growth has slowed to single-digit rates, which has dulled emerging-market exports to the Asian giant.

The Federal Reserve:

Last year, we heard a steady drumbeat of talk from Fed officials that policy makers were getting set to cut back on its $85 billion in monthly bond buys. The Fed made good on its threat in December, with a $10 billion reduction and continued with a second $10 billion cutback at the end of January.  However, they are still purchasing $65 Billion each month in bonds at this time.  Their future actions will be watched closely, and Jane Yellen is now officially the new FED chairwoman.

We appreciate the privilege to serve each of you and look forward to working together in the years to come.  If you still have not scheduled your year-end review, either in person or by phone, please do so today.

God Bless,

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

 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.

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.

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