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The RFG Weekly Wealth Report

February 26, 2018

Last week, the Presidents' Day holiday meant markets were only open for 4 trading days, and during that time, we received comparatively few economic reports. Nonetheless, major domestic indexes showed considerable volatility and posted losses for 3 straight days. By Friday, however, stocks rebounded and ended the week in positive territory. For the week, the S&P 500 gained 0.55%, the Dow added 0.36%, and the NASDAQ was up 1.35%. International stocks in the MSCI EAFE lost ground, dropping 0.50%


On February 26, 1616, Galileo Galilei was formally banned by the Roman Catholic Church from teaching or defending the view that the earth orbits the sun.


What drove market performance last week?

Once again, inflation and interest rates were on many investors' minds. In particular, multiple reports from the Federal Reserve contributed to performance.

On Wednesday, the Fed released minutes from its January meeting, which indicated that officials had concerns about inflation. The minutes revealed that between rising inflation and economic growth, the Fed sees justification for continued interest-rate increases. In reaction to the news, 10-year Treasury note yields hit their highest level in 4 years.

How do treasury yields and stock prices affect each other?

To say that the interaction between treasuries and stocks is complex would be an understatement. At its most basic, prices for stocks and bonds usually move in opposite directions. When stock prices go up, bond prices drop - and vice versa. For treasuries and other bonds, yields rise when their prices drop. As a result, when the stock market jumps, treasury yields often do, too.

Last Wednesday, however, rising yields may have contributed to a drop in the markets. Why?

Some investors become concerned when 10-year Treasury yields hit 3%, since that percentage level has aligned with bear markets for the past several decades. On Wednesday, the yields hit 2.94% - just a sliver away from that "warning" level.

Please note that the rate-driven analysis triggering this concern is likely far too simple and may not accurately predict what's ahead. With that said, the concern still has the ability to affect investor reactions.

What happened later in the week?

Friday, the Fed shared more information with a new report on its monetary policy. The details helped allay some investors' fears of interest rates increasing too quickly. In reaction, yields on 10-year Treasury decreased to 2.87% - and the S&P 500 had its largest gain in weeks.

What's on the horizon?

After receiving multiple perspectives from the Fed last week - but relatively few new data updates - we should gain significant economic insight this week. From a Gross Domestic Product reading to perspectives on manufacturing and consumer confidence, investors will have many fresh data points to analyze. We will monitor these updates closely and continue to help you stay informed about where the economy stands and what to expect in your financial life.



Protein helps to keep our muscles strong, which is important for maintaining the balance and mobility needed to continue to live independently as we age.

The current recommended dietary allowance (RDA) for protein is 0.8 grams per kilogram (g/kg) of body weight a day for adults over 18, or about 2.3 ounces for a 180-pound adult - but research is showing that higher levels may be needed for adults age 65-plus.

In our older years, we are at risk of sarcopenia, which is the loss of muscle mass, strength and function. The essential amino acids in protein are key nutrients for muscle health, but older adults are less responsive to low doses of amino acid intake. A 2016 study from researchers at the departments of Food Science and Geriatrics at the University of Arkansas found that this lack of responsiveness can be overcome with higher levels of protein consumption. The study says that protein levels in the range of 30 to 35 percent of total caloric intake may prove beneficial.

People with sarcopenia may need 1.2 to 1.5 g/kg of protein a day, according to the Mayo Clinic; that's 3.5 to 4.3 ounces for a 180-pound adult. It is also important to eat the right type of proteins, including some that include the amino acid leucine, which has been shown to preserve body muscle. Leucine is found in higher amounts in animal foods: beef, lamb, pork, poultry, fish, eggs, milk and products made with milk.

As with any health and nutrition change, it is important to talk to your doctor about your protein needs and intake as you age.



Benjamin Franklin may have recognized life's 2 certainties: death and taxes, but a letter from the IRS can certainly produce a similar sense of doom. IRS representatives understand the angst a letter from the agency can produce in American taxpayers. Their initial advice to recipients is: Don't panic. Simply responding to the agency's query usually resolves the issue. Here are 4 more tips to help relieve the stress and address the IRS's questions:

  1. Read the letter completely and carefully. The agency is typically looking for an answer to a particular question. Follow the steps closely and do exactly what the letter requests.
  2. Compare the issues flagged in the letter with your tax return. If the IRS is pointing to changes or corrections in your return, review the information and compare it with your original return.
  3. Reply to the letter only if the agency is asking for a response. The IRS only wants a response when it specifically requests one.
  4. Respond promptly. If you don't agree with the issues the IRS is raising, explain in a letter exactly why. Mail the letter to the address listed at the bottom of the letter; include documents and other information. Allow at least 30 days for the IRS to respond.

Other details may apply, and you can find more information on the IRS website.