Broker Check

The RFG Weekly Wealth Report

September 17, 2018

Last week, the East Coast prepared for Hurricane Florence, which roared through the Carolinas and Georgia. As investors kept their eyes on the weather and its potential for destruction, estimates emerged of up to $27 billion in hurricane damage. This potential for damage contributed to insurance companies in the S&P 500 declining last week. While the hurricane likely won't have a large effect on our economy, its destruction could influence data for months to come.


In 2017, over 140 million hours were spent by identity theft victims trying to solve their issues.


Last week brought another milestone in our economy: the 10th anniversary of Lehman Brothers' bankruptcy.

For 158 years, the Wall Street firm weathered the markets' changes. By 2008, however, various challenges, including excessive risk taking, led to its demise. The firm's unexpected bankruptcy announcement shocked investors and triggered market panic, leading what was a simmering financial crisis to become the Great Recession. A decade later, the markets are on more solid ground, and banks hold more capital and have stronger regulation. While some experts warn of a potential looming recession, current market performance and economic data indicate just how far we've come.

Let's examine last week's data to understand examples of where we are today:

Domestic indexes rebounded to post healthy gains for the week, with the S&P 500 adding 1.16%, the Dow gaining 0.92%, and the NASDAQ increasing 1.36%. International stocks in the MSCI EAFE were also up, gaining 1.76%.

In addition, we received the following updates, which support a picture of a more robust economy:

  • Consumer sentiment jumped: The September reading was at its 2nd-highest point since 2004. The data reveals that consumers expect the economy to grow and create more jobs.
  • Retail sales stalled but are primed for growth: Spending barely increased in August, after months of strong growth. However, analysts believe this data is "a blip" rather than an emerging trend, as tax cuts and a healthy labor market leave Americans with money in their pockets.
  • Industrial production rose for the 3rd-straight month: Auto manufacturing contributed to higher than expected industrial production in August. For now, trade tensions have not yet hurt this sector.

These data reports may not show blockbuster growth, but together they indicate our economy is doing well. In fact, they were strong enough to lead many economists and analysts to increase their projections of how fast the economy expanded during the 3rd quarter.

Looking back, the markets have come far from where they were 10 years ago. But risks will always remain, as Hurricane Florence and Lehman Brothers remind us. Today and in the future, we are here to help you understand where you are and plan for whatever may lie ahead.



Many Americans fail to take even the most basic steps to protect their digital identity, from monitoring their banking accounts online to varying their passwords to setting up a security freeze on their credit reports, according to a new AARP survey.

"Our survey results indicate that a lot of people may feel overwhelmed, and have just given up," says AARP's lead fraud researcher and the report's coauthor, Doug Shadel. "Two-thirds of those surveyed said that given the number of data breaches that have occurred, they think it is inevitable that criminals will be able to exploit their credit at some point. But we are emphasizing that there are powerful things you can do to make sure that stolen data can't be used against you."

One area where older adults are more vigilant than younger adults is in the use of passwords. Security experts advise using unique passwords for each individual account, but the survey reveals that this is not a typical practice.

About 36 percent of adults age 65 and older have used the same password for more than one online account, as have 42 percent of those age 50 to 64. But some 55 percent of adults age 18 to 49 have replicated passwords on different accounts.

It is important to always stay up to date with your online passwords and to maintain a vast mix between all online accounts. However, be sure to keep track of these passwords somewhere off the web and on a secure device.



A defined benefit plan looks a lot like a traditional pension plan where a team of investing professionals do all the work for you. Employers contribute to the plan and employees have no input in the investing choices. It is a great choice if your a small business owner looking to put away a significant amount of money for retirement. Here are some pros and cons of a defined benefit plan:

Pros of a Defined Benefit Plan:

  • Very high contribution limits. How much you can contribute depends on your age, but you could potentially put away more than $100,000 per year for retirement.
  • Can be combined with other plans. You can contribute to a defined benefit plan while simultaneously contributing to a 401(k) or SEP IRA.
  • Lower taxes. Contributions can be written off as business expenses, thereby reducing your taxable income.
  • Tax deferral. Growth of contributions is tax-deferred.

Cons of a Defined Benefit Plan:

  • Expensive. Defined benefit plans are complicated to set up and somewhat costly to run.
  • Little wiggle room. You commit to funding the plan at a certain level, and you are stuck with that even in a year when money is tight.
  • Employer takes 100% of investment risk.

Bottom line: This plan is great for solo self-employed workers who have high, stable incomes and want to put a lot away for retirement. Please contact us if you are interested in learning more about a Defined Benefit Plan and if it is right for you.