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The RFG Weekly Wealth Report

March 25, 2019
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Friday, the yield of the 3-month Treasury bill exceeded the yield of the 10-year Treasury note for the first time in 12 years. For some analysts, this "inverted yield curve" may imply a short-term lessening of confidence. (Treasury yields move inversely to Treasury prices.1

As a result, the S&P 500 ended the week 0.94% lower. The Nasdaq Composite fell 0.80%, and the Dow Industrial's lost 1.19% 2 3 4. In contrast, the MSCI EAFE index following international stocks rose, gaining 0.52% for the week.5

FACT OF THE WEEK

The price of conflict has motivated major changes in tax policy and the source for introducing income tax and payroll withholding. WWII marked 1944-45, "the most progressive tax years in U.S. history," as top marginal rates hit the all time high at 94% (on income over $200,000, equivalent of around $2.5 million in today's dollars). 

The three decades following, the top rate remained high, never dipping below 70% until 1981 and continued to adjust to the current 37% rate.

MARKET MINUTE

Fed Sees No Hikes in 2019

On Wednesday, the Federal Reserve held interest rates steady, but lowered its estimate of 2019 economic growth to 2.1%.

Last December, the central bank forecast two rate hikes in 2019. It now expects to leave rates unchanged this year, with one quarter-point hike projected for 2020.

This pivot may acknowledge a slight change in economic conditions. The Fed's latest policy statement noted that the "growth of economic activity has slowed from its solid rate in the fourth quarter."

Oil Hovers Near $60

At Friday's closing bell, a barrel of West Texas Intermediate (WTI) crude oil was valued at $58.85 on the New York Mercantile Exchange (NYMEX). Its value briefly climbed to $60 earlier in the week.

Month-over-month, the price of WTI crude has risen nearly 5%. Historically, higher oil prices can have a significant impact on retail gasoline prices. 6

What's Next

A U.S. delegation is scheduled to accompany Treasury Secretary Steven Mnuchin to China this week for further trade negotiations. Finally, Brexit will not occur this Friday, as the European Union has extended the United Kingdom's deadline in response to Prime Minister Theresa May's request.  7 8   

FINANCIAL STRATEGY OF THE WEEK

Determine If You Are On Track To Achieve Your Goals 

In a recent Financial Finesse study on the State of U.S. Employees' Retirement Preparedness, fifty-seven percent of employees at pre-retirement age, between 55 and 64, said they had not run a calculation to estimate whether or not they were on track to achieve their income goals in retirement. According to the study, after evaluating those who did not know if they are on track, participants received an average wellness score of only 4.7 out of 10.

Planning for retirement today poses challenges past generations did not have, making retirement a more difficult goal to reach. These challenges include:

• Decreased Social Security and other government benefits

• Lower market returns and interest rates on investments

• Lower home equity to rely on due to the mortgage crisis

• Higher healthcare costs and longer life spans to plan for

Determining if you are currently on track to meet your goals is one of the first steps to developing a sound retirement plan. The sooner you take control of your financial situation, the greater your odds of a successful retirement. 

Please contact my office if you would like help evaluating your progress toward your financial goals.

Source: Morningstar.com, March 22, 2019

Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
Diversification does not guarantee profit nor is it guaranteed to protect assets. 

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.

The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.

The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.

The Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of stocks of technology companies and growth companies.

The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indices from Europe, Australia, and Southeast Asia.

The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

Past performance does not guarantee future results.

You cannot invest directly in an index.

Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.

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1. http://www.bloomberg.com/
2. http://quotes.wsj.com/
3. http://quotes.wsj.com/
4. http://quotes.wsj.com/
5. http://quotes.wsj.com/
6. http://money.cnn.com/
7. http://www.cnbc.com/
8. http://www.nytimes.com/