Broker Check

The RFG Weekly Wealth Report

April 25, 2016

U.S. stock markets finished last week in heady territory.

The Dow Jones Industrial Average closed at 18,003. Its all-time closing high is 18,312. The Standard & Poor's 500 Index was less than 1 percent below its intraday trading record, which was set last year.

Despite strong stock market performance, optimism was in short supply.

Barron's latest Big Money poll showed money managers are less bullish than they were last fall. Just 38 percent were bullish or very bullish about the prospects for stocks in coming months, 46 percent were neutral, and 16 percent were bearish. Their outlook varied by market. Overall, they were most enthusiastic about the United States, European, and emerging markets:

  • U.S. stocks: 72 percent bullish / 28 percent bearish
  • European stocks: 66 percent bullish / 34 percent bearish
  • Emerging markets stocks: 53 percent bullish / 47 percent bearish
  • Japanese stocks: 30 percent bullish / 70 percent bearish
  • Chinese stocks: 29 percent bullish / 71 percent bearish

The American Association of Individual Investors' Sentiment Survey reported, when compared to money managers, investors are less neutral (43 percent) and more bearish (24 percent) about what may happen during the next six months.

Current levels of pessimism might have inspired Sir John Templeton, a renowned contrarian investor. He once said, "Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria."

ON AVERAGE, AMERICANS SPEND 91 PERCENT OF THEIR TIME INDOORS OR IN A VEHICLE. Just 7 to 8 percent of their time is spent outside. These were the findings of The National Human Activity Pattern Survey (NHAPS) which measures variation in human exposure to pollutants.

The findings do not bode well for Americans' health because levels of pollution indoors are a lot higher than those outside and can cause serious health issues. They also are notable because researchers believe being outside has positive health effects:

"Research published in the Journal of Aging Health shows that getting outside on a daily basis may help older people stay healthy and functioning longer. Participants in the study who spent time outdoors every day at age 70 showed fewer complaints of aching bones or sleep problems, among other health-related problems, at age 77 than those who did not head outside each day."

Being outside is thought to have benefits for people of all ages. These may include:

  • Greater optimism
  • Enhanced mental health
  • Improved attention spans
  • Stronger immune systems

Rearranging time budgets to include more outdoor activities could improve financial outcomes, too, since healthcare costs are a concern for many families, and these costs often increase as people age. The Bureau of Labor Statistics reported, on average, Americans spent about $53,500 in 2014. Almost $4,300 - about 8 percent - was spent on healthcare.


Quote of the Week

"Everybody needs beauty as well as bread, places to play in and pray in, where nature may heal and give strength to body and soul."

--John Muir, American environmentalist and author


Golf Tip of the Week

Fix Your Swing Rhythm

While many golfers have a solid, consistent short-game swing, they often lose that rhythm when it comes to a full golf swing. If you're struggling with a choppy swing that feels too fast, try a simple drill.

Lay five golf balls in a vertical line just a few inches apart. Set up over the ball closest to you and start with a short chip swing. Then, increase the length of your swing with each ball. Focus on maintaining a steady rhythm in your swing. If you notice yourself speeding up with the fuller swings, make a note where it happens and repeat the drill until your full swing is as steady and consistent as your short chip.


Financial Question of the Week

Why do I need an estate plan?

The biggest reason to have an estate plan is to make sure that your personal values about both medical and financial matters are honored in the event that death or incapacity prevents you from acting for yourself. In addition, tax minimization is a further and very important goal of estate planning for persons with taxable estates. To create an estate plan for yourself or update an existing plan, you will most likely need the services of an estate planning attorney.

When you consult with an estate planning attorney, the attorney considers how you want assets distributed to heirs, what taxes your estate might be liable for and whether there are tax-minimization strategies that would be appropriate and appealing; what your preferences and values are with respect to the management of medical and financial affairs in the event of incapacity; and any complicating family issues. To deal with these issues, we often work with you and your attorney to help provide full and accurate information about you.

When an estate plan is formulated, be sure you understand what the attorney is saying. Estate planning ideas can be elusive, but strive for a working knowledge of the material presented for your consideration.

Please contact my office if you or someone you know would like help getting the estate planning process underway.