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The RFG Weekly Wealth Report

September 21, 2015
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 As Tom Petty often sang, "The waiting is the hardest part."

Whether it's waiting for college acceptance letters, medical test results, employment offers, or Federal Reserve monetary policy changes, waiting can produce a lot of anxiety. A 2012 research paper written by Associate Professor Kate Sweeney and Graduate Fellow Sara Andrews of the University of California, Riverside, explained it like this:

"...Although waiting for inevitable events such as the arrival of a bus or one's turn in line may be irritating... the combination of uncertainty about the outcome and waiting for that outcome can be particularly excruciating. In fact, waiting may be more anxiety provoking than actually facing the worst case scenario..."

That may go a ways toward explaining why markets didn't rally when the Federal Reserve decided to leave rates unchanged last week. The Federal Open Market Committee's statement indicated they were concerned, "Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term."

On the face of it, continued low rates should have been good news for assets like stocks, according to Barron's. However, any positive aspects to the news were mitigated by the fact everyone expects the Fed to begin raising rates soon. Investors are waiting for it to happen, and they're uncertain how economies and markets will react when it does.

Heightened anxiety may be one of the reasons investors responded the way they did last week. On Friday, after mulling the Fed's decision, national stock market indices around the world - in the United States, England, Germany, France, and Japan - fell significantly, according to Yahoo! Finance.

Now, we're back to waiting.

If anxiety remains high, markets may be volatile.

IT'S OFFICIAL. THE IGS ARE IN. Ignoble is a word rarely heard in everyday conversation. Merriam-Webster defines it as meaning, "of low birth or common origin, or characterized by baseness, lowness, or meanness."

The 25th First Annual Ig® Nobel Prize Ceremony was held last week at Harvard University. reported, "Winners traveled to the ceremony, at their own expense, from around the world to receive their prizes from a group of genuine, genuinely bemused Nobel Laureates..." Winners completed research that made people laugh and then caused them to think.

  • The Management Prize went to Gennaro Bernile, Vineet Bhagwat, and P. Raghavendra Rau, authors of 'What Doesn't Kill You Will Only Make You More Risk-Loving: Early-Life Disasters and CEO Behavior.' They examined the link between CEOs' early-life exposure to major fatal disasters and the financial and investment policies adopted by their companies. They found, "CEOs who experience fatal disasters without extremely negative consequences lead firms that behave more aggressively, whereas CEOs who witness the extreme downside of disasters behave more conservatively."
  • The Economics Prize was awarded to the Bangkok Metropolitan Police, which implemented a new policy in an effort to reduce bribery. They pay a bonus to police officers who refuse to accept bribes, even though the officers are required by law not to accept bribes. (It's a concept that may resonate with parents.)
  • The Literature Prize went to Mark Dingemanse, Francisco Torreira, and Nick J. Enfield, who presented evidence and arguments supporting the idea that 'huh?' is a word, and that it "is found in roughly the same form and function in spoken languages across the globe."

If you're interested in learning about the ignoble undertakings of other winners (who documented chicken walking like dinosaurs, created bee sting pain indices, and completed other thought-provoking experiments), visit


Quote of the Week

"A day without sunshine is like, you know, night."

--Steve Martin, American comedian


Golf Tip of the Week

Dig in for Better Bunker shots

A bunker shot doesn't have to be threatening. Many amateur golfers struggle to get aggressive enough with their sand shots. Here's a drill that will make you more aggressive by training you to hear the sound of a great bunker shot.

To get started, dig in with the bottom of your sand wedge about an inch behind your ball. You want to get fairly deep in the sand - about two inches. Then accelerate and "spank" the sand, moving through the ball. You should hear that "thumping" sound of a great bunker shot. Work through the drill multiple times so that you internalize the aggressive swing and acceleration through the ball that you need to get it up and out of the sand.


Financial Question of the Week

Should I withdraw more money from my IRA than required?

Although the power of tax deferral cannot be denied, for some retirees, overloading withdrawals out of their IRA to maximize income at low tax brackets may make sense.

One option for additional IRA withdrawals is to convert funds to a Roth IRA.  This allows you to pay taxes at a low rate today while also eliminating taxes on any future gains.

If you will remain in the 15% tax bracket, long-term capital gains are tax free - providing an alternative to Roth IRA funding. One reason people take additional IRA distributions is to reinvest funds outside the IRA and take advantage of this zero tax rate.

Please contact my office if you would like help evaluating your situation to determine if this "Tax Maximization" strategy is appropriate for you.