News & Blog

Global financial market movement in 2014 could be described in four words: slow and steady rise.  All areas of the market posted healthy, positive returns for the year through June 30, 2014. US Stocks, measured by the S&P 500 Index, were up 7.14%. Both International (4.78%) and Emerging Market stocks (6.14%) are also up year to date. Despite the Federal Reserve’s tapering of bond purchases, known as Quantitative Easing (QE3), interest rates surprisingly declined in the first half of the year. The Barclays US Aggregate Bond Index returned 3.93% through the end of June.  Alternative investments, such as global real estate and commodities, also posted positive returns.

In addition to strong returns, markets experienced near record low levels of volatility during the quarter. The CBOE Volatility Index (VIX), a key measure of market expectations of near-term volatility, averaged 13.34 in April and May, well below the historical average of 20, and dropped as low as 11.40 on May 30. As a point of reference, the VIX peaked above 80 in the height of the 2008-2009 financial crisis, 6x the current levels of volatility![1] The VIX index data begins in January 1990, which is nearly 25 years of data, a relatively short time period for investment analysis.  Remember that volatility is both a measure of up movements and down movements. Perhaps investors are neither greedy nor fearful at the moment, but rather, complacent.

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Did you know there are assets that will not transfer to your heirs based on the instructions in your will? Instead, these assets transfer based on a beneficiary form you filled out.  While many advisors recommend you check your beneficiary designation forms any time you experience a major life event – birth, death, marriage, or divorce – we believe it’s a best practice to review your beneficiaries once per year.

Retirement savings accounts, such as IRAs, SIMPLE IRAs, SEP IRAs, 401k, 403b, and pension plans, annuity contracts, and life insurance proceeds are all assets that transfer based on the beneficiary designation and not through your will. Despite the importance of beneficiary designations, many people do not consult an advisor, attorney, or CPA before completing these forms.

There are a host of potential problems that can occur if your beneficiaries are not properly designated. Here are just a few examples:

Retirement savings or life insurance proceeds passing to an ex-spouse. Surprisingly, this is a common occurrence because many people forget to update old beneficiary forms.  One major potential downfall of this mistake is disinheriting children from a second marriage, at least in regards to these accounts.

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Brightscope, the online financial information company dedicated to bringing transparency to opaque markets, recently published a list of Top 100 Social Financial Advisors in the US. ThirtyNorth’s Director of Investments, Blair duQuesany, made the list at number 46.

According to Brightscope Co-Founder and CEO, Mike Alfred, “It has been reported that nearly half of investors would like to interact with advisors online but they cannot find them. Social media has become a required communication tool and BrightScope wants to recognize advisors taking advantage of the impact a robust digital profile can have on an advisor’s practice.”

View the entire list here.

Follow Blair duQuesnay on Twitter @BlairHduQuesnay

Third-party rankings and recognition from rating services, organizations, and publications are no guarantee of future investment success. Working with a highly-rated advisor does not ensure that a client or prospective client will experience a higher level of performance. A more thorough disclosure of the criteria used in formulating these rankings is available by contacting the advisor.

Financial markets greeted the New Year with increased volatility. Global stock markets retreated in January, rebounded strongly in February, and declined again in March.  By quarter end, US Stocks were up 1.81% (S&P 500 Index), developed international stocks were up a modest 0.66% (MSCI EAFE Index), and emerging market stocks, showing continued weakness, were down -0.43% (MSCI Emerging Markets Index).  Fixed income investors caught a breather from negative price pressure, as bonds returned 1.84% (Barclays Aggregate Bond Index) for the quarter.  Alternative investments demonstrated their value in a diversified portfolio. Global real estate was up 7.03% (S&P Global REIT Index), and commodities snapped a lengthy losing streak, returning 6.99% (DJ-UBS Commodity Index) year to date.

During the quarter, the current bull market for US stocks turned 5 years old. For those who love useless data facts, it is now the 5th longest bull market for US stocks since the Civil War. [1] The S&P 500 Index has returned 179% since its March 9, 2009 intra-day low of 666, and is 7% shy of tripling in value.[2]  However, current levels are only 21% above the previous high in October 2007. Television pundits and Wall Street sell-side analysts are ever so eager to call the top of the market and predict the next down turn. While we do not attempt to make such predictions, we have a difficult time finding legitimate reasons for a major stock market decline in the near-term. Bear markets are caused by the existence of one or more of these four factors – economic recessions, restrictive monetary policy, excessive valuations, and exogenous shocks.

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Suzanne T. Mestayer, managing principal of ThirtyNorth Investments LLC in New Orleans, was appointed to the board of directors of the Federal Reserve Bank of Atlanta’s New Orleans branch.

Federal Reserve Bank of Atlanta branch directors provide economic information from the branch territory to the district bank’s president and head office directors.

They use the information in formulating monetary policy and making discount rate recommendations. Continued reading article on The New Orleans Advocate

By:  H. Clark Gaines, Jr.    (On Twitter @Clarkgaines)

 

“Pay attention to the fine print.  It’s more important than the sale price.” – Francis Underwood

Frank Underwood

 

 

 

 

 

 

 

 

 

Francis Underwood, the smooth talking Congressman played by Kevin Spacey in Netflix’s hit show, House of Cards, is never short on crafty one-liners.  Seldom though does he give us one with so many parallels to investing.  In today’s investing climate, there’s a lot of hype about Exchange Traded Funds (ETFs).  The assumption is that mutual funds are slow, expensive, antiquated means of investing while ETFs are liquid, transparent, and a cheap way to access a market sector or index.  Some broker-dealers offer teaser rates for trading ETFs with no transaction costs.  Imagine that, a “free” way to invest in the market!

Most of our clients have heard us say, there is no free lunch in investing.

Just because something appears free, nearly free, or even “cheap” doesn’t mean that is the case. Transaction costs are only one piece of a complex investing puzzle.

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ThirtyNorth Director of Investments Blair duQuesnay was quoted in the Wall Street Journal recently. Click the link to read the full article.

Five Really Dumb Money Moves Retirees Make by Tom Lauricella

Have you made your 2013 IRA contribution yet? It’s not too late. You have until April 15, 2014 to make IRA contributions. Last year the IRS raised IRA contribution limits to $5,500 for individuals under age 50 with an additional $1,000 for individuals over age 50.  The following are some common questions we hear regarding IRA contributions:

ThirtyNorth Investments, LLC does not provide tax advice. You should consult your tax professional regarding questions of deductibility, limits, and eligibility before making IRA contributions.

  1. My spouse doesn’t work. Can he/she still make an IRA contribution?  – Generally, individuals who are unemployed are not allowed to contribute to retirement accounts. However, there is an exception for married individuals. The working spouse can contribute to an IRA on behalf of the non-working spouse. In order to make “spousal IRA contributions” you must be married, file a joint tax return, you must be under age 70.5, and have compensation of at least the amount you contribute to your IRAs. However, there is no age limit to contribute to a ROTH IRA, only a requirement to have earned income below certain thresholds discussed below. Fun fact: this is now officially known as the Kay Bailey Hutchison Spousal IRA Limit in honor of the former Texas Senator.
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The US stock market pleasantly surprised everyone in 2013.  The S&P 500 Index experienced a record year. International stocks also had strong year, although emerging market stocks were down and trailed global stock markets significantly. Interest rates rose in 2013, causing negative returns for the bond market. Emerging market bonds, following a strong 2012, fell further than domestic bonds. Alternative investments were a mixed bag.  Global real estate was up slightly, while commodities were down due to weakness in gold, agriculture, and industrial metals. Of course calendar years are arbitrary measures for long-term investors who do not buy in on January 1st and sell on December 31st, but they do serve as convenient time periods for reflection and review of market performance.

Human nature dictates that we gravitate towards that gleaming return of the S&P 500 Index last year. We are tempted to measure our success against this number. How quickly we forget the reason we choose diversification in the first place! Remember the discussion about not “putting all of your eggs in one basket”? Let’s assume you were invested in a portfolio comprised only of the S&P 500 Index, and compare it to two hypothetical portfolios; a properly diversified 60/40 (moderate risk) portfolio and an aggressive portfolio of global stocks. We will compare an investment of $100,000 on January 1, 1995; one portfolio contains only the S&P 500 Index, one is globally diversified portfolio with 60% in global stocks and 40% in bonds, and the third is a globally diversified portfolio with 100% in stocks.[1]

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There’s a lot of anxiety about the US stock market. The Dow Jones Industrial Average and the S&P 500 Index are both at all-time highs. In every meeting for the past two weeks, clients have asked these questions. Why is the market so high? Doesn’t that mean we’re due for a pullback? How much higher can it go?

If recent history is any guide, it’s no wonder people are suspicious of new highs. The last two times the S&P 500 Index hit all-time highs, (1,527 in March 2000 and 1,565 in October 2007) they were followed by -49% and -57% bear markets. As of this writing on November 26, 2013, the S&P 500 is above 1,800.  Our tendency to extrapolate future market movement from recent history is called anchoring. Anchoring means that we believe the market will drop dramatically from all-time highs simply because it has done so in the recent past. We are anchoring to these recent experiences and assigning predictive power to them. In reality, this belief is based on irrelevant figures and statistics. Past market movement is no indication of future market movement.  Logically we know this is true, but the behavioral characteristic of anchoring is a powerful force.

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