Market Week: March 20, 2017

The Markets

As of market close March 17, 2017 – Following the Fed’s announcement that it was raising the target range for the federal funds rate 25 basis points, investors favored government bonds and dividend-paying stocks last week. As a result, the yield on 10-year Treasuries fell 7 basis points as prices climbed with increased demand. Each of the benchmark indexes listed here posted gains over their prior week’s closing values. The small-cap Russell 2000 and Global Dow led the way, followed by the Nasdaq.

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Don’t Be Dogmatic About Retirement-Portfolio Withdrawals

Required minimum distributions first. Taxable accounts next, followed by traditional IRAs and 401(k)s. Roth IRAs and 401(k)s last.  That’s the standard sequence for tax-efficient portfolio draw down during retirement. The overarching thesis is to be sure to tap those accounts where you’ll face a tax penalty for not doing so (RMDs) while hanging on to the benefits of tax-sheltered vehicles for as long as possible. Because Roth assets enjoy the biggest tax benefits–tax-free compounding and withdrawals–and are also the most advantageous for heirs to receive upon your death, they generally go last in the withdrawal-sequencing queue.

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Market Week: March 13, 2017

The Markets

As of market close March 10, 2017 – Stocks rallied last Friday, fueled by a robust jobs report. However, the end-of-week surge wasn’t enough to overcome index losses from earlier in the week. Falling energy prices dragged down both the large-cap Dow and S&P 500, while the Russell 2000 dropped over 2.0% and is barely in positive territory for the year. Long-term bond prices also plummeted with the yield on the 10-year Treasuries climbing 26 basis points for the week.

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Market Week: March 6, 2017

The Markets

As of market close March 3, 2017 – The Dow reached 21115 last Wednesday, then fell back a bit, but still closed the week over 21000. The S&P 500 marked its sixth consecutive week of gains, while the Global Dow led the way, climbing over 1.0% by last week’s end. Of the benchmarks listed here, only the Russell 2000 fell, but only slightly. Following President Trump’s speech to Congress last Tuesday evening, stocks soared Wednesday before retreating Thursday and Friday while bond yields soared, possibly in response to Fed Chair Janet Yellen’s indication that interest rates are likely to be raised when the Committee next meets later this month.

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Don’t Follow The Rules, Follow the Principle

Many of us are likely familiar with the accounting world’s Rules v. Principles ethics regulation. But you may not be aware that the Department of Labor, since promulgating its fiduciary rule last year, has implemented a similar type of principle-based regulatory approach. Within the financial advisor world much of the debate over the so-called Fiduciary Rule has been centered on this approach.

But as a client, whether you are aware of this debate or not, the question becomes: why should you care?

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