Retirement Planning Advice and Financial Related Education by Barry Unterbrink, Chartered Retirement Planning Counselor

Monday, October 27, 2014

Quarterly Overview and Strategies to End 2014; Social Security Hikes

During the third quarter, stocks, bonds, and commodities decided to part company performance-wise, resulting in a very mixed bag for investors in moderate growth and balanced portfolios. The large stocks (S&P 500 Index) managed to eke out a small gain of +1.13%, and that was about the only bright spot with stock-based market indexes. Mid-capitalization stocks fell 4%, Small cap stocks, -7%. Bonds were a brighter spot, as longer-term bonds gained 3%, while shorter durations were breakeven. Overseas markets did not help US investors much either; developed markets were off 6% and emerging markets down 4%. So far in October, which historically is the worst month to stay in the stock market, large stocks are +1%, while smaller stocks are ahead a tad over 2% not bad with four days to go!

Commodities across the board of grains, metals and energy moved lower in the quarter. In fact, consumer prices fell 0.2% in August, a first in 18 months! Energy, natural gas, gasoline all contributing – finally a break at the pump I say. I bought gasoline in South Carolina mid-month for $2.74. The year-over-year gain of inflation registered a +1.7% thru September, so that’s an important figure to have in hand. Why? Because, interest rates are very low, and safer, fixed income investments are not covering the rise in consumer prices. Some are, but you won’t find them at your local bank or credit union. It’s my job to find investment vehicles that can beat the inflation bogey without undue risk to invested principle. Read on.

Where to Look, What to Consider Now
I am finding some value with no risk to your principal in 3 to five year CD-type fixed annuities at rates between 2.3% to 3.15%. These are fixed and guaranteed rates with tax deferral until you cash out, and they will cover some tax and inflation along the way. Consider them as part of your "safe money" savings.
If you are inclined to a bit more risk in the stock and bond markets, or have retirement plans that hold the same, then you should consider re-balancing your funds to reduce risk of loss. For instance, year to date, a 100% stock portfolio is ahead about 8%, while a portfolio diversified between stocks, bonds, cash and precious metals is up 7% - with less risk and less drawdown in your account value. Ask me if you need a portfolio review; it could be very worthwhile and profitable to understand this tool at your disposal.

Social Security News for 2015 Beneficiaries, click on:
Stay tuned as we enter the last 10 weeks of 2014. I promise to get the news out to you in faster fashion the next report.

Thanks for reading, and stay safe and healthy!

Barry L. Unterbrink
Chartered Retirement Planning Counselor
(954) 719-1151
(954) 642-2253 fax
Fort Lauderdale, Florida




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