Quote of the Week

“Eat better, eat less, exercise more.”   Some food for thought after Thanksgiving!

Technical Corner

In the holiday-shortened week, U.S. stocks had the worst Thanksgiving week performance in seven years. Stock markets withdrew back to the lows reached in late October, erasing gains for the year and leaving investors wondering if the lower stock prices are a Black Friday bargain. I don’t see any bargains here. We  have been out of the market except for a small position since October 30th.

Continued weakness in tech stocks, higher corporate bond spreads in interest rates as compared to U.S. Treasuries are telling us that things are not good going forward.

Crude oil declined for the seventh straight week, and disappointing corporate earnings also contributed to the decline. Around 69% of the corporations reporting earnings also reported lower forward prospects. What we have is lower top line revenue projections with higher corporate expenses due to higher interest costs and wage costs squeezing corporate profits. And we all know that lower corporate earnings lead to lower stock prices.

Market volatility has also risen which generally is not a good indication for stock prices as any negative news will cause the price of a company’s stock to over react to negative news.

For the week the Dow was down 4.4%, the S&P 500 was down 3.8%, the Nasdaq was down 4.3%, and the MSCI EAFE was down 0.01%. For the year the Dow is down 1.8%, the S&P 500 is down 3.8%, the Nasdaq is up 0.5%, and the MSCI EAFE is down 12.6%.

Sue’s Thoughts – A List Worth Sharing

While reading AARP magazine last month, I came across the following list and I realized that it was important information that every couple should share, regardless of their age. If you do as the list suggests, in the event of death or illness, it will help lessen your emotional load and possibly prevent a lot of wasted time.

Their suggestions correlate with an earlier article I wrote on February 19 of this year about “the final act.” That article was about giving your loved ones an idea of your funeral and burial wishes.  (See the article here.)

Step number one ties in nicely with an electronic document vault service we offer to our clients. If you would like to learn more about the program, please give us a call and we will send you a checklist and explain how the service works.

Ten Steps to Help Protect a Spouse
  1. Gather financial papers. Store deeds, passports, insurance policies, estate documents and the latest statements from financial accounts in a fireproof box at home, where survivors can easily find them.
  2. Make a “must call” list. Compile contact formation for your accountant, lawyer and other financial professionals who need to be contacted when a spouse dies.
  3. Share passwords. Keep a master list of all usernames and passwords so your spouse can still have access after your death.
  4. Update beneficiaries. Make sure beneficiary designations for your pension, 401(k), IRA, brokerage accounts and life insurance proceeds still reflect your wishes.
  5. Check credit cards. Make sure your name is on the credit card account. In most states, when your spouse dies, you won’t be responsible for any debt on a card that’s not in your name. But you also won’t be able to use it, and will have to reapply for credit in your own name.
  6. Set up advance directives. You both will need health care powers of attorney to designate the person you want to make medical decisions on your behalf if you are incapacitated. You’ll also need a living will that spells out what measures you want
  7. Designate a money person. Each of you will need a financial power of attorney so you can name a trusted person to make money decisions for you if you’re unable to do so.
  8. Review wills and trusts. Do this every few years or when there’s a significant change in your life, such as a sizable increase or decrease in your finances. If you don’t have a will, get one.
  9. Discuss funeral plans. This can save thousands of dollars by letting the surviving spouse—who may need the money—know it’s OK not to choose the most expensive funeral.
  10. Learn how bills are paid. Keep a list of how bills are paid so the survivor doesn’t miss a payment or overdraw an account.

“10 Steps to Help Protect a Spouse.” AARP.ORG https://www.aarp.org/money/budgeting-saving/info-2018/financial-plan-protect-spouse.html   Accessed  October 11, 2018

By the Numbers

“COST OF OUR DEBT – The Congressional Budget Office forecasted in April 2018 that interest paid on our national debt will increase from $390 billion in fiscal year 2019 (i.e., the 12 months ending 9/30/19) to $915 billion in fiscal year 2028 (i.e., the 12 months ending 9/30/28). That’s a projected increase of +9.9% per year for the next 9 fiscal years of our nation’s net interest costs (source: Congressional Budget Office). – Michael A. Higley, BTN 11-26-2018

If you have friends or family in need of financial life planning services,

It would be the honor of Laurence Lof Financial Advisors to assist them.

We value your referrals!

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These are the opinions of Larry Lof and Stephanie Mayoral and not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. Past performance is not indicative of future results. Due to our compliance review process, delayed dissemination of this commentary occurs.

The S&P 500 is an index of stocks compiled by Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. The index includes a representative sample of 500 leading companies in leading industries of the U.S. economy. Indices mentioned are unmanaged and cannot be invested into directly.

Technical analysis represents an observation of past performance and trend, and past performance and trend are no guarantee of future performance, price, or trend. The price movements within capital markets cannot be guaranteed and always remain uncertain. The allocation discussed herein is not designed based on the individual needs of any one specific client or investor. In other words, it is not a customized strategy designed on the specific financial circumstances of the client. Please consult an advisor to discuss your individual situation before making any investments decision. Investing in securities involves risk of loss. Further, depending on the different types of investments, there may be varying degrees of risk including loss of original principal.

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