March 2012 Market Update

TAX TIME TRAUMA

During the time period we all affectionately call “tax time” there are many important decisions related to one’s finances. Some of these decisions must still be made for the previous year (like whether to contribute to an IRA and what type) yet so many more deal with the year ahead. It is critical that all options be evaluated and that no stone go unturned.
profile-picWhat makes this particularly difficult is the rush to gather all your tax information, relating to what has already happened last year, so you can meet the all too familiar tax deadlines. While this exercise can be a real headache, you must also set aside time and energy to learn about your financial options and make appropriate decisions for you and your family.

 

One often neglected decision is whether someone should contribute to an IRA and, if so, to which type of IRA. This benefit does not expire for the previous year until your tax filing deadline (for most people this is April 17, 2012 for the 2011 tax year). When considering your options, do not simply review your current tax situation, your 2011 tax liability, or your strong desire to avoid (at all costs) paying tax today. Think also about the future landscape from a tax and legislative perspective. How will you fund future financial goals and what will be the tax impact of such withdrawals? How will the future tax regime look? Do you have heirs to whom you want to leave an inheritance or will it all go to charity at the end of your days?

 

These are only a few of the questions that should be answered thoughtfully prior to making your decision about these options. Also remember that the larger the dollar amount or bigger the commitment, the more important these questions become when attempting to determine the best answer.

 

MARKET COMMENTS & OBSERVATIONS

profile-picWe saw many market indexes take a breather during March from their robust gains of the past several months. Out of the five financial market indices represented below, the S&P 500 index was the only one to post a positive gain this past month. It is noteworthy that the S&P 500’s gain of 12.6% for the first quarter of 2012 is its best first quarter return since 1998. Stock prices have appreciated significantly in a relatively short period of time thanks to continued easy money policies by central banks, healthy corporate balance sheets and better earnings, and a gradually improving economic picture.Only time will tell if the recent rally in stock prices has run its course.

 

Financial Market Indices as of March 31, 2012

March 2012

Last 3 Months

Year-to-Date

Last 12 Months

S&P 500 Total Return (US stocks)

3.3%

12.6%

12.6%

8.5%

MSCI Developed EAFE (foreign stocks)

-0.4%

11.0%

11.0%

-5.3%

MSCI Emerging Mkt. Equities (emerging country stocks)

-3.5%

13.6%

13.6%

-11.1%

Barclays Capital Aggregate Bond – Intermediate Term

-0.2%

0.7%

0.7%

6.2%

Barclays Capital Municipal Bond Index

-0.6%

1.7%

1.7%

12.1%

 

Cash Positions in Portfolios

We take our responsibility to managing your wealth very seriously. Although we are not market timers, we do look for opportunities to adjust your asset allocation strategy if we believe it will enhance returns. The world we live in today is much more challenged and we believe this requires us, as investment managers, to be more nimble and opportunistic with the trades we place. Thus, over the first few days of March we “slightly” reduced exposure to global stocks in client portfolios. We have temporarily parked the proceeds into a money market fund. Although cash doesn’t pay any return in this low interest rate world, it is a great short-term holding account because it is not subject to declines in value, or short-term redemption fees. This provides us great flexibility to put this cash back to work in productive investments when we determine appropriate.

 

New Report Format

We have changed the format of your quarterly performance report. You’ll notice more graphs and charts highlighting data on your investments. We now have the capability to add a column showing your average annual investment return over the past 3 years. By this time next year, we’ll be able to provide a 5 year average annual return since we’ll have 5 years of daily price history with our present portfolio software. Page 4 of the report is all about performance – showing benchmark comparisons and a new graph which measures the market value of your portfolio versus net additions (deposits less withdrawals) to the portfolio over the past 3 years.

 

KNOWLEDGE AND TRAINING

 

On March 27th and 28th Chad Sander attended the Fund Evaluation Group (FEG) investment forum in Cincinnati, OH. FEG provides investment consulting, portfolio management and research services. The independently-owned firm has approximately $31 billion in total client assets under advisement and over 80 employees. This annual conference brings together experts in investment management, economics and politics to discuss the current investment climate and asset allocation strategies.

 

Terry Prather has become a member of Ed Slott’s Elite IRA Advisor Group, an exclusive organization of financial advisers dedicated to being leaders in the IRA industry. Membership requires specific training in the IRA and qualified plan areas, regular conference attendance and examinations.

 

 

 

 

start-the-conversation

The information in this material is only as current as the date indicated, and may be superseded by subsequent market events or for other reasons. While all information prepared in this document is believed to be accurate, any statements of opinion constitute only current opinions of Payne Wealth Partners, Inc., which are subject to change and which Payne Wealth Partners, Inc. does not undertake to update. Accordingly, you should not put undue reliance on these statements. The information does not attempt to examine all the facts and circumstances that may be relevant to an individual’s financial needs. Payne Wealth Partners, Inc. is not soliciting any action based on these statements.

Contact Our Offices

Payne Wealth Partners, Inc.
Keystone Financial Consulting
601 N Cross Pointe Blvd
Evansville, IN 47715
Phone: 812-477-6221
Toll Free: 888-477-6221
  • YouTube
  • Follow us on twitter
  • Follow us on facebook
  • Follow us on linkedin
  • GooglePlus
×