Friday, May 26, 2017

Remember the Fallen





 Memorial Day is a day to pay our respects to Americans who have fallen serving in American Wars. Offering your respect can be done in many ways and here are just a few to consider:
1. Fly your American flag at half-staff from Sunrise until Noon. After Noon, the flag is raised up to its full glory to demonstrate the American spirit.
2. Participate in a “National Moment of Remembrance” at 3:00 p.m. on May 27th. Observe a minute of silence at 3 o’clock local time for those who have given their lives.
3. Donate Blood to the American Red Cross. Remember those heroes who are gone by becoming a hero to someone who needs blood or blood parts.
4. Say “Thank You” to a Veteran. This can be as informal as saying thanks to a soldier in uniform or shaking the hand of a veteran.
5. Visit a National Memorial or Monument. Vietnam Veterans Memorial, Pearl Harbor Memorial, and Arlington National Cemetery are just a few you could visit.
Another way to show your respect is to celebrate the three-day weekend with your friends and family because this is just one of the liberties for which our fallen heroes died.
Womack Investment Advisers shows respect for you, our client, by monitoring your investments to help you achieve your financial goals. If you have any questions, please let us know.
Happy Memorial Day!


Best Regards,

The Womack Investment Advisers Team


Sources:
*The above material was prepared by Peak Advisor Alliance.

Thursday, May 25, 2017

Supersize Me: Here's a Way to Fatten up Your Retirement Savings


Wouldn't it be something if you could plump up your retirement savings as easily as you can put on a few pounds eating fast food? Here's one way to do it: Open a health savings account (HSA). It offers a triple tax advantage and you can contribute the maximum every year.

Here's the catch: not everyone can do this.

HSAs are like side dishes. They are only available to people enrolled in their employers' high-deductible health insurance plans (HDHP) and who do not participate in any other health insurance plans.

In addition, the HDHP must have minimum deductibles ($1,300 for an individual and $2,600 for a family for 2017) and maximum out-of-pocket costs ($6,550 for an individual and $13,100 for a family for 2017). If you are enrolled in a plan that meets these requirements, then you may be able to fatten up your retirement savings with an HSA.

HSAs offer a triple tax advantage:
  1. Contributions are tax-deductible
  2. Any interest and earnings grow tax-deferred
  3. Distributions are tax-free when used for qualified medical expenses
These accounts were created to help people in HDHPs pay for current medical expenses, but the money saved in HSAs can also be used for healthcare expenses in retirement.

You see, unlike flexible spending accounts (FSAs), there is no 'use it or lose it' provision. Any money left in an HSA at the end of the year belongs to the account owner and remains in the account, growing tax-deferred, until it is distributed.

In fact, it's important not to confuse an HSA with an FSA. They are distinctly different. For example:
  • You can save more in an HSA than in an FSA. An individual can contribute up to $3,400 to an HSA in 2017, and a family can contribute up to $6,750. That's a lot more than anyone can save in an FSA, which has a maximum contribution of $2,600 pre-tax for 2017.
Also, if you're age 55 or older, you can make a catch-up contribution and save an additional $1,000 in your HSA each year.
  • HSAs are portable. FSAs are not. The money in your HSA account is yours. If you change employers, the account, and any savings in it, remains yours. Typically, FSAs are 'use it or lose it' plans. If money is left in an FSA at year-end, one of three things may occur:
  1. Any unspent savings is lost.
  2. The employer's FSA provides a grace period of up to 2½ months after the end of the plan year during which the savings can be used for qualified medical expenses.
  3. The employer's FSA has a carryover feature, which allows up to $500 to rollover and be used for qualifying medical expenses during the following year.
HSAs offer a clear advantage for people who may not incur significant medical expenses each year. HSA assets can accumulate until you need them – even if that's after you retire.
  • You can invest HSA savings, but not FSA savings. Some HSAs offer investment options. If your plan is to save for medical expenses later in life, then being able to invest – having an opportunity to grow your savings tax-deferred over a long period of time – may provide a significant advantage.
Consider these hypothetical scenarios*:
  • An individual who contributes $3,400 to an HSA for 30 years, earns 4 percent each year, and does not spend any of the money, would have almost $200,000 more for retirement. 
  • A family that contributes $6,750 to an HSA for 30 years, earns 4 percent each year, and does not spend any of the money, would have almost $400,000 more for retirement.
Sometimes, employers and health plan providers have relationships with HSA providers. Before defaulting to your employer's choice, compare the investment options offered and the fees and expenses charged against those of other HSA providers.

Here's some food for thought for Millennials and Generation Z. Many young people have few medical expenses. Consequently, saving in an HSA may seem unnecessary. If you cast your eyes to the future, or think about the health of your parents and grandparents, it's not difficult to see health expenses are likely to increase with age.

Even if you stay healthy well into retirement, which we all hope to do, the money in an HSA can be used to help pay Medicare premiums tax-free after age 65.

Saving in an HSA gives participants in HDHPs opportunities to set aside pre-tax dollars, grow any earnings tax-deferred, and pay no taxes on distributions, as long as they're used for qualified medical expenses. It's a win-win-win opportunity.

So, if you're already saving for the future in an IRA, 401(k), or another qualified retirement plan – and you have the opportunity to enroll in an HDHP and open an HSA – you may want to consider it.

Tuesday, May 23, 2017

Are You Helping Your Adult Children Financially?


In 2015, Pew Research investigated whether aging parents received more assistance from adult children or adult children received more assistance from parents. In the United States, Italy, and Germany, they found parents provide more financial assistance to their adult children than the adult children provide to their parents.

The survey found 39 percent of American parents had helped their adult children with errands, housework, or home repairs during the past twelve months, and 48 percent had helped with childcare. Almost two-thirds had provided monetary support. Financial help appeared to be contingent on parents' circumstances. Those with higher household incomes were more likely to give money to adult children.

Becoming the 'Bank of Mom and Dad' can be a slippery slope, according to AARP Magazine. Since parent-child relationships can be emotionally fraught, it's sometimes difficult to gauge when financial assistance is a good idea and when it's not. Should you pay for a car repair? Help with the down payment on a home or apartment?  Foot the bill for a grandchild's private school or college? Fund a lavish wedding? Help with medical bills?

The AARP suggested answering four questions, using a scale of 0 to 5, may help parents determine whether to give money to an adult child. The questions are:
  1. Will this investment add stability and security to my child's life? (0 = entirely optional; 5 = absolutely necessary)
  2. Is this a short-term or one-time cash need, or is it something that could go on for years? (0 = guaranteed, long-term payouts; 5 = absolutely just one time)
  3. Is there risk in the investment beyond the cash outlay, such as financial liability on a contract or damage to your credit? (0 = very high levels of risk; 5 = no additional risks)
  4. Can you lend or give this money without fear of damaging your relationship with your child? Or, will it cause tensions or resentments for the people involved? (0 = guaranteed tensions or resentments; 5 = everyone is happy)
If the combined answers total 13 or higher, the answer is yes, give money to your adult child. If the total is less than 13, you may want to think twice before opening your wallet.

Classic Cars and Market Tops







In the midst of last Wednesday’s market plunge numerous financial websites weighed in on whether it was time to “buy the dip” or “throw in the towel”.  One writer, Wolf Richter (editor-in-chief of the Wolf Street Blog), advised readers that according to one indicator they would strongly want to consider the latter.  The Hagerty Market Index tracks the prices of cars— not just any cars, but very expensive classic collectible cars.  Hagerty is the leading insurer of classic collectible cars, and is thus intimately knowledgeable of their values.  

According to Richter, the reason the Hagerty Index is important is that classic car prices often move similarly to – and sometimes lead – prices of other assets such as equities and real estate.  Richter writes “The global asset class of collector cars ... is quietly but persistently and very unenjoyably experiencing a downturn that parallels and in some aspects already exceeds the one during the financial crisis.”  The Hagerty index peaked and then dropped in April 2008, a few months before U.S. stocks suffered the biggest crash in decades, suggesting it could be an early indicator of what may be in store for other asset classes.  At the present time, the Hagerty Index is down about 10% over the last year and about 15% from its peak in September, 2015.

One indicator does not tell the future, especially the stock market...but i thought it was interesting, especially for  classic car lovers. It may pay to wait until you buy that classic car...and the stock market.

Monday, May 22, 2017

Womack Weekly Commentary: May 22, 2017



Weekly Market Commentary


May 22, 2017

The Markets

How much is too much?

There has been no shortage of drama since the new administration took office – legislative setbacks, controversial hiring and firing, and fiery tweets on various topics. Regardless, U.S. investors and markets remained stalwart until last week when the CBOE Volatility Index (a.k.a. the fear gauge) jumped 46 percent higher and markets declined.

Financial Times explained:

“…a range of stock benchmarks made their biggest single-day fall since November, as the political controversy over Donald Trump ties with Russia undermined investors’ faith in the administration’s ability to enact its pro-growth policies. Markets subsequently steadied, but investors are primed for further volatility as the White House faces the distraction of a lengthy inquiry led by an independent special counsel.”

Markets recovered some ground late in the week as the influence of Washington, D.C. drama was offset by strong earnings news. On Friday, FactSet reported first quarter earnings results were in for 95 percent of the companies in the Standard & Poor’s 500 (S&P 500) Index and 75 percent had beaten estimates. Altogether, corporate earnings were about 6.0 percent higher than expected.

Earnings performance was particularly strong for companies in the Information Technology, Healthcare, and Financials sectors, and relatively weak for companies in the Telecom Services, Real Estate, and Consumer Staples sectors.

Brace yourself. Next week may be bouncy. The Federal Reserve Open Market Committee will release minutes from its most recent meeting. In addition, we’ll receive the administration’s proposed budget, along with new economic data and consumer sentiment readings.



Data as of 5/19/17
1-Week
Y-T-D
1-Year
3-Year
5-Year
10-Year
Standard & Poor's 500 (Domestic Stocks)
-0.4%
6.9%
16.8%
8.1%
12.6%
4.6%
Dow Jones Global ex-U.S.
0.4
11.9
17.9
-0.3
5.8
-1.1
10-year Treasury Note (Yield Only)
2.2
N/A
1.9
2.5
1.7
4.8
Gold (per ounce)
1.7
8.0
-0.1
-1.3
-4.7
6.6
Bloomberg Commodity Index
1.5
-3.2
0.1
-14.5
-9.0
-7.0
DJ Equity All REIT Total Return Index
1.4
2.6
7.7
8.8
10.8
5.5
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

Are you helping your adult children financially? In 2015, Pew Research investigated whether aging parents received more assistance from adult children or adult children received more assistance from parents. In the United States, Italy, and Germany, they found parents provide more financial assistance to their adult children than the adult children provide to their parents.

The survey found 39 percent of American parents had helped their adult children with errands, housework, or home repairs during the past twelve months, and 48 percent had helped with childcare. Almost two-thirds had provided monetary support. Financial help appeared to be contingent on parents’ circumstances. Those with higher household incomes were more likely to give money to adult children.

Becoming the ‘Bank of Mom and Dad’ can be a slippery slope, according to AARP Magazine. Since parent-child relationships can be emotionally fraught, it’s sometimes difficult to gauge when financial assistance is a good idea and when it’s not. Should you pay for a car repair? Help with the down payment on a home or apartment?  Foot the bill for a grandchild’s private school or college? Fund a lavish wedding? Help with medical bills?

The AARP suggested answering four questions, using a scale of 0 to 5, may help parents determine whether to give money to an adult child. The questions are:

      1. Will this investment add stability and security to my child's life? (0 = entirely optional; 5 = absolutely necessary) 
      2. Is this a short-term or one-time cash need, or is it something that could go on for years? (0 = guaranteed, long-term payouts; 5 = absolutely just one time)      
   3. Is there risk in the investment beyond the cash outlay, such as financial liability on a contract or damage to your credit? (0 = very high levels of risk; 5 = no additional risks)
               4. Can you lend or give this money without fear of damaging your relationship with your child? Or, will it cause tensions or resentments for the people involved? (0 = guaranteed tensions or resentments; 5 = everyone is happy)

If the combined answers total 13 or higher, the answer is yes, give money to your adult child. If the total is less than 13, you may want to think twice before opening your wallet.

Weekly Focus – Think About It

“Life is to be lived, not controlled; and humanity is won by continuing to play in face of certain defeat.”  
                                                                 --Ralph Ellison, American author of ‘Invisible Man’

Best regards,

Womack Investment Advisers, Inc.

WOMACK INVESTMENT ADVISERS, INC.
Oklahoma / Main Office: 1366 E. 15th Street - Edmond, OK  73013
California Office: 4660 La Jolla Village Dr., Ste. 500 - San Diego, CA 92122

Phone (405) 340-1717 - Toll Free (877) 340-1717

P.S.  Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added.
* These views are those of Peak Advisor Alliance, and not the presenting Representative or the Representative’s Broker/Dealer, and should not be construed as investment advice.
* This newsletter was prepared by Peak Advisor Alliance. Peak Advisor Alliance is not affiliated with the named broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indices referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* You cannot invest directly in an index.
* Consult your financial professional before making any investment decision.
* Stock investing involves risk including loss of principal.
* To unsubscribe from the Womack Weekly Commentary please reply to this e-mail with “Unsubscribe” in the subject line, or write us at raegan@womackadvisers.com
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