It's been 8 days since the Presidential Election and financial markets have had quite a wild ride. On election night, S&P futures traded down limit of -5%. It appeared that markets would react strongly to the downside much like after the Brexit vote. However, the markets quickly digested the surprising Trump decision and markets have traded sharply higher on hopes that Trump's policies will be inflationary and stimulate the economy. While it is too early to tell what he will be able to accomplish, financial markets have wagered some early bets on who the winners and losers will be. The early winner is financial stocks. Trump is widely expected to roll back the regulations of Dodd-Frank which were enacted after the financial crisis of 2008. Financials are also benefiting from the rise in long term interest rates which benefits their net interest margin and equals larger profits. The sharp move in interest rates caused headaches for high dividend stocks which were the hardest hit with REITs, consumer staples and utilities all in the red.
Last week's Presidential election brought volatility to financial markets and the most damage was inflicted on the Mexican Peso. With threats of renegotiating NAFTA and taxing Mexicans citizens to pay for a border wall, the Mexican Peso dropped over 10% in one day and became the worst performing emerging market currency in 2016. While this is terrible if you live south of the border, it can mean great things if you are planning a vacation. Since last year, the Peso has fallen over 23% which means huge potential savings for American travelers! It's time to pack your bags and brush up on your Spanish because 2017 should provide money saving opportunities for the savviest travelers. Here are 3 tips on planning your future getaway.
The subject of investment advisory fees can be confusing. While researching online, I observed that it is difficult to find average fees published anywhere so I hope that you find this blog post helpful.
This week, I am inspired by Walt Disney World, a.k.a. "The Most Magical Place On Earth," where we spent Spring vacation for a family reunion with my wife's family and some friends. While waiting in lines and traveling to and from the park, I had time to reflect upon the success of Disney and how Walt Disney's philosophy can be applied to a successful investment strategy.
This weekend millions of people will gather around the United States and join together in the fight to end premature birth. The March for Babies is held yearly in over a thousand communities with the proceeds going to fund March of Dimes research to prevent premature births, birth defects and infant mortality.
This will be the 3rd year that my family participates in this wonderful event. Last year Runnymede was a top corporate fundraiser in Morris County and once again we are hoping to be a big contributor. If you would like to help with a donation, any amount would help the cause, even if only a dime.
Here are 3 reasons why I walk at the March for Babies:
Thanks to the Fed's zero interest rate policy (ZIRP), baby boomers are facing a much tougher road to retirement than those in the past. While it may seem like an eternity, it was only 10 years ago when you could park your money in a savings account and earn interest of 5%. Retirees who worked hard and saved their money could safely invest their assets in retirement and not have to worry about suffering any losses.Today is an especially challenging environment for investors who are looking to generate a safe income stream. No Treasury bond will pay a safe 5% return as a 30-year Treasury Bond yields just 2.69%. This is causing a massive gap between what boomers say they want in retirement and what they're doing to make it happen.
Many media pundits like to skew numbers to fit their narrative and a lot of people out there believe the Wall Street storytelling that "earnings excluding energy are fine" and "sales excluding currency are growing."
Well we disagree. It's too bad that in the real world, many energy companies are nearing bankruptcy and multinational corporations have to deal with currency fluctuations. Therefore, investors can't simply ignore all the bad news and go about life hunky dory. The ugly truth is that S&P reported earnings have declined for 5 consecutive quarters and are in a full blown earnings recession.
As we near a close to 2015, it is time to look forward to 2016. We have done this in 2014 and 2015, so it is becoming a tradition to see which strategists did well and which missed the mark. What do the experts think will happen in 2016 and should we even care.
Perhaps you are familiar with Philip Telock's landmark UC Berkeley study that looked at 82,000 predictions over 25 years by 300 leading economists. It turned out that their so called expert views were no better than random guesses, and worse, the more famous, the less accurate the prediction.
Last year the strategists predicted a weak bull market for 2015, but it turned out they were still too optimistic. Their average forecast was for a 6% gain in the S&P 500 to 2218. However as of today the S&P 500 stands at 2074 which is down slightly from its 2089 close at year end 2014. The two that were closest to the mark were Goldman's David Kostin and Barclays' Jonathan Glionna who both forecast a year end close of 2100.
Officially approved by Congress on December 18th, 2015, there will be no more waiting until the final weeks of December (or beyond) to see if Congress will extend the Qualified Charitable Distribution from IRAs. The Protecting Americans from Tax Hikes (PATH) Act of 2015 includes a provision to permanently extend the ability of individuals at least 70½ years of age to exclude from gross income qualified charitable distributions from Individual Retirement Accounts (IRAs) of up to $100,000 per taxpayer in any tax year.
#GivingTuesday refers to the Tuesday after Thanksgiving and was a movement started in 2012 by the 92nd Street Y and the United Nations Foundation. This national day of giving was a response to the commercialization and consumerism that created Black Friday and Cyber Monday. #GivingTuesday has seen significant growth since 2012. Last year, it brought in over $45 million, a 63% increase over 2013. While this is impressive growth, it is merely a rounding error in comparison to Black Friday and Cyber Monday which are expected to bring in $13 billion in sales in 2015. Let's help flip that script and raise more money for charities in 2015!
IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Runnymede Capital Management, Inc.), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Runnymede Capital Management, Inc. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Runnymede Capital Management, Inc. is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of Runnymede Capital Management, Inc.’s current written disclosure statement discussing our advisory services and fees is available for review upon request.