Category: Nonprofit Investing

Nonprofit Investing

Financial News and Portfolio Management Discussion through December 9th

All the news you need to stay informed about what’s currently driving the market – courtesy of Raffa Wealth Management, LLC.

US stocks notched another record high on a positive jobs report and tax overhaul optimism. The S&P 500 and Dow both gained 0.4% for the week. Abroad, Europe climbed 1.4% and Japan ticked down 0.1% for the week. The yield on the 10 year Treasury finished the week at 2.38% up slightly from the previous week. Bitcoin mania continued over the week rising over 40% in 40 hours at one point.  Article

The US jobs report beat expectations with 228,000 new hires compared to the 195,000 expected. The unemployment held steady at its 18 year low of 4.1%. Wage growth, however, disappointed rising 2.5% vs. the expected 2.6%.  Article

Greece reached a deal with its creditors to payout another $5 billion euros of its bailout.

An agreement was reached between the UK and the EU after six months of talks allowing for negotiations to move forward on a trade deal and a post Brexit transitional period.

A revision to Japan’s third quarter GDP growth showed that GDP was stronger than expected and the country has now posted 7 straight quarters of growth.

GE will cut 12,000 jobs or 18% of its workforce form its power business.

 

About

Raffa Wealth Management is an independent investment advisor providing nonprofit organizations, high net-worth investors, and qualified retirement plans with a full range of investment consulting services.  We were established to fill the need for transparency, clarity, and vision in the professional management of investment assets.   Visit us at www.raffawealth.com

 

What a Year in the Market. Is it Time to Make Changes for 2018?

It has been a fantastic year in the stock market – so far! This statement could be uttered by people all over the world in 2017.

In the US, stocks have gained 19.9% for the year through November. The average long tem rate of return for the US stock market has been 10% so the market is up nearly double the average. Stock market analysts at the major banks were calling for returns of about 6% before the year, well below actual results.

In international markets, after years of trailing US stocks, they broke out with a 24.5% return through November. Similarly, the long term return of international stocks has been about 10%, so again 2017 has blown past the historical average. Results were particularly impressive in emerging markets. After many analysts thought the asset class could show some growth entering 2017, emerging markets have been by far the best major asset class in 2017 soaring 32.8%.

Finally, fixed income has gained 3.1% for the year despite two Fed interest rate increases to date and likely a third this month. Interest rates, as measured by the 10 year Treasury yield, have instead come down over the course of the year. The yield started the year at 2.45% and is now at 2.33% (when yields fall, existing bond values climb). Again, the average projection by the major financial prognosticators was for bonds to post a negative return. They expected interest rates to rise with the 10 year Treasury yield at 3.0% at year end – substantially off from what occurred.

So how could so many analysts and economists have got it so wrong? The simple answer is, no one knows the future. Not even the top members of the field. This has proven out year after year. Sure, sometimes a market guru gets a call right and the press rushes to get more predictions. Meanwhile the many other inaccurate predictions drift form memory. This article does a good job of tackling how these predictions are covered.

What lies ahead for 2018? I advise against listening to the “experts” who are making their predictions now about the next hot asset class, or their year end target for the S&P 500. As you can see from the above, they were wrong by a wide margin this past year. Instead, the best course of action is to focus on your circumstances and whether or not there have been any changes that might drive a change in your portfolio. Has there been a change in time horizon for your portfolio or a change in risk tolerance? Is more/less cash needed throughout the year? While it may be tough to ignore the pundits in the financial press, concentrating on your own ability and willingness to take risk should be your main focus and let that drive changes in your investments. By remaining disciplined to your target asset allocation and only making adjustments if there have been changes in any of the above issues, it best positions you to achieve your financial goals.

Index Performance Nov. YTDTrl 1 Yr
US Stock (Russell 3000)3.04%19.93%22.27%
Foreign Stock (FTSE AW ex US)0.93%24.54%27.94%
Total US Bond Mkt. (BarCap Aggregate)-0.13%3.07%3.21%
Short US Gov. Bonds (BarCap Gov 1-5 Yr)-0.29%0.70%0.71%
Municipal Bonds (BarCap 1-10yr Muni)-0.92%2.83%3.58%
Cash (ML 3Month T-Bill)0.08%0.74%0.79%

Photo courtesy Anthony Quintano.

About
Raffa Wealth Management is an independent investment advisor providing nonprofit organizations, high net-worth investors, and qualified retirement plans with a full range of investment consulting services.  We were established to fill the need for transparency, clarity, and vision in the professional management of investment assets.   Visit us at www.raffawealth.com

 

There is no guarantee that any investment strategy, including those described here, will be successful. Any investment or investment strategy can lose money. Past performance does not guarantee or predict future results.  You should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Raffa Wealth Management, LLC.  This information was gathered from reliable sources but we cannot guarantee accuracy.  Indexes do not reflect the fees associated with actual investments and such fees would reduce the performance illustrated.

Financial News and Portfolio Management Discussion through December 2nd

All the news you need to stay informed about what’s currently driving the market – courtesy of Raffa Wealth Management, LLC.

US stocks rose over the week on increasing expectations for tax reform. Both the Senate and House approved separate tax reform bills, which now need to be reconciled. The S&P 500 gained 1.5% and the Dow surged 2.9% for the week. Internationally, Europe fell 0.7%, while Japan rose 1.4% for the week. The yield on the 10 year Treasury ended the week at 2.36% up slightly over the previous week.  Article

The number of people visiting stores on Black Friday fell 4% while the online purchases rose 18%.

New home sales rose in October for the second month in a row driven by entry level buyers. They are up 19% over the past year and at a 10 year high.

Total economic output in the third quarter ran slightly higher than a sustainable level meaning the economy was operating at its full potential for the first time in a decade.

Third quarter GDP was revised up to 3.3% from 3.0%.

OPEC and a Russian group of big oil producers agreed to limit oil output through the end of 2018. They are pledging to withhold about 2% of the worlds daily output.

Consumer spending rose 0.3% in October after jumping 0.9% in September.

Consumer confidence has risen five straight months and is at a 17 year high.

Bitcoin has surged over the year returning over 955% and surpassing the $11,000 mark.

Meredith agreed to pay $1.85 billion for Time.

 

About

Raffa Wealth Management is an independent investment advisor providing nonprofit organizations, high net-worth investors, and qualified retirement plans with a full range of investment consulting services.  We were established to fill the need for transparency, clarity, and vision in the professional management of investment assets.   Visit us at www.raffawealth.com

 

Financial News and Portfolio Management Discussion through November 25th

All the news you need to stay informed about what’s currently driving the market – courtesy of Raffa Wealth Management, LLC.

US Stocks closed the week at new all time highs driven by continued strong corporate earnings and global growth. The S&P 500 rose 0.9%, closing above 2,600 for the first time, and the Dow climbed 0.9% for the week as well. Internationally, Japan and Europe gained 0.7% for the week. The yield on the 10 year Treasury ended the week slightly lower at 2.34%. Oil reached its highest close since June 2015 at $58.95 a barrel on lower stockpiles and expected production cuts.  Article

Minutes from the Fed’s end of October meeting showed they remained on pace for a December rate increase and more rate increases in 2018.

The Justice Dept. sued to block the AT&T Time Warner merger.

HP CEO Meg Whitman announced she would step down early in 2018.

Companies are on pace to spend the least amount on buybacks since 2012.

Loan growth at US banks it hits lowest level since 2013 marking the sixth straight quarter of decline.

 

 

About

Raffa Wealth Management is an independent investment advisor providing nonprofit organizations, high net-worth investors, and qualified retirement plans with a full range of investment consulting services.  We were established to fill the need for transparency, clarity, and vision in the professional management of investment assets.   Visit us at www.raffawealth.com

 

Financial News and Portfolio Management Discussion through November 18th

All the news you need to stay informed about what’s currently driving the market – courtesy of Raffa Wealth Management, LLC.

US stocks posted a slight decline for the week with question about the tax overhaul weighing on the market. The S&P 500 fell 0.1% and the Dow dropped 0.3% for the week. Abroad, Japan and Europe slipped 1.3% for the week. The yield on the 10 year Treasury bond eased to finish at 2.35%.  Article

Japan’s GDP grew at 1.4% in the third quarter marking its longest growth streak in 16 years.

Total US household debt rose for the 13th straight quarter.

The House passed its tax overhaul bill, however passage in the Senate is uncertain.

GE announced plans to undergo a massive restructuring cutting its dividend by $4 billion, cutting board seats and streamline operations.

Target’s sales rose, but it issued a disappointing forecast.

Wal-Mart posted its strongest quarterly sales growth in almost a decade.

 

About

Raffa Wealth Management is an independent investment advisor providing nonprofit organizations, high net-worth investors, and qualified retirement plans with a full range of investment consulting services.  We were established to fill the need for transparency, clarity, and vision in the professional management of investment assets.   Visit us at www.raffawealth.com