One of the first pieces of advice I received when I was studying to become a financial planner was, “Buy Low, Sell High”. While this seems like very simple advice, it is extremely difficult to do. As an example, you buy an investment and it drops in value, you buy more and it declines from there. Do you say, “if things continues at this rate I will be broke soon” or do you say, “this is great I better buy more”? A lot of people laugh when I make that last statement. The reason is simple BUYING LOW IS NOT EASY.
After a disappointing January, equities rebounded in fine style in February. The S&P 500 and Russell 2000 hit new all-time highs, and the S&P had its strongest month since October 2011. The Nasdaq continued to be the strongest year-to-date performer, while a temporary bailout extension for Greece helped benefit the Global Dow.
The announcement and press conference following the Federal Reserve's March meeting will be a focus for investors, who will watch to see if language about "patience" disappears from the discussion of future interest rate increases.
(Un)Happy New Year: Fresh uncertainties in Europe, slowing economic growth, anticipation of a looming Federal Reserve rate hike, and a stronger dollar all contributed to a volatile month for equities. The losses weren't good news for believers in the January Effect (the idea that equities' behavior in January suggests what might happen during the rest of the year). However, it might also be useful to remember that the S&P 500 lost 3.6% last January but ended 2014 up 11.4%.
Charitable giving can play an important role in many estate plans. Philanthropy cannot only give you great personal satisfaction, it can also give you a current income tax deduction, let you avoid capital gains tax, and reduce the amount of taxes your estate may owe when you die.
Equities generally continued to push upward in November. The small caps of the Russell 2000 were the exception; they ended the month flat and were up less than 1% for the year. However, the S&P 500 and the Dow industrials once again hit new record levels, while the Nasdaq increased its year-to-date lead. Meanwhile, the Global Dow had its best month since February.