Q1 2019 Market Review

Jeff Weeks

April 5, 2019

Remember how bleak the markets seemed at the end of 2018? All of the worries about whether the Fed may have applied the brakes a tad too long, an escalating trade war with China, a mid-term shakeup in Washington DC, ongoing Brexit drama, and a eurozone confidence slowdown? While some of those issues remain unresolved, hopes for a trade deal with China and an about face toward dovishness by key central banks buoyed markets in spite of a Polar Vortex and another government shutdown that created more headwinds.

US growth stocks, both small and large, were the big winners of the quarter, but every equity category saw gains.

Jeff Weeks

March 15, 2019

Accountable Update

Guaranteed Annuities and other Three-Legged Chickens

Jeff Weeks

March 15, 2019

Accountable Update

One of my first Accountable Update posts was about Three-Legged Chickens. I was reminded of this recently as one of my clients dealt with a complicated Guaranteed Minimum Withdrawal Benefit (GMWB) variable deferred annuity that a “friend” sold him for his IRA several years ago.

As is usually the case with products like this, it sounded too good to be true when it was sold to him. He could invest in the stock market but have a guaranteed minimum return of 7%. If only it were so simple.

Long story short, after over a decade, the value of the underlying funds were not much more, if any, than his original investment. After a few years, he decided to transfer the account somewhere else, but had been discouraged from moving it due to surrender penalties that were as high as 7% of his account balance. While market conditions and fund selection contributed to the dismal performance, the fact that he was paying over 2% in annual fees was the primary culprit.

We ultimately found a solution for him after carefully reading his annuity contract. The insurance company now sends him a check each year for the rest of his life and we deposit that into his IRA within 60 days of the distribution so it can continue to grow tax deferred. If you want to hear all of the details, or if you have a similar product and feel stuck, get in touch to discuss.

If you are considering any new investments, especially those touting guarantees, let me tell you a story about a chicken…

Jeff Weeks

March 8, 2019

Accountable Update

What is the "Point"?

Jeff Weeks

March 8, 2019

Accountable Update

Where were you on November 14, 1972? I don’t recall much, as I was only 4 years old, but I do have a memory of it. We had one black & white TV in our home that was always tuned to Walter Cronkite at 5:30 PM on the local CBS affiliate (it was one of only four choices if you counted PBS).

My earliest memories are of watching Apollo rocket launches and splashdowns on that TV. While I don’t remember exactly why I was paying such close attention on this day, I suspect that my mom had mentioned that they may show the astronauts or the rocket pad at Cape Kennedy, as the Apollo 17 mission was scheduled around that time. While this tactic may have kept me out of her hair while she was cooking dinner, it also led to me to asking questions. A LOT of questions.

“What is Vietnam,” I would ask?

“A country,” would be the reply.

“What is a Watergate?”

“A hotel.”

But sometimes, the answer would just be, “Ask your father when he gets home.”

On this day, Mr. Cronkite had led the news with a headline that announced that the Dow Jones Industrial Average had just exceeded 1,000 points for the first time in history.

“Mom, what is the Dow?”

“It is where you can invest in companies,” she said.

“What does it mean to be at 1,000 points?’

“Ask your father.”