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Market Month: October 2019

The Markets (as of market close October 31, 2019) Investors continued to buy stocks, pushing values higher in October. Each of the benchmark indexes listed here posted solid monthly gains despite signs that the economy is slowing, both domestically and globally. Businesses remain hesitant to invest in nonresidential structures, equipment, and software, exports are lagging in volume, and prices remain subdued. Manufacturing continues to wane, and residential sales have been erratic at best. However, there may be headway in the negotiations between the United States and China, as the two economic giants try to resolve their ongoing trade war (although rhetoric from either side changes almost daily). The labor market continues to add new jobs, although wage inflation was muted last month. Since the beginning of the year, interest rates have been reduced by 75 basis points to their lowest levels since May 2018. The last day of the month saw the House of Representatives pass a resolution establishing a framewor ...

Tips for Managing Your Holiday Spending

Like almost everything else these days, the holidays have become a barrage of options and choices, with nearly limitless opportunities to overspend. Here are some tips to help you make sure your family's spending remains in check this holiday season. Develop a spending strategy First and foremost, develop a budget. Involving family members will help you establish and maintain realistic expectations at the outset. Remember to include not just gifts, but also holiday meals and parties, travel, greeting cards and stamps, gift wrap, decorations, and any other category you deem necessary. This is also a good time to commit to using cash or charging no more than you can pay off in one month. Next, devise a method of tracking all your purchases, receipts, gift recipients, and the locations of hidden gifts that you might otherwise forget about. This will make life easier as the chaos ramps up. Review your credit cards to see if you have any perks. Could you use earned points for travel, or cash-back ...

Ten Year-End Tax Tips for 2019

Here are 10 things to consider as you weigh potential tax moves between now and the end of the year. 1. Set aside time to plan Effective planning requires that you have a good understanding of your current tax situation, as well as a reasonable estimate of how your circumstances might change next year. There's a real opportunity for tax savings if you'll be paying taxes at a lower rate in one year than in the other. However, the window for most tax-saving moves closes on December 31, so don't procrastinate. 2. Defer income to next year Consider opportunities to defer income to 2020, particularly if you think you may be in a lower tax bracket then. For example, you may be able to defer a year-end bonus or delay the collection of business debts, rents, and payments for services. Doing so may enable you to postpone payment of tax on the income until next year. 3. Accelerate deductions You might also look for opportunities to accelerate deductions into the current tax year. If you ...

Don't Want to End Up in Business with a Total Stranger? Have the Right Documents in Place.

One of the keys to happiness in life is marrying the right person. We guard ourselves against marrying the wrong person and we certainly avoid marrying people at random. Likewise, a key to successful business is working with the right partners. Much like the perfect union, business partners often rely on each other for the success of their business and their economic prosperity. Business owners are careful to avoid going into business with the wrong person and they do not pick random partners. Business ownership is more fluid than marriage. Partners may come and go from a business by buying and selling equity in the venture. Often, these moves are constrained by carefully negotiated partnership agreements, and new partners only enter the business with approval of existing partners. Sometimes, however, the law will dictate that a partner must transfer his or her equity to an unrelated party, allowing new partners into a business without approval of the other partners. David Frederick, J.D., LL ...

A Lifetime of Retirement Saving

In the 20th century, the American retirement system was supported by three financial legs: employer pensions, Social Security, and an employee’s personal savings. Essentially, employees shared the responsibility of saving for retirement with their employers and the federal government. Life is different in the 21st century. Now employer pensions are all but history, and there is constant concern for the viability of Social Security. Employees are now principally responsible for saving for their own retirement. Fortunately, employees today tend to have broad access to retirement accounts such as 401(k) accounts, Individual Retirement Accounts (IRAs), and Roth accounts. These accounts provide substantial incentives and benefits for retirement savings. Even with these tools, retirement saving is a lifetime endeavor that requires constant diligence and perseverance. David Frederick, J.D., LL.M., SVP First Bank Wealth Management The Early Years Retirement savings is most effective ...

Quarterly Market Review (Third Quarter 2019)

  This report features world capital market performance and a timeline of events for the past quarter. It begins with a global overview, then features the returns of stock and bond asset classes in the US and international markets. The report also illustrates the impact of globally diversified portfolios and features a quarterly topic. Overview: Market Summary World Stock Market Performance World Asset Classes US Stocks International Developed Stocks Emerging Markets Stocks Select Market Performance Select Currency Performance vs. US Dollar Real Estate Investment Trusts (REITs) Commodities Fixed Income Global Fixed Income Impact of Diversification Quarterly Topic: Timing Isn’t Everything Quarterly Market Summary Index Returns       Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfol ...

August Market Overview - 2019

The Markets (as of market close August 30, 2019) Despite a closing push, August closed on a weak note for stocks, ending a tumultuous month marked by high volatility. Investors moved away from stocks, fearing that the ongoing U.S.-China trade war would negatively impact domestic and global economies. As a result, gold prices surged and long-term bond yields plummeted as prices rose. Despite the wide market swings, consumers spent more of their income as the job market remained strong. By the close of trading on the last day of the month, each of the benchmark indexes listed here fell, with the small caps of the Russell 2000 being hit the hardest, followed by the Global Dow, the Nasdaq, the S&P 500, and the Dow, which lost over 1.70% from its July closing value. Year-to-date, each of the indexes remain ahead of their respective 2018 closing prices. However, compared to their values at the end of August 2018, the Dow and the S&P 500 are up 1.70% and 0.86%, respectively, while the Nasdaq (-1.80%), ...

Recent Market Volatility

August 2019 In recent days the increase in volatility in the stock market has resulted in renewed anxiety for many investors. While it may be difficult to remain calm during a substantial market decline, it is important to remember that volatility is a normal part of investing. Additionally, for long-term investors, reacting emotionally to volatile markets may be more detrimental to portfolio performance than the drawdown itself. INTRA-YEAR DECLINES Exhibit 1 shows calendar year returns for the US stock market since 1979, as well as the largest intra-year declines that occurred during a given year. During this period, the average intra-year decline was about 14%. About half of the years observed had declines of more than 10%, and around a third had declines of more than 15%. Despite substantial intra-year drops, calendar year returns were positive in 33 years out of the 40 examined. This goes to show just how common market declines are and how difficult it is to say whether a large intra-year dec ...

Handling a Dispute with Your Insurance Company

From time to time, you may need to resolve a dispute with your insurance company. Disagreements often arise about the amount due on a bill, the amount the company paid on a claim, or the nonpayment of a claim. Here are some steps that can help you resolve a dispute efficiently and agreeably. Know your rights The insurance industry is highly regulated. Your state has laws that dictate what insurance companies can and cannot do when it comes to bill collecting, settling claims, and other matters. The law may be called the Unfair Insurance Practices Act, the Unfair Claims Settlement Practices Act, or something similar. To learn about the laws in your state, call your state insurance department or check its website. Most states have the following regulations in place: An insurance company cannot misrepresent your policy. In other words, the company cannot knowingly tell you that the policy means something that it doesn't actually mean. In addition, the company cannot change the policy without ...

Market Month: July 2019

The Markets (as of market close July 31, 2019) Stocks ran hot and cold in July, influenced by worsening global economic conditions, ongoing trade negotiations with China, and lagging domestic business investment. While the Fed's decision to reduce short-term interest rates was not unexpected, stocks were sent reeling, closing out the month on a bit of a sour note. Despite analysts and Wall Street predicting the interest rate reduction, some experts questioned the timing, particularly in the event of a deeper economic downturn in the future. Corporate earnings reports in July were generally positive, driving stock prices higher. Low unemployment, increased consumer spending, and moderate wage increases helped insulate domestic investors from an otherwise global economic downturn. By the close of trading on the last day of the month, only the Global Dow was unable to surpass its June closing value. Otherwise, each of the benchmark indexes listed here posted monthly gains, led by the Nasdaq and the S&a ...

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All First Bank blog information and content is strictly informational. It is not intended to be specific investment, tax, or legal advice. If you need detailed financial, investment, or tax advice, please contact a First Bank qualified professional. Please note, First Bank occasionally shares third-party content we find to be relevant and helpful to our audiences.