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Agenda
Is your 401(k) plan customized to meet the need of your employees? Plan design can be complex, but learning the basics can help you work better with your trusted advisor to move participants closer to retirement readiness.

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Why a GIPS Audit Matters

Why a GIPS Audit Matters

A firm that is GIPS compliant must abide by high ethical standards.

 

Provided by 

 

What are GIPS, and why should investors seek firms that comply with them? To put it simply, when an investment management company commits to undergoing a GIPS audit, it affirms its commitment to upholding ethical standards agreed upon by investment firms worldwide.

 

GIPS stands for Global Investment Performance Standards. These criteria were introduced in 1999 by the Chartered Financial Analyst Institute, which awards its CFA designation to select financial services industry professionals only after rigorous exams and a course of study.1

    

Investment firms that abide by GIPS demonstrate that they are highly principled. When institutional and individual investors look for investment companies to manage their assets, they appreciate transparency and a straightforward measurement of investment results. GIPS directs investment firms on how to calculate and present those results to current and potential clients.

 

When a firm chooses to comply with GIPS, it also opens itself to third-party audits. It must hire an independent verifier to evaluate its degree of compliance with GIPS, and that verifier must follow standards set forth in the GIPS.2

 

You should ask for a GIPS-audited report from any firm you want to do business with. Accept nothing less, for when an investment management company agrees to upholding the GIPS, you know that the firm commits itself to fully disclosing investment results as well as fairly representing them. GIPS require a firm to present at least five years of GIPS-compliant investing history, rising to a minimum of ten years as the firm matures. If the firm has not yet been in existence for five years, it must show the entirety of its track record in investment management.3

 

Investment management firms that aim to serve institutional investors absolutely need to comply with GIPS. Non-compliance not only raises questions about transparency and performance results, but also questions about competence. 

 

Whether you are investing on behalf of your household or on behalf of a university, trust, corporation, or pension fund, you want to select a firm that calculates investment results by global standards, discloses how fees impact investment performance, and tells you clearly how well or poorly portfolios grouped under a single investment objective are returning. Demand nothing less and look for a firm that voluntarily undergoes periodic GIPS audits.3

 

Gregg A Hancock Jr.
Vice President SENB Wealth Management
Trust Business Development Officer
SENB Wealth Management
309-757-0700
wealthmanagement@senb.com
www.senb.com

 

This material was prepared by MarketingPro, Inc.

Citations.

1 – investopedia.com/terms/g/gips.asp [2/13/18]

2 – gipsstandards.org/compliance/pages/verification.aspx [2/13/18]

3 – investopedia.com/articles/07/gips.asp [2/13/18]

 

WEEKLY ECONOMIC UPDATE, February 20th, 2018

­

WEEKLY ECONOMIC UPDATE

WEEKLY QUOTE

 

“Courage is resistance to fear, mastery of fear – not absence of fear.”

     

– Mark Twain

      

   

WEEKLY TIP

 

If at all possible, avoid taking a loan from your workplace retirement plan. If you withdraw funds from it before age 59½, you will usually incur a penalty, and you will be drawing down money that should be left to grow and compound in a tax-favored account.

     

  

WEEKLY RIDDLE

 

You can crack it, share it, tell it, make it, or play it. What is it? Can you name it?

 

 

Last week’s riddle:

Cheryl was driving a black car. Its lights were off, and there was no moonlight. A cat walked into the middle of the road. How did she know to stop?

 

Last week’s answer:

She was driving in the daylight.

 

 

February 19, 2018

   

INFLATION SUDDENLY INTENSIFIES

The Consumer Price Index rose 0.5% in January, its greatest month-over-month advance since January 2017. Core inflation (minus food and energy prices) increased 0.3%, marking the largest monthly gain in almost 13 years.1

 

RETAIL SALES PACE SLOWS

Contradicting perceptions that the economy might be overheating, retail purchases fell 0.3% in January. Minus car buying, retail sales would have been unchanged for a second straight month, as a Department of Commerce revision rendered the previously announced December gain flat.2

 

DEVELOPERS BUILT MORE IN JANUARY

Groundbreaking increased 9.7% last month, according to a Census Bureau report. The first month of the year also brought a 7.4% rise in building permits.3

 

TAILWINDS RETURN TO WALL STREET

In the wake of the correction, the major indices rebounded nicely last week. The Nasdaq Composite led the way, rising 5.31% to a Friday settlement of 7,239.47. Bulls also sent the Dow Industrials and S&P 500 much higher: the Dow gained 4.25% on the week to 25,219.38, while the S&P rose 4.30% to 2,732.22. The CBOE VIX volatility index is certainly on a wild ride: it fell 33.52% across last week to 19.32, but remained up 75.00% YTD. In the commodities sector, oil staged a notable comeback, rallying 4.2% in five days to finish the week at $61.68 on the NYMEX.4,5

 

THIS WEEK: Monday is Presidents Day: U.S. financial markets are closed. The earnings roll call for Tuesday includes results from Cardtronics, Cracker Barrel, Domino’s Pizza, Duke Energy, Fluor, Fresh Del Monte Produce, Home Depot, HSBC, Medtronic, Noble Energy, Public Storage, Sempra Energy, Transocean, and Walmart. On Wednesday, Wall Street considers January existing home sales, minutes from the Federal Reserve’s January policy meeting, and earnings from Avis Budget Group, Cheesecake Factory, Dish Network, Garmin, Kaiser Aluminum, Owens Corning, Pandora Media, Roku, Sunoco, and Wendy’s. A new initial jobless claims report arrives on Thursday, plus earnings news from Bloomin’ Brands, Chesapeake Energy, Edison International, First Solar, GoDaddy, Herbalife, Hewlett-Packard, Hormel, Intuit, Planet Fitness, Wayfair, and Wingstop. Huntsman and KBR present earnings Friday.

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+2.02

+22.31

+16.07

+10.42

NASDAQ

+4.87

+24.50

+25.36

+21.18

S&P 500

+2.19

+16.40

+15.96

+10.24

REAL YIELD

2/16 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.78%

0.43%

-0.53%

1.48%

 

Sources: wsj.com, bigcharts.com, treasury.gov – 2/16/184,6,7,8

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

 

 

Please feel free to forward this article to family, friends or colleagues. If you would like us to add them to our distribution list, please reply with their address. We will contact them first and request their permission to add them to our list.

 

This material was prepared by MarketingPro, Inc.

Citations.

1 – thestreet.com/story/14488773/1/bond-yields-surge-as-investors-anticipate-rate-hikes-following-inflation-uptick.html [2/14/18]

2 – marketwatch.com/story/us-retail-sales-slump-in-january—and-december-doesnt-look-so-good-now-either-2018-02-14/ [2/16/18] 

3 – investing.com/economic-calendar/ [2/16/18]

4 – markets.wsj.com/us [2/16/18]

5 – marketwatch.com/story/us-oil-benchmark-aims-for-3-day-win-streak-ahead-of-rig-data-2018-02-16 [2/16/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F16%2F17&x=0&y=0 [2/16/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F16%2F17&x=0&y=0 [2/16/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F16%2F17&x=0&y=0 [2/16/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F15%2F13&x=0&y=0 [2/16/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F15%2F13&x=0&y=0 [2/16/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F15%2F13&x=0&y=0 [2/16/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F15%2F08&x=0&y=0 [2/16/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F15%2F08&x=0&y=0 [2/16/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F15%2F08&x=0&y=0 [2/16/18]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [2/16/18]

8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [2/16/18] 

 

 

Keeping This Correction in Perspective

Keeping This Correction in Perspective

After 20 months of relative calm, this volatility needs to be taken in stride.

 

Provided by

 

Are you upset by what is happening on Wall Street? It may help to see this pullback within a big-picture context. Corrections have become so rare as of late that when one occurs, emotion threatens to influence investment decisions.

 

So far, February has been a rough month for equities. At the close on February 8, the Dow Jones Industrial Average was officially in correction territory after a slide occurred, which included two 1,000-point descents within four days. Additionally, nearly every U.S. equity index had lost 7% or more in the past five trading sessions.1,2

 

This drop is troubling, yes – but not as unsettling as it may first seem. The market has been up for so long that it is easy to dismiss the reality of its occasional downs. Last year’s quiet trading climate could legitimately be characterized as “abnormal.”

 

Prior to this current retreat, the S&P 500 had not fallen 5% from a peak since June 2016. It went more than 400 trading days without such a slump, setting a record. In this same calm stretch, the index also went through its longest period without a dip of 3% or more.3

 

During a typical year, there are five trading days when equities descend at least 2%, plus one correction of about 14%. On average, equities take roughly a 30% fall every five years.4

 

This year, the kind of volatility normally seen in the market has returned. It may feel like a shock after so much smooth sailing, but it is the norm – and while the Dow’s recent daily losses are numerically unprecedented, they are also proportionate with the level of the index.

 

A few things are worth remembering at this juncture. One, Wall Street has had more good years than bad ones, as any casual glance at its history will reveal. This year may turn out well. Two, something similar happened in the mid-1990s – a long, easygoing bull run was suddenly disrupted by major volatility. That bull market kept going, though – it lasted four more years, and the S&P 500 doubled along the way. Three, this market needed to cool off; in the minds of many analysts, valuations had become too expensive. Four, the economy is in excellent shape. Five, earnings are living up to expectations. Last week, Thomson Reuters noted that 78% of the S&P firms that had reported this earnings season had topped profit forecasts.1,3

      

Wall Street may be turbulent, but you can stay calm. You could even look at this as a buying opportunity. Assuming this is a correction and nothing more, the market may regain its footing more quickly than we think. Typically, the average correction lasts less than 90 days. Consider any moves carefully – and talk with a financial professional if you have concerns or anxieties about this volatile episode for the markets.5

Gregg A Hancock
Vice President SENB Wealth Management
Trust Business Development Officer
SENB Wealth Management
309-757-0700
wealthmanagement@senb.com
www.senb.com

 

This material was prepared by MarketingPro, Inc.

 

Citations.

1 – cnbc.com/2018/02/08/us-stock-futures-dow-data-earnings-fed-speeches-market-sell-off-and-politics-on-the-agenda.html [2/8/18]

2 – markets.wsj.com/us [2/8/18]

3 – money.cnn.com/2018/01/22/investing/stock-market-today-extreme-calm-pullback/index.html [1/22/18]

4 – marketwatch.com/story/panicked-about-a-stock-market-crash-what-you-need-to-remember-can-fit-on-a-single-notecard-2018-02-08 [2/8/18]

5 – cnbc.com/2018/02/07/the-quicker-the-sell-off-the-faster-we-recover-says-market-watcher.html [2/7/18]

 

WEEKLY ECONOMIC UPDATE, February 12th, 2018

­

WEEKLY ECONOMIC UPDATE

WEEKLY QUOTE

 

“Understanding human needs is half the job of meeting them.”

     

– Adlai Stevenson

      

   

WEEKLY TIP

 

Risk and reward go hand in hand when investing. For that reason, it is crucial to define your risk tolerance limits. When investors lose their tolerance, they can make emotional decisions they may later regret.

     

  

WEEKLY RIDDLE

 

Cheryl was driving a black car. Its lights were off, and there was no moonlight. A cat walked into the middle of the road. How did she know to stop?

 

 

Last week’s riddle:

No matter the time of day, it can open what you can’t. If not for it, on your front porch you would stand. What is it? 

 

Last week’s answer:

A key.

 

 

February 12, 2018

   

WALL STREET SEES ITS FIRST CORRECTION SINCE 2016

On Friday, the S&P 500 settled at 2,619.55, down 5.16% for the week. Thursday, it entered correction territory just nine days after its January 26 record close. The Dow Jones Industrial Average made even bigger headlines last week by taking two 1,000-point drops within four days, the second occurring Thursday.1,2

 

Last Monday, U.S. equities took their largest single-session fall in more than six years as higher interest rates for bonds and inflation concerns strengthened selling pressure. To add to the anxiety, two of the financial industry’s top ‘roboadvisor’ websites crashed during Monday’s rout, frustrating individual investors. The Dow retreated 5.21% for the week to 24,190.90, while the Nasdaq Composite slid 5.06% to 6,874.49.1,3

 

SERVICE SECTOR GREW RAPIDLY IN JANUARY

At a mark of 59.9, the Institute for Supply Management’s latest purchasing manager index for the service sector bettered the forecast of analysts polled by Briefing.com, who expected a small climb to 56.7. The index was at 56.0 for December.4

 

EARNINGS LOOK STRONG

FactSet’s latest analysis of corporate profits shows a 14% Q4 earnings growth rate and a Q4 sales growth rate of 8.0% for the S&P 500. Through Friday, 65% of S&P 500 companies had reported quarterly results.5

 

A RETREAT FOR CRUDE

Oil also had a poor week, descending 9.6% in five trading days to a Friday NYMEX settlement price of $59.20. It rebounded Friday from an intraday low of $58.07.6

 

THIS WEEK: Heineken and Loews Corp. announce earnings on Monday. Baidu, Blue Apron, Denny’s, Kemper, MetLife, PepsiCo, Under Armour, Voya Financial, and Weibo present results Tuesday. Investors review January’s Consumer Price Index and retail sales report Wednesday, along with earnings news from Agilent Technologies, Applied Materials, Cisco, Credit Suisse, Hilton Worldwide Holdings, Hyatt Hotels, Marathon Oil, Marriott, Molson Coors, TripAdvisor, and Wyndham Worldwide. On Thursday, the earnings parade includes Avon, CBS, Nestlé, Shake Shack, Sonoco, and Waste Management; reports on initial jobless claims and January wholesale inflation also surface. The University of Michigan’s initial February consumer sentiment index arrives Friday, plus data on January construction activity and industrial production and earnings from Campbell Soup, Coca-Cola, Deere & Co., Enbridge, J.M. Smucker, Kraft Heinz, Ryder Systems, and Vulcan Materials.

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

-2.14

+19.92

+14.58

+9.86

NASDAQ

-0.42

+20.28

+23.05

+19.83

S&P 500

-2.02

+13.51

+14.51

+9.68

REAL YIELD

2/9 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.78%

0.41%

-0.57%

1.36%

 

Sources: wsj.com, bigcharts.com, treasury.gov – 2/9/181,7,8,9

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

 

 

Please feel free to forward this article to family, friends or colleagues. If you would like us to add them to our distribution list, please reply with their address. We will contact them first and request their permission to add them to our list.

 

This material was prepared by MarketingPro.

 

Citations.

1 – markets.wsj.com/us [2/9/18]

2 – seattletimes.com/business/us-stocks-snap-higher-a-day-after-entering-a-correction/ [2/9/18] 

3 – businessinsider.com/betterment-and-wealthfront-crash-during-market-bloodbath-2018-2 [2/5/18]

4 – briefing.com/investor/calendars/economic/2018/02/05-09 [2/9/18]

5 – insight.factset.com/sp-500-companies-with-more-global-exposure-reporting-higher-earnings-growth-in-q4 [2/9/18]

6 – cnbc.com/2018/02/09/oil-falls-below-60-for-first-time-in-2018-on-pace-for-big-weekly-drop.html [2/9/18]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F9%2F17&x=0&y=0 [2/9/18]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F9%2F17&x=0&y=0 [2/9/18]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F9%2F17&x=0&y=0 [2/9/18]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F8%2F13&x=0&y=0 [2/9/18]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F8%2F13&x=0&y=0 [2/9/18]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F8%2F13&x=0&y=0 [2/9/18]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F8%2F08&x=0&y=0 [2/9/18]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F8%2F08&x=0&y=0 [2/9/18]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F8%2F08&x=0&y=0 [2/9/18]

8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [2/9/18]

9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [2/9/18] 

 

 

Why Having a Financial Professional Matters

Why Having a Financial Professional Matters

A good professional provides important guidance and insight through the years.

 

What kind of role can a financial professional play for an investor? The answer: a very important one. While the value of such a relationship is hard to quantify, the intangible benefits may be significant and long lasting.

 

A good financial professional can help an investor interpret today’s financial climate, determine objectives, and assess progress toward those goals. Alone, an investor may be challenged to do any of this effectively. Moreover, an uncounseled investor may make self-defeating decisions.

 

Some investors never turn to a financial professional. They concede that there might be some value in maintaining such a relationship, but they ultimately decide to go it alone. That may be a mistake.

    

No investor is infallible. Investors can feel that way during a great market year, when every decision seems to work out well. In long bull markets, investors risk becoming overconfident. The big-picture narrative of Wall Street can be forgotten, along with the reality that the market has occasional bad years.

 

This is when irrational exuberance creeps in. A sudden market shock may lead an investor into other irrational behaviors. Perhaps stocks sink rapidly, and an investor realizes (too late) that a portfolio is overweighted in equities. Or, perhaps an investor panics during a correction, selling low only to buy high after the market rebounds.

 

Often, investors grow impatient and try to time the market. Poor market timing may explain this divergence: according to investment research firm DALBAR, the S&P 500 returned an average of 8.91% annually across the 20 years ending on December 31, 2015, while the average equity investor’s portfolio returned just 4.67% per year.1

                 

The other risk is that of financial nearsightedness. When an investor flies solo, chasing yield and “making money” too often become the top pursuits. The thinking is short term.

 

A good financial professional helps a committed investor and retirement saver stay on track. He or she helps the investor set a course for the long term, based on a defined investment policy and target asset allocations with an eye on major financial goals. The client’s best interest is paramount.

 

As the investor-professional relationship unfolds, the investor begins to notice the intangible ways the professional provides value. Insight and knowledge inform investment selection and portfolio construction. The professional explains the subtleties of investment classes and how potential risk often relates to potential reward. Perhaps most importantly, the professional helps the client get past the “noise” and “buzz” of the financial markets to see what is really important to his or her financial life.

 

This is the value a financial professional brings to the table. You cannot quantify it in dollar terms, but you can certainly appreciate it over time.

Gregg A Hancock
Vice President SENB Wealth Management
Trust Business Development Officer
SENB Wealth Management
309-757-0700
wealthmanagement@senb.com
www.senb.com

This material was prepared by MarketingPro, Inc.

     

Citations.

1 – zacksim.com/heres-investors-underperform-market/ [5/22/17]

 

WEEKLY ECONOMIC UPDATE, February 5th 2018

­ 

WEEKLY ECONOMIC UPDATE

WEEKLY QUOTE

 

“There are no speed limits on the road to excellence.”

     

– David W. Johnson

      

   

WEEKLY TIP

 

Smart households invest with diversification. They recognize that directing most of their invested assets into one or two investment classes potentially heightens their risk exposure.

     

  

WEEKLY RIDDLE

 

No matter the time of day, it can open what you can’t. If not for it, on your front porch you would stand. What is it?

 

 

Last week’s riddle:

Frank got behind the wheel and traveled from Fort Lauderdale to Norfolk without any tires. How did he pull this off? 

 

Last week’s answer:

He was behind the captain’s wheel of a boat.

 

 

February 5, 2018

   

WAGE GROWTH PICKS UP AT LAST

In January, average hourly pay was 2.9% higher than it was a year earlier. That was the key takeaway from the Department of Labor’s latest jobs report, which noted the addition of 200,000 net new workers last month. In January, the headline unemployment rate stayed at 4.1%; the broader U-6 rate, which counts the underemployed, ticked up to 8.2%.1

 

ISM: FACTORY SECTOR IN GREAT SHAPE

The Institute for Supply Management released its January purchasing manager index for the manufacturing industry last week, and the reading of 59.1 surpassed the forecast, made by economists surveyed by MarketWatch, by half a point. A reading approaching 60 indicates significant expansion.2

 

HOUSEHOLDS SPEND MORE, REMAIN OPTIMISTIC

Personal spending and incomes rose 0.4% in December, according to a Department of Commerce report. The Conference Board’s consumer confidence index climbed 2.3 points to 125.4 in January, while the University of Michigan’s final January consumer sentiment index came in at 95.7 Friday, 1.3 points above its prior reading.2

 

STOCKS SLUMP AS FEBRUARY BEGINS

As the 10-year Treasury yield hit 2.85% during Friday’s Wall Street trading session, bears came out of hiding. New wage growth data only added to investor concerns about rising inflation – and how the Federal Reserve might respond to it. For the week: the S&P 500 fell 3.85% to 2,762.13; the Dow Industrials, 4.12% to 25,520.96; the Nasdaq Composite, 3.53% to 7,240.95.3,4

 

THIS WEEK: ISM’s service sector PMI appears Monday, along with earnings from Bristol-Myers, Macerich, Panasonic, Suzuki, and Sysco. Akamai, Allergan PLC, Anadarko Petroleum, Aramark, Beazer Homes, BP, Chipotle, Container Store, Cummins, Dunkin’ Brands, General Motors, Genworth Financial, Gilead Sciences, Netgear, Snap, Spirit Airlines, and Walt Disney Co. release earnings Tuesday. Wednesday’s earnings roll call includes news from Allstate, Callaway Golf, Exelon, GlaxoSmithKline, Hasbro, Humana, Invacare, Michael Kors, NetEase, O’Reilly, Peabody Energy, Prudential Financial, Rio Tinto, Take-Two Interactive, Tesla, Twenty-First Century Fox, Valvoline, Yelp, and Zynga. Thursday, a new initial claims report arrives, plus earnings from Activision Blizzard, CBRE, Coty, CVS Health, Expedia, Goodyear, GrubHub, HanesBrands, Kellogg, Lions Gate, NCR, Nvidia, Penske, Philip Morris, Teva Pharmaceuticals, The Hartford, Twitter, Tyson Foods, VeriSign, Viacom, W.R. Grace, and Yum! Brands. Friday, nothing major is scheduled.

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+3.24

+28.34

+16.43

+10.03

NASDAQ

+4.89

+28.47

+25.55

+20.00

S&P 500

+3.31

+21.10

+16.51

+9.79

REAL YIELD

2/2 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.70%

0.43%

-0.55%

1.31%

 

Sources: wsj.com, bigcharts.com, treasury.gov – 2/2/184,5,6,7

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

 

 

Please feel free to forward this article to family, friends or colleagues. If you would like us to add them to our distribution list, please reply with their address. We will contact them first and request their permission to add them to our list.

 

This material was prepared by MarketingPro, Inc., 

 

Citations.

1 – nbcnews.com/business/economy/u-s-added-200-000-jobs-january-n843996 [2/2/18] 

2 – marketwatch.com/economy-politics/calendars/economic [2/2/18]

3 – tinyurl.com/y7wgwjtg [2/2/18]

4 – markets.wsj.com/us [2/2/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F2%2F17&x=0&y=0 [2/2/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F2%2F17&x=0&y=0 [2/2/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F2%2F17&x=0&y=0 [2/2/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F1%2F13&x=0&y=0 [2/2/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F1%2F13&x=0&y=0 [2/2/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F1%2F13&x=0&y=0 [2/2/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F1%2F08&x=0&y=0 [2/2/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F1%2F08&x=0&y=0 [2/2/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F1%2F08&x=0&y=0 [2/2/18]

6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [2/2/18]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [2/2/18] 

 

 

Lift Retirement

News And Information For Employers

The Retirement Mindgame

The Retirement Mindgame

Your outlook may influence your financial outcome.

 

Provided by

 

What kind of retirement do you think you’ll have? Qualitatively speaking, what if the success or failure of your retirement begins with your perception of retirement?

 

A whole field of study has emerged on the psychology of saving, spending, and investing: behavioral finance.  Since retirement saving is a behavior (and since other behaviors influence it), it is worth considering ways to adjust behavior and presumptions to encourage a better retirement.

 

Delayed gratification or instant gratification? Financially speaking, retiring earlier has its drawbacks and may lead you into the next phase of your life with less income and savings. 

 

If you don’t love what you do for a living, you may see only the downside of working longer rather than the potential boost it could provide to your retirement planning (i.e., claiming Social Security later or tapping retirement account balances later and letting them compound more). If you see work as a daily set of unfulfilling tasks and retirement as an endless Saturday, Saturday will win out, and your mindset will lead you to retire earlier with less money.

 

On the other hand, if you change your outlook to associate working longer with retiring more comfortably, you may leave work later with a bigger retirement nest egg – and who wouldn’t want that?

 

If you don’t earmark 66 or 70 as your retirement year, you can become that much more susceptible to retiring as soon as possible. You’re 62, you can get Social Security; who cares if you get less money than you get at 66 or 70 if it’s available now?

 

Resist that temptation if you can. While some retirees claim Social Security at age 62 out of necessity, others do out of inclination, perhaps not realizing that inflation pressures and long-term care costs may render that a poor decision in the long run.

 

Social Security wants you to wait until you reach what it calls Full Retirement Age (FRA) to claim your benefits. For those born after 1942, FRA is 66, 67, or somewhere in between. When you take benefits earlier than that, your monthly benefit payments are reduced by as much as 25%. That reduction is permanent.1

 

Some people are misinformed about this. In a 2017 Fidelity Investments poll, 38% of respondents thought the reduction was temporary and that their monthly benefits would suddenly increase when they reached their FRA.2

 

Setting a target age for retirement – say, 65, 66, or even 70 – before you turn 60 can help mentally encourage you to keep working to that age. Providing your health and employment hold up and you can work longer, patience can lead you to have more Social Security income rather than less.

   

Take a step back from your own experience. For some perspective on what your retirement might be like, consider the lives of others. You undoubtedly know some retirees; think about how their retirements have gone. Who planned well, and who didn’t? What happened that was unexpected? Financial professionals and other consultants to retirees can also share input, as they have seen numerous retirements unfold.

 

Reduce your debt. Rather than assume new consumer debts, which advertisers encourage us to take on, commensurate with salary and career growth, pay down your debts as best you can with the outlook that you are leaving yourself more money for the future (or for unexpected situations).

 

Save and invest consistently. See if you can increase your savings rate on the way toward retirement. Don’t look at it as stripping money out of your present. Look at it as paying yourself first on behalf of your future. 

Gregg A Hancock
Vice President SENB Wealth Management
Trust Business Development Officer

SENB Wealth Management
309-757-0700
wealthmanagement@senb.com
www.senb.com

This material was prepared by MarketingPro, Inc.

 

Citations.

1 – gobankingrates.com/investing/mistakes-even-smart-people-make-retirement/ [1/8/18]

2 – fool.com/retirement/2017/12/14/why-do-so-many-people-claim-social-security-at-62.aspx [12/14/17]

WEEKLY ECONOMIC UPDATE, January 29th 2018

­ 

WEEKLY ECONOMIC UPDATE

WEEKLY QUOTE

 

“It is the mark of an educated mind to be able to entertain a thought without accepting it.”

     

– Aristotle

      

   

WEEKLY TIP

 

Before accepting a job offer, ask what maternity, paid leave, and short-term disability benefits are included.

     

  

WEEKLY RIDDLE

 

Frank got behind the wheel and traveled from Fort Lauderdale to Norfolk without any tires. How did he pull this off?

 

 

Last week’s riddle:

Rob looks out at a boat full of people in a harbor. He is in disbelief when his friend Christine looks at the same boat and says there is not a single person on board. Is Rob seeing things? How could Christine be right in her assertion? 

 

Last week’s answer:

The boat is taking married couples on a harbor cruise.

 

 

January 29, 2018

   

THE ECONOMY EXPANDED 2.6% in Q4

The Department of Commerce’s first estimate of fourth-quarter gross domestic product was 0.6% below the Q3 number, but still well above the 2.1% rate the nation has averaged in the recovery from the Great Recession. America saw 2.3% economic growth in 2017, according to the report.1

 

HOME SALES RETREATED DURING THE HOLIDAYS

Winter chill possibly encouraged the decline as much as high prices and low inventory. The National Association of Realtors noted a 3.6% slump in resales in December, while the Census Bureau said that new home purchases fell 9.3% last month. Existing home sales improved 1.1% during 2017; new home sales, 8.3%.2

 

OIL REBOUNDS, REACHES $66

WTI crude advanced 4.5% in five trading days, settling at $66.14 Friday on the NYMEX. That was its highest close in more than three years. Crude prices have risen for five of the past six weeks.3

 

KEY STOCK INDICES CLIMB

Wall Street’s big three performed well last week, as these advances show: Dow 30, +2.09% to 26,616.71; S&P 500, +2.23% to 2,872.97; Nasdaq Composite, +2.31% to 7,505.77. Meanwhile, the NYSE Arca Biotech benchmark rose an astounding 9.16%.4

 

THIS WEEK: Monday, December personal spending figures appear, plus earnings from Lockheed Martin and Seagate. The latest Conference Board consumer confidence index surfaces Tuesday in addition to earnings from Aetna, Ally Financial, Chubb, Corning, Electronic Arts, Harley-Davidson, McDonalds, Nucor, Pfizer, Pulte Group, Stryker, and T. Rowe Price. Wednesday, the Federal Reserve wraps up a policy meeting; the Street also considers December pending home sales, an ADP payrolls report, and earnings from Aflac, Anthem, Arcelor Mittal, AT&T, Avery Dennison, Boeing, Citrix, D.R. Horton, eBay, Facebook, Ingersoll-Rand, Eli Lilly, MetLife, Microsoft, Mondelez, PayPal, Pitney Bowes, Qualcomm, Symantec, U.S. Steel, and Xerox. ISM’s January factory PMI arrives Thursday, along with earnings from Alibaba, Alphabet, Altria Group, Amazon, Amgen, Apple, AutoNation, Cigna, ConocoPhillips, DowDuPont, GoPro, Hershey, International Paper, Marathon Petroleum, MasterCard, Mattel, Motorola Solutions, Nokia, Parker Hannifin, Quest Diagnostics, Ralph Lauren, Regis, Royal Dutch Shell, Time Warner, Valero Energy, and Visa. The Department of Labor’s January jobs report and the final January University of Michigan consumer sentiment index roll out Friday, plus earnings from Chevron, Clorox, Estee Lauder, ExxonMobil, Honda, Merck, Phillips 66, Sony, Sprint, and Weyerhaeuser.

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+7.68

+32.42

+18.31

+11.80

NASDAQ

+8.73

+32.72

+27.66

+22.27

S&P 500

+7.45

+25.09

+18.23

+11.59

REAL YIELD

1/26 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.57%

0.43%

-0.56%

1.34%

 

Sources: wsj.com, bigcharts.com, treasury.gov – 1/26/184,5,6,7

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

 

 

Please feel free to forward this article to family, friends or colleagues. If you would like us to add them to our distribution list, please reply with their address. We will contact them first and request their permission to add them to our list.

 

This material was prepared by MarketingPro, Inc., 

 

Citations.

1 – nytimes.com/2018/01/26/business/economy/gdp-economy.html [1/26/18]  

2 – apnews.com/721aacbd0d354c2e8c4e32d6daf332da [1/25/18]

3 – marketwatch.com/story/oil-takes-to-split-path-as-dollar-rally-fades-2018-01-26 [1/26/18]

4 – markets.wsj.com/us [1/26/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F26%2F17&x=0&y=0 [1/26/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F26%2F17&x=0&y=0 [1/26/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F26%2F17&x=0&y=0 [1/26/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F25%2F13&x=0&y=0 [1/26/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F25%2F13&x=0&y=0 [1/26/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F25%2F13&x=0&y=0 [1/26/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F25%2F08&x=0&y=0 [1/26/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F25%2F08&x=0&y=0 [1/26/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F25%2F08&x=0&y=0 [1/26/18]

6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [1/26/18]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [1/26/18]