That Was The Week That Was-4th Week August

Taxes and Required Minimum Distributions. If you’re at least 70 1/2 and have an IRA or qualified employer sponsored plan that you are not contributing to you need to take an RMD for 2014. The amount you need to take is on your most recent statement, or you can call me. Some clients have their RMD date set automatically. In which case you do not need to do anything. You don’t have to take constructive receipt of your RMD but you can direct it to a taxable account, as many of my clients do.

The bad news is that if you don’t take your RMD by December 31st the penalty is 50% of the amount you were supposed to take out. If your RMD is $4,000 the penalty is $2,000! Make sure you do this before the end of the year. Call me for papers and instruction for your specific RMD amount.

Dennis Lockhart is CEO of the Federal Reserve Bank of Atlanta. Lockhart is not convinced that the economy is ready for ‘lift-off’. He says he is aligned with Chairwoman Yellen and doesn’t expect a rate hike anytime before mid 2015. Comments from an interview at Jackson Hole on August 24th.

The Aden sisters in their published investment newsletter of August 22nd report that bonds have been the best investment so far this year and may continue to be decades from now. They argue that we may see a return to Quantitative Easing if the Fed missteps and low interest rates for decades, much like what we’ve seen in Japan.

Index Investing has overwhelmed Active Managed Funds so far in 2014. There has been no huge star that has surprised investors in the active management arena. It seems managers are playing it very cautious and after a huge 2013 one cannot blame them. The fact that there was such huge expectations for this year that disappointed on so many levels only makes this year’s performance best seen in the rearview mirror. It has also been a stock pickers market. The fact that many of us have seen this story before should then be no surprise. As of August 22nd the S&P 500-Index +9% ytd.

Bob Doll, CFA. of Nuveen Asset Management, in his Weekly Investment Commentary: 8/25/2014:

• The labor market is strengthening.
• The housing market is also improving. July new home sales dipped slightly. Pending home sales for July have increased.
• Manufacturing levels are increasing. (Paul’s Note: Although stock weakness with those industrial/manufacturing companies with exports/facilities in Russia.)
• The Fed is adopting a more hawkish tone.
• The odds of a Republican takeover of the Senate are rising.

Consumer confidence in August rises to a seven year high! Bloomberg 8/26/2014.

Tuesday S&P 500 closed above 2000! This sent global equities to a record $66 trillion. The Index has almost tripled from its low in March, 2009. Guillaume Duchesne, equity strategist at BGL BNP Paribas SA in Luxembourg said, ‘We have recently moved from a liquidity driven market into a fundamental-driven one. …you need to be more selective, looking for markets with the strongest fundamentals.’ Bloomberg 8/26/14.

Barrons reported in ‘Asia Stocks to Watch’, the biggest e-commerce IPO slated for this fall is causing some consternation with money managers as they figure out what to sell in order to make room for what, some expect, to be the biggest IPO in U.S. history. There’s only so much money available and to make room in their portfolios money managers will have to cull their least ‘worthy’ holdings. Expect to see some stocks to slump for no other reason than they are being sold to make room. 8/27/2014 Barrons.com.

 

Questions call Paul @ 596 295 0430 or write at pstanley@westminsterfinancial.com. Share this blog with someone who cares about their money.

SECURITIES OFFERED THROUGH WESTMINSTER FINANCIAL SECURITIES, INC. MEMBER FINRA/SIPC.