Strategic vs. Tactical Asset Allocation

In recent years, the markets, the economy and the global political scene have evolved considerably. We’ve witnessed both remarkable volatility and remarkable resilience in these areas. The reality is that less predictability in today’s economic landscape requires more vigilant risk diversification, coupled with the ability to adapt to a fast-changing environment.¹

We work with our clients to set financial goals and make strategic and tactical recommendations to help them reach their individual financial objectives. Equally as important, we want to encourage clients to work with us to monitor their financial progress and let us know when their personal or financial situation changes. Investing mirrors life in many ways: You make plans, but they often get disrupted, waylaid or delayed. By closely monitoring your financial strategy, we can help you determine if and when it’s time to make changes.

To this end, it may be beneficial for you to understand the distinction between strategic asset allocation and tactical asset allocation. Strategic allocation establishes and maintains a deliberate mix of stocks, bonds and cash designed to help meet your long-term financial objectives.²

Tactical asset allocation, on the other hand, is more market focused. While an investor may set parameters for how much and how long he wants to invest in a certain asset class, he may want to then increase or decrease his allocations by 5 percent to 10 percent over a short time based on economic or market opportunities.³

It is important to be aware that tactical asset allocation strategies present higher risks but also the opportunity for higher returns. It’s a good idea to set percentage limits on asset allocations and time benchmarks for when you may want to exit certain positions.⁴ Tactical asset allocation is, in fact, a market timing strategy, but its risk lies more in asset categories rather than individual holdings, and a crucial key for this type of allocation is to actively manage that risk.⁵

To help diversify and manage risk, some financial advisors recommend exchange traded funds (ETFs). These are passively managed funds that can be bought and sold throughout the trading day. While ETFs are passively managed, they provide a means for an investor to tactically expand or shrink exposure to a specific asset class in her own actively managed portfolio. Proponents of ETFs favor them because of their low cost, tax efficiency and trading flexibility.⁶

Content prepared by Kara Stefan Communications.

¹ Nasdaq. June 26, 2017. “Asset owners must be more innovative to fulfill investment missions.” http://www.nasdaq.com/press-release/asset-owners-must-be-more-innovative-to-fulfill-investment-missions-20170626-00612. Accessed July 8, 2017.

² Chris Chen. Insight Financial Strategists. July 1, 2017. “Tactical asset allocation can enhance a long term strategy.” http://insightfinancialstrategists.com/asset-allocation/?utm_source=ReviveOldPost&utm_medium=social&utm_campaign=ReviveOldPost. Accessed July 8, 2017.

³ Ibid.

⁴ Ibid.

⁵ Girija Gadre, Arti Bhargava and Labdhi Mehta. The Economic Times. June 19, 2017. “5 smart things to know about tactical asset allocation.” http://economictimes.indiatimes.com/wealth/invest/5-smart-things-to-know-about-tactical-asset-allocation/articleshow/59189407.cms. Accessed July 8, 2017.

⁶ Robert Powell. MarketWatch. June 9, 2017. “Why financial advisers prefer ETFs over mutual funds.” http://www.marketwatch.com/story/why-financial-advisers-prefer-etfs-over-mutual-funds-2017-06-09. Accessed July 8, 2017.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. 

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

Investment Advisory Services offered through Global Financial Private Capital, LLC.

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Retirement Plan Fees: Know What You Are Paying

Retirement Plan Fees: Know What You Are Paying

Many large companies offer employees a 401(k) plan with some degree of matching contribution. Although this is a good employee benefit to have, you always should pay attention to the fees involved in your plan. Your plan provider charges various fees to invest, manage and administer the plan, and those fees are passed on to the participants who invest.

The Center for Retirement Research at Boston College reports that, in recent years, the fees charged by actively managed mutual funds — including those in 401(k) plans — have dropped. Since 2015, the average fee dropped from 0.78 percent to 0.75 percent. Around 15 years ago, fees averaged about 1 percent. However, fees for passively managed index mutual funds, generally referred to as index funds, average significantly less at 0.17 percent. Index funds passively track the investments of a specific market index; there is no manager actively choosing investments for the fund on a day-to-day basis.¹

If you have a 401(k) plan through a current or former employer, we’re happy to help you determine what you are paying in fees and help you assess your financial situation. In many cases, the more investors learn about fees, the more they start choosing investments that cost less. The Center for Retirement Research suggests this by sharing that U.S. investors withdrew $627 billion from actively managed funds that charged the highest fees and invested $429 billion into lower-fee index funds in 2015 and 2016.²

The Department of Labor’s fiduciary rule, which took partial effect in June, has made it easier for investors to know what they are paying for by requiring the disclosure of all fees and commissions. This information must be in dollar form.³ In addition, FINRA, a self-regulatory organization that regulates broker-dealers in the United States, offers a Fund Analyzer tool on its website that can help investors estimate the impact of fees and expenses on an investment and research applicable fees and available discounts for specific funds.⁴

Are fees really that important? It can depend. If you are paying a money management firm to select investments and it does a great job of providing consistent performance over time, it may be worth what you pay in fees. But it may also be worth considering how your investments compare with the overall market. For example, over the past three years, the S&P 500 has increased by 26 percent (as of mid-June 2017).⁵ If you were invested in a low-expense S&P 500 index fund, you would have experienced impressive returns. But if you had been paying a high fee for an active manager yielding the same performance, it may not have been worth the expense.

Speaking of fees, be aware that the IRS permits investors to deduct certain expenses incurred on taxable investments, such as:⁶

·         Fees for investment counsel, including subscriptions to financial publications

·         IRA or Keogh custodial fees (if paid by cash outside the account)

·         Transportation to your broker’s or investment advisor’s office

·         Safety deposit box rent if you use it to store certificates or investment-related paperwork

If you have a 401(k) plan through a current or former employer and would like help determining what you are paying in fees, we’re happy to help you assess your financial situation. Using a variety of investment and insurance products, we can create a financial strategy that can help put you on the path toward your financial goals.

Content prepared by Kara Stefan Communications.

¹ Center for Retirement Research at Boston College. June 29, 2017. “Mutual Fund Fees: Here’s What Matters.” http://squaredawayblog.bc.edu/squared-away/mutual-fund-fees-heres-what-matters/. Accessed July 5, 2017.

² Ibid.

³ Investopedia. July 5, 2017. “DOL Fiduciary Rule Explained as of July 5^th, 2017.” http://www.investopedia.com/updates/dol-fiduciary-rule/. Accessed July 13, 2017.

⁴ FINRA. “Fund Analyzer.” http://apps.finra.org/fundanalyzer/1/fa.aspx. Accessed July 5, 2017.

5 Dayana Yochim. Atlanta Journal Constitution. July 5, 2017. “This May Be Why You’re Down in an Up Market.” http://www.ajc.com/business/consumer-advice/this-may-why-you-down-market/hQWTwwUWlBhEKX8tJoyNHL/. Accessed July 5, 2017.

⁶ Rande Spiegelman. Charles Schwab. March 15, 2017. “Investment Expenses: What’s Tax Deductible?” http://www.schwab.com/insights/taxes/investment-expenses-whats-tax-deductible. Accessed July 5, 2017.

Neither the firm nor its agents or representatives may give tax advice. Be sure to speak with a qualified professional about your unique situation.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. 

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

Investment Advisory Services offered through Global Financial Private Capital, LLC.

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3 Common Questions About Social Security

While Social Security shouldn’t be relied upon to be the sole source of income during retirement, it can play an important role in your overall financial strategy for retirement. But making sense of the basic ins and outs of Social Security can be overwhelming. Here are three questions people commonly ask as they approach retirement age:

When can I start taking benefits?

While full retirement age is 66 for people born between 1943 and 1954 and gradually increases to age 67 for those born in 1960 or later, you can start receiving Social Security benefits at age 62.¹ Keep in mind, however, that there is a cost to early distribution; your benefits are reduced by about 0.5 percent for each month you receive benefits before full retirement age.² For example, those born in 1955 with a full retirement age of 66 and two months who start taking benefits at age 62 will receive about 75 percent of the full benefit.³

On the flip side, delaying benefits past full retirement age, up to age 70, increases your distribution amount. If the same individual in the previous example waits until age 68 to take benefits, his or her benefit will increase 8 percent each year after full retirement age. This increase continues until you reach age 70 or you start taking benefits, whichever comes first.⁴

What happens to my benefits when I die?

It depends. If you are married and your spouse is age 60 or older, he or she may be eligible to collect a survivor’s benefit. The benefit amount remains the same as the deceased’s amount, although that amount is reduced if benefits are started before the surviving spouse’s full retirement age.⁵ A spouse cannot collect both survivors benefits and retirement benefits based on their own work record. They will collect whichever benefit is higher.⁶

If you have a minor child or children, your surviving spouse (regardless of age) may also be eligible for a survivors benefit until the minor child turns age 16. If you have no surviving spouse or minor children, your benefit remains in the Social Security trust fund and is not paid out to any other named beneficiaries, unless they qualify under the Social Security survivors benefits eligibility rules.⁷

Can I work while receiving benefits?

Yes. However, if you haven’t reached full retirement age, your benefit amount will be reduced if your earnings exceed the limit. Starting with the month you’ve reached full retirement age, your benefits will not be reduced no matter how much you earn.⁸ The earnings limit and reduced amount vary according to your age. To find out how much your benefits might be reduced, use the Social Security earnings calculator at https://www.ssa.gov/OACT/COLA/RTeffect.html.⁹

Understanding Social Security can be challenging, but you don’t have to go it alone. Contact us today to learn more about  how to incorporate your Social Security benefits  into your complete financial strategy. We may be able to identify potential retirement income gaps and may introduce investment and insurance products as a potential solution.

Content prepared by Amy Ragland.

¹ Social Security. January 2017. “Understanding the Benefits.” https://www.ssa.gov/pubs/EN-05-10024.pdf. Accessed June 20, 2017.

² Ibid.

³ Social Security. “Retirement Planner: Benefits By Year of Birth.” https://www.ssa.gov/planners/retire/agereduction.html. Accessed June 20, 2017.

⁴ Social Security. “Retirement Planner: Delayed Retirement Credits.” https://www.ssa.gov/planners/retire/delayret.html. Accessed June 20, 2017.

⁵ Joseph L. Matthews. Caring.com. Dec. 24, 2016. “What happens to the rest of a person’s Social Security money after they die?” https://www.caring.com/questions/social-security-benefits-after-death. Accessed June 20, 2017.

⁶ Ibid.

⁷ Ibid.

⁸ Social Security. June 15, 2017. “What happens if I work and get Social Security retirement benefits?” https://faq.ssa.gov/link/portal/34011/34019/Article/3739/What-happens-if-I-work-and-get-Social-Security-retirement-benefits. Accessed June 20, 2017.

⁹ Social Security. “Retirement Earnings Test Calculator.” https://www.ssa.gov/OACT/COLA/RTeffect.html. Accessed June 20, 2017.

Financial professionals are able to provide you with information but not guidance or advice related to Social Security benefits. We are not affiliated with the U.S. government or any governmental agency.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. 

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

Investment Advisory Services offered through Global Financial Private Capital, LLC.

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Taxes and Retirement Planning

The White House recently introduced what it billed the “biggest tax cut” in U.S. history. While a presidential tax proposal is not likely to get passed without significant changes, the fact that Republicans dominate both chambers of Congress suggests 2017 may well be a year in which significant tax reform is engineered.¹

One thing should be perfectly clear: The U.S. tax code is highly complicated.² There may not be anyone who understands it all off the top of their head. CPAs and tax professionals must conduct thorough due diligence to tailor strategies and complete returns for taxpayers with complex situations.

Because of this, we recommend our clients who require tax advice work directly with an experienced and qualified tax professional. However, we also believe financial and tax professionals should not work in a vacuum, and therefore are more than happy to work in concert with our clients’ tax advisors to help align their financial strategy with their tax situation.

This is particularly important when it comes to retirement planning, because you want to save as much as possible before you retire, which may include tax-deferred financial vehicles such as a 401(k) or IRA, but you don’t want to get hit with a big tax bill on untaxed earnings once you’re in retirement.³ This is a delicate balance that requires experience and collaboration from both a financial professional and a tax professional.

One tax issue each of us deals with is the federal income tax rate. Our annual earnings determine which federal tax bracket we land in, but that tax bracket isn’t the tax rate applied to our entire income. Instead, we pay every tax rate on income blocks up to our individual bracket. Like many things about filing taxes, this can be highly confusing for many people.

It may be easier to understand this through a hypothetical example. Let’s say Joe, who is single, had $92,000 of taxable income in 2016, which landed him in the 28 percent tax bracket. This is how his total tax is calculated:⁴

·         He pays 10% on the first $9,275 (tax of $927.50)

·         He pays 15% on the next $28,375 (tax of $4,256.25)

·         He pays 25% on the next $53,500 (tax of $13,375)

·         He pays 28% on the final $850 (tax of $238)

o   Total tax bill of $18,796.75

As you can see, Joe doesn’t pay 28 percent on the full amount of his taxable income; his taxable amount progresses through each income bracket and their respective tax rates until it reaches his total taxable income for the year. Therefore, a person who falls in the highest tax bracket is only paying that higher tax rate on a portion of his or her income.

This is an important distinction to remember as the U.S. works toward tax reform. On one hand, reducing the number of tax rates from seven to three (Trump’s proposal: 10 percent, 25 percent, 35 percent)⁵ looks to simplify tax filings, but for many people, this could mean paying a higher tax rate on larger blocks of income. Let’s take the hypothetical example of Joe again, using the same income brackets (to date, no tax rate income brackets have been proposed). Here’s how Joe’s scenario might break down:

·         He pays 10% on the first $9,275 (tax of $927.50)

·         He pays 25% on the next $81,875 (tax of $20,468.75)

·         He pays 35% on the final $850 (tax of $297.50)

o   Total tax bill of $21,693.75

This example simply illustrates how a progressive income tax works. Obviously, it doesn’t take into consideration credits and deductions, which vary substantially among taxpayers. Nor does it include payroll taxes.⁶

Federal income brackets and their respective tax rates are the most fundamental issues Americans are subject to when filing taxes. But as you can see, there’s nothing straightforward about them. This is worth remembering as tax reforms continue to be proposed and debated moving forward: Nothing concerning taxes is simple, and there are usually layers that impact us that the average layperson isn’t likely to see.

Content prepared by Kara Stefan Communications

¹ Fox News. April 26, 2017. “Mnuchin vows ‘biggest tax cut’ in US history, confirms plan to slash business rate.” http://www.foxnews.com/politics/2017/04/26/mnuchin-vows-biggest-tax-cut-in-us-history-confirms-plan-to-slash-corporate-rate.html. Accessed May 5, 2017.

² Vanessa Williamson. The Atlantic. April 18, 2017. “How the Tax-Filing Process Confuses Americans about Tax Policy.” https://www.theatlantic.com/business/archive/2017/04/paying-taxes-confusion-policy-1040/523287/. Accessed May 5, 2017.

³ Fidelity. March 1, 2017. “How to invest tax efficiently.” https://www.fidelity.com/viewpoints/investing-ideas/tax-strategy. Accessed May 5, 2017.

⁴ Tina Orem. Nerd Wallet. Sept. 8, 2016. “2016 Federal Income Tax Brackets.” https://www.nerdwallet.com/blog/taxes/federal-income-tax-brackets/. Accessed May 5, 2017.

⁵ Martha C. White. NBC News. May 2, 2017. “Even Families Making $100K Won’t Be Better Off Under New Tax Plan.”  http://www.nbcnews.com/business/taxes/even-families-making-100k-won-t-be-better-under-new-n753941. Accessed May 5, 2017.

⁶ NPR. 2017. “On Tax Day, an Economist Outlines How the Payroll Tax Works.” http://nhpr.org/post/tax-day-economist-outlines-how-payroll-tax-works#stream/0. Accessed May 5, 2017.

These hypothetical examples are for illustrative purposes only. This information is not intended to provide tax advice. Be sure to speak with qualified professionals about your unique situation.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. 

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

Investment Advisory Services offered through Global Financial Private Capital, LLC.

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How Much Money Do You Need to Retire?

How much money do you need to retire? That’s about as personal a question as, “What do you look for in a spouse?” or “What is your dream job?” The answer is different for everyone.

So are questions about when you want to retire, how you want to retire (suddenly or gradually) and where you want to retire. There are vast combinations of these and many other variables that serve to make the style and level of retirement different for every individual -- even within the same household.

Americans are retiring at a rate of 10,000 per day, which means a lot of people need retirement planning advice.¹ Financial services firms like ours develop relationships with neighbors and friends in our local community to offer personalized guidance and advice on financial matters. If you’re pondering how much money you may need to retire, please come and see us. Not only can we help you with that assessment, we create financial strategies through the use of insurance and investment products to help you work toward your retirement goals.

Fidelity recently conducted a survey that yielded wildly divergent responses in terms of how much money people think they need to retire. For example, 25 percent think they will need to have saved two to three times their annual salary during their last year of full-time work, while many financial advisors say it’s more like 10 years’ worth of salary saved. Overall, 74 percent of Americans underestimate how much they will need for a comfortable retirement.²

It’s important to keep in mind that issues may arise even if you’ve saved an appropriate amount for your household by the time you retire. Some circumstances -- such as the unexpected death of one spouse before the other -- could expose the need to replace a lost source of income. This is a possible circumstance where buying a life insurance policy, even long after your children have grown up and are on their own, may still be a part of your overall financial strategy, depending on your personal circumstances. At a minimum, one of the two Social Security benefits the couple was receiving will stop when one spouse dies. A life insurance payout can help augment any lost Social Security or pension benefits to help a surviving spouse maintain his or her current standard of living throughout retirement.³

While some retirement factors are personal, others may be cultural in nature. The most current available data shows that in the U.S., the average white family has more than $130,000 in retirement savings while the average African American household has only $19,000. Over time, disparities in income and personal wealth have an even more dramatic impact: By the time they enter their 60s, whites have accumulated 11 times more in savings than African Americans -- on average at least $1 million more in wealth.⁴

Unequal pay and career opportunities also may impact a woman’s ability to save enough for retirement. To complicate matters further, women tend to live longer. A couple estimating how much they need to retire may make the assumption that they’ll need, for example, 25 years of retirement income. The husband might pass away after 15 years while the wife lives another 15 years on her own. However, their income plan may not reflect a loss of income sources once the husband dies nor increased expenses the surviving wife may incur in her later years of life.⁵

If you’re interested in estimating about how much money you may need to save each year, try out an online retirement calculator, like this one provided by the U.S. Financial Industry Regulatory Authority (FINRA).⁶ You also can contact us to schedule a more in-depth retirement analysis.

Content prepared by Kara Stefan Communications

¹ Insured Retirement Institute. 2016. “Boomer Expectations for Retirement 2016.” https://www.myirionline.org/docs/default-source/research/boomer-expectations-for-retirement-2016.pdf. Accessed April 28, 2017.

² Lee Barney. Plan Sponsor. March 6, 2017. “Most People Think They Will Need a Paltry Amount for Retirement.” http://www.plansponsor.com/Most-People-Think-They-Will-Need-a-Paltry-Amount-for-Retirement/?fullstory=true. Accessed April 28, 2017.

³ Jamie Hopkins. Forbes. April 27, 2017. “Why Life Insurance Is Essential for Retirement Planning.” https://www.forbes.com/sites/jamiehopkins/2017/04/27/why-life-insurance-is-essential-for-retirement-planning/#78b4ee9f31cd. Accessed April 28, 2017.

⁴ Rodney Brooks. Chicago Defender. April 28, 2017. “The African American Retirement Planning Gap.” https://chicagodefender.com/2017/04/28/the-retirement-crisis-facing-african-americans/. Accessed April 28, 2017.

⁵ LeAnn Bjerken. Spokane Journal of Business. April 27, 2017. “Women face unique challenges in retirement planning.” https://www.spokanejournal.com/local-news/women-face-unique-challenges-in-retirement-planning/. Accessed April 28, 2017.

⁶ FINRA. 2017. “Retirement Calculator.” http://apps.finra.org/calcs/1/retirement. Accessed April 28, 2017.

Life insurance policies are contracts between your client and an insurance company. Life insurance product guarantees rely on the financial strength and claims-paying ability of the issuing insurer.

Financial calculators are designed as informational tools to help you estimate answers to common financial questions. They are not intended to predict future returns or results, nor do they represent the performance of any specific investment or product.

This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. 

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

Investment Advisory Services offered through Global Financial Private Capital, LLC.

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Will Power be Restored to Coal Industry?

In March, President Donald Trump signed executive orders to rescind several regulations that were in place to limit pollution from mining and burning coal.¹ The administration’s goal is to revive the coal mining industry, but the downside is coal emissions release more greenhouse gases than natural gas.²

These recent actions serve as a reminder that nearly every sector, no matter how reliable it has been in the past, goes through cycles of uncertainty. The utilities sector, for example, has long been recognized as a steady provider of dividend payments and thus is a popular instrument for retirement income.³

Like any industry, it has its ups and downs, which can affect an investor’s returns and income stream. That’s why we believe it’s generally a good idea to remain diversified, even within a historically reliable sector, to help mitigate risk. As financial professionals, we’re here to help you analyze your personal financial situation and create strategies utilizing a variety of investment and insurance products that can help you work toward your financial goals. Please remember that investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

In 2016, natural gas (34 percent) surpassed coal (30 percent) as the country’s No. 1 source of energy for the first time in U.S. history. Nuclear power accounted for a 20 percent share of electricity generation. Renewable power sources, such as wind and solar power, are the fastest-growing power sources today, but they still represent only 8 percent.⁴

As for the future of coal, the CEO of the country’s third-largest coal mining company believes the industry will see most of its future gains not from policy changes, but from demand by China and South Korea. Last fall, these countries agreed to stop importing coal from North Korea, which was a boon for the U.S. industry.⁵

The CEO for the U.S.’s largest public utility says his company closed many of its coal plants because it could produce energy at a lower cost with fewer facilities -- not because of regulations. He also reiterated the company’s commitment to reducing carbon emissions by 60 percent by 2020. Having been raised near coal plants in Philadelphia, with coal cinders floating frequently through the air, he said he appreciates the great strides that have been made in clean air.⁶

While clean energy sources have a way to go before they become the more affordable choice, many experts believe that eventually will happen. When it does, it’s unlikely consumers or corporations would choose a more expensive option to fuel their electricity.

Content prepared by Kara Stefan Communications

¹ CNBC. March 28, 2017. “Coal can be more profitable and efficient going forward, expert says.” http://www.cnbc.com/2017/03/28/coal-can-be-more-profitable-and-efficient-going-forward-expert-says.html. Accessed April 25, 2017.

² Ryan Handy. Houston Chronicle. Jan. 16, 2017. “Natural gas surpasses coal as fuel for power production.” http://www.houstonchronicle.com/business/article/Natural-gas-surpasses-coal-as-fuel-for-power-10861176.php. Accessed April 25, 2017.

³ Kira Brecht. U.S. News & World Report. Feb. 5, 2016. “Generate Income and Play Defense With Utility Stocks.”   http://money.usnews.com/investing/articles/2016-02-05/generate-income-and-play-defense-with-utility-stocks. Accessed April 25, 2017.

⁴ Ryan Handy. Houston Chronicle. Jan. 16, 2017. “Natural gas surpasses coal as fuel for power production.” http://www.houstonchronicle.com/business/article/Natural-gas-surpasses-coal-as-fuel-for-power-10861176.php. Accessed April 25, 2017.

⁵ Michael Bastasch. Daily Caller. 2017. “Mining CEO Expects A Record Year For Coal Exports.” http://dailycaller.com/2017/04/14/mining-ceo-expects-a-record-year-for-coal-exports/. Accessed April 25, 2017.

⁶ Jonathan Matisse. Knoxville News Sentinel. April 19, 2017. “TVA CEO: Coal plants not reopening under Trump.” http://www.knoxnews.com/story/money/business/2017/04/19/tva-ceo-coal-plants-not-reopening-under-trump/100641238/. Accessed April 25, 2017.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. 

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

Investment Advisory Services offered through Global Financial Private Capital, LLC.

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Prospects for Growth in 2017

Some researchers believe the U.S. economy has a healthy outlook: The GDP growth rate is in the ideal 2 percent to 3 percent range, unemployment continues to abate and inflation remains in check.¹

The U.S. Bureau of Labor Statistics expects 88 percent of all occupations will experience growth by 2020, with the biggest increases coming in health care, personal care and construction. It also predicts that jobs requiring a master’s degree will grow the fastest.²

Aside from the potential of lower taxes, more jobs and infrastructure spending, the U.S. economy has another reason for optimism: American manufacturing, industrial production and trade sectors appear to be emerging from their recession. Economists anticipate that industrial sector growth will continue throughout 2017.³

Furthermore, consumer and chief executive officer confidence levels have improved considerably since the November U.S. election. The current expectation for more fiscal stimulus is expected to translate into greater spending and stronger economic growth.⁴

In periods of positive economic news such as this, people sometimes get caught up in “the good times” – planning vacations and finding other ways to spend newly acquired discretionary income. As financial professionals, we want to help you create a long-term financial strategy now, so that you feel confident in your financial future.

Clearly, no one knows where the market will go in 2017, but according to investment analysts at Charles Schwab, income growth may be poised to continue in the immediate future. Technology, health care and financial sectors are among those that could outperform in 2017.⁵ One reason is that the U.S. is entering an era of deregulation. President Trump has already started to roll back regulations put in place during the Obama administration, which issued more than 3,750 final rules and regulations during its eight-year tenure.⁶

If you find yourself with some extra funds you would like to put away for retirement, call us for assistance on allocating them to your financial plan.

Content prepared by Kara Stefan Communications

¹ Kimberly Amadeo. The Balance. March 15, 2017. “US Economic Outlook: For 2017 and Beyond.” https://www.thebalance.com/us-economic-outlook-3305669. Accessed March 21, 2017.

² Ibid.

³ Rick Rieder. BlackRock. Jan. 13, 2017. “2 Reasons the U.S. economy Should Fare Better in 2017.” https://www.blackrockblog.com/2017/01/13/us-economy-fare-better-2017/. Accessed March 21, 2017.

⁴ Ibid.

⁵ Brad Sorenson. Charles Schwab. March 16, 2017. “Schwab Sector Views: How Should Investors Look at Health Care Now?” http://www.schwab.com/public/schwab/nn/articles/Sector-Views. Accessed March 21, 2017.

⁶ Alejandro Chafuen. Forbes. Jan. 3, 2017. “The U.S. Economy In 2017: Welcome Higher Growth.” https://www.forbes.com/sites/alejandrochafuen/2017/01/03/the-u-s-economy-in-2017-welcome-higher-growth/#5ef2fcb938fb. Accessed March 22, 2017.

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