Cautious Optimism

According to Guggenheim Partners, the most recent data from leading economic indicators, ranging from hiring to housing, demonstrates that the U.S. economy is “firing on all cylinders.” However, CIO Scott Minerd harkens back to the summer of 1987 when investors, deluded by a benign risk environment, failed to recognize the levels of overvaluation present in the market. This ultimately led to the dramatic October 19 market drop known as Black Monday.

[CLICK HERE to read the article, “Guarding Against Complacency,” from Guggenheim Partners, July 9, 2014.]

According to the Organisation for Economic Co-operation and Development (OECD), the impact of the last recession still reverberates among many demographics. In fact, poverty rose by two percentage points in rich countries between 2007 and 2011. Worldwide, young adults suffered the biggest income losses during the recession. Interestingly, this age group currently is at the greatest risk of income poverty, whereas just 25 years ago it was the over-65 age group that faced the greatest risk. Now the 65-plus demographic is in the most positive financial shape.

[CLICK HERE to read the article, “The Measure of Poverty,” from the OECD, June 30, 2014.]

The government has taken steps to protect both businesses and consumers against the severity of a future financial crisis. In the wake of the recession, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010, which mandated stronger regulation of Wall Street finance and private equity firms.

[CLICK HERE to read the article, “On its Fourth Anniversary, Has Dodd-Frank Begun to Bite?” from The Center for Economic and Policy Research, July 17, 2014.]

Fidelity discusses a “protected accumulation strategy” to help guard against today’s potential market volatility. This tactic locks in a portion of your future income and protects it from market drops.

[CLICK HERE to read the article, “Safeguard Your Retirement Income,” from Fidelity, July 10, 2014.]

New research reveals that money can only enhance your life to a certain degree. How you feel about your life and accomplishments can improve with higher income and education levels, but the study concluded that, on average, there is a certain level of annual income at which needs are met and Americans are not likely to be any happier as a result of higher earnings. This salary range varies by state based on the cost of living: In Hawaii it is $122,175 per year; $65,850 in Mississippi.

[CLICK HERE to read the article, “Here Is the Income Level at Which Money Won’t Make You Any Happier in Each State,” from The Huffington Post, July 17, 2014.]

We’d like to emphasize this notion of “cautious optimism” when it comes to your financial picture. Economic prospects may be improving at the national level, but each household’s circumstances are different at the personal level. If we can help you assess your situation to guard against complacency, please contact us.

Guarantees and protections provided by insurance products including annuities are backed by the financial strength and claims-paying ability of the issuing insurance carrier.

Our firm assists retirees and pre-retirees in the creation of retirement strategies that include the use of insurance products.

These articles are being provided for informational purposes only and should not be used as the basis for any financial decisions. While we believe this information to be correct, we do not guarantee the accuracy or completeness of the information included. All clients are encouraged to consult qualified tax and legal professionals before making any decisions about your personal situation.

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.

AE07145061