Call us today!

Phone: (512) 498-PLAN (7526)


Let's talk about Risk...

As the markets are more aggressively fluctuating it is causing and creating some anxiousness and concern about risk.

Market corrections are normal.
--The lack of these in the last 16 months is NOT normal.

We take risk very seriously and talk with you often about your Risk number. What is a comfortable draw-down on overall assets?
--It is historical for the market to have an annual pull back of 13.6% (the S&P 500 index over the last 25 years)

Your comfort level is very important to us. We understand risk and market gyrations after 35 years in the business, and we can offer our wisdom and experience.
Well blended assets/managers is the key to portfolio success.

Know that we are staying "plugged in" and vigilant about your accounts and managers.

Managing your expectations is very important, so please let us know if you need to visit with us.

We appreciate you and look forward to visiting with you!

Your PlanningWorks Team

I Don't Budget Because...

You're not alone-whatever your excuse may be. It's too time consuming, complicated, not sure how... Unfortunately, a budget is the very foundation for your entire life plan. Without one, you can't build any kind of plan without running a huge risk that it may all fall apart. According to a GoBankingRates survey, 1 in 4 Americans' number one daily thought is money. Two in five Americans feel their biggest challenges are either sticking to a budget or saving for retirement, with these answers selected almost equally.1
No matter what your age, it's critical to have a clear picture of who you are today financially so you can better plan for tomorrow. So I would like to offer you an easier way to create your budget and categorize yourself with those 5 percent of Americans who will retire successfully and stay successfully retired. It is called the "60/40 Rule."
It is fast and simple. If you are overspending, it really doesn't matter what you are overspending on. You are just overspending. So just make a decision to keep your budget in-line with your income. Keep your committed expenses to 60 percent of your gross income each month. What are committed expenses? They are the non-negotiable, basic expenses (though a couple of them can be adjusted to suit your income - such as eating out less often or resisting the NFL package on Direct TV). Here is a start for a list of committed expenses:
  • Food (Eating out and Eating In)
  • Clothing
  • Household Items & Expenses
  • Bills & Loan Payments
  • Insurance
  • Taxes (ALL of them-income, real estate, etc.)
  • Charitable Contributions
That leaves 40 percent of your gross income to divide and take care of tomorrow, next year, and the future years beyond that. But hold on - this 40 percent has a priority list.
First and foremost, the young person you are today will be the only one to take care of the older person you will be someday-so save for your retirement first! Regrettably, there is no set percentage. It's different for every person. And if you don't know what you should be putting back, you've got a new #1 for your to-do list: talk with your advisor and find out.
Next, plan for an emergency before it happens. A good rule of thumb is to keep 3 to 6 months of income easily accessible in order to withstand an emergency. Visit with your advisor about the best place for you maintain these funds.
The third savings spot is your "savings to spend" plan. Consider having your employer directly deposit this percentage into your savings account for those little or big expenditures throughout the year such as a vacations, a new car or appliances, etc.
The last part of your 40 percent does have a limit. This is your fun money. Spend it however you want... just as long as it doesn't exceed 10 percent of your income.
So that's it. It really is that simple. With less than an hour of set-up you just completed your budget and not to mention, started saving at least 30 percent of your income. Henry Ford stated, "Whether you think you can or you can't; you are correct." Do you think you can be in the top percent of confident Americans who believe they can successfully retire and stay successfully retired?
  1. GoBankingRates 2015 Life + Money Survey
Written by Angela Robinson CRC®

Are you ready for a disaster?

Are you ready for a disaster?

Recently Austin Disaster Relief Network posted a great list and ways to develop a plan for you and your family. We thought it was so beneficial that we wish to share it.

Family Contact Plan
• Who will you contact in the event of a disaster? Make sure every family member ha full contact information (Phone numbers, email address, addresses)
• Sometimes local cell phone service is disrupted locally, but both parties can contact someone in a different geographic area (ie: out of state).  Designate a friend or family member that live several hours away that you can both call
• Text one another when cell phone service is disrupted

Evacuation Plan
• Designate a meeting point close to the house in case family members use different exits
• Designate a meeting point outside of town in case family members are separated before or during disaster
• Designate friend or relative several hours away who can provide temporary housing during local evacuation

Disaster Supplies
• Build a kit of disaster supplies, food and water for each family member (one gallon per person per day)
• Buy key items first, then build it over time.  Buy a few extra items each time you go to the grocery store until you've built your supply
• Do not store bottled plastic containers of water directly on concrete floors (ie: garage floors)

Grab and Go Bag (what you grab when you have 30 seconds to leave)
• Pack bag for each family member
• Include change of clothes, including undergarments, socks, shoes (2-3 days)
• Include copies of vital documents (driver's licenses, birth/marriage certificates, passports, social security cards, insurance cards)- consider saving these on password-protected USB drives for privacy purposes
• Include toiletries for three days
• Cash in small bills and coins or travelers' checks
• Emergency contact information (out of state friends/family, doctors, hospitals, etc.)
• Consider a bag for your car too

• Channel 184 on car satellite radio for severe weather/emergency updates
• Make sure gas is turned off, no leaks before using grills, matches, candles or other heat cooking, lighting sources
• Buy foods you'll eat and eat what you buy - rotate food supplies to ensure you have fresh, un-expired food


Recommended Disaster Supplies

Food and Water (3 day min for family member)
• Water: 1 gal per person per day in non-breakable container. Best : 2-week supply per person.
• Food: non-perishable, 3600 calorie min. Avoid foods that make you thirsty
• Water purifiers (tablets or iodine tablets)
• Manual can opener
• Disposable eating utensils

• First aid kit (one at home, each car and work)
• Non-prescription drugs (vitamins, pain relievers)
• Prescription drugs (at least 3-day supply, 1-month preferred
• Insect repellant
• Sun Block

• Personal hygiene kit: toothbrush, paste, soap, comb, razor, deodorant, feminine supplies, toilet paper, shampoo, etc.
• Moist towelettes
• Household chlorine bleach (for cleaning)
• Waterless hand sanitizer
• Small plastic bags with ties or zip-top bags
• Dentures 
• Hearing Aids and batteries

• Battery powered radio and extra batteries
• Solar or hand-crank radio
• Several flashlights and extra batteries
• Highway flares
• Cell phone with charger, extra batteries
• Emergency candles and matches in waterproof container

How will the EquiFax breach affect you?


Like throwing a stone into a pond, the Equifax data breach has long-lasting repercussions. Already, because of what’s being considered one of the largest data breaches in recent history, 143 million consumers may be affected. Data compromised in the breach has the potential to impact any form of credit taken out in the U.S. — including mortgages, credit cards, and car loans.


The credit-reporting agency, Equifax, recently revealed that a data breach lasting from mid-May through July 2017 gave hackers access to their consumers’ names, Social Security numbers, addresses, birth dates, and, for some, driver’s license numbers. The Federal Trade Commission confirms that credit card numbers were stolen from an estimated 209,000 people and documents with personally identifying information for roughly 182,000 others. Hackers also accessed personal data for customers in the UK and Canada. Equifax says their agency didn’t discover the breach until July 29, 2017, after most of the damage was done.

Anyone who may be affected by the breach is encouraged to act fast. Lisa Lindsay, executive director of the collaborative group Private Risk Management Association (PRMA), says “Consumers will need to evaluate what they want to do next with regards to protection and what risk management options they want to take such as purchasing cyber and fraud insurance. Those impacted by the breach could be at risk for additional attacks.”

Equifax’s website has a section where you can determine if you were one of the people whose data was compromised. Go to: We encourage you to check and whether you are, or aren’t, some action steps follow.


  1. Protect yourself against potential identity theft by visiting to review your credit report for fraudulent activity. At this site, you can get a free report from each of the three credit repositories (bureaus) once a year. If you stagger them out, you can effectively monitor your credit for free annually.
  2. Place a fraud alert or credit freeze to make it more difficult for anyone to open unauthorized accounts in your name. If you elect to do a credit freeze, you need to contact each bureau individually and process that freeze with them. There is a small fee in Texas to do this, it was about $10 for each. Keep in mind, if you freeze your credit, you will need to unfreeze any time you apply for credit of any kind. During the time when you are applying for credit and the freeze is lifted, you can place a 90-day fraud alert on your credit. This should limit lenders from granting credit under your name without first verifying that you are the one who applied for the loan. See the bottom of this email for contact information for each bureau.
  3. Stay educated and get more resources from the FTC’s Privacy, Identity, and Online Security site at


  • Activity from the Equifax breach could still show up months later.
  • Even with a clean credit report, freezing your credit or setting up fraud alerts will make it harder for an identity thief to open a credit card or take out a loan in your name.
  • Pay special attention around tax season in April. This is when your Social Security number is more likely to be stolen for a refund.
  • You may also choose to purchase additional cyber or fraud insurance. But check with your provider first - Identity theft coverage, which may include credit monitoring, is often lumped into homeowners’ insurance policies.

Credit Reporting Companies
Equifax: 1-800-525-6285 or
Experian: 1-888-397-3742 or
TransUnion: 1-800-680-7289 or

Your security is a priority.  

We appreciate you and want to help protect you.

Your PlanningWorks Team

An Estate Plan or a Wealth Transfer Strategy?


An Estate Plan or a Wealth Transfer Strategy?

Basic estate planning documents may not communicate your intentions.


Provided by PlanningWorks


There are three degrees of estate planning: advanced, basic, and none at all. Basic is better than none, but elementary estate planning can still leave something to be desired. While appropriate documents may be in place, they may not be able to fully convey what you really want to do with your estate.


Have you communicated your wishes to your heirs, in writing? Cut-and-dried, boilerplate legal forms will hardly do this for you.


In a wealth transfer strategy (as opposed to a basic, generic estate plan), you share your values and goals in addition to your assets. You hand down your wealth with purpose, noting to your beneficiaries and heirs what should be done with it. You also let them know how long the transfer of assets may take. This way, expectations are set, and you reduce the risk of your beneficiaries and heirs being unpleasantly surprised.


Are your heirs prepared to inherit your wealth? Prepare them as best you can during your lifetime. Introduce them to the financial, tax, and insurance professionals who have helped you through the years; they should know how to contact these professionals, and they should value their wisdom.


Explain the “why” of your estate planning decisions. For example, if you intend to transfer assets to heirs or charity through a living trust, a charitable remainder trust, or a qualified charitable distribution from an IRA, share the logic behind the move.


Also, let your heirs know that your wealth transfer strategy is dynamic. It can change. Five or ten years from now, you may have more or less wealth than you currently do, and life events may come along and prompt changes to your estate planning documents. Speaking of communication, this leads to a third, important aspect of a wealth transfer strategy.


Have you double-checked things? Look at your beneficiary forms and other estate planning documents. Are they up to date?


When a beneficiary form is out of date, it can invite problems – because legally, the instructions on a beneficiary form can overrule a will bequest. What if the named beneficiary is dead, and the contingent beneficiary is dead as well? What if your named beneficiary is estranged or divorced from you? In such instances, the asset may not transfer to whom you wish after you pass away. Looking at the wealth transfer process from another angle, you also want to make sure you have an executor who is of sound mind and who has the potential to remain lucid and reasonably healthy for years to come.1


A basic estate plan is better than procrastination. A bona fide wealth transfer strategy is even better. Involving your heirs in its creation, refinement, and implementation may help you guide your wealth into the future in accordance with your goals.


PlanningWorks may be reached at 512 498-7526 or


Financial Priorities Young Families Should Address

Financial Priorities Young Families Should Address

Wise money moves for parents under 40.


Provided by PlanningWorks


As you start a family, you start to think about certain financial matters. Before you became a mom or dad, you may not have thought about them much, but so much changes when you have kids.


Parenting presents you with definite, sudden, financial needs to address. By focusing on those needs today, you may give yourself a head start on meeting some crucial family financial objectives tomorrow. The to-do list should include:


Life & disability insurance coverage. If one or both of you cannot work and earn income, your household could struggle to meet education expenses, medical expenses, or even paying the bills. Disability insurance payments could provide some financial support in such an instance. Some employers provide it, but that coverage often proves insufficient. Every fifth American has a disability, and more than 25% of 20-year-old Americans will become disabled before reaching retirement age. One in eight working people will be disabled for five years or longer during their pre-retirement years. Could you imagine your household going that long on only a fraction of its current income?1,2


Generally, the earlier you buy life insurance coverage, the cheaper the premiums will be. The biggest savings await those consumers who buy coverage before age 30 and before they marry and have kids. After 30, high blood pressure and cholesterol problems may begin to show up on blood tests, and other health problems may surface. As an example, a single, child-free 25-year-old in good health purchasing a 30-year term policy with a $500,000 death benefit will pay a monthly premium of about $75. The premium jumps to around $115 for the typical 35-year-old married parent in good health.3


Estate planning. Is it too early in life to think about this? No. Life insurance, a will, a living trust – these are smart moves, especially if you have children with any kind of special needs or health concerns of your own that may shorten your longevity or lead to weaknesses in body or mind. Besides documents linked to insurance and wealth transfer, consider a durable power of attorney and a health care proxy.


If you are considering designating a guardian for your children in the event of the unthinkable, whoever you appoint needs to be comfortable with the possibility of taking legal responsibility for your child. That person must also have the financial wherewithal to be a good guardian, and his or her family or spouse must also be amenable to it.


College planning. What will a year at a public university cost in 2035? Vanguard, the investment company, conducted an analysis and projected an average tuition of $54,070. (The 2035 projection was $121,078 for a private college.) So, the message is clear: start saving now. Saving and investing for college through a 529 plan, a Coverdell ESA, or other accounts that offer the potential for tax-deferred growth may give you a better chance to meet those future costs.4


An emergency fund. Ideally, your household maintains a cash cushion equivalent to 3-6 months of salary. Build it a little at a time, set aside a bit of money per month, and you may be surprised at how large it grows during the coming years.


Address these priorities now, and you may lower your chance of financial stress in the future.


PlanningWorks may be reached at 512 498-7526 or


Refreshed Client Site Homepage and Goals Tab are Here

On August 22 we released an update to your Personal Financial Management site. We know your life is busy, so this update was designed to make it even easier to see what's most important to you.

Here's what changed on your website:

  • modern and streamlined homepage that places real-time account, budget, and goal tracking information front and center.
  • New goal tracking tools allow you to analyze and monitor the progress of your financial goals in real time.

And in an effort to streamline your user experience, we removed a few features from the site, including:

  • The Tour Guide Video
  • Mobile Set-up Tile
  • Awards Manager

Additionally, a new "bell" Alert icon has replaced the Alert bar notification.

Check out a sneak peek of the redesigned homepage and new Goals tab.

Note that existing accounts, documents and reports on your website were not affected by this update. I hope you're as excited as we are about the new features! Please let me know if you have any questions.

As a reminder - the link to login to your website can be found at - click the button at the top that says "PlanningWork$ eMoney"

Before You Claim Social Security

Note from Lisa & Mikiel:
In our experience, cash flow planning is the largest part of retirement planning. We have special software tools that allow us to calculate and consider all aspects of Social Security planning that may benefit you. Please give us a call at 512 498-7526 or email us at for more information.
Before You Claim Social Security
A few things you may want to think about before filing for benefits.
Whether you want to leave work at 62, 67, or 70, claiming the retirement benefits you are entitled to by federal law is no casual decision. You will want to consider a few key factors first.
How long do you think you will live? If you have a feeling you will live into your nineties, for example, it may be better to claim later. If you start receiving Social Security benefits at or after age 67 (Full Retirement Age), your monthly benefit will be larger than if you had claimed at 62. If you file for benefits at 67 or later, chances are you probably a) worked into your mid-sixties, b) are in fairly good health, c) have sizable retirement savings.
If you sense you might not live into your eighties or you really, really need retirement income, then claiming at or close to 62 might make more sense. If you have an average lifespan, you will, theoretically, receive the average amount of lifetime benefits regardless of when you claim them; the choice comes down to more lifetime payments that are smaller or fewer lifetime payments that are larger. For the record, Social Security's actuaries project the average 65-year-old man living 84.3 years and the average 65-year-old woman living 86.6 years.1  
Will you keep working? You might not want to work too much, for earning too much income can result in your Social Security being withheld or taxed.
Prior to age 66, your benefits may be lessened if your income tops certain limits. In 2017, if you are 62-65 and receive Social Security, $1 of your benefits will be withheld for every $2 that you earn above $16,920. If you receive Social Security and turn 66 this year, then $1 of your benefits will be withheld for every $3 that you earn above $44,880.
Social Security income may also be taxed above the program's "combined income" threshold. ("Combined income" = adjusted gross income + non-taxable interest + 50% of Social Security benefits.) Single filers who have combined incomes from $25,000-34,000 may have to pay federal income tax on up to 50% of their Social Security benefits, and that also applies to joint filers with combined incomes of $32,000-44,000. Single filers with combined incomes above $34,000 and joint filers whose combined incomes surpass $44,000 may have to pay federal income tax on up to 85% of their Social Security benefits.2
When does your spouse want to file? Timing does matter. For some couples, having the lower-earning spouse collect first may result in greater lifetime benefits for the household.3  
Finally, how much in benefits might be coming your way? Visit to find out, and keep in mind that Social Security calculates your monthly benefit using a formula based on your 35 highest-earning years. If you have worked for less than 35 years, Social Security fills in the "blank years" with zeros. If you have, say, just 33 years of work experience, working another couple of years might translate to slightly higher Social Security income.3
Your claiming decision may be one of the major financial decisions of your life. Your choices should be evaluated years in advance, with insight from the financial professional who has helped you plan for retirement.
PlanningWorks may be reached at 512 498-7526 or
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
1 - [7/27/17]
2 - [5/8/17]
3 - [12/15/16]

Special Note from Lisa & Mikiel, Quarterly Economic Update

PlanningWorks Presents:







“To fulfill a dream, to be allowed to sweat over lonely labor, to be given the chance to create, is the meat and potatoes of life. The money is the gravy.”

- Bette Davis





New parents should strive to insure themselves. That means life insurance coverage for both spouses or partners. In the event of one spouse or partner’s untimely death, life insurance benefits may replace lost income and help the surviving parent pay for child care costs. 





A review of Q2 2017

Special Note from Lisa & Mikiel:

Fred Fern, the founder and owner of Churchill Management Group was in our office recently for a visit. Fred shared with us his discipline & passion he has for managing risk with our clients:

The Discipline:
Team Approach
Process for Fundamentals, Sentiment & Tehnicals
Depth of Experience

The Passion:
Three Generations of Family in Management
Commitment to achieve and serve clients risk management objectives
Conviction to reach out and talk one on one with clients and us

Churchill continues to be highly ranked with Barron's - they were the #1 Money Manager of the Year in 2016, with G.I.P.S. audited reporting.* The company currently manages $4.6 billion in assets and pension funds.

Fred has shared with us many stories of how he has founded, grown and sustained his highly effective and productive business.

If you are interested in learning more about Churchill Management Group - please contact our office and we would be happy to talk with you. Please call us at 512 497-7526 or email us at

Lisa & Mikiel


After a remarkable first quarter, the stock market cooled off slightly in Q2 – but investors still saw substantial gains. Strong earnings helped take Wall Street’s collective mind off a decidedly mixed bag of economic signals. Consumers remained confident as the quarter unfolded; although hiring, inflation, and consumer spending weakened. Home sales declined, then rebounded. Overseas, factory activity in China and the eurozone showed improvement, and foreign equity benchmarks continued climbing. Many commodities took sizable Q2 losses. When the quarter ended, the bulls were still firmly in charge.1


As one quarter ends, the Bureau of Economic Analysis commonly makes its third and last assessment of the prior quarter’s economic growth (though, even this “final” estimate may be adjusted in later years). In the last week of June, the BEA announced a “final” Q1 growth number of 1.4%, which was nothing to celebrate. Would Q2 growth come in above 2%?2


Second-quarter consumer spending data from the Department of Commerce raised some concerns about reaching that percentage of growth. While April and May brought solid growth for personal incomes (0.3% in the former month and 0.4% in the latter), the gain in personal spending fell from 0.4%, in the fourth month of the year, to 0.1%, in the fifth. Retail sales, too, tailed off: after rising a robust 0.4% in April, they fell 0.3% for May.2


Households did feel good about the state of the economy and their financial prospects. At final readings of 97.0 in April, 97.1 in May, and 95.1 in June, the University of Michigan’s consumer sentiment index stayed well north of its 86.1 historical average. The Conference Board’s index ended the quarter at a very high mark of 118.9.2,3


Hiring figures from the Department of Labor were somewhat weak. Monthly employment reports showed that U.S. firms added 174,000 net new jobs in April and 138,000 net new jobs in May. (In March, the number had been just 50,000.) Was the job market simply at capacity? Only time would tell. Reductions in the labor force participation rate helped send both the headline jobless rate and the U-6 rate, factoring in the underemployed, to notable lows. By June, the headline (U-3) rate had dipped to 4.3%, a level unseen in 16 years; the U-6 rate had fallen to a 10-year low of 8.4%.4


On the manufacturing front, the news appeared better. The Institute for Supply Management’s factory purchasing manager index rose to 57.8 in June, a 34-month peak. This was after readings of 54.8 in April and 54.9 in May. ISM’s service sector PMI was also well above the expansion line of 50 in April and May, displaying respective readings of 57.5 and 56.9 in those months.5,6


Still, federal government reports showed manufacturing and industry production falling off in Q2. Industrial output jumped 1.1% in April; then, flattened in May. Manufacturing output went from a 1.1% gain to a 0.4% retreat. Hard goods orders were down 0.9% in April; then, down 1.1% a month later.2


Annualized inflation declined during the quarter. The May Consumer Price Index showed only a 12-month gain of 1.9% and just 1.7% for core prices. A month earlier, yearly inflation had been at 2.2% with the core CPI rising 1.9%. Did wholesale inflation also lessen? The headline number did, ticking down 0.1% in May to 2.4%. The core Producer Price Index was up 2.1% year-over-year through May, a 0.2% increase from April.2


The Federal Reserve lifted the federal funds rate by another quarter point in June to a target range of 1.00-1.25%. It also disclosed it would begin reducing its massive bond portfolio “this year,” which could put pressure on long-term interest rates. The central bank intends to let $6 billion of Treasuries and $4 billion per month in agency debt and mortgage-linked securities mature per month to start. In late June, all 34 of the country’s largest banks passed the Fed’s annual stress tests – a milestone unseen since their adoption seven years ago.7,8


Emmanuel Macron’s decisive victory in France’s national election cheered investors concerned about the potential for another crack in the European Union, and it started a rally in the euro, which continued in June after European Central Bank President Mario Draghi commented that “the threat of deflation is gone and reflationary forces are at play.” Investors took those words as a strong hint that the ECB would presently end its quantitative easing. As the quarter concluded, Chancellor Angela Merkel’s reelection seemed probable in Germany; a fourth Merkel term would be another boost to EU economic confidence and stability.1,9


Manufacturing economies accelerated around the world in the quarter. The Markit eurozone factory PMI reached 57.0 in May, and then, 57.4 in June (a 4-year peak). Manufacturing PMIs in Vietnam, India, South Korea, Taiwan, and Japan were all above 50 (the level signifying sector expansion) as Q2 wrapped up. China’s official factory PMI was at 51.2 in May; then, 51.7 in June. Its official service sector PMI came in at 54.5 in May and 54.9 in June.10,11


One factoid conveys how well global equity benchmarks did in 2017’s first half: 26 of the world’s 30 major indices posted 6-month gains. The last time that happened was in 2009 – and it has only occurred in four other similar intervals within the past two decades.12


Germany’s DAX finished the first half up an impressive 7.4% YTD, and France’s CAC 40 was up 5.3% on the year when Q2 ended. The United Kingdom’s FTSE 100 was 2.4% higher YTD on June 30. India’s Sensex topped the 31,000 level in June, reaching an all-time peak and outdistancing nearly all of its nearby Asia-Pacific benchmarks with an astounding 16.1% first-half advance. The Nikkei Asia300 index did even better, ending the first half of 2017 up more than 21% YTD.13,14


Looking at some regional indexes, the pan-Europe Stoxx 600 index fell 0.5% in Q2, but still had risen 5.0% YTD through June. The MSCI World Index advanced 3.4% in the quarter, to go up 9.4% for the year; MSCI’s Emerging Markets benchmark rose 5.5% in Q2, taking its YTD gain to an impressive 17.22%.13,15


Oil traded under $50 for most of the second quarter, touching a low of $42.05 before rising to finish Q2 at $46.33 on the NYMEX. Gold ended June at $1,241.40; silver, at $16.57.1,16


Losers outnumbered winners in the commodity sector in Q2, and some commodities took steep falls. Iron ore slid 21.37% in the quarter; sugar, 17.60%; gasoline, 11.16%; coffee, 10.95%. Other notable losses came for silver, oil, and cocoa, which were all down between 9-10% for the quarter; heating oil and natural gas gave back roughly 5%. Among the big Q2 winners: oats, up 29.32%; CBOT wheat, up 19.81%; feeder cattle, up 10.43%. Palladium picked up 4.78%; soybean oil; 3.62%; corn; 1.72%; copper, 1.66%.1


The animal protein and grain sectors were the best-performing portions of the commodities market in the quarter, respectively gaining 15.13% and 13.34%. The energy sector fell 7.61%; the precious metals sector, 2.09%; the base metals sector, 1.75%.1


Home buying slumped in April and then rebounded during May. In the fourth month of the year, the National Association of Realtors calculated a 2.5% decline in resales – but a 1.1% May gain left them 2.7% improved over the past 12 months. That May gain happened with inventory down 8.4% year-over-year and a median existing home price 5.8% higher ($252,800) than a year before. The Census Bureau said that new home sales dropped 7.9% in April, but they rose 2.9% a month later.2,17


Cheap mortgages were certainly a plus. In Freddie Mac’s March 30 Primary Mortgage Market Survey, mortgage types bore the following average interest rates: 30-year fixed, 4.14%; 15-year fixed, 3.39%; 5/1-year adjustable, 3.18%. Freddie’s June 29 survey showed the following averages: 30-year fixed, 3.88%; 15-year fixed, 3.17%; 5/1-year adjustable, 3.17%.18


Three other closely-watched housing market indicators weakened in Q2. The Census Bureau’s monthly snapshot of housing starts and building permits showed starts down 2.8% in April and 5.5% in May as well as permits slipping 2.5% for April and 4.9% for May. The year-over-year advance on the 20-city composite S&P/Case-Shiller home price index was 5.9% in the March edition and 5.7% in the April edition (this is a famously lagging indicator). Finally, NAR’s pending home sales index took two small steps back, retreating 1.7% in April and 0.8% in May.2


A sustained rally with only brief, minor setbacks left the notable U.S. equity and volatility indices at the following levels at the end of Q2: S&P 500, 2,423.41; Dow Jones Industrial Average, 21,349.63; Russell 2000, 1,415.36; Nasdaq Composite, 6,140.42; CBOE VIX, 11.18. The quarterly gains for the big three are noted below; the Russell advanced 2.39% in three months, while the VIX fell 3.12%. The PHLX Oil Service Sector index brought up the rear among U.S. equity indices, staggering to a 22.54% 3-month loss.19

















S&P 500






6/30 RATE










Sources:,,, – 6/30/171,20,21,22

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.


With the three marquee U.S. equity indices up between 15-27% in 12 months, investors are naturally skeptical about how long stocks can maintain such powerful momentum. Bulls still rule the Street, though – and bullish analysts see more upside to this market during the rest of 2017. It is true that past performance is no guarantee of future success, but the major Wall Street indices have tended to have a good second half in the past 20 years, regardless of their first-half performance. The Dow and Nasdaq have posted second-half advances during 14 of the past 20 years, and the S&P 500 has followed suit in 13 of the past 20 years. Looking closer at the years featuring these advances, the average second-half rise was 4.31% for the Nasdaq, 3.23% for the Dow, and 2.68% for the S&P. Since 1988, the S&P has never retreated during the second half of a year when it has gained 6% or more in a first half. So, in recent stock market history, when the bulls have been ruling the Street in the first half of a year, they have tended to keep running the rest of the year. Bears might say that the bulls who embrace these statistics are suffering from recency bias, and perhaps, that argument has merit. Then again, bearish analysts have predicted an end to this bull market year after year, and still, it persists.23



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Economic Update for May, 2017

PlanningWorks Presents:







“The whole life of man is but a point of time; let us enjoy it.”

- Plutarch





If you have assets in a workplace retirement plan or a traditional IRA, you can do a Roth conversion regardless of how much you earn. (You will be in line to pay ordinary income tax on the amount you convert.)




It can fit down a chimney when it is down. It has a hard time going down a chimney when it is up. You can hold it with one hand, and make it expand. What is it?



Last month’s riddle:
Three sisters walk toward school with just one small umbrella, which they must all try to fit under. When they reach their school, none of them are the slightest bit wet. How is this possible?


Last month’s answer:

It didn’t rain on their way to school.


May 2017

In April, investors kept one eye on impressive corporate earnings and another on geopolitical developments in Asia and Europe. Earnings ultimately drew the most attention – the Dow Jones Industrial Average rose more than 1% for the month, while the Nasdaq Composite added more than 2%. The latest readings on some key economic indicators were disappointing, but consumer confidence and purchasing manager indices looked good. Positive economic news filtered in from both China and the eurozone. Home sales were up; mortgage rates down. Commodity futures largely struggled. All in all, the month featured more economic positives than negatives.1


An extremely bullish stock market climate and abundant consumer confidence often coincide. In April, the nation’s most-watched consumer confidence indices remained high; albeit, not as high as they were in March. The Conference Board’s index declined to 120.6, 4.3 points lower than the previous month; the University of Michigan’s household sentiment index ended the month at 97.0, one point lower than its preliminary April mark.2


Job creation had waned in March. The Department of Labor’s employment report showed only 98,000 net new hires in that month. Still, the jobless rate dipped 0.2% to 4.5%. The U-6 rate, measuring both unemployment and underemployment, declined 0.3% to 8.9%. Does all that seem incongruent? Two factors may help explain it. One, the number of unemployed Americans declined by 326,000 during March, for assorted reasons. Two, the DoL uses two different surveys to compile data for its monthly report. One tracks payrolls at businesses; the other, the employment status of individuals.3


Turning from the workplace to the point of purchase, March saw flat consumer spending and a 0.2% downturn in retail sales. (Consumer incomes rose 0.2%.) In related news, America’s first-quarter GDP number was lackluster – the economy grew just 0.7% in the opening three months of the year, according to the initial estimate of the Bureau of Economic Analysis.2,4


Consumer inflation declined 0.3% in March, with core consumer prices down 0.1%. Even after that significant dip, the yearly gain in the headline Consumer Price Index stood at 2.4%. The Producer Price Index ticked down 0.1% in March, leaving annualized wholesale inflation at 2.3%.4


The Institute for Supply Management’s service sector purchasing manager index was at a healthy 55.2 in the third month of the year, though it was 2.4 points below its February reading. ISM’s manufacturing PMI, which had been at 57.2 in March, came in at a still-strong 54.8 for April. Hard goods orders were up 0.7% in March after a 2.3% gain in February.2,5


April brought news of economic improvement in China. During Q1, the nation’s economy grew at a 6.9% pace – the best pace seen in six quarters. That surpassed the 6.5% target set by its government. Real estate investment had increased 9.1% and fixed-asset investment 9.2% from a year earlier, but the real boost came from a 21.0% year-over-year gain in local and central government spending. Disposable income grew at a yearly rate of 7.0%, a high unmatched since late 2015. Chinese factory growth did fall short of expectations in April, with the nation’s official PMI hitting a 6-month trough of 51.2.6,7


Markit’s eurozone manufacturing PMI hit a 6-year peak in Q1, reaching 56.4; service sector PMIs for Germany, France, and Spain were all above 55 for the quarter. Markit estimated the Spanish economy growing by 0.8-0.9% in Q1, with projected expansion of 0.6% for Germany and France and 0.3-0.4% for Italy. Eurostat, the European Union’s statistical office, estimated euro area inflation at 1.9% in April, 0.4% higher than it had been in March.8,9


In April, Argentina’s Merval (+4.98%) and France’s CAC 40 (+4.38%) made the biggest upward moves among foreign benchmarks. Spain’s IBEX 35 went +3.15%; Germany’s DAX, +2.38%. Three other major indices gained more than 2% in April: India’s Nifty 50 went +2.23%; the FTSE Eurofirst 300, +2.11%; and the MSCI Emerging Markets, +2.04%.10,11


Other April performances: South Korea’s Kospi, +1.95%; India’s Sensex, +1.73%; Australia’s All Ordinaries, +1.49%; the MSCI World, +1.33%; Brazil’s Bovespa, +1.18%; Hong Kong's Hang Seng, +1.11%; Japan’s Nikkei 225, -0.03%; Canada’s TSX Composite, -0.08%; Mexico’s Bolsa, -0.16%; the U.K.’s FTSE 100, -1.90%; China’s Shanghai Composite, -3.02%.10,11



With stocks once again at or near record levels, commodities mostly cooled off. Gold was certainly an exception: it rose 1.59% last month to settle at $1,269.50 per ounce on the COMEX on April 28. Silver, on the other hand, sank 5.30% to finish April at $17.16. Copper gave back 2.23% for April; platinum, only 0.22%. The U.S. Dollar Index retreated 1.51%.12,13


As for oil, it ended April under $50 – at $49.19 on the NYMEX, to be precise. It lost 3.26% on the month. Unleaded gas took the big tumble among major energy futures, dropping 9.33%. Heating oil’s loss was smaller at 4.36%. Natural gas futures advanced 2.41% for April. Two crops fell particularly hard – cocoa dove 11.94%; coffee, 8.65%. Sugar lost 4.30%. Cotton futures were up 2.34% in April, but corn dipped 2.12%, and wheat, 2.34%. Soybeans were down just 0.05% on the month.12


With the Federal Reserve pledging to tighten as last year ended, who would have guessed mortgage rates would be lower in April than at the start of the year? They were. Freddie Mac’s April 27 Primary Mortgage Market Survey showed average interest on the 30-year FRM at 4.03%; in the January 5 survey, the average interest rate was 4.20%. A year-to-date decline was also evident for the 15-year FRM (3.44% to 3.27%). Average interest on the 5/1-year ARM was 3.12% in April, 3.33% in December. Between March 30 and April 27, the average interest rate on the 30-year FRM lessened 0.11%; for the 15-year FRM and the 5/1-year ARM, the respective descents were 0.12% and 0.06%.14


Existing home sales were up 4.4% in March, according to the National Association of Realtors, a nice change from the (revised) 3.9% February retreat. New home buying, too, improved – the March gain was 5.8%, leaving the annualized advance at 15.6%.4,15 


Looking at other housing indicators, the January edition of the 20-city Case-Shiller home price index arrived, showing a 5.8% year-over-year increase. That bettered the 5.6% yearly rise seen in the December edition. The NAR announced a 0.8% retreat for pending home sales during March, contrasting with a 5.5% surge in February. Housing starts fell by 6.8% in the third month of 2017, but building permits rose 3.6%.2,4


The Nasdaq Composite surpassed 6,000 for the first time in April, gaining 2.30% for the month. At the closing bell on April 28, the index’s 52-week advance stood at 26.64%. The S&P 500 added 0.91% in April; the Dow Jones Industrial Average, 1.34%. The small-cap Russell 2000 improved 1.05%. April’s stock rally thrust the CBOE VIX south by 12.53%; it ended the month at 10.82. The Nasdaq 100 was the pacesetter among consequential U.S. equity indices in April, rising 2.71%. At the end of April, the foremost equity indices watched by Wall Street settled as follows: DJIA, 20,940.51; NASDAQ, 6,047.61; S&P, 2,384.20; RUT, 1,400.43.1,16    

















S&P 500






4/28 RATE










Sources:,, – 4/28/171,17,18,19

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.


On April 28, FactSet estimated 12.5% blended earnings growth for companies in the S&P 500. If that projected annualized growth rate holds, Q1 will turn out to be the best quarter for earnings growth in nearly six years. Earnings gains will certainly vary over succeeding quarters, but for the near term, this story of solid growth may continue to be the narrative. In early May, the most attention may be paid to the Department of Labor’s latest jobs report (Did the March data amount to an aberration? Did payroll growth pick up in April?) and the Federal Reserve’s newest policy statement (Will the central bank send hawkish or dovish signals?). Most investors are looking at the markets through a bullish lens right now, and barring some abrupt, troubling event, the bulls look ready to run for another month.20


UPCOMING ECONOMIC RELEASES: Here is what investors will watch for in May: the FOMC’s latest policy statement and the April ISM service sector PMI (5/3), the April Challenger job-cut report and March factory orders (5/4), the April jobs report from the Department of Labor (5/5), the April PPI (5/11), the April CPI, April retail sales, and the initial May consumer sentiment index from the University of Michigan (5/12), April housing starts, building permits, and industrial production (5/16), April new home sales (5/23), April existing home sales (5/24), April durable goods orders, the federal government’s second estimate of Q1 growth, and the University of Michigan’s final May consumer sentiment index (5/26), the Conference Board’s latest consumer confidence index, April personal spending, and the April PCE price index (5/30), and then April pending home sales, plus the Federal Reserve’s latest Beige Book (5/31).



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