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It’s the American dream; to own a home, and maybe some property and make it your own. The past decade and a half has borne witness to a rollercoaster ride in the values of homes in many parts of the country. New home sales sank to a 6-year low by February of 2007, falling to an annualized pace of 848,000 units. That was down four percent from January of that year. That number also represented an 18.3 percent drop from the year earlier figure. Problems had also showed up in the sub-prime mortgage sector that month with tightening credit. These figures helped to push the broad stock market indexes lower. Ironically, it had been new home sales in 2004 and 2005 that had helped contribute to a more robust economy those years. This year has been a real departure from 2007. September saw an annually-adjusted rate of 645,000 units in



The Internet hasn’t only changed the way people communicate, check on financial accounts or study for school projects; it has brought great wealth to certain companies and their stockholders. Whether they are in the social media realm, in entertainment, online product sales or make the devices we use to access the Internet, most have reflected the explosion in this new technology. FAANG stocks, a term presumably coined by well-known stock promoter Jim Cramer, describes five tech stocks that have had tremendous growth in recent years — Facebook, Apple, Amazon, Netflix and Google (Alphabet). These five stocks account for 11.9 percent of the S&P 500’s market capitalization. The stocks had all had great success since their initial offerings and continued that trajectory during the rally after the inauguration through March. Then; something happened. First, during the week of  June 5th to 9th, 2017, several of the stocks hit new highs. Call it



Watch the bouncing ball; that may describe oil prices in recent years. With incremental changes, Americans are at the point where we might not even pay attention anymore. It’s only those trends that move the ball substantially, either up or down, that seem to catch our attention. With that in mind, oil prices have mostly trended downward in recent months, reaching a 7-month low in mid-June. The reasons are many with catalysts in various parts of the world. In May, it was partially due to increased production in Libya and an oversupply in the U.S. That last reason may be a curiosity to many compared with the status quo only five or ten years ago. But, more recently, the U.S. stockpiles have remained resilient. OPEC had cut production to bolster prices, but the move had not made a big dent in the global supply, which has kept prices in check.



Preventing future terrorist attacks was apparently not on the minds of the French people as they went to the polls and voted for Emmanuel Macron as the country’s next president. Macron had run on a pro-Europe, pro-EU platform, but it was his opponent who ran on the need for stricter vetting of refugees. At 39, Macron is the youngest person to hold the position since Napoleon. The French presidential election occurs in two phases and Emmanuel Macron and Marine Le Pen were the top two finalists who survived the first round two weeks before and sought political victory in a second round that happened two weeks later. Election result projects in France gave Macron two thirds of the vote. Instead of leading another country to exit the European Union, Macron embraces the EU and campaigned on his commitment to the union. Macron’s competitor’s campaign for the presidency never had a



France has had more than its share of terrorist events and that fact has crept into the country’s politics. It has propelled one of two parties competing for the presidency into prominence for the post. Emmanuel Macron and Marine Le Pen made it through round one to fight it out in a run-off election. The first round of voting occurred on April 23, 2017 and the second round run-off will happen on May 7, 2017. Neither finalist comes from either of the country’s two leading parties. News sources characterize them both as outsiders, although Macron had worked as the Deputy Secretary General and Economy Minister for French president Hollande. The candidates from the country’s two major parties only accounted for less than 27 percent of the total vote. The voters have spoken. If this sounds like it bears a resemblance to the last U.S. presidential election, you would be right. There



Investors can be nervous people. That goes double for institutional investors; the people who manage big pension funds, mutual funds, foundations or the funds in insurance companies. When you are responsible for managing billions of dollars, in some cases, you worry about a hiccup of any geopolitical nature. It can mean volatility in the market and that can mean a loss. Unfortunately for those money managers, there is always some concerns on the world stage. Whether those concerns have to do with Iran, North Korea, Russia, terrorism, the French election or Syria, it can impact the oil markets or the stock market. Uncertainty about anything is not welcome in the equity or futures markets and it can wreck havoc with many forms of investments. In times of uncertainty, many investors seek out safe havens such as gold or government bonds, as lower risk alternatives. Yet, employing a knee-jerk reaction isn’t



Taxes are much like rust; once they are allowed to erode, they just keep on eroding. As a saver or investor, both fees and taxes can erode the potential future balance of a savings or retirement account. For this reason, strategies should always include tax considerations, especially for those in higher marginal tax brackets. During a person’s working years, if they used a defined contribution plan like a 401k, they realized a tax decrease as their contributions were not currently taxed. The effect this has was generally to reduce a workers taxes. With the exception of Roth accounts, a retiree must start tapping those retirement savings, and when they do, they will pay taxes at their current tax rate. Their marginal tax rate will be higher in most cases than if they were simply paying long-term capital gains on investments. One thing that holders of a 401k plan should avoid



Can you imagine that you have run up the balances on your credit cards to their maximums and you call the issuer of each credit card and announce; “I have decided that you need to raise my spending limit.” You know the response; “We make that decision; not you.” The bank, or other institution, that issues those credit cards has an underwriting department that determines your risk and ability to pay before they determine a maximum spending limit on your card. A responsible household manages its debt and monthly spending against its income and other sources of assets. This balancing act keeps debt from getting out of hand and assists in maintaining good relations with creditors and keeps the consumer’s FICO score, and other measures of financial responsibility, high. This micro-economic example is replicated on a macro scale when you consider the same balancing act that the United States must



While many retirement plans do not require taxes during the accumulation phase, as the old saying goes; “nothing can be certain except death and taxes.” At some point, taxes are paid on income. There is no skirting it. The benefit of many retirement plans is that they are tax-deferred. During retirement planning, many workers don’t anticipate the effects of taxes during that phase of their lives. They forget that any consideration of living expenses must still be net of taxes. The benefit of tax deferral on many retirement plans is that taxes don’t have to be paid on the income at the time it is earned; often during the time you are at your highest tax rate. The theory is that when you retire, you will be at a lower tax rate and you can pay taxes on your deferred income at that lower rate. As long as the federal,


5-Minute Market Update | February 13, 2017

I am happy to present this week’s market commentary from FormulaFolio Investments. The goal is to give our clients and friends a simple way to see everything they need to know about the financial markets on a weekly basis, in 5 minutes or less. After all, investing should be simple, not complicated. Market Update Equities: Broad equity markets finished mostly positive for the week with large-cap US stocks experiencing the largest gains. S&P 500 sectors finished the week mostly positive as cyclical sectors generally outperformed defensive sectors. So far in 2017 technology, consumer discretionary, and materials are the strongest performers while telecommunications and energy are the only sectors with negative performance year-to-date. Commodities: Commodities were positive for the week as oil prices remained mostly flat. Speculation regarding OPEC production cuts has pushed oil prices up since late November, but an increase in US production has given investors pause so far