Wealth Management Blog | WrapManager (38)

Eagle Asset Management - Interest Rates and Your Retirement Plan

Posted by WrapManager's Investment Policy Committee

July 9, 2015

Eagle Asset Management's Richard Skeppstrom provides his market perspective for July.

"Prudence is restraining growth?

Second-quarter domestic economic growth has not bounced as much as expected. That’s curious because the weather has improved and the collapse in the price of oil put money in folks’ pockets. I’ve read in a few different places that we are saving the money that we would have spent on fuel. Saving? Like, not spending? Frankly, I’d dismissed the whole notion as absurd. Americans spend. However, that was until I saw a brief note describing Larry Fink’s theory on the matter. He’s the maestro of BlackRock and I pay attention when he speaks (he manages a few trillion dollars more than me). Mr. Fink believes very low interest rates are forcing people to save more for retirement. That’s entirely logical but hard to embrace since we (a large swath of the adult population) have ignored the economic realities of retirement for as long as I can remember.

Mutual Fund Taxation: How to Deal with a 7-Year Bull Market

July 8, 2015

It’s been quite a bull run for stocks, and the benefits are many for those who have been heavily invested in the stock market these last seven years.1 However, there is a downside to such a run, taxes on capital gains distributions. Over the past several years, the amount of capital gains has steadily increased, and the increase will likely continue as long as the stock market continues to rally. This leads investors to wonder what they can do to decrease their tax burden. Before we talk about possible strategies, let’s take a look at the situation. After several years of gains, funds began making payouts, just small payouts at first and gradually larger and larger percentages per share. These payouts qualify as taxable gains, and as such, they are taxable. Additionally, payouts lead to outflows when what you really want to do is preserve your capital. Capital gains don’t often fit into investors’ long-term wealth strategies, so it’s wise to know what other options are available to you. [+] Read More

3 Reasons for International Diversification in Your Portfolio

June 29, 2015

Another day, another headline about a potential Greek exit from the eurozone. The “negotiations” between European leaders and Greece over the past few days have ended in (sometimes quite bitter) stalemates, and Greece is running out of time to secure their next bailout. They owe the International Monetary Fund €1.53 billion by June 30,1 and it does not appear as though they have the cash needed to pay up. So what does this mean for investors and your portfolios? If Greece does not strike a deal with other members of the eurozone very soon, it could mean a messy exit from the currency bloc and could have rippling effects on Europe and the global economy. As investors, it is one thing to think about how Greece’s economy would fare on its own without the support of Europe (might not be too pretty), and entirely another to mull the rippling effects that a “Grexit” could have on the rest of the world. [+] Read More

Eagle Asset Management's Perspective on Rate Increases

June 25, 2015

Eagle Asset Management's Richard Skeppstrom discusses the Fed's approach to debt and credit in this month's Market Perspective. "Betwixt and between The easy money’s been made. That’s not gloomy talk. It’s not controversial. It’s not a recommendation to do anything. It’s a fact. You can expect high returns from stocks when margins are depressed, valuations are low, interest rates can be slashed and the U.S. Federal Reserve is about to juice the system. But that’s simply not where we are now. We are in a new market where the returns will be lower, fewer things will work and volatility will be higher. We will be in this environment for the foreseeable future. This is sort of like getting older. As they say, it’s better than the alternative. Cheer up. [+] Read More

Federated Investors - Strategic Value Dividend Commentary

June 24, 2015

Federated Investors discusses consumer spending and speculates on the potential "snapback" in the coming quarter. "Market Overview The month closed with the first revision to the first-quarter flash estimate of the U.S. gross domestic product (GDP), showing the economy entered contraction territory. A wider trade deficit, smaller inventory build and a downward tweak to already modest consumer spending drove the decline, putting real GDP at -0.7% annualized. The report was hardly surprising to the markets, which actually had been expecting a little worse. The bigger question is how much of a snapback to expect in the current quarter. [+] Read More

The Impact of Rising Interest Rates on Your Portfolio

June 17, 2015

You’ve probably heard it more than once in the last few months: the Federal Reserve appears likely to commence “lift-off” of interest rates at some point later this year. Some analysts believe the first rate hike could come this June, others point to September. At the end of the day, no one really knows for sure when that first hike will come (even the Fed is reluctant to commit to a defined timeframe). But there does seem to be consensus around one view: it will eventually happen. Source: Federal Reserve, FactSet, J.P. Morgan Asset Management. Market expectations are the federal funds rates priced into the fed futured market as of the date of the March 2015 FOMC meeting. *Forecases of 17 Federal Open Market Committee (FOMC) participants, midpoints of central tendency except for federal funds rate which is a median estimate. Data are as of April 30, 2015 Click to view larger image So what does that mean for investors? Do rising interest rates spell trouble for equities and the fixed income markets? Is now the time to adjust your investment portfolio? Using history and hard data as a guide, we’ll take a closer look. [+] Read More

Pre-tax or After-tax Retirement Investment? - Doug's Quiz Corner

June 17, 2015

Quizmaster Doug Hutchinson has come up with another great quiz that explores pre-tax and after-tax options for retirement investing. Let’s see what the math has to say. Good luck! [+] Read More

Cambiar Investors Commentary - Q1 2015

June 11, 2015

In Cambiar Investors' First Quarter Market Commentary, they discuss a wide array of world events effecting their positions. “The first part of 2015 saw global financial returns transposed versus the back half of 2014. Following a peculiar 2014 where U.S. blue chip stocks generated the only significantly positive returns in U.S. dollar terms, conditions have so far reversed in 2015, with international returns faring better than U.S. returns in both local currency and dollarized terms. [+] Read More

Eagle Asset Management May 2015 Market Perspective

June 10, 2015

Eagle Asset Management portfolio manager, Richard Skeppstrom, provides his May market perspective. "A Catch-22: The powerful earnings advance will peter out without better economic growth but the Fed will raise rates if the economy accelerates." Richard Skeppstrom, manager for Eagle's Strategic Return Portfolio, comments on his view of the U.S. Market's neutral state. [+] Read More

ClearBridge Investments - Market Review Q1 2015

June 3, 2015

Legg-Mason ClearBridge's Senior Portfolio Manager, John Goode, provides his first quarter market review. "Tales from the Past and the Future Perspective about the future requires speculation about developments over a time period which often is not helpful for near and intermediate term investment decisions. However, there are times in history when it is necessary to step out on a thin intellectual limb and try to make sense of some of the very big developments that may be especially important over the next 7-10 years. In doing this, it is necessary to look back in time to understand how we got here and where we might be going. [+] Read More