June Market Review from Sumner Wealth Management

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- JUNE 2017 -

 
 

 In This Edition:

  • Life Experience
  • By the NUMBERS
  • About SWM

 

 

Market Performance

Stock Market

1st QTD

 YTD '17

12 MONTH

 Total U.S. Market1 +5.74% +5.74% +18.07%
   Domestic Large Cap Equity2 +6.07% +6.07% +17.17%
   Domestic Small Cap Equity3 +2.47% +2.47% +26.22%
 International Equity4 +7.86% +7.86% +13.13%
   Developed International Equity5 +7.25% +7.25% +11.67%
   Emerging Market Equity6 +11.45% +11.45% +17.22%

Fixed Income

1st QTD

 YTD '17

12 MONTH

 U.S. Investment Grade Bonds7 +0.82% +0.82% +0.44%
Cash Equivalent8 +0.10% +0.10% +0.30%
1Russell 3000 2S&P 500 Index 3Russell 2000 Index 4MSCI ACWI ex-U.S. Index 5MSCI EAFE Index 6iShares MSCI Emerging Markets Index 7Barclays Capital U.S. Aggregate Bond Index 8Barclays Capital 1-3 Month U.S. Treasury Bill Index   
 
 

Dear Visitor,

I hope your in good health and in good spirits.  I need to apologize for the delay of the newsletter(s) but my family has endured some health issues.  Some of you know, but my wife was diagnosed with Breast Cancer in April.  It was a shock to all of us, and the mammogram did not pick up the Cancer.  However, my wife notice some "strange" lumps and a biopsy was performed which was positive for carcinoma.  With numerous appointments, and decisions to make, she underwent surgery Monday, June 12th.  The surgery was a success, she is cancer free, and we still have more test coming up to make sure the Cancer is not in other locations in her body.  The doctors are confident that there will be no other forms of Cancer.  

So, when you think it want happen to you, think twice.  Most of you know that as your advisor, I always stress to be prepared and have things in order.  Things like this happen and when your not prepared, your left in a panic trying to remember, "what do I need to do" or " do I have enough funds or policies in place to protect my family".  This type of incident is why I like to have annual reviews, either in person or over the phone.  Do you have Disability Insurance, enough Life Insurance, it your Will/Trust updated, does your significant other know where these documents are? This went through my mind every day.   

As for us, the long road to recovery begins, and as most of you know, I am not just your advisor, but a friend.  This is why I am sharing you this story.  From this experience, I have a new respect for Cancer and all the people who have suffered from this terrible disease.  My wife is strong, and we will beat this battle! 

 

By the NUMBERS:

1. SO MANY RECORDS - The S&P 500 closed at a calendar year 2017 high of 2439 on Friday 6/02/17, its 22nd record closing high this year.  During a bull market that is now in its 100th month, the stock index has set 148 record closing highs (source: BTN Research).


2. 
WHAT DO THEY KNOW? - The S&P 500 may be up +9.6% YTD (total return) through Friday 6/09/17, but only 35% of stock investors are currently bullish on US equities for the upcoming 6 months.  Ironically only 19% of individual investors were "bullish" on US stocks just 5 days before a bull market began in March 2009 that has now lasted 99 months up to the current day (source: AAII).


3. 
FUNDING A RETIREMENT - The S&P 500 has averaged +9.1% per year (total return) over the 25 years ending 12/31/16.  A lump-sum of $903,388 (in a pre-tax account) will sustain a 20-year payout of $100,000 per year (i.e., $2 million of gross distributions before taxes) assuming the funds continue to earn +9.1% annually.  This mathematical calculation ignores the ultimate impact of taxes on the account which are due upon withdrawal, is for illustrative purposes only and is not intended to reflect any specific investment or performance.  Actual results will fluctuate with market conditions and will vary (source: BTN Research).


4. 
GOOD RESULTS LATELY - The S&P 500 was down on a total return basis in 9 of the 13 years from 1929-1941.  The S&P 500 has been down on a total return basis in just 1 of the last 14 years from 2003-2016, i.e., down in calendar year 2008 (source: BTN Research).


5. 
PRETTY LIKELY - The Fed Funds futures market was priced last Friday 6/09/17 to reflect a 99.6% chance of a ¼ of 1% rate hike by the Fed at this week's 2-day meeting that ends Wednesday 6/14/17 (source: CME Group).


6. 
BACK WORKING AGAIN - During the global real estate recession that began in 2008, our national jobless rate peaked at 10.0% in October 2009, representing 15.4 million out-of-work Americans.  The May 2017 jobless rate of 4.3% equates to 6.9 million individuals lacking employment (source: Department of Labor).


7. 
MISMATCH - There are 6.0 million job openings nationwide as of 4/30/17, the largest number ever reported for a statistic that has been tracked since December 2000.  That number has climbed 2.3 million (from 3.7 million) in the last 4 years.  For our nation's 6.9 million out-of-work citizens, the record total of job openings may point to a "shortage of skills" that has prevented them from gaining employment (source: Department of Labor).


8. 
IMPACTS THEM MOST - The 1-page tax reform outline released by the White House on 4/26/17 included a proposal to eliminate the deductibility of state and local taxes and property taxes on the 1040 return.  The plan would increase individual income taxes by an estimated $1.3 trillion over the next 10 years.  Taxpayers reporting at least $100,000 of adjusted gross income would pay 75% of the higher taxes (source: Tax Policy Center).


9. 
TOP HAT - The top 1% of US taxpayers paid 39.5% of total federal income taxes collected for the 2014 tax year (source: Internal Revenue Service).


10. 
IT'S VERY IMPORTANT - 58% of American retirees consider their monthly Social Security benefit to be a "major source of retirement income" (source: Gallup).

 

About SWM

Our firm assist individuals, families, and businesses in proactively preparing themselves for a broad range of financial decisions and life events by helping our clients gain income protection, financial stability, with a solid plan.  We are an integrated, Wealth Manager Specialists. 


Mark Sumner
Financial Advisor

 

Sumner Wealth Management, Inc.          
142 South Cardigan Way, ste D                                                                                                                                      
PO Box 4446                                                                                                                                                  
Mooresville, NC  28117                      
Direct (704) 905 - 3594                                         
www.sumnerwealthmanagement.com                                  


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   Sumner Wealth Management | 704.905.3594 | www.SumnerWealthManagement.com

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1.     SO MANY RECORDS - The S&P 500 closed at a calendar year 2017 high of 2439 on Friday 6/02/17, its 22nd record closing high this year.  During a bull market that is now in its 100th month, the stock index has set 148 record closing highs (source: BTN Research).

2.     WHAT DO THEY KNOW? - The S&P 500 may be up +9.6% YTD (total return) through Friday 6/09/17, but only 35% of stock investors are currently bullish on US equities for the upcoming 6 months.  Ironically only 19% of individual investors were "bullish" on US stocks just 5 days before a bull market began in March 2009 that has now lasted 99 months up to the current day (source: AAII).

3.     FUNDING A RETIREMENT - The S&P 500 has averaged +9.1% per year (total return) over the 25 years ending 12/31/16.  A lump-sum of $903,388 (in a pre-tax account) will sustain a 20-year payout of $100,000 per year (i.e., $2 million of gross distributions before taxes) assuming the funds continue to earn +9.1% annually.  This mathematical calculation ignores the ultimate impact of taxes on the account which are due upon withdrawal, is for illustrative purposes only and is not intended to reflect any specific investment or performance.  Actual results will fluctuate with market conditions and will vary (source: BTN Research).

4.     GOOD RESULTS LATELY - The S&P 500 was down on a total return basis in 9 of the 13 years from 1929-1941.  The S&P 500 has been down on a total return basis in just 1 of the last 14 years from 2003-2016, i.e., down in calendar year 2008 (source: BTN Research).

5.     PRETTY LIKELY - The Fed Funds futures market was priced last Friday 6/09/17 to reflect a 99.6% chance of a ¼ of 1% rate hike by the Fed at this week's 2-day meeting that ends Wednesday 6/14/17 (source: CME Group).

6.     BACK WORKING AGAIN - During the global real estate recession that began in 2008, our national jobless rate peaked at 10.0% in October 2009, representing 15.4 million out-of-work Americans.  The May 2017 jobless rate of 4.3% equates to 6.9 million individuals lacking employment (source: Department of Labor).

7.     MISMATCH - There are 6.0 million job openings nationwide as of 4/30/17, the largest number ever reported for a statistic that has been tracked since December 2000.  That number has climbed 2.3 million (from 3.7 million) in the last 4 years.  For our nation's 6.9 million out-of-work citizens, the record total of job openings may point to a "shortage of skills" that has prevented them from gaining employment (source: Department of Labor).

8.     IMPACTS THEM MOST - The 1-page tax reform outline released by the White House on 4/26/17 included a proposal to eliminate the deductibility of state and local taxes and property taxes on the 1040 return.  The plan would increase individual income taxes by an estimated $1.3 trillion over the next 10 years.  Taxpayers reporting at least $100,000 of adjusted gross income would pay 75% of the higher taxes (source: Tax Policy Center).

9.     TOP HAT - The top 1% of US taxpayers paid 39.5% of total federal income taxes collected for the 2014 tax year (source: Internal Revenue Service).

10.   IT'S VERY IMPORTANT - 58% of American retirees consider their monthly Social Security benefit to be a "major source of retirement income" (source: Gallup).