Archive for 'December 2014'

    High Yield: Oil Impact Spills Over to Other Sectors

    December 23, 2014 4:25 PM by Stephen Hillebrecht

    Negative sentiment toward energy bonds has extended into other areas of the high-yield market. That may present an attractive opportunity.

    The steep decline in oil prices and its effect on securities of energy companies in the high-yield bond market has garnered much attention in the past several weeks. Due to large issuance of high-yield bonds by energy companies in the past several years, the sector now accounts for more than 13% of the Bank of America Merrill Lynch U.S. High Yield Master Index. Although recent price declines have reduced energy’s weight, it is still the largest sector in the index. Certainly, there are many highly leveraged companies that will face challenges if oil prices stay at these levels, but not all energy companies’ fortunes are equally tied to the price of crude.

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    Retirement Planning Opportunities Should Abound in 2015

    December 23, 2014 1:20 PM by Brian Dobbis

    The road to retirement is long and winding and filled with questions about when to retire and with what income. Now is the time to look at the key retirement deadlines and regulatory changes for 2015.


    When, less than a month after taking office, President Gerald Ford signed into law the Employee Retirement Income Security Act of 1974 (ERISA), American workers gained unprecedented flexibility to accumulate assets for their golden years. That pension reform bill created the Individual Retirement Account, or IRA—a powerful savings tool with the potential for tax-deferred growth.

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    Market Sentiment Sinks the Ruble

    December 23, 2014 9:08 AM by Leah G. Traub, Ph.D.

    Market contagion, however, should be limited.

    When a country is facing a currency crisis, as clearly Russia is, an interest-rate hike alone, with no other measures, is a sign of desperation and a lack of understanding of the underlying situation. So it was not surprising when the market punished the ruble following a late-night decision on Monday, December 15, by the Russian central bank to hike a key interest rate by 650 basis points, to 17%. 

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    How to "Stretch" Your Nest Egg When You're Toast

    December 19, 2014 4:35 PM by Brian Dobbis

    The Stretch IRA beneficiary option facilitates a potential multiyear intergenerational wealth transfer after an account owner passes away.


    Wouldn’t it be nice if your retirement nest egg could last for multiple generations? The Stretch IRA basically allows a named beneficiary upon the account owner’s death to control IRA payouts. The beneficiary effectively inherits a tax-deferred account, or if it’s a Roth, a tax-free account from which payments can be spread over a significant number of years. That allows tax-deferred compounding to continue, and taxes on the payments may be minimized or at least defrayed for a considerable period.

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    The Fed: Just a Little Patience

    December 17, 2014 4:20 PM by Zane Brown

    Though the central bank altered the language about the timing of future policy moves in its December 17 policy statement, its projections still suggest a mid-2015 hike in interest rates. 

    The Federal Reserve executed a neat bit of linguistic jiu-jitsu in the statement released at the conclusion of its two-day policy meeting on December 17, 2014. The Fed’s policy-setting arm, the Federal Open Market Committee (FOMC), replaced the hedged language of “a considerable time” regarding how long the Fed would maintain its zero-interest rate policy, saying instead that it could be “patient” before making any changes. The FOMC essentially defined “patience” as a “considerable time,” but the change still suggests to many investors that the first interest-rate hike will begin in about six months. 

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    U.S. Dollar: How Should Investors Approach a Mightier Buck?

    December 15, 2014 5:00 PM by Zane Brown

    In the last of a three-part series, Zane Brown offers some potential strategies to respond to the dollar's recent increase versus other currencies.

    In the first two parts of this series, we examined the causes of the ongoing rise in the value of the U.S. dollar—and its potential effects on the U.S. economy and corporate profits. Now it's time to take a look at the broader implications for investors.

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    U.S. Dollar: Stronger Currency, Stronger Economy?

    December 12, 2014 4:15 PM by Zane Brown

    In the second of a three-part series on the dollar's renewed vigor, Zane Brown looks at its potential impact on the U.S. economy—and corporate profits.

    In the first of our three-part series on the implications of a stronger U.S. dollar, we looked at the factors driving the greenback’s rise in value versus other currencies. Here in Part Two, we’ll consider its effect on the U.S. economy and corporate profits. (Part Three will examine the broad investment implications of dollar strength.) 

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    IRAs: RMD Mistakes to Avoid

    December 11, 2014 5:40 PM by Brian Dobbis

    Failure to comply with minimum distribution requirements can cost your client a bundle. Such mistakes are happening more frequently as investors stay in the workforce longer.


    Investors in individual retirement accounts (IRAs) generally are required to start taking required minimum distributions (RMDs) from their accounts the year they turn 70½. Failure to withdraw the full RMD in any year can result in severe consequences, including a 50% penalty surtax on the amount that was not taken, but which should have been.

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    U.S. Dollar: Greener Pastures for the Greenback

    December 10, 2014 4:35 PM by Zane Brown

    Here's the first of a three-part series on the rise of the U.S. currency—and what it could mean for markets and the economy.

    What’s behind the recent strength of the U.S. dollar? What affect could it have on the economy? And what are the broad investment implications of this development? We’ll address each of these questions in a three-part series in The Investment Conversation. Here, we’ll tackle question number one.

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    IRA Beneficiary Planning: When to Sweat the Small Stuff

    December 5, 2014 12:28 PM by Brian Dobbis

    Naming beneficiaries on each and every IRA account is critical if your clients want to ensure that the intended heirs receive the proper proceeds in a timely manner.


    An often-overlooked retirement-planning topic is beneficiary planning. It can’t be stressed enough: Completing a beneficiary form for each and every retirement account your client owns is one of the most important administrative steps an accountholder can take.

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