Archives for January 2017

Bear Market in Stocks by 2020

7 – Bear market in stocks by 2020.

The U.S. stock market has been driving ahead since March 2009. From a low of 6500 in the Dow to 18,300 on Election Day, Barack Obama has seen one of the best stock markets of any president in history. It’s a bit ironic that the president who most railed against wealth inequality enjoyed one of the greatest booms ever and couldn’t really celebrate that.

Bear markets come in two forms: with and without recession. Recessionary bear markets typically last longer and experience a larger decline. If I believe that recession is possible under Trump then so should a bear market. The next bear market will likely see a loss greater than the largest decline of the current bull market but not nearly as great as the financial crisis bear market. In that case, the next bear market should see a drop between 25% and 40% and last 6-15 months.

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Economy Sees Recession During the Next Four Years

The Friday before the election, our quantitative election model forecasted that Donald Trump was going to be the 45th President of the United States. I didn’t believe it myself, yet I didn’t question whether the model was broken. After all, it’s accuracy rate has been higher than 80%, correcting predicting every election since 1996.

After a barrage of media interviews where some questioned whether I was just a shill for Mr. Trump, the election came and he was in fact elected President. In follow up interviews the day after the election, I offered that any pullback in stocks would be a buying opportunity for a run to all-time highs by the first quarter or so on the way to my longstanding target, first offered in 2010, of Dow 20,000.

I also opined that while Mr. Trump may have run under the GOP label, he was certainly not conforming to any traditional Republican platform and was really a populist who leaned right. Although he often fought with Speaker Paul Ryan during the campaign (and many other mainstream Republicans), Trump knew he needed Republican leadership and they needed him to advance their pro-growth and America First nationalistic agendas. “Politics makes strange bedfellows”

Economically, I believed that the corporate tax rate would be one of the first and easiest items to pass. I even expected a few Democrats to join the party. Tax reform would be next with the individual brackets being cut from 7 to 3 and rates for everyone making less than a million to go down. Legislation to terminate hundreds of Barack Obama’s executive orders would also be seen in the first 100 days. Infrastructure, where I have my own idea of how to pull this off without having the government borrow, would be tabled until 2018.

While Donald Trump began his term with an approval rating of 42%, 66% of the people believe better times are ahead. Consumer Confidence spiked for the past two months to a 13-year high. People may seem to dislike President Trump, but they have very high expectations for the economy and their own well-being. Some could argue that’s because the GOP controls Congress and they believe Speaker Ryan will get the job done.

In any case, with the stock market breaching 20,000 and at all-time highs and the economic data from Q4 still stuck in neutral, the markets and public hopes seem to be priced for perfection. That means there is not a lot of margin for error. With that in mind, it got me thinking about things that could go wrong or different paths President Trump could take.

8 – Economy sees recession during the next four years.

With all of these pro-growth economic plans from Speaker Ryan, this surprise may seem counterintuitive. The past 8 years have seen the worst economic recovery of the modern era. While it may be the typical post-financial crisis expansion, it’s still underwhelming. I think Barack Obama inherited part of this, but I also think his policies caused part of it and prevented more robust growth. There is a chance that our economy has significant structural problems, like Japan on a smaller scale, and even a strong, pro-growth agenda won’t help.

Additionally, presidents who follow two-term presidents typically see a recession within four years. Obama followed Bush 43 and he inherited the Great Recession. Bush 43 followed Clinton and he had the post 9-11 one. Bush 41 succeeded Reagan and he saw the S&L crisis/Gulf War oil recession. Carter followed Nixon/Ford and the economy pulled back in 1980 from Fed rate hikes. Nixon succeeded Kennedy/Johnson and he faced recession at the end of 1969 from higher inflation. JFK followed Eisenhower and he inherited a Fed-driven recession. Ike succeeded Truman and saw another inflation-led recession in 1953. Lastly, Truman took over for FDR and presided over two recessions during his first term as the economy was changing back to a peacetime economy with less government spending.

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Top 8 Shocking Surprises Plus 2 Bonuses Under Donald Trump

The Friday before the election, our quantitative election model forecasted that Donald Trump was going to be the 45th President of the United States. I didn’t believe it myself, yet I didn’t question whether the model was broken. After all, it’s accuracy rate has been higher than 80%, correcting predicting every election since 1996.

After a barrage of media interviews where some questioned whether I was just a shill for Mr. Trump, the election came and he was in fact elected President. In follow up interviews the day after the election, I offered that any pullback in stocks would be a buying opportunity for a run to all-time highs by the first quarter or so on the way to my longstanding target, first offered in 2010, of Dow 20,000.

I also opined that while Mr. Trump may have run under the GOP label, he was certainly not conforming to any traditional Republican platform and was really a populist who leaned right. Although he often fought with Speaker Paul Ryan during the campaign (and many other mainstream Republicans), Trump knew he needed Republican leadership and they needed him to advance their pro-growth and America First nationalistic agendas. “Politics makes strange bedfellows”

Economically, I believed that the corporate tax rate would be one of the first and easiest items to pass. I even expected a few Democrats to join the party. Tax reform would be next with the individual brackets being cut from 7 to 3 and rates for everyone making less than a million to go down. Legislation to terminate hundreds of Barack Obama’s executive orders would also be seen in the first 100 days. Infrastructure, where I have my own idea of how to pull this off without having the government borrow, would be tabled until 2018.

While Donald Trump began his term with an approval rating of 42%, 66% of the people believe better times are ahead. Consumer Confidence spiked for the past two months to a 13-year high. People may seem to dislike President Trump, but they have very high expectations for the economy and their own well-being. Some could argue that’s because the GOP controls Congress and they believe Speaker Ryan will get the job done.

In any case, with the stock market breaching 20,000 and at all-time highs and the economic data from Q4 still stuck in neutral, the markets and public hopes seem to be priced for perfection. That means there is not a lot of margin for error. With that in mind, it got me thinking about things that could go wrong or different paths President Trump could take.

8 – Economy sees recession during the next four years.

With all of these pro-growth economic plans from Speaker Ryan, this surprise may seem counterintuitive. The past 8 years have seen the worst economic recovery of the modern era. While it may be the typical post-financial crisis expansion, it’s still underwhelming. I think Barack Obama inherited part of this, but I also think his policies caused part of it and prevented more robust growth. There is a chance that our economy has significant structural problems, like Japan on a smaller scale, and even a strong, pro-growth agenda won’t help.

Additionally, presidents who follow two-term presidents typically see a recession within four years. Obama followed Bush 43 and he inherited the Great Recession. Bush 43 followed Clinton and he had the post 9-11 one. Bush 41 succeeded Reagan and he saw the S&L crisis/Gulf War oil recession. Carter followed Nixon/Ford and the economy pulled back in 1980 from Fed rate hikes. Nixon succeeded Kennedy/Johnson and he faced recession at the end of 1969 from higher inflation. JFK followed Eisenhower and he inherited a Fed-driven recession. Ike succeeded Truman and saw another inflation-led recession in 1953. Lastly, Truman took over for FDR and presided over two recessions during his first term as the economy was changing back to a peacetime economy with less government spending.

7 – Bear market in stocks by 2020.

The U.S. stock market has been driving ahead since March 2009. From a low of 6500 in the Dow to 18,300 on Election Day, Barack Obama has seen one of the best stock markets of any president in history. It’s a bit ironic that the president who most railed against wealth inequality enjoyed one of the greatest booms ever and couldn’t really celebrate that.

Bear markets come in two forms: with and without recession. Recessionary bear markets typically last longer and experience a larger decline. If I believe that recession is possible under Trump then so should a bear market. The next bear market will likely see a loss greater than the largest decline of the current bull market but not nearly as great as the financial crisis bear market. In that case, the next bear market should see a drop between 25% and 40% and last 6-15 months.

6Not all cabinet nominees confirmed

Another surprise that seems counterintuitive since the Senate is controlled by the GOP. No president since Ronald Reagan saw all of their cabinet nominees confirmed. Every single president had at least on nominee who was rejected, John Tower in 1989 under Bush 41 or withdrawn, all of the rest since Clinton. In fact, Clinton, Bush 43 and Obama all had at least two nominees withdraw their name. While Betsy DeVos seems to be the most controversial at the moment, my sense is that a less public nominee will withdraw.

5 – Trump and the GOP fall out of love

It was a vicious campaign that saw allegiances move all over the place. In the end, after attacking a good number of his fellow candidates, Donald Trump reconciled in one way, shape or form with every single one of them. Given Trump’s personality and populist and nationalistic tone, there is a good chance that Paul Ryan, Mitch McConnell and the GOP end up at odds with President Trump over the details of legislation or executive orders which don’t sit well with the GOP and their constituents.

4 – Trump and Chuck Schumer kumbaya

As recently as 2011, Donald Trump may have been or was aligned with the Democrats. He and Senate minority leader, Chuck Schumer, used to be pals in New York City. If President Trump and the GOP have a falling out, it’s very likely that Chuck Schumer and some of the Democrats will fill that void, especially if it’s during a period where a Supreme Court Justice vacancy needs to be filled.

3 – Moderate Justice chosen for the Supreme Court

Whether Donald Trump has a fight with the GOP or not or if the President finds common ground with the Democrats, a moderate Justice for the Supreme Court will be nominated from one of the judges whom the GOP already approved of at a lower court. All indications are that Trump’s first nomination to the bench, due in early February, will have similar views to that of Antonin Scalia whom he or she will be replacing. That will please and appease the party base. From there, it is likely that one of the liberal Justices will retire by 2020 and Trump, the consummate dealmaker, will nominate a moderate to sail through the Senate.

2 – Trump and Putin have a falling out

This is probably the least surprising of all on the list. One of my theories is that Trump has been so pro-Putin because Obama and Hillary Clinton were such adversaries of Russia. It was yet another good way to differentiate during the campaign. The U.S. and Russia’s interests are so inversely aligned that it would be almost impossible for the two countries not to have a falling out by 2020. I will venture a guess that the impetus for a disagreement comes from Russia’s dealings with Iran or Syria, or Russia’s military taking aggressive positions along a bordering nation.

1Donald Trump is not on the ticket against the Democrats’ candidate in 2020

I find it very hard to believe that Donald Trump will want to run again in 2020. While 74 is by no means old, he will have literally done it all by that time. I think there is a binary path to his party’s nomination in 2020. First, things go so well that Trump opts to leave on top, securing his legacy with the country in great shape. On the flip side, after an amazing honeymoon, his policies get bogged down first in committee and then on the floors of Congress. For the first time in his life, he is unable to make a deal.

At the same time, Angela Merkel already lost the 2017 election in Germany and the euro currency and euro zone are breaking apart in 2018 and 2019. This causes major recessions in Europe and Asia that spillover into the U.S. Along with the bear market in stocks, Trump’s popularity and approval rating plummet so much that he is primaried by several in the GOP. Seeing no path to reelection, Trump withdraws from the race to retake control of his empire.

There you have 8 unexpected, outside the box surprises over the next four years. Clearly, not all of them will happen, but in a vacuum, each one has a puncher’s chance. President Donald Trump is certainly going to have his hands full.

After this list was published, I added two bonus shocking surprises.

Bonus #1 – Janet Yellen reappointed Fed Chair

Donald Trump attacked and criticized the Fed and Chair Janet Yellen during the campaign. He blamed her and them for many of our economic woes along with the stock market being on the edge of a cliff about to plummet. Once 20,000 was hit, Trump changed his tune dramatically, exclaiming how great it was to achieve that milestone with more upside ahead.

As Yellen’s term as chair expires at the end of 2018, Donald Trump does an about face and reappoints her for a second four year term. At that time, the Fed successfully raised interest rates to 2.5% without adversely slowing down the economy. At the same time, the stock market’s bull market kept on going with the Dow exceeding 23,000.

Bonus #2 – Inner circle is a revolving door

Given how Donald Trump’s campaign went and how much turnover there was at the top, that theme continues straight to the 2018 mid-term election. At least 3 cabinet members will be replaced by then and another one or two from the rest of the inner circle. Some will be asked to leave while others will become frustrated with either the president or acrimony in Congress. Steve Bannon, Kellyanne Conway, Sean Spicer, Wilbur Ross, Steve Mnuchin, James Mattis, John Kelly, Reince Priebus are a few to keep an eye on.

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Dow 20,000 Already Forgotten

Last week, the Dow hit my longstanding target of 20,000, first given on CNBC’s Squawk Box in 2010 just after I forecast that the Fed’s balance sheet would hit a staggering $5 trillion. If we see 5 consecutive closes above 20,000, the next upside target will be created. Since Dow 20K, it’s been even more Donald Trump and politics on the financial channels. I think the Q4 GDP report is now totally forgotten.

Market sentiment had become a little frothy heading in to Dow 20K and I thought that finally closing above that meaningless milestone would cause an even stronger rush by the bulls to a potential intermediate-term peak. However, it doesn’t seem to be the case. With President Trump’s pen busier than a one-legged grasshopper at a jumping contest, Dow 20K has taken a backseat. Weekend talk shows totally ignored it. Financial media has largely forgotten about it. This is actually a positive over the intermediate-term.

Before offering some downside targets for a small pullback, let’s wait to see where stocks close on Monday. The bulls could try to defend 19,900 although 19,700 looks more solid. Weakness remains a buying opportunity until proven otherwise.

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Dow Breaking Out & Q4 GDP Miss the Last

After hitting yet another one of my upside targets, 20,000, the Dow has yet to pause. Five straight closes above 20,000 will open up new upside targets before the bull market ends.  As you can see below, the Dow has been consolidating sideways since early December. That’s often referred to as a flat top or box. When prices finally exceed the flat top, they oftentimes see a spurt in the same direction.

Although momentum is on the side of the bulls there are a few short-term headwinds which will present themselves if the rally stalls and closes back in the box sooner than later. Should that occur, I would expect a quick pullback to 19,700.

The NASDAQ 100 has been the leading index since late December, yet it certainly looks a bit tired, the same comment I made earlier in the week. Semiconductors look even more in need of a rest and they typically lead the NASDAQ 100. Keep in mind that all I am saying is that stocks may pause to refresh. The bull market is alive and reasonably healthy. Weakness is a buying opportunity until proven otherwise.

Sector leadership remains strong. Semis, banks, discretionary and transports look powerful although they could use a rest. Industrials and materials are also kicking it into high gear. Healthcare and energy continue to lag, but I think they will have their day in the sun after this quarter.

New highs in high yield bonds and the NYSE A/D Line bode well for the bull market, regardless of the next 5-10% move.

Q4 GDP just printed at 1.9% which was below forecasts. I wouldn’t be surprised if that’s the low print Donald Trump sees for a while and the market just shrugs it off.

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Bulls Wake Up and Attack

No sooner did the ink dry on Monday’s piece than the market quickly tossed aside my thinking for a bit more of a pullback before racing to new highs. Since December 13, four out five of the major stock market indices have been digesting post-election gains and pulling back in a very orderly fashion. Only the NASDAQ 100 has really moved meaningfully higher.

After a morning of selling on Monday, the bull pushed stocks higher into the close. On Tuesday, the bulls spent the morning holding on to minor gains before the fuel was poured on the flames for a strong afternoon run. The media is giving President Trump the credit, but I think it’s getting old to constantly blame and credit his daily comments on market movement. Leadership was very strong with all four key sectors, banks, semis, discretionary and transports, participating, leading and heading to new highs.

The Dow seems poised to test 20,000 once again with the S&P 500 and S&P 400 on breakout watch. The lagging Russell 2000 is right up against some overhead supply which could act as a small headwind unless the other indices drag the small caps higher and help break them out as well.

The NYSE Advance/Decline Line very quietly scored yet another all-time high as you can see below and that immunizes the stock market from a bear market for a while.

High yield (junk) bonds also got out of their recent little funk and should revisit new highs before long. Tuesday was a little bullish surprise, at least for me, and we will want to see some follow through this week, but definitely not an immediate return to this week’s lows.

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“Buy the Election, Sell the Inauguration”

That’s been a popular refrain over the past week as stocks continue in stall mode, basically since December 13. In fact, the Dow and Russell 2000 are now down on the new year. Only the NASDAQ 100 which I thought would go from laggard to leader has had the power to forge ahead in 2017. However, that index is now looking a bit tired and in need of a little rest which won’t be so bad.

For most of the indices, a move to new January lows would be healthy and set up a nice spot to buy. As I have said, I don’t expect anything more than 3-5% pullback. The bull market remains intact and more new highs are coming.

The mean reversion or post-election losers trade remains in place. Bonds, gold, yen and euro continue to move higher and we are finally seeing the defensive equity sectors begin to move. Those are staples, utilities and REITs. At this point, I do not expect them to continue to rally like I do the other more economically sensitive sectors.

Interesting to note that Donald Trump begins his presidency with the lowest approval rating, 42%, of any incoming president in history. Talk about expectations being low. However, 66% believe the economy will do better under Trump and Consumer Confidence just spiked for the second straight month to a 13 year high. It certainly seems like people have confidence in the Trump/Ryan economic plan, but just do not like Trump as a person. I think President Trump could live with that if his policies succeed.

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Bulls & Bears Even But Opex Tilts Down

Bulls and bears come into the new week on equal footing,  both still fighting it out in the trading range. The bulls have done nothing wrong to indicate anything more than a 3-5% pullback and the bears will have a lot to prove at that point. Since early December, the small cap Russell 2000 has lagged and the bulls are getting to that point where it’s time to step up. Clearly, the unpopular NASDAQ 100 has been the leadership index. As I mentioned on CNBC last week, I do think Dow 20,000 gets hit sooner than, but that would be a short-term selling opportunity rather than a launching pad.

For this holiday shortened, option expiration week, the seasonal trend is for mildly lower prices and that’s how it look like the week is beginning. The “losers” from Q4 or the mean reversion instruments continue to lead the markets. Those are treasury bonds, gold, yen and euro. I am a little surprised that staples, utilities and REITs haven’t stepped up, but maybe they need a little soft patch from stocks. In any case, these are short-term opportunities and not trades for the whole year.

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Bears Need to Act Quickly, But Bulls Won’t Make It Easy

After Thursday’s morning sell off the bears finally had something to latch on to. All they needed was to stave off any bull attempt to rally into the close so the bears could try and follow through on Friday morning. However, as pundits called for more weakness, stocks rallied all afternoon and into the close. Unless the bears can make some serious noise on Friday and undercut Thursday’s low, it looks like Dow 20,000 will be tested over the coming few days.

Earnings season has begun and everyone is keenly focused on the banks as strong results are expected. I have a slightly different view. While I fully expect good earnings, especially from JP Morgan, Bank America and the super regionals, the real test comes in three months as fruits of the Fed’s recent rate hike will start to be felt. I also think that forward guidance or soothing commentary will be much more important than the current report.

I have been mentioning that what lost during Q4 was likely to bounce back and lead to begin the year. That means treasury bonds, gold, yen and euro. If stocks are ready to blast higher by another 1000 points or so, these instruments should start to roll over much sooner than later and revisit their December lows. At the same time, I would expect leadership from semis, banks and transports to reemerge and make new highs.

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Top 15 Financial Resolutions for 2017

It’s amazing how powerful the turn of the calendar can be. New Year’s resolutions dominate the landscape with all of the weight loss programs and workout products at the top of the list. I’ve never been a huge “resolution” person, probably since there’s just too much I need to change and it’s a little overwhelming!

But each year, I may pick one single project or thing that needs to get done and is manageable. Last year, my goal was to spend five consecutive weeknights at home (by 5pm) with my family. Between coaching my kids’ teams and their activities, I was unable to accomplish that. That will happen in 2017 plus a new goal on the business side.

Below is my full list of resolutions for 2017 which was partially unveiled and discussed on WTNH’s Good Morning CT Weekend. You can watch that HERE.

1 – Take a financial inventory of your current holdings

Make a list of all accounts and holdings on a piece of paper or Excel spreadsheet of their values at the end of 2016 and 15 (and as far back as you have data). Compute the return from one year to the next. Using 2007 – 2016 should give you a good cross section of market environments with strong up years like 2013, a strong down year, 2008, and a number of strongly volatile and very average years.

Determine the composition of your portfolio: What percent is in stocks, bonds, currencies, commodities, cash, etc.? Try to understand why something did better or worse than expected and consider adding or withdrawing where appropriate. Remember, the most successful investors are the ones who add to their best investments after they experience a challenging period. Make sure you understand what you own and why!

2 – Photograph inventory of your home

With modern technology, it’s never been easier to take pictures or record video. Start on the outside and make sure to capture anything and everything than can be lost due to fire, storm or theft. You, your insurance company and the authorities will be happy you did.

3 – Organize key financial documents

Should tragedy strike your family, make sure that all important documents can easily be located and used by other family members, lawyers or the executor. These documents include but are not limited to will, power of attorney, bank, brokerage and 401K accounts, insurance, mortgage, deeds, etc.

4 – Create/update will

More than half of all Americans die without a will. That is one amazing statistic. Most reason that they just haven’t gotten around to having one done. Laws vary by state as to exactly what happens if you without a will. With estate laws about to change again, there are a variety of reasons to have an updated will. First, you are able to decide exactly what share of your estate and what property goes to which individuals. Otherwise, and especially if there have been more than one spouse and multiple children from those spouses, the different parties will spend a lot of money and time fighting over the assets. If you don’t have an attorney or don’t want to pay one, at least buy the software and do it yourself.

5 – Update beneficiaries

Retirement accounts like IRAs, 401Ks and annuities have beneficiaries. That is, a person, people or entities you want to receive those assets after your passing. Make sure your beneficiaries are still alive and you still want them to receive that predetermined portion. Many times beneficiaries’ family status changes and account owners no longer want them to receive all or any of their account. Additionally, accounts grow in different ways and significant growth of an account may skew the intended gift.

6 – Check credit report

There are several services that offer to supply your credit report on an annual basis for free. Make sure to check all three credit bureaus. Identity theft and credit fraud have become pervasive this decade and it takes a very long time to correct problems. If you see a negative mark on your credit, even a small one, make sure to address it until it has been fixed. It may take a while. Additionally, make sure to close any and all accounts and cards not currently being used as they can negatively impact your credit.

7 – Create a budget

If you notice, I didn’t say to live by a budget, just to create one. That’s the hardest step to take, the first one. Simply either keep track of everything you spend or for a few dollars, purchase a program like Quicken to track it for you. You will be amazed how your money gets spent over the course of the year.

8 – Pay down/off high interest rate credit card debt

This should be the most obvious tip as the higher the interest rate, the more difficult it is to pay off. With the Federal Reserve raising short-term interest rates in December and likely to raise a few more times in 2017, just paying the monthly minimum will take you decades to pay off your debt. That is among the worst mistakes you can make. Whatever it takes, even at the expense of retirement plan contributions, you absolutely must pay down and then off high interest rate credit card debt.

9 – Consolidate debt

Credit card companies are thirsting for new business and luring customers with all kinds of 0% interest rate and free transfer offers. Whether or not you can pay off/down your credit card debt, you should definitely consolidate as many of your credit cards with balances as possible at preferably 0% interest.

10 – Refinance your mortgage

The 35-year bull market in bonds ended in July 2016. With the bond market running in 30-40 year cycles, the odds greatly favor that long-term interest rates, not the ones the Federal Reserve sets, will be rising for the next few decades on balance. Long-term mortgages key off the 10 year treasury note which has already rallied 100% from its 2016 bottom. If you haven’t already refinanced your mortgage when interest rates were at record lows, use any weakness seen during the first four months of 2017 to refinance.

11 – Establish an emergency fund

Working people should have an emergency fund of at least 3-6 months of expenses in case an unexpected event occurs, like losing your job. This fund should be very liquid and easily accessed. If you are single and in your 20s, you can probably get away with a smaller fund. The older you are and the more people who depend on you means the fund should be larger. Having available credit on a credit card is not an acceptable emergency fund.

12 – Rebalance 401K and other investment accounts

While I advocate rebalancing quarterly, most investors, especially those who do not work with a financial advisor, do not even do this annually. This is vital for long-term success. Let’s say your 401K account is allocated 70% to equities and 30% to fixed income. Over the course of every year, stocks and bonds perform differently and that allocation has likely changed, sometimes dramatically. Rebalancing sets that account back to the 70/30 or whatever you chosen allocation is.

13 – Increase 401K or other retirement plan contributions

For the vast majority of Americans, employer sponsored retirement plans are the best form of saving for retirement. With old fashioned, traditional pension plans going the way of the rotary dial phone, many people are offered 401K plans with some employers giving certain contribution matches. Participants should strongly consider raising their contribution percentage until it is maxed out, even if that means just a few dollars a week.

For 2017, the maximum 401K contribution is $18,000 for individuals under the age of 50. For those over the age of 50, the IRS allows an additional $6,000 catch up provision. For IRAs, the maximum contribution is $5,500 for those under 50 with an additional $500 catch up provision for those over 50.

14 – Sell winners

In my Top Financial Tips to Year-End (http://investfortomorrowblog.com/archives/2559), I suggested that investors should hold off selling their winning positions as there was a good chance that capital gains taxes would be cut in 2017. With the calendar turned and a tax cut likely to be seen in the second half of the year, but retroactive to January 1st, investors with taxable gains who were looking to sell in 2016 should now consider selling with the prospect of lower capital gains taxes.

15 – Understand exactly what your health insurance covers

This is not your parents’ old health insurance coverage! There is no more blanket coverage. Deductibles are very high. Copays are high. There is in network, out of network, coinsurance, urgent care, emergency room, etc. With the ObamaCare exchanges failing and premiums skyrocketing, insurance companies are not going to absorb the cost. You are! Don’t wait until your family gets a negative surprise to understand the coverage you have and don’t have.

BONUS – Travel to Europe

It was only 9 years ago when supermodel Gisele Bundchen demanded to be paid in euros instead of dollars. Around that time, it cost $1.60 to buy one euro. I vividly remember doing several media interviews declaring that the euro was peaking and a new, long-term, secular bull market in the dollar was in its infancy. Since Gisele’s embarrassingly poor call, the euro has collapsed from 1.60 to 1.01, or 37%, making travel to mainland Europe the cheapest since 2002 and on its way to becoming even more affordable this decade.

If you need help working through these resolutions or some of your own, please call the office directly at 203.389.3553 or email info@investfortomorrow.com.

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