Economic News, Outlook & Notable Numbers - October 2012

■ Non-farm payrolls increased by 114,000 in September and payroll gains in July and August were revised higher by +86,000. The household survey showed a significant increase in employment following three months of little change, pushing the unemployment rate down to 7.8%. However, due to an increase in those working part time for economic reasons, the broader U-6 measure of unemployment stayed at 14.7%.

■ The Institute of Management Supply Purchasing Managers Index (ISM Manufacturing PMI) moved back into expansion territory in September, increasing +1.9 points to 51.5%. The more leading new orders component increased +5.2 points, and the employment measure improved as well. Eleven of the eighteen industries surveyed reported growth.

■ The ISM Non-Manufacturing PMI increased +1.4 points to a healthy 55.1%. The business activity component climbed over 4 points to 59.9%. The employment component fell but remains in expansion territory. Twelve of the sixteen industries surveyed reported growth.

■ Second quarter Gross Domestic Product (GDP) growth was revised downward to +1.3% (from +1.7%).

■ Industrial production fell by -1.2% in August. Output in the gulf coast region was restrained by Hurricane Isaac. Industrial production is 2.8% above its year-ago level. Capacity utilization fell by 1 percent to 78.2%, a level 2.1 points below its long-term average.

■ Durable goods orders fell -13.2% in August, the largest decrease since January 2009. Excluding transportation, orders fell -1.6%.

■ Retail sales rose +0.9% in August and are up +4.7% year-over-year.

■ Real disposable personal income fell -0.3% in August and real personal consumption expenditures increased +0.1%. The savings rate fell to 3.7%.

■ Inflation measures moved higher on higher energy prices.

■ The producer price index climbed +1.7% in August, the largest monthly rise since June 2009. Excluding food and energy, prices were up only +0.2% for the month. Over the last 12 months, prices are up +2.0%.

■ The consumer price index (CPI) increased +0.6% in August, with 80% of the increase coming from the gasoline index. CPI inflation is up +1.7% over the last 12 months, still below the Fed’s target. Core CPI, which excludes food and energy prices, edged up +0.1% for the month and is up +1.9% over the last 12 months.

■ Housing market data released in September was mixed but leans positive.

■ Existing home sales increased +7.8% to a Seasonally Adjusted Annual Rate (SAAR) of 4.82 million.

■ New home sales fell -0.3% from July’s revised rate, to a SAAR of 373,000. Median and average sale prices increased 1%.

■ Housing starts increased +2.3% to a SAAR of 750,000, but building permits fell -1.0%.

■ The S&P/Case-Shiller Home Price Index increased +1.6% in July. For the third consecutive month, all 20 cities recorded positive monthly changes. 16 of the 20 cities recorded year-over-year price gains.

■ The Conference Board Leading Economic Index declined -0.1%, but the coincident indicator, which measures current economic activity, increased +0.1%.

The Federal Reserve launched an open-ended quantitative easing program. The Fed will purchase $40 billion of agency mortgage-backed securities (MBS) per month until they see substantial improvement in the labor market. The Fed will continue its Operation Twist program through December, which includes the purchase of $45 billion per month of longer-dated Treasuries. The Fed also pushed out their expectation for the continuation of zero-bound rates until at least mid-2015.

Annualized for periods greater than one year. Past performance is no guarantee of future results. Source: FactSet, Red Rocks Capital, Hedge Fund Research. Total returns as of 9/30/12.

■ Investors’ risk appetite returned in the third quarter, helped by promises of additional liquidity by central banks including the Federal Reserve and the European Central Bank (ECB). The S&P 500 Index gained +6.4% in the third quarter and is up +30.2% over the last twelve months.

■ Through the first nine months of the year the NASDAQ has been the best performing broad market index, gaining +19.6%. Apple (AAPL) is responsible for 5.6 percentage points of that gain.

■ Earnings growth has remained strong, with 67% of companies beating earnings estimates for the second quarter; however, only 41% of companies beat expectations for revenue growth.

■ Energy was the strongest performing sector in the third quarter, gaining over +10%, followed by consumer discretionary (+7.5%) and information technology (+7.5%). The utilities sector actually posted a slight decline, falling -0.5%.

■ Large caps led both mid and small caps in the third quarter and value was slightly ahead of growth. For the year to date period, large caps have a nice lead over mid and small caps, but there has been little differentiation by style.

■ After ECB President Mario Draghi pledged to do whatever it takes to save the euro, including sovereign bond purchases, Europe staged a nice rally, gaining over +7% in the third quarter, slightly ahead of U.S. equity markets. International equity returns were boosted by a weaker U.S. dollar, which fell over -2% during the quarter as risk appetites returned. For the year to date period, U.S. markets maintain a sizeable six point lead over international markets.

■ Emerging markets gained almost 8% in the third quarter and are now ahead of developed international equity markets for the year to date period. The strong gains in the emerging markets index have come despite significant relative underperformance by two large markets, Brazil and China. India, Mexico and Thailand have all posted returns above +20% so far this year.

■ U.S. Treasury yields remain at extremely low levels and yield volatility remains low. The 10-year Treasury note closed out September at a yield of 1.65%, just 2 basis points lower than where it began the quarter. Yields are about 20 basis points lower than where they started the year.

■ Corporate credit, both investment grade and high yield, has delivered very strong returns. Spreads have tightened meaningfully on solid fundamentals and robust investor demand for yield. In the third quarter, the Barclays Credit Index gained +3.5% in the Barclays High Yield Index gained +4.5%, outperforming the Barclays Aggregate Index by 190 basis points and 290 basis points respectively. High yield, a beneficiary of strong mutual fund and Exchange Traded Fund (ETF) flows, has returned over +12% so far this year.

■ The technicals in the municipal bond market remain favorable as net new supply is light and investor demand for tax free income is strong. Munis edged out taxable bonds in the third quarter.

■ Overall hedge funds have had a lackluster year as most have kept market exposure too low and have not participated in the strong equity market performance.

■ Commodities were beneficiaries of the “risk on” trade and were the top performer of all of the major asset classes in the third quarter. The gains were broad based across the commodity complex, with only soft commodities falling in price. Gold was up over +10 during the quarter as investors sought a hard asset in the face of more central bank easing.

■ Global Real Estate Investment Trusts (REITs) lagged equities in the third quarter but are still ahead so far this year with a gain of over +21%. Asia has been the best performing geography while industrial REITs have been the best performing property type.

Investors reacted to the announcement of more liquidity provided by central banks by bidding up the prices for risk assets. With an open-ended asset purchase program and their intent to keep interest rates “low for longer”, the Federal Reserve has gone all in to promote growth. The ECB’s commitment to purchase sovereign bonds should buy time for the peripheral European countries to put credible plans into place. Emerging economies have greater policy flexibility to ease further if growth slows to an unacceptable level.

There are some positives in addition to accommodative monetary policy. The housing market is healing, which could serve as a boost to economic growth as well as consumer net worth, and as a result, consumer confidence. Low mortgage rates and rising rents have driven housing affordability to record levels; however, credit remains tight. U.S. companies remain in solid shape. They have solid balance sheets that are flush with cash that could be put to work through mergers and acquisitions, capital expenditures or hiring, or returned to shareholders in the form of dividends or share buybacks. Valuation of U.S. equities remains reasonable and more attractive valuations can be found outside the U.S.

It is unclear how long this liquidity-fueled rally can continue in the face of a number of major risks. As investor sentiment has shifted more bullish, the equity markets may have moved ahead of the fundamentals. The major risks that concern us include:

■ U.S. fiscal cliff / U.S. election: We face a significant fiscal cliff in 2013 due to expiring tax cuts and spending measures. With economic growth in the U.S. at stall speed, the size of the fiscal cliff could tip us into recession territory. There will be no resolution of the fiscal cliff until after the election is decided, which will result in greater uncertainty. We hope for a short-term extension of some of the measures, setting up for a larger tax and entitlement reform package to be debated in 2013. Fiscal policy uncertainty has led U.S. companies to put plans for additional hires and/or capital expenditures on hold until it is clear what the rules are.

■ European sovereign debt crisis and recession: While the ECB and European Union leaders have pledged support to the euro, actions need to follow words. Bond purchases by the ECB will not solve the problems in Europe, but it can buy policymakers time to make real reforms. However, growth will continue to weaken in the region. High unemployment combined with planned austerity measures have led to more social unrest.

■ Global growth slowdown: There is evidence of a slowdown in growth not only in developed markets, but also in emerging markets. Growth in the U.S. continues to be sluggish, leaving the economy susceptible to shocks. Europe is in recession territory. Growth in China has slowed and continues to show signs of further weakening. Weaker economic growth will soon flow through to earnings.

■ Tensions in the Middle East: Geopolitical risks in the Middle East are cause for concern. A sharp rise in oil prices will be a negative shock to the global economy.

These unresolved macro risks will keep the markets susceptible to bouts of volatility as we enter the last few months of the year. Because of massive government intervention in the global financial markets, we will continue to be susceptible to event risk. As a result, our portfolios will continue to be positioned with a modestly defensive bias. Instead of taking a strong position on the direction of the markets, we seek to take advantage of high conviction opportunities and strategies within asset classes.

In Short Supply – The inventory of existing homes for sale in the United States declined by 750,000 in the last 12 months, a drop of 24% (source: National Association of Realtors).

Green Acres – Net farm income in America is projected to reach an all-time record of $122.2 billion in

2012. Net farm income was $63.0 billion in 2009 (source: Department of Agriculture).

The Biggest – 7 of the 10 largest corporations in the world (based upon 2011 sales) are in the oil industry

(source: Fortune).

This newsletter is intended to provide opinions and analysis of the general conditions of the market and economy, but is not intended to provide personalized investment advice. Statements referring to future actions or events, such as the future financial performance of certain asset classes or market segments, are based on the current expectations and projections about future events provided by various. sources, including Brinker Capital's Investment Management Group. These statements are not guarantees of future performance and actual events may differ materially from those discussed. This commentary includes statistical information obtained from various third-party sources. Brinker Capital believes those sources to be accurate and reliable; however, we are not responsible for errors by third-party sources on which we reasonably rely. Performance data represents general indexes representative of certain asset classes and are not indicative of actual past performance of any specific portfolio managed or sponsored by Brinker Capital.

Source: FactSet

Barclays Capital Municipal Bond Index – A benchmark index that includes investment-grade, tax-exempt, and fixed-rate bonds with long-term maturities (greater than two years) selected from issues larger than $50 million.

Barclays Capital U.S. Aggregate Bond Index – An unmanaged market-value-weighted performance benchmark for investment-grade fixed-rate debt issues, including government, corporate, asset-backed, and mortgage-backed securities, with maturities of at least one year.

Barclays Capital U.S. TIPS Index (Treasury Inflation-Protected Securities) –The Barclays U.S. TIPS Index consists of inflation-protection securities issued by the U.S. Treasury.

BofA Merrill Lynch 3-7 Year Municipal Bond Index – The index measures the performance of mutual bonds with maturities between three and seven years.

Conference Board Leading Economic Index –An American economic leading indicator intended to forecast future economic activity. It is calculated by The Conference Board, a non-governmental organization, which determines the value of the index from the values of ten key variables. These variables have historically turned downward before a recession and upward before an expansion.

Consumer Price Index (CPI) –Consumer Price Index is a measure of the cost of goods purchased by average U.S. household. It is calculated by the U.S. government's Bureau of Labor Statistics.

Dow Jones Industrial Average (DJIA) – The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.

Dow Jones/UBS Commodity Index – A rolling commodities index composed of futures contracts on 19 physical commodities traded on U.S. exchanges. The index serves as a liquid and diversified benchmark for the commodities asset class.

Dow Jones U.S. Total Stock Market – The Dow Jones U.S. Total Stock Market Index represents the broadest index for the U.S. equity market, measuring the performance of all U.S. equity securities with readily available price data. The index was created in 1974.

Emerging Markets (EM) – A foreign economy with a low to middle per capita income that is developing in response to the spread of capitalism and has created its own stock market. Analogous to small growth companies, emerging markets have high potential as well as high risk. Such countries constitute approximately 80% of the global population, and represent about 20% of the world's economies.

Exchange Traded Fund (ETF) – A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange.

FTSE EPRA/NAREIT Global Real Estate (Financial Times and London Stock Exchange European Public Real Estate Association/National Association of Real Estate Investment Trusts®) –The FTSE EPRA/NAREIT Global Real Estate Index is designed to represent general trends in eligible listed real estate stocks worldwide. Relevant real estate activities are defined as the ownership, trading and development of income-producing real estate. Only closed-end companies listed on an official stock exchange are included in the index.

Gross Domestic Product (GDP) – GDP is commonly used as an indicator of the economic health of a country, as well as to gauge a country's standard of living.

HFRX Global Hedge Fund Index – The HFRX Global Hedge Fund Index is designed to be representative of the overall composition of the hedge fund universe. It comprises eight strategies: convertible arbitrage, distressed securities, equity hedge, equity market neutral, event driven, macro, merger arbitrage, and relative value arbitrage. The strategies are asset-weighted based on the distribution of assets in the hedge fund industry.

ISM Manufacturing PMI – A monthly index released by the Institute of Supply Management which tracks the amount of manufacturing activity that occurred in the previous month. This data is considered a very important and trusted economic measure. If the index has a value below 50, due to a decrease in activity, it tends to indicate an economic recession, especially if the trend continues over several months. A value substantially above 50 likely indicates a time of economic growth. The values for the index can be between 0 and 100.

ISM Non-Manufacturing PMI – ISM Non-Manufacturing Index is a gauge of business conditions in non-manufacturing industries, based on measures of employment trends, prices and new orders. Though non-manufacturing sectors make up the majority of the economy, the ISM Non-Manufacturing has less market impact because non-manufacturing data tends to be more cyclical and predictable. However, these sectors do account for a considerable portion of CPI. As a result, the figure gives insight into conditions which can impact output growth and inflationary pressures.

MSCI All Country World ex-U.S. (Morgan Stanley Capital International) –The MSCI All Country World Index ex-U.S. is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets, except the U.S. The index consists of 47 country indices comprising 22 developed and 25 emerging market country indices.

MSCI EAFE (Morgan Stanley Capital International Europe, Australasia and Far East) –The MSCI EAFE Index is recognized as the preeminent benchmark in the United States to measure international equity performance. It comprises 21 MSCI country indices, representing the developed markets outside of North America: Europe, Australasia and the Far East.

MSCI Emerging Markets (Morgan Stanley Capital International) –The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. As of June 2006, the MSCI Emerging Markets Index consisted of the following 25 emerging market country indices: Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Jordan, Korea, Malaysia, Mexico, Morocco, Pakistan, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey.

National Association of Securities Dealers Automated Quotations (NASDAQ) – The NASDAQ Composite Index is a market-capitalization-weighted, unmanaged index that is designed to represent the performance of the National Association of Securities Dealers Quotation System, which includes more than 5,000 stocks traded only over the counter and not on an exchange. The index does not include the reinvestment of dividends.

Real Estate Investment Trust (REIT) A security that sells like a stock on the major exchanges and invests in real estate directly, either through properties or mortgages.

Red Rocks Listed Private Equity Index – The Red Rocks Listed Private Equity Index is designed to track the performance of the largest and most liquid publicly traded private equity firms principally invested in the United States and publicly traded private equity portfolios with principal investments in the United States. The publicly traded stocks within the Index are traded on any nationally recognized exchange worldwide.

Russell 1000 – Measures the performance of the 1,000 largest companies in the Russell 3000 Index, which represents approximately 92% of the total market capitalization of the Russell 3000 Index. As of the latest reconstitution, the average market capitalization was approximately $13.9 billion; the median market capitalization was approximately $4.9 billion. The smallest company in the Index had an approximate market capitalization of $2.0 billion.

Russell 1000 Growth – Measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values.

Russell 1000 Value – Measures the performance of Russell 1000 companies with lower price-to-book ratios and forecasted growth values.

Russell 2000 Small Cap – Measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represents approximately 8% of the total market capitalization of the Russell 3000 Index. As of the latest reconstitution, the average market capitalization was approximately $762.8 million; the median market capitalization was approximately $613.5 million. The largest company in the index had an approximate market capitalization of $2.0 billion and a smallest of $218.4 million.

Russell 2000 Small Cap Growth – Measures the performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values.

Russell 2000 Small Cap Value – Measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values.

Russell 2500 – Measures the performance of the 2,500 smallest companies in the Russell 3000 Index.

Russell 2500 Growth – Measures the performance of those Russell 2500 companies with higher price-to-book ratios and higher forecasted growth values.

Russell 2500 Value – Measures the performance of Russell 2500 companies with lower price-to-book ratios and forecasted growth values.

Russell 3000 – This index encompasses the 3,000 largest U.S.-traded stocks, in which the underlying companies are all incorporated in the U.S.

Russell Mid Cap – Measures the performance of the 800 smallest companies in the Russell 1000 Index, which represents approximately 30% of the total market capitalization of the Russell 1000 Index. As of the latest reconstitution, the average market capitalization was approximately $5.3 billion; the median market capitalization was approximately $3.9 billion. The largest company in the index had an approximate market capitalization of $14.9 billion.

Russell Mid Cap Growth – Measures the performance of those Russell Midcap companies with higher price-to-book ratios and higher forecasted growth values. The stocks are also members of the Russell 1000 Growth Index.

Russell Mid Cap Value – Measures the performance of those Russell Midcap companies with lower price-to-book ratios and lower forecasted growth values. The stocks are also members of the Russell 1000 Value Index.

Seasonally Adjusted Annual Rate (SAAR) – Rate adjustment used for economic or business data that attempts to remove the seasonal variation in data. Calculated by dividing the unadjusted annual rate for the month by its seasonality factor and crated an adjusted annual rate for the month.

Standard & Poor's 500 Index (S&P 500) – An index consisting of 500 stocks chosen for market size, liquidity and industry grouping, among other factors. The S&P 500 is designed to be a leading indicator of U.S. equities and is meant to reflect the risk/return characteristics of the large-cap universe. Companies included in the index are selected by the S&P Index Committee, a team of analysts and economists at Standard & Poor's. The S&P 500 is a market-value-weighted index -- each stock's weight in the index is proportionate to its market value.

Standard & Poor’s/Case-Shiller Home Price Index – The S&P/Case-Shiller Home Price Index measures the residential housing market, tracking changes in the value of the residential real estate market in 20 metropolitan regions across the United States. The index uses the repeat sales pricing technique to measure housing markets. The index is calculated monthly and published with a two-month lag.

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Brinker Capital.

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Mar

2

March 2018 Market and Economic Outlook
Despite the pick-up in volatility at the end of January, risk assets continued their upward ascent throughout the month. Expectations surrounding the implementation of the newly passed tax reform bill and the weakening US dollar served as positive catalysts for the month. Macroeconomic data was mixed; fourth quarter real GDP growth came in slightly below expectations but manufacturing activity accelerated and the US jobs report was positive. Although we have seen initial signs of rising inflation, levels remain subdued as low unemployment has yet to translate into meaningful wage growth. We expect the Federal Reserve (Fed) to remain on track with interest rate normalization and the positive, albeit choppy, market momentum we have seen to date indicates that markets can likely withstand an additional Fed rate hike in March.

The S&P 500 Index was up 5.7% for the month with cyclicals outperforming defensive sectors. Consumer discretionary (+9.3%) led while tax cuts and a solid job market served as positive catalysts. Information technology (+7.6%) and financials (+6.5%) also posted strong returns for the month. Utilities (-3.1%) and REITs (-2.0%) were down as traditional bond proxy sectors experienced headwinds amidst rising interest rates. Growth outperformed value and large-cap outperformed both mid-cap and small-cap equities.

Developed international equities (+5.0%) performed in line with domestic equities. Fundamentals within the Eurozone continued to improve and sentiment is high. The focus remains on European Central Bank policy and how the reduction of its quantitative easing purchases will impact markets. Emerging markets were up 8.3%. A weaker dollar and stronger demand for commodities served as tailwinds for both emerging Asia and Latin America regions.

The Bloomberg Barclays US Aggregate Index was down -1.2% for the month. Interest rates surged with 10-year Treasury yields increasing 31 basis points, ending the month at 2.7%. Tightening monetary policy and improving US growth expectations will likely continue to put upward pressure on the long end of the yield curve. High yield was the only sector to post positive returns in January, as credit spreads continued to grind tighter. Like taxable bonds, municipals were negative for the month.

We remain positive on risk assets over the intermediate-term, although we acknowledge we are in the later innings of the bull market and the second half of the business cycle. While this cycle has been longer in duration compared to history, the recovery we have experienced has been muted, supported by the extended recovery period. While our macro outlook is biased in favor of the positives, the risks must not be ignored.

We find a number of factors supportive of the economy and markets over the near-term.
- Pro-growth policies of the Administration: The Trump administration has delivered a new tax plan and a more benign regulatory environment. We could see additional government spending on infrastructure in 2018.
- Synchronized global economic growth: Growth in the US has started to accelerate, and growth in both developed international and emerging economies has meaningfully improved. The tax cuts could also help to boost GDP growth in 2018.
- Improvement in earnings growth: Corporate earnings growth has improved globally and corporate tax reform should further benefit US-based companies.
- Elevated business sentiment: Measures like CEO Confidence and NFIB Small Business Optimism are at elevated levels. This typically leads to additional project spending and hiring, which should boost growth. The corporate tax cut should also benefit business confidence and lead to increased capital spending.
However, risks facing the economy and markets remain, including:
- Fed tightening: The Fed will continue to tighten monetary policy, with at least three interest rate hikes priced in for 2018. We may see tightening from other global central banks as well.
- Higher inflation: Current levels of inflation are muted but inflation expectations have ticked higher and the reflationary policies of the Administration could further boost levels. Should inflation move higher, the Fed may shift to a more aggressive tightening stance.
- Geopolitical risks: Geopolitical risks including trade policies and global challenges could cause short-term market volatility.
Despite the volatility experienced over the last week, the technical backdrop of the market remains favorable, credit conditions are supportive, and global economic growth is accelerating. So far President Trump’s policies are being seen as pro-growth, and business and consumer confidence are elevated. The onset of new policies under the Trump administration and actions of central banks may lead to higher volatility, but our view on risk asMarchsets remains positive over the intermediate-term. Higher volatility can lead to attractive pockets of opportunity we can take advantage of as active managers.

Brinker Capital Barometer (as of 1/5/18)

Source: Brinker Capital. Leigh Lowman, CFA, Investment Manager. Views expressed are for informational purposes only. Holdings subject to change. Not all asset classes referenced in this material may be represented in your portfolio. Indices are unmanaged and an investor cannot invest directly in an index. All investments involve risk including loss of principal. Fixed income investments are subject to interest rate and credit risk. Foreign securities involve additional risks, including foreign currency changes, political risks, foreign taxes, and different methods of accounting and financial reporting. S&P 500: An index consisting of 500 stocks chosen for market size, liquidity, and industry grouping, among other factors. The S&P 500 is designed to be a leading indicator of US equities and is meant to reflect the risk/return characteristics of the large-cap universe. Companies included in the Index are selected by the S&P Index Committee, a team of analysts and economists at Standard & Poor’s. Bloomberg Barclays US Aggregate: A market capitalization-weighted index, maintained by Bloomberg Barclays, and is often used to represent investment grade bonds being traded in United States.

Views expressed are those of Brinker Capital, Inc. and are for informational/educational purposes. Opinions and research referring to future actions or events, such as the future financial performance of certain asset classes, indexes or market segments, are based on the current expectations and projections about future events provided by various sources, including Brinker Capital’s Investment Management Group. Information contained within may be subject to change. Diversification does not assure a profit not guarantee against a loss.

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Hedges Wealth Management.

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Miami FL, Charleston SC, Atlanta GA, Charlotte NC - Tax, Financial Planning, Investments and Insurance.
Posted 2nd March 2018 by Anonymous

Location: Hedges Wealth Management, 310 Seaport Ln, Mt Pleasant, SC 29464, USA

Labels: bonds Charleston Miami Charlotte Atlanta Financial Advisor SC NC FL GA Economic Outlook March 2018 Fed insurance Investments rates tax
Nov

8

Avoid the pain of regret: a disciplined approach to retirement savings
With 39 percent of Americans feeling ill-prepared for retirement, according to the Employee Benefit Research Institute’s 2017 Retirement Confidence Survey, we are often challenged to come up with a solution to make saving easier.[1] Unfortunately, there are no easy solutions, and in the absence of unplanned windfalls, there are no shortcuts. There are, however, strategies that will help you overcome behavioral impediments by infusing discipline into your retirement savings plan. Here are six strategies to consider:

Automate the process. The best way to make retirement savings a priority is to put it on autopilot, so each time you get paid you save for the future without giving it much conscious thought. If you have an employer-sponsored retirement plan, arrange for a percentage of your pay before taxes to go directly into your retirement account. Also, commit to increasing the percentage you allocate to your retirement account every time you get a raise. The impact of automated savings plans to net pay is often far less than anticipated, and after time it goes somewhat unnoticed. The impact on your nest egg, however, could be quite significant.

Make it binding. Make your future self a promise to refrain from withdrawing any money from your account before retirement. The best way to protect your retirement account is to establish a separate emergency reserve fund. It is typically recommend setting aside six months’ worth of income to cover unexpected expenses like uncovered medical costs, home repairs, or other unplanned surprises. With an emergency fund, you have a resource to fund whatever immediate needs arise without tapping your retirement account or delaying your savings goals.

Pay your future self what you paid your creditors. After you’ve cleared an outstanding debt, consider “continuing” those payments by making deposits into your retirement account. For example, if you pay off a car loan that previously cost you $500 a month, allocate that same amount to your retirement account.

Establish a home for “found” money. It’s not uncommon for someone to view inheritances, tax refunds, and company bonuses as “found money,” and splurge on items they would not otherwise buy. If you receive a windfall or even a little extra, consider allocating the amount into three portions: one for long-term savings goals, one for short-term savings goals, and one to reward yourself.

Use reward points. Several credit card companies offer specialized cash back programs which convert rewards points into cash deposits into 529 college savings plans, brokerage accounts, or other retirement accounts (e.g., IRAs).

Get an accountability partner. To increase the likelihood of meeting your retirement savings goals, ask someone to hold your feet to the fire. Your accountability partner should be objective, and unlike a spouse, have no vested interest in daily household financial decisions. Your accountability partner should track your progress, offer encouragement, and continually remind you of your long-term goal. If you are already working with a financial advisor, ask him or her to take an active role in keeping you motivated and engaged in meeting your retirement goals.

As the late Jim Rohn once said, “We must all suffer from one of two pains: the pain of discipline or experience the pain of regret. The difference is discipline weighs ounces while regret weighs tons.” Failing to save enough for retirement comes in as the top financial regret of older Americans.[2] So, if saving for retirement poses a challenge to you today, give some thought to the challenges your future self will face if you don’t take these steps.

For more than 10 years, Brinker Capital Retirement Plan Services has worked with advisors to offer plan sponsors the solutions to help participants reach their retirement goals. When plan sponsors appoint Brinker Capital as the ERISA 3(38) investment manager, this allows them to transfer fiduciary responsibility for the selection and management of their investments so they can focus on the best interests of their employees. This fiduciary responsibility is something that Brinker Capital has acknowledged, in writing, since our founding in 1987.

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Brinker Capital, Inc., a Registered Investment Advisor.

[1] Retirement Confidence Survey 2017, Employee Benefit Research Institute

[2] Bankrate Financial Security Index Survey, May 17, 2016

Views expressed are those of Brinker Capital, Inc. and are for informational/educational purposes. Opinions and research referring to future actions or events, such as the future financial performance of certain asset classes, indexes or market segments, are based on the current expectations and projections about future events provided by various sources, including Brinker Capital’s Investment Management Group. Information contained within may be subject to change. Diversification does not assure a profit not guarantee against a loss.

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Hedges Wealth Management.

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Posted 8th November 2017 by Anonymous

Location: Hedges Wealth Management, 310 Seaport Ln, Mt Pleasant, SC 29464, USA

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Apr

4

Fed continues on road to interest rate normalization
In a widely anticipated move, the Fed increased interest rates by 25 basis points on March 15, 2017, the second interest rate hike in three months and there are talks of potentially two more raises this year. Positive economic data and a rise in business confidence served as a catalyst for the Fed to continue its interest rate normalization efforts with the possibility of as many as two additional rate increases later this year. However, recent rhetoric from the Fed reaffirmed their commitment to move at a cautious pace, supporting Brinker Capital’s view that the process of longer term rates will likely be prolonged and characterized in fits and starts, rather than linear, as the market adapts to the new normal.

Source: FactSet, Federal Reserve, J.P. Morgan Asset Management. U.S. Data are as of February 28, 2017. Market expectations are the federal funds rates priced into the fed futures market as of the date of the December 2016 FOMC meeting. *Forecasts of 17 Federal Open Market Committee (FOMC) participants are median estimates. **Last futures market expectation is for November 2019 due to data availability.

Catalysts for higher interest rates

Many positive factors are currently present in the economy that point to a move toward interest rate normalization:
- Stable U.S. economic growth. Economic growth in the U.S. has been modest but steady. The new administration and an all-Republican government will likely further stimulate the economy through reflationary fiscal policies including tax cuts, infrastructure spending and a more benign regulatory environment.
- Supportive credit environment. High yield credit spreads have meaningfully contracted and are back to the tight levels we saw in 2014. Commodity prices have also stabilized.
- Inflation expectations. Historically, there has been a strong positive correlation between interest rates and inflation. Many of the anticipated policies of the Trump administration are inherently inflationary. Inflation expectations have increased accordingly and headline inflation has been moving towards the Fed’s 2% long-run objective. In addition, we believe we are in the second half of the business cycle, typically characterized by wage growth and increased capital expenditures, both of which eventually translate into higher prices.
- Unemployment levels. The labor market has become stronger and is nearing full employment. Unemployment has dropped to a level last seen in 2007.
Historical perspective

From 1965 to present, the Fed has implemented policy tightening a total of 15 times and the impact on the bond market has not always translated into longer rates rising. For example, back in 2004 the Fed began raising rates in response to beginning concerns of a housing bubble and the bond market did well as the yield on the 10-year Treasury fell.

More recently during the current market cycle, the Fed increased rates by 25 basis points in December 2015. The 10 year Treasury yield fell and the bond market generated a positive return while equities plummeted in the first quarter of 2016. A year later, the Fed increased rates by 25 basis points in December 2016. The impact on markets was minimal with both equities and fixed income generating strong positive returns in the two months that followed.

Fixed income allocation

Traditional fixed income has historically provided a hedge against equity market risk with substantially less drawdown than equities. Although a rising rate environment would suggest flat to negative returns for some areas of fixed income, the asset class still provides stability in portfolios when equities sell off. For example, fixed income provided an attractive safe haven during the market correction in the beginning of 2016.

In an environment of rising rates, Brinker Capital believes an allocation to traditional fixed income is still merited as we expect the asset class to provide a good counter to equity volatility.

Source: Fact Set, Brinker Capital, Inc. Index returns are for illustrative purposes only. Investors cannot invest directly in an index. Past performance does not guarantee future results.

Overall, much uncertainty remains on the timing and trajectory of interest rate changes. Brinker Capital remains committed to helping investors navigate through a rising rate environment through building diversified portfolios across multiple asset classes.

Views expressed are those of Brinker Capital, Inc. and are for informational/educational purposes. Opinions and research referring to future actions or events, such as the future financial performance of certain asset classes, indexes or market segments, are based on the current expectations and projections about future events provided by various sources, including Brinker Capital’s Investment Management Group. Information contained within may be subject to change. Diversification does not assure a profit not guarantee against a loss.

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Hedges Wealth Management.

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If you are looking for more information on any subject in this Blog, please Contact Us directly electronically or via phone. Thank you.

www.hedgeswealthmanagement.com
Posted 4th April 2017 by Anonymous

Location: Hedges Wealth Management, 310 Seaport Ln, Mt Pleasant, SC 29464, USA

Labels: Basis Points Charleston Miami Charlotte Atlanta Financial Advisor SC NC FL GA Fed Federal Reserve Financial Advice interest rates Raises
Nov

15

Post Election Financial Advice

Global events, such as the intensely divided presidential election that we just lived through, are certain to generate some periods of market volatility of varying lengths in addition to a significant amount of stress. However, we urge financial advisors and investors to retain a few dos and don’ts to help manage post-election anxiety:

Don’t equate risk with volatility. Volatility does not equal risk. Risk is the likelihood that you will not have the money to live the life you want to live. Paper losses are not “risk” and neither are the gyrations of a volatile market. Long term investors have been rewarded by equity markets, but those rewards come at the price of bravery during periods of short-term uncertainty.

Do know your history. Despite what political pundits and TV commentators would have you believe, this is not an unusually scary time to be alive. The economy continues to grow (slowly) and most quality of life statistics (crime, drug use, teen pregnancy) have been declining for years. Markets have always climbed a wall of worry, rewarding those who stay the course and punishing those who succumb to fear.

Don’t give in to action bias. At most times and in most situations, increased effort leads to improved outcomes. Investing is that rare world where doing less actually gets you more.

Do take responsibility. Most investors are likely to tell you that timing and returns are the biggest drivers of financial performance, but research tells another story. Research suggests that you are the best friend and the worst enemy of your own portfolio. Over the last 20 years, the market has returned roughly 8.25% per annum, but the average retail investor has kept just over 4% of those gains because of poor investment behavior.1 At times when market moves can feel haphazard, it helps to remember who is really in charge.

Don’t focus on the minute to minute. If you are investing in the stock market you have to think long-term. As mentioned above, you can avoid action bias by not checking your portfolio status all day every day, especially during times of higher volatility. Limited looking leads to increased feelings of security and improved decision-making.

Do work with a professional. Odds are that when you chose your financial advisor, you selected him or her because of their academic pedigree, years of experience or a sound investment philosophy. Ironically, what you may have overlooked is the largest value he or she adds—managing your behavior. Studies put the value added from working with an advisor at 2 to 3% per year. Compound that effect over a lifetime, and the power of financial advice quickly becomes evident.

Source: (1) Dalbar, Inc. Quantitative Analysis of Investor Behavior. Boston: Dalbar, 2015.

Views expressed are those of Brinker Capital, Inc. and are for informational/educational purposes. Opinions and research referring to future actions or events, such as the future financial performance of certain asset classes, indexes or market segments, are based on the current expectations and projections about future events provided by various sources, including Brinker Capital’s Investment Management Group. Information contained within may be subject to change. Diversification does not assure a profit not guarantee against a loss.

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Hedges Wealth Management.

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310 Seaport Lane #2121 | Mt Pleasant | SC 29464

T +1 843 270 2534

If you are looking for more information on any subject in this Blog, please Contact Us directly electronically or via phone. Thank you.

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Posted 15th November 2016 by Anonymous

Location: Hedges Wealth Management, 310 Seaport Ln #2121, Mt Pleasant, SC 29464, USA

Labels: 2016 Election Financial Advice Investment Advice Investor Returns Markets portfolio Results
Sep

11

How To Get A 35% Investor Tax Credit In SC

Maximizing tax credits offered by the IRS and various states around the US is key to maximizing your financial position. There are many types of tax credits available for both individuals and businesses. One of the better ones is for angel investors in the State of SC who invest in a qualified business. Investors can attain up to 35% as a tax credit. This tax credit was created by Nikki Haley under the High Growth Small Business Creation Act, alternatively known as the Angel Investor Act on June 14, 2013.

Let's look at the math and see why this one is so important. If you are an accredited investor in South Carolina who puts $100,000 into a qualified business like NannyPod for example, you could potentially get a 35% tax credit.

If a company is offering a convertible note, with a minimum valuation of $2M and a maximum valuation of $5M, then the $100,000 that you put in could potentially convert to between 5% and 2% equity ownership. However, due to the 35% tax credit, you actually realize this ownership for an investment cost of $65,000.

$100,000 x 35% = $35,000

$100,000 - $35,000 = $65,000

Hence, your investment of $100,000, really turns out to be an investment of $65,000.

Now let's look at what happens when the company is sold, and you get a return on your investment. If the company you invested in does well, and has a successful exit strategy of say $50M in 5-6 years time, then your worst case scenario 2% ownership is now worth $1M.

If we calculate the return on $100K growing to $1M, then you made 1000%. However, if we calculate the return on $65K invested due to receiving the $35K tax credit, then you actually made 1538%, an additional 538% more.

This clearly illustrates why maximizing tax credits can be of huge benefit, especially to angel investors in the State of SC.

The State of SC Angel Investor Tax Credit Application form can be found here.

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Hedges Wealth Management.

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T +1 843 270 2534

If you are looking for more information on any subject in this Blog, please Contact Us directly electronically or via phone. Thank you.

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Posted 11th September 2016 by Anonymous

Location: Hedges Wealth Management, 310 Seaport Ln, Mt Pleasant, SC 29464, USA

Labels: 35% Act Angel Investor Charleston Miami Charlotte Atlanta Financial Advisor SC NC FL GA NannyPod Return SC tax credit
Jun

28

Brexit and Goldman Sachs Outlook June 2016
There is no silver bullet when it comes to investing or wealth management in general… if there was, we would all be sitting on yachts and most likely not reading this article. However, there needs to be some clarity and calm on the very complex 'Brexit' subject for our US based clientele.

We experienced first hand the creation of Exchange Rate Mechanism (ERM), Britain's exit from the ERM, the intro of the Euro, and now the exit from the EU (aka "Brexit"). Many people travel, but those who live in places differ tremendously than those who spend two nights in a city and are up at dawn to find the next locale in a neighboring country or city. When you live somewhere, you remember far more. Having lived in the UK for over 20 years, in the USA for over 15 years, and multiple other countries like Australia, Argentina, Senegal, Italy, France and Spain, here is our first hand perspective in short…
- Brexit is not a global economic disaster
- The Brexit referendum consisted various complex subjects (immigration, EU participation, grants, trade). Some voted with their emotions, some voted with their wallets...
- Brexit will make the US Dollar stronger
- Brexit now allows a potential UK Independence Day that will compete with July 4th (parody!)
- Brexit will mean higher inflation, higher unemployment, slower growth, higher interest rates in the UK
- Brexit affects you negatively if you have money in the UK and are holding GBP currency
If you are still concerned, and require more extensive reading, please click the below link on the recent Goldman Sachs Economic Outlook.

Need personal financial advice? Get in touch with us instantly for an on-demand in person meeting or phone call on any financial subject matter. Just click here.

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1279 Dingle Road | Mt Pleasant | SC 29466

T +1 843 270 2534

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Posted 28th June 2016 by Anonymous

Location: HWM, 1279 Dingle Rd, Mt Pleasant, SC 29466, USA

Labels: America Brexit Charleston Miami Charlotte Atlanta Financial Advisor SC NC FL GA EU euro Independence inflation Unemployment USA
Jun

8

5 Things To Do Before Retiring

If you are planning to retire in Charleston SC, Charlotte NC, Atlanta GA or Miami FL in the next few years, complete this financial checklist to make sure that you are organized.

1) Set Your Financial Goals
Goals need to be written down and follow the SMART criteria. What get's measured is managed profusely better than something unmeasured. Write down your income goals and your planned anticipated spending goals per month. Start this today.

2) Get Your Investment Portfolios Set Up Correctly
If you are like most people, you have several investment portfolios dotted around at multiple places. You have a few old 401Ks at previous companies, a couple of IRAs at different firms and probably some cash that should have been invested but is just being eroded by inflation. Putting your investment portfolios in one place makes them easier to manage and see what is happening.

3) Read Up On Social Security & Medicare
We all know that Social Security is a complex and boring subject, but if you want to retire successfully, with the most income, then you need to be fluent in this subject. If you are not sure about what to do with electing your Social Security, seek advice from professionals in this space.

4) Use Technology To Make Finances Easy
Technology has come a long way in the past 10 years, especially software platforms that allow you to see all of your bank accounts, mortgages, credit cards, real estate, 401K plans, IRAs and more on one screen. Some software allows you to set retirement income goals, incorporating your investment portfolio allocations, annuities and social security.

5) Pay Off Debts
The reality with debts and borrowing is that they play on your mind and can make you feel worried. In order to live a happy comfortable retirement, consider paying off all credit cards, mortgages and loans. If the interest rates are extremely low, then it may be to your advantage to hold on to them, but do what you feel that helps you sleep well at night!

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Hedges Wealth Management.

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Miami FL, Charleston SC, Atlanta GA, Charlotte NC - Tax, Financial Planning, Investments and Insurance.

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Hedges Wealth Management LLC - A Registered Investment Adviser

Hedges Insurance Agency LLC

Tax, Financial Planning, Investments and Insurance Advisors

1279 Dingle Road | Mt Pleasant | SC 29466

T +1 843 270 2534

If you are looking for more information on any subject in this Blog, please Contact Us directly electronically or via phone. Thank you.

www.hedgeswealthmanagement.com

Posted 8th June 2016 by Anonymous

Location: HWM, 1279 Dingle Rd, Mt Pleasant, SC 29466, USA

Labels: Charleston Miami Charlotte Atlanta Financial Advisor SC NC FL GA goals Investment Portfolios Medicare plan Retirement Social Security Software Technology
Jun

1

7 Things To Know Before Taking Social Security
The Social Security Administration Offices in Charleston South Carolina, Charlotte North Carolina, Miami Florida, Atlanta Georgia and across the USA cannot offer you advice. Before you make any decisions, consider the answers to these seven important questions.
1. What are Delayed Retirement Credits and how do Delayed Retirement Credits affect my retirement benefit?
  They are additions to benefits if retirement benefits are delayed beyond full retirement age. Delayed credits may accrue up to age 70. The Delayed Retirement Credit provisions allow for any month for which a worker was at least full retirement age, was insured for retirement benefits, and did not receive retirement benefits. The amount of the delayed retirement credit depends on when you were born, currently anyone born after 1-1-1943, receive a monthly credit of 2/3% or .0066667. That's equates to a yearly credit of 8%.
2. What is the deeming provision? Are there any exceptions?
  If you file for benefits prior to full retirement age, you are deemed to have filed for all benefits for which you are eligible. A Claimant who is entitled to reduced retirement benefit and a reduced spouse's benefits must file for both benefits if eligibility for both benefits exists in the first month of entitlement.
  
  The deemed filing rule applies to:
  1. All reduced spouse's benefits, including independently-entitled divorced spouse's benefits, on all Social Security Numbers.
  2. Certificate of Election for Reduced Spouse's Benefits.
  Exceptions include child in care, if you are between the age of 62 and full retirement age and have a child under the age 16 in your care or a disabled adult child.
3. Am I able to work while receiving Social Security Retirement benefits?
  Yes, you can work while receiving retirement benefits. However, Social Security Retirement benefits are meant to replace, in part, earnings lost to an individual due to retirement. So, under the law, those benefits could be reduced if earnings exceed certain amounts. These amounts are listed on the Social Security website.
  
  For beneficiaries who are younger than FRA, deduct $1 from benefits for each $2 earned over the annual exempt amount (2014 - $15,480). In the year in which full retirement age is attained, deduct $1 from benefits for each $3 earned over the full annual exempt amount in the months prior to FRA (2014 – $41,400). This is referred to as the earnings test.
4. How much will my Social Security Retirement be reduced if I elect benefits early?
  If you elect your retirement benefits early they will be reduced by 5/9 of 1% for the first 36 months prior to full retirement age. Any month in excess of 36 months will be reduced by 20%, which is the total reduction for the first 36, plus 5/12 of 1% for each month in excess. For example, if full retirement age is 66 and you elect benefits at 62 then your benefits will be reduced by 20% for the first 36 months and 5% for the 12 month after, for a 25% reduction for electing early. Once you elect reduced benefits you will receive a reduced benefit for the entire time you collect Social Security.
5. Are retirement benefits guaranteed to keep up with the cost of inflation?
  Yes, Congress enacted the cost of living adjustment or COLA provision in 1972. This provision provided for automatic cost of living adjustments if there was an increase in the Consumer Price Index for Workers of at least 3%. In 1986, Congress eliminated the three percent requirement due to waning inflation. Currently there is a cost of living adjustment if there is an increase in the average consumer price index for workers. If however, the increase is by less than .05 percent or there is a decrease there will not be an adjustment for that year.
6. I'm getting divorced, how will this affect my retirement benefits? What if I did not work?
  In the event of a divorce, the lower earning spouse will be eligible for spousal benefits under the higher earning spouse's record if they have been married for more than 10 years. This does apply to a spouse that has insufficient work credits or no work credits. However, this benefit can be terminated under multiple situations:
  - If the lower earning spouse is eligible for benefits on their own earnings record of more than or equal to half of the higher earning spouse's benefit,
  - at the death of the spouse receiving the spousal benefit,
  - marriage to someone other than the beneficiary they are claiming under,
  - the beneficiary dies,
  - if the workers entitlement to disability insurance benefits terminates and they do not become entitled to retirement benefits.
  - The divorced spousal benefit is not available until two years after the divorce if the insured individual is age 62 but not yet entitled.
7. Are my retirement benefits taxable?
  Yes, Social security retirement benefits are taxable in certain situations. Taxpayers must include benefits in the gross income in an amount equal to the lesser of:
  - One-half of the net benefits received during the taxable year, or
  - One-half of the sum derived by subtracting a base amount from the taxpayers modified adjusted gross income plus one-half of the social security benefit received.
  This applies to any earnings in excess of income limits determined by the IRS.
  
  Up to 50% Taxed Up to 85% Taxed
  
  Individual 25,000-34,000 34,001+
  
  Joint 32,000-44,000 44,000+
What's at stake with regards to your Social Security Timing? Use our calculator to find out!

Disclosure: By law, we we are required to disclose that we are not endorsed by any government agency, or part of any government agency such as the Centers for Medicare and Medicaid Services or the Social Security Administration Offices in Charleston South Carolina, Charlotte North Carolina, Miami Florida or Atlanta Georgia. Thank you.

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Social Security Timing.

Click here for more Newsletters. Thank you.

Miami FL, Charleston SC, Atlanta GA, Charlotte NC - Tax, Financial Planning, Investments and Insurance.

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Hedges Wealth Management LLC - A Registered Investment Adviser

Hedges Insurance Agency LLC

Tax, Financial Planning, Investments and Insurance Advisors

1279 Dingle Road | Mt Pleasant | SC 29466

T +1 843 270 2534

If you are looking for more information on any subject in this Blog, please Contact Us directly electronically or via phone. Thank you.

www.hedgeswealthmanagement.com
Posted 1st June 2016 by Anonymous

Location: Hedges Wealth Management, 1279 Dingle Rd, Mt Pleasant, SC 29466, USA

Labels: Credits Divorce Election income inflation Retirement Social Security Spouse tax Timing Work
Apr

14

Economic Outlook - April 2016
After an extremely volatile quarter, the broad equity market indexes ended just about where they started. Risk assets began the year under heavy pressure, with the S&P 500 Index declining more than -10% to a 22-month low on February 11. Concerns over the global growth outlook and the impact of further weakness in crude oil prices weighed on investors, and investor sentiment hit levels of extreme pessimism. Then we experienced a major reversal beginning on February 12, helped by a rebound in oil prices after Saudi Arabia and Russia agreed to freeze production, and more dovish comments by the Federal Reserve. Expectations regarding the pace of additional rate hikes by the Fed have been tempered from where they started the year.

All U.S. equity sectors ended the quarter in positive territory except for healthcare and financials. Dividend paying stocks significantly outperformed, resulting in a strong quarter for both the telecom and utilities sectors, and value indexes overall. From a market capitalization perspective, mid-caps outperformed both large and small caps, helped by the strong performance of REITs, another yield-oriented asset class.

Developed international equity markets lagged U.S. equity markets in the first quarter despite benefiting from a weaker U.S. dollar. Japan and Europe were particularly weak despite additional easing moves by their central banks, while the commodity-sensitive countries, such as Canada and Australia were positive for the quarter. Emerging markets outperformed U.S. equity markets for the quarter despite declines in China and India. Brazil was the strongest performer, helped by a rebound in the currency, expectations for political change, and the bounce in commodity prices.

Bonds outperformed stocks during the quarter, and did not even decline during the risk-on rally. Additional easing from the European Central Bank and a negative interest rate policy in Japan prevented U.S. bond yields from moving higher.

All fixed income sectors were positive for the quarter, led by corporate credit, which benefited from meaningful spread tightening, and TIPS, which benefited from their longer duration. Municipal bonds delivered positive returns, but lagged taxable fixed income.

We remain positive on risk assets over the intermediate-term; however, we acknowledge that we are in the later innings of the bull market that began in 2009 and the second half of the business cycle. The worst equity market declines are typically associated with recessions, which are preceded by aggressive central bank tightening or accelerating inflation, factors which are not present today. While our macro outlook is biased in favor of the positives and a near-term end to the business cycle is not our base case, the risks must not be ignored.

A number of factors we find supportive of the economy and markets over the near term.
- Global monetary policy remains accommodative: Despite the Federal Reserve beginning to normalize monetary policy with a first rate hike in December, their approach is patient and data dependent. The Bank of Japan and the ECB have been more aggressive with easing measures in an attempt to support their economies, and China is likely going to require additional support.
- Stable U.S. growth and tame inflation: U.S. economic growth has been modest but steady. Payroll employment growth has been solid and the unemployment rate has fallen to 5.0%. Wage growth has been tepid at best despite the tightening labor market, and reported inflation measures and inflation expectations, while off the lows, remain below the Fed’s target.
- U.S. fiscal policy more accommodative: With the new budget fiscal policy is poised to become modestly accommodative in 2016, helping offset more restrictive monetary policy.
- Solid backdrop for U.S. consumer: The U.S. consumer should see benefits from lower energy prices and a stronger labor market.
However, risks facing the economy and markets remain, including:
- Risk of policy mistake: The potential for a policy mistake by the Fed or another major central bank is a concern, and central bank communication will be key. In the U.S. the subsequent path of rates is uncertain and may not be in line with market expectations, which could lead to increased volatility. Negative interest rates are already prevalent in other developed market economies.
- Slower global growth: Economic growth outside the U.S. is decidedly weaker, and a significant slowdown in China is a concern.
- Another downturn in commodity prices: Oil prices have rebounded off of the recent lows and lower energy prices on the whole benefit the consumer; however, another significant leg down in prices could become destabilizing.
- Further weakness in credit markets: While high yield credit spreads have tightened from February’s wide levels, further weakness would signal concern regarding risk assets more broadly.
The technical backdrop of the market has improved, as have credit conditions, while the macroeconomic environment remains favorable. Investor sentiment moved from extreme pessimism levels in early 2016 back into more neutral territory. Valuations are at or slightly above historical averages, but we need to see earnings growth reaccelerate. We expect a higher level of volatility as markets assess the impact of slower global growth and actions of policymakers; however, our view on risk assets tilts positive over the near term. Higher volatility has led to attractive pockets of opportunity we can take advantage of as active managers.

Source: Brinker Capital. Views expressed are for informational purposes only. Holdings subject to change. Not all asset classes referenced in this material may be represented in your portfolio. All investments involve risk including loss of principal. Fixed income investments are subject to interest rate and credit risk. Foreign securities involve additional risks, including foreign currency changes, political risks, foreign taxes, and different methods of accounting and financial reporting. Brinker Capital Inc., a Registered Investment Advisor.

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Social Security Timing.

Click here for more Newsletters. Thank you.

Miami FL, Charleston SC, Atlanta GA, Charlotte NC - Tax, Financial Planning, Investments and Insurance.

Connect and Read More About Us

Hedges Wealth Management LLC - A Registered Investment Adviser

Hedges Insurance Agency LLC

Tax, Financial Planning, Investments and Insurance Advisors

1279 Dingle Road | Mt Pleasant | SC 29466

T +1 843 270 2534

If you are looking for more information on any subject in this Blog, please Contact Us directly electronically or via phone. Thank you.

www.hedgeswealthmanagement.com
Posted 14th April 2016 by Anonymous

Location: Hedges Wealth Management, 1279 Dingle Rd, Mt Pleasant, SC 29466, USA

Labels: 2016 Economic Outlook bonds Equities Financial Advisor Charleston Miami Charlotte Atlanta Global Growth interest rates S&P 500 Stock Market Outlook USA
Mar

25

Understand April 29th 2016 Social Security Deadline

As the April 29th Social Security deadline approaches for the file and suspend strategy, phones have been busy. Not all clients need to act prior to that deadline, however.

The file and suspend and the Restricted Application strategies work in conjunction with one another for a married couple. Someone would need to file and suspend to give the option to his or her spouse to take advantage of the spousal benefit. Someone would need to be at Full Retirement Age (FRA) to take advantage of these options, age 66 if born between 1943 and 1954.

Auxiliaries, such as spouses or children, may claim benefits based on a worker who claimed benefits and requested a voluntary suspension prior to April 30, 2016. Let’s take a look at a quick example.

Bob turns 66 on March 4, 2016. He needs to file and suspend so he can continue to build delayed retirement credits on his own work record and to give the option to his spouse to file for a spousal benefit. He would need to complete this action prior to April 30, 2016.

Suspensions requested on or after April 30, 2016 preclude any other beneficiary from collecting child or spousal benefits during the suspension.

If Bob was under a rock and suspended after April 29, 2016, his wife would not be able to file a spousal benefit. His suspension also would suspend anyone else from claiming off of his record.

People born on or before Jan. 1, 1954, may restrict an application to only spousal benefits, while delaying receipt of their retirement benefits and collecting an 8% per-year delayed retirement credit. Let’s see how these work together.

Bob turns 66 on March 4, 2016. He files and suspends in March to make benefits available to Connie, his 65-year-old wife (date of birth Aug. 10, 1950). She has not reached her FRA yet but turns 66 this August. Since Bob filed and suspended before the April 30th deadline, Connie can now file the Restricted Application to take only the spousal benefit while allowing hers to build delayed retirement credits.

Let’s look at another example, when both are under 66 but born on or prior to Jan 1, 1954.

Jack (date of birth June 2, 1951) and MaryAnn (date of birth June 12, 1953) both have an FRA of 66. MaryAnn was the higher wage earner and wants to take a spousal benefit off Jack’s record once she reaches FRA. In order for this to happen, Jack would need to file and receive benefits so MaryAnn can file the Restricted Application. The reverse is available — for Jack to file spousal on MaryAnn’s record — but it may not make sense to if they were looking to maximize.

People born Jan. 2, 1954, and later should focus on whether to file early or file late while considering the implications of the decision for the surviving spouse.

Our software was updated to compute all scenarios, for single, widowed and divorced individuals. These changes were made immediately after the president signed the Bipartisan Budget Act of 2015 into law. Being able to spot these scenarios and what may work for the client or potential client cannot be done easily. Social Security is not a one-strategy-fits-all type of program. There are other factors such as longevity, inflation rate, continuing to work, tax implications that will keep Social Security planning at the forefront of an overall retirement plan. These are all topics that are discussed with our clients, along with ways to integrate Social Security claiming with retirement income planning in the most tax-efficient way.

See What's At Stake with your Social Security using this Free Calculator.

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Social Security Timing.

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Posted 25th March 2016 by Anonymous

Location: Hedges Wealth Management, 1279 Dingle Rd, Mt Pleasant, SC 29466, USA

Labels: Best Advice Calculator File and Suspend FRA Full Retirement Age Income Planning Restricted Application Social Security Deadline 2016 Spousal Benefit

	Up to 50% Taxed	Up to 85% Taxed
Individual	25,000-34,000	34,001+
Joint	32,000-44,000	44,000+

■ The ISM Non-Manufacturing PMI increased +1.4 points to a healthy 55.1%. The business activity component climbed over 4 points to 59.9%. The employment component fell but remains in expansion territory. Twelve of the sixteen industries surveyed reported growth.

■ Second quarter Gross Domestic Product (GDP) growth was revised downward to +1.3% (from +1.7%).

■ Industrial production fell by -1.2% in August. Output in the gulf coast region was restrained by Hurricane Isaac. Industrial production is 2.8% above its year-ago level. Capacity utilization fell by 1 percent to 78.2%, a level 2.1 points below its long-term average.

■ Durable goods orders fell -13.2% in August, the largest decrease since January 2009. Excluding transportation, orders fell -1.6%.

■ Retail sales rose +0.9% in August and are up +4.7% year-over-year.

■ Real disposable personal income fell -0.3% in August and real personal consumption expenditures increased +0.1%. The savings rate fell to 3.7%.

■ Inflation measures moved higher on higher energy prices.

■ The producer price index climbed +1.7% in August, the largest monthly rise since June 2009. Excluding food and energy, prices were up only +0.2% for the month. Over the last 12 months, prices are up +2.0%.

■ Housing market data released in September was mixed but leans positive.

■ Existing home sales increased +7.8% to a Seasonally Adjusted Annual Rate (SAAR) of 4.82 million.

■ New home sales fell -0.3% from July’s revised rate, to a SAAR of 373,000. Median and average sale prices increased 1%.

■ Housing starts increased +2.3% to a SAAR of 750,000, but building permits fell -1.0%.

■ The S&P/Case-Shiller Home Price Index increased +1.6% in July. For the third consecutive month, all 20 cities recorded positive monthly changes. 16 of the 20 cities recorded year-over-year price gains.

■ The Conference Board Leading Economic Index declined -0.1%, but the coincident indicator, which measures current economic activity, increased +0.1%.

Annualized for periods greater than one year. Past performance is no guarantee of future results. Source: FactSet, Red Rocks Capital, Hedge Fund Research. Total returns as of 9/30/12.

■ Investors’ risk appetite returned in the third quarter, helped by promises of additional liquidity by central banks including the Federal Reserve and the European Central Bank (ECB). The S&P 500 Index gained +6.4% in the third quarter and is up +30.2% over the last twelve months.

■ Through the first nine months of the year the NASDAQ has been the best performing broad market index, gaining +19.6%. Apple (AAPL) is responsible for 5.6 percentage points of that gain.

■ Earnings growth has remained strong, with 67% of companies beating earnings estimates for the second quarter; however, only 41% of companies beat expectations for revenue growth.

■ Energy was the strongest performing sector in the third quarter, gaining over +10%, followed by consumer discretionary (+7.5%) and information technology (+7.5%). The utilities sector actually posted a slight decline, falling -0.5%.

■ Large caps led both mid and small caps in the third quarter and value was slightly ahead of growth. For the year to date period, large caps have a nice lead over mid and small caps, but there has been little differentiation by style.

■ U.S. Treasury yields remain at extremely low levels and yield volatility remains low. The 10-year Treasury note closed out September at a yield of 1.65%, just 2 basis points lower than where it began the quarter. Yields are about 20 basis points lower than where they started the year.

■ The technicals in the municipal bond market remain favorable as net new supply is light and investor demand for tax free income is strong. Munis edged out taxable bonds in the third quarter.

■ Overall hedge funds have had a lackluster year as most have kept market exposure too low and have not participated in the strong equity market performance.

■ Global Real Estate Investment Trusts (REITs) lagged equities in the third quarter but are still ahead so far this year with a gain of over +21%. Asia has been the best performing geography while industrial REITs have been the best performing property type.

It is unclear how long this liquidity-fueled rally can continue in the face of a number of major risks. As investor sentiment has shifted more bullish, the equity markets may have moved ahead of the fundamentals. The major risks that concern us include:

■ Tensions in the Middle East: Geopolitical risks in the Middle East are cause for concern. A sharp rise in oil prices will be a negative shock to the global economy.

In Short Supply – The inventory of existing homes for sale in the United States declined by 750,000 in the last 12 months, a drop of 24% (source: National Association of Realtors).

Green Acres – Net farm income in America is projected to reach an all-time record of $122.2 billion in

2012. Net farm income was $63.0 billion in 2009 (source: Department of Agriculture).

The Biggest – 7 of the 10 largest corporations in the world (based upon 2011 sales) are in the oil industry

(source: Fortune).

Source: FactSet

Barclays Capital Municipal Bond Index – A benchmark index that includes investment-grade, tax-exempt, and fixed-rate bonds with long-term maturities (greater than two years) selected from issues larger than $50 million.

Barclays Capital U.S. Aggregate Bond Index – An unmanaged market-value-weighted performance benchmark for investment-grade fixed-rate debt issues, including government, corporate, asset-backed, and mortgage-backed securities, with maturities of at least one year.

Barclays Capital U.S. TIPS Index (Treasury Inflation-Protected Securities) –The Barclays U.S. TIPS Index consists of inflation-protection securities issued by the U.S. Treasury.

BofA Merrill Lynch 3-7 Year Municipal Bond Index – The index measures the performance of mutual bonds with maturities between three and seven years.

Consumer Price Index (CPI) –Consumer Price Index is a measure of the cost of goods purchased by average U.S. household. It is calculated by the U.S. government's Bureau of Labor Statistics.

Dow Jones Industrial Average (DJIA) – The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.

Dow Jones/UBS Commodity Index – A rolling commodities index composed of futures contracts on 19 physical commodities traded on U.S. exchanges. The index serves as a liquid and diversified benchmark for the commodities asset class.

Dow Jones U.S. Total Stock Market – The Dow Jones U.S. Total Stock Market Index represents the broadest index for the U.S. equity market, measuring the performance of all U.S. equity securities with readily available price data. The index was created in 1974.

Exchange Traded Fund (ETF) – A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange.

Gross Domestic Product (GDP) – GDP is commonly used as an indicator of the economic health of a country, as well as to gauge a country's standard of living.

Real Estate Investment Trust (REIT) A security that sells like a stock on the major exchanges and invests in real estate directly, either through properties or mortgages.

Russell 1000 Growth – Measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values.

Russell 1000 Value – Measures the performance of Russell 1000 companies with lower price-to-book ratios and forecasted growth values.

Russell 2000 Small Cap Growth – Measures the performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values.

Russell 2000 Small Cap Value – Measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values.

Russell 2500 – Measures the performance of the 2,500 smallest companies in the Russell 3000 Index.

Russell 2500 Growth – Measures the performance of those Russell 2500 companies with higher price-to-book ratios and higher forecasted growth values.

Russell 2500 Value – Measures the performance of Russell 2500 companies with lower price-to-book ratios and forecasted growth values.

Russell 3000 – This index encompasses the 3,000 largest U.S.-traded stocks, in which the underlying companies are all incorporated in the U.S.

Russell Mid Cap Growth – Measures the performance of those Russell Midcap companies with higher price-to-book ratios and higher forecasted growth values. The stocks are also members of the Russell 1000 Growth Index.

Russell Mid Cap Value – Measures the performance of those Russell Midcap companies with lower price-to-book ratios and lower forecasted growth values. The stocks are also members of the Russell 1000 Value Index.

Seasonally Adjusted Annual Rate (SAAR) – Rate adjustment used for economic or business data that attempts to remove the seasonal variation in data. Calculated by dividing the unadjusted annual rate for the month by its seasonality factor and crated an adjusted annual rate for the month.

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