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Weekly Economic Update

­MidAmerica Financial Resources Presents:

 

WEEKLY ECONOMIC UPDATE

 

 

 

WEEKLYQUOTE

 

“Next to trying and winning, the best thing is trying and failing.”

 

- L.M. Montgomery

 

 

WEEKLYTIP

 

Will you soon be using a credit card outside the U.S.? Call the card issuer before your trip, and let your bank know the exact countries and territories you will be visiting. Otherwise, you may run the risk of having your card suspended on suspicion of fraud.

 

WEEKLYRIDDLE

 

When is L greater than XL?

 

 

Lastweek’sriddle:

What goes with you wherever you go, often demands an answer, and never asks you a question?

Lastweek’sanswer:

Your cell phone.

 

 

 

 

June 27, 2016

 

BREXIT VOTE BATTERS GLOBAL MARKETS

The world reacted to the news Thursday night that U.K. voters had decided to leave the European Union. Germany’s DAX, France’s CAC-40, and Japan’s Nikkei 225 respectively ended their Friday trading sessions with losses of 6.82%, 8.04%, and 7.92%. Wall Street was not hit as hard, but the Dow fell 3.39% Friday, while the Nasdaq declined 4.12% and the S&P 500 retreated 3.60%.1,2

 

A GAIN FOR EXISTING HOME SALES IN MAY

Last month, the pace of residential resales accelerated another 1.8%. According to the National Association of Realtors, the latest annual rate of 5.53 million sales marked a 9-year high. Separately, a Census Bureau report showed a 6.0% drop in new home buying in May.3

CONSUMER SENTIMENT GAUGE DECLINES IN JUNE

Displaying a final June reading of 93.5, the University of Michigan’s monthly consumer sentiment index finished the sixth month of the year 1.2 points below its final May mark. A year ago, the index was at 96.1.4

 

STOCKS END ROCKY TRADING WEEK LOWER

Even with global markets plunging on Friday, weekly losses for the major U.S. indices were not extreme. The Nasdaq declined 1.92% across five days, while the Dow and S&P 500 respectively retreated 1.56% and 1.64%. As the dust settled Friday, the Dow closed the week at 17,399.86; the S&P, at 2,037.30; and the Nasdaq, at 4,707.98. Gold jumped $59.30 Friday to a COMEX close of $1,322.40. Oil settled at $47.64 Friday on the NYMEX.2,5

 

THIS WEEK: Global markets will react further to the Brexit on Monday; stateside, no major news releases are scheduled. Tuesday, an E.U. leadership summit begins in Brussels; the Conference Board presents its June consumer confidence index; the April Case-Shiller home price index appears; the BEA issues its final estimate of Q1 GDP; and Nike reports quarterly results. Wednesday, Federal Reserve chair Janet Yellen, European Central Bank president Mario Draghi, and Bank of England governor Mark Carney take part in a panel discussion at an ECB forum in Portugal; Wall Street will also pay attention to May pending home sales, May personal spending figures, and earnings news from General Mills, Monsanto, and Pier 1. Thursday, a new initial claims report complements earnings from ConAgra Foods, Constellation Brands, Darden Restaurants, and Paychex. Friday, investors consider ISM’s June U.S. manufacturing PMI and China’s latest factory PMI reading.

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

-0.14

-3.15

+9.16

+5.83

NASDAQ

-5.98

-8.09

+15.49

+12.19

S&P 500

-0.32

-3.38

+12.12

+6.37

REAL YIELD

6/24 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.15%

0.48%

0.64%

2.64%


Sources: wsj.com, bigcharts.com, treasury.gov - 6/24/162,6,7,8

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

 

 

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Securities and advisory services offered through National Planning Corporation (NPC), Member FINRA/SIPC, a Registered Investment Adviser.
MidAmerica Financial Resources and Malan Financial Group are separate and unrelated companies to NPC.

 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Citations.

1 - markets.on.nytimes.com/research/markets/worldmarkets/worldmarkets.asp [6/24/16]

2 - markets.wsj.com/us [6/24/16]

3 - investors.com/news/economy/new-home-sales-fall-6-jobless-claims-near-43-year-low/ [6/23/16]

4 - investing.com/economic-calendar/michigan-consumer-sentiment-320 [6/24/16]

5 - cnbc.com/2016/06/24/us-markets.html [6/24/16]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F24%2F15&x=0&y=0 [6/24/16]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F24%2F15&x=0&y=0 [6/24/16]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F24%2F15&x=0&y=0 [6/24/16]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F24%2F11&x=0&y=0 [6/24/16]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F24%2F11&x=0&y=0 [6/24/16]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F24%2F11&x=0&y=0 [6/24/16]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F23%2F06&x=0&y=0 [6/24/16]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F23%2F06&x=0&y=0 [6/24/16]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F23%2F06&x=0&y=0 [6/24/16]

7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [6/24/16]

8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [6/24/16]

 

 

 

 

 


Estate Planning After a Second Marriage

Special considerations for a complex situation.

 

Provided by MidAmerica Financial Resources

 

Marrying again makes estate planning more involved. How do you provide for everyone you love? Should you provide for everyone you love? How do you arrange to transfer wealth in a way that won’t hurt the feelings of certain heirs?

   

If you have not planned your estate yet, take inventory. Spend a half-hour and jot down the assets you own, major and minor. Who should own these assets after you die? Your spouse should do this, too – and you should talk about your preferences. It may not turn out to be the easiest conversation, but agreement now may preclude family squabbles and legal challenges down the line. (If you have a prenuptial agreement in place, you may have already discussed some of these matters.) You should also consider two scenarios – what happens if you die first, and what happens if your spouse dies before you do.

 

If you and/or your spouse have children from prior marriages, there may be some dilemmas for each of you. If you die, there is a real possibility that your current husband or wife will not elect to provide for your children from past marriages. So what might you do to prepare for that possibility? You might make a child the primary beneficiary of a life insurance policy, or set up a trust for your kid(s), or place certain real property under joint ownership with a child.

   

If you have already written a will, it will probably need revisions. They could be considerable. You want to be extremely specific about which heir gets what; you need to state bequests convincingly, because the more convincing your bequest, the less ambiguity.  

 

How up-to-date are your beneficiary designations? Out-of-date beneficiary decisions are an Achilles heel of estate planning. Be sure to review them; you may want to revise beneficiary forms for retirement plans, investment accounts, and insurance policies.

   

As you consider these revisions, pay particular attention if you have been divorced. Divorce may actually preclude you from changing beneficiaries in certain cases. Turn to a lawyer and show the lawyer a copy of your divorcee decree; ask if revising your beneficiary designations will violate it. Should you be unable to make beneficiary changes to your life insurance policy, you may want to buy another one in consideration of your new spouse.1

   

Take a look at irrevocable trusts. They can be used to provide for your spouse as well as your kids. Some people establish a separate property trust to provide for their spouse after their death while directing most or all of their real property to their children.2,3

 

Alternately, parents create irrevocable trusts to direct assets to particular children. They are attractive estate planning vehicles for a number of reasons. A trust agreement is a private mechanism for wealth transfer, while a will is a public document (and some parents who have remarried would rather their wills not be made public). Assets within irrevocable trusts are shielded from creditors, and also from inheritance claims of spouses of the adult children named as heirs. An irrevocable trust represents a “finalized” estate planning decision, one that ensures that particular assets transfer to a parent’s biological children. Irrevocable trusts are also rarely undone. It typically takes permission from beneficiaries (and a judge) to reverse them.4

 

Those aforementioned pre-nups can play an estate planning role as well. They allow you to designate personal assets (such as assets within a college savings account) for existing rather than future children. Post-nuptial agreements (similar to pre-nups, but drafted after a marriage) can also accomplish this. Some states do not view pre-nup and post-nup agreements as legally valid, however – and sometimes carrying out the terms and conditions of these agreements is up to a judge.

 

Be sure to consult legal & financial professionals. When estates become this complex, collaboration with professionals having a thorough understanding of estate planning and tax issues is essential.

   

MidAmerica Financial Resources may be reached at 618.548.4777 or greg.malan@natplan.com.

www.mid-america.us

 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. NPC does not render legal advice.

     

Citations.

1 - elderlawanswers.com/redo-your-estate-plan-when-you-remarry-5477 [12/29/14]

2 - nolo.com/legal-encyclopedia/estate-planning-blended-family-29665.html [8/7/15]

3 - tinyurl.com/ohqsvro [8/14/15]

4 - blogs.wsj.com/totalreturn/2015/03/18/for-blended-families-consider-prenups-and-trusts/ [3/18/15]

 





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