Market Recap – Time for a Financial Spring Cleaning

March 24, 2017 in Market Commentary by

Market Digest – Week Ending 3/24/2017
Despite increasing in the latter half of the week, U.S. stocks were unable to fully recover from Tuesday’s sharp decline. All attention was on politics as House Republicans tried to muster enough support to replace the Affordable Care Act. Markets reacted with initial skepticism, worrying a failed health care vote would cast doubt on the new administration’s ability to pass other policies. Foreign developed stocks ended the week slightly down, while emerging markets, U.S. bonds and gold all posted gains. The dollar weakened.

Weekly Returns:
S&P 500: 2,344 (-1.3%)
FTSE All-World ex-US: (-0.3%)
US 10 Year Treasury Yield: 2.41% (-0.09%)
Gold: $1,246 (+1.4%)
USD/EUR: $1.080 (+0.6%)

Major Events:

  • Monday – First day of spring
  • Tuesday – Apple unveiled a new iPad for $329 in an effort to combat lower priced offerings from competitors
  • Wednesday – U.S. existing home sales fell 3.7% in February from the previous month, primarily due to tight inventory and rising prices
  • Wednesday – A terror attack in London left four four dead and injured over 50, according to latest reports. The attacker was killed onsite
  • Thursday – House Republicans delayed a vote to replace the Affordable Care Act on fears it lacked the necessary support to pass
  • Friday – Amidst further uncertainty, House Republicans pulled their healthcare bill in the final minutes before the vote.

Our take:
Monday’s vernal equinox marked the start of a new season, and with that comes the annual tradition: spring cleaning. But don’t think this only applies to your closets and garage—there is something much more important to attend to: your finances. Now is as good a time as any to clean things up and make sure you’re on the right track. Here are a few basic steps to take:

    1. Create a plan. You’ve heard it all before. People are much more likely to accomplish goals with a plan than without. So what is yours? Are you saving the right amount for retirement? What about college for your children? A new home purchase? Don’t let yourself suffer from “analysis paralysis.” It’s easy to be overwhelmed by these decisions and give up, choosing to maintain the status quo. But by having a proper plan in place, you’ll know exactly where to focus your efforts so none of your goals are neglected.
    2. Out with the old. Yep, it’s time to tidy up. Do you have any concentrated positions you’ve been hanging onto? Depending on your tax situation, now could be a good time to diversify. You may also have a number of old 401k’s out there, each with a different set of investments. You could even be paying excessive fees by keeping your money there. Make things easier on yourself and consider rolling those 401k’s into a single IRA. This will consolidate everything into one place and give you total control over investment choices.
    3. In with the new. Once you’ve cleaned house and organized, it’s time to execute your plan. In other words, make sure the appropriate accounts are set up and start saving. You’ll also need to review your overall asset allocation and make sure it’s appropriate for your specific goals and financial situation. It should be diversified globally and across multiple asset classes.

Not sure how much to save, or what allocation you should use for your investments? Try the Personal Capital Financial Dashboard. It’s free and is a great first step to cleaning up your finances. And if you need a more customized approach, consider hiring a professional – just be careful. Many professionals disguise themselves as “financial planners” when in fact they’re just brokers paid on commission. Always make sure to ask how they’re compensated so you’re aware of any conflicts of interest.

Happy cleaning!

This blog is for informational purposes only; we are not in the business of providing tax or legal advice and we generally recommend seeking the advice and counsel of a tax professional before taking any action that may cause a material taxable event.

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Brendan Erne, CFA
Brendan Erne serves as the Portfolio Management Team Leader with Personal Capital Advisors. He has over 15 years of industry experience, spanning almost all levels of the investment process, including several years at Fisher Investments as an equity analyst covering the Technology and Telecommunications sectors. He also co-managed a large cap growth portfolio and co-authored Fisher Investments on Technology, published by John Wiley & Sons. Brendan is a CFA charterholder.

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