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Gene Todd, Executive Vice President/Managing Director of First Bank's Wealth Management Group

From monthly archives: February 2017

We are pleased to present below all posts archived in 'February 2017'. If you still can't find what you are looking for, try using the search box.

Which State Will You Live in Retirement?

“In this world nothing can be said to be certain, except death and taxes.” – Ben Franklin. This old adage is as relevant today as it was back in 1789. There are essentially two types of taxes in the United States: living taxes and death taxes. If you are thinking of moving to another state in retirement, there are generally three financial questions to consider before you move: What is the state income tax? How much does it cost to live there? Will my estate get taxed when I die? State Income Tax There are currently seven states that do not tax the income of its residents (see map below). However, the state tax system is more complicated than that. For example, Tennessee only taxes interest and dividend income. Certain cities charge a separate tax from the state. Such as a New York City resident who may pay an additional 3.876%. Some states exclude pension income from taxation. When considering where to live in retirement, it is important to consider what type of income you will receive ...

Market Highs – What’s Next?

When markets hit new highs, is that an indication that it’s time for investors to cash out? History tells us that a market index being at an all-time high generally does not provide actionable information for investors. For evidence, we can look at the S&P 500 Index for the better part of the last century. Exhibit 1 shows that from 1926 through the end of 2016, the proportion of annual returns that have been positive after a new monthly high is similar to the proportion of annual returns that have been positive after any index level. In fact, over this time period almost a third of the monthly observations were new closing highs for the index. Looking at this data, it is clear that new index highs have historically not been useful predictors of future returns. Given that the level of an index by itself does not seemingly have a bearing on future returns, you may ask yourself a more fundamental question: What drives expected returns for stocks?   POSITIVE EXPECTED RETURNS One way ...

Capital Markets Update - February 2017

This year’s January is quite the contrast to last year. As many of you may recall, last year, the U.S. stock market started the year with its worst decline in history falling close to 8% for the first 2 weeks, before recovering some in the second half of the month to “only” finish down 5.0% for the month of January. Compare that to this year as the U.S. stock market reached record highs with the Dow Jones Industrial Average moving past the 20,000-point milestone for the first time in history. For the month of January this year, the S&P 500 was up 1.90%.  Internationally, stock prices did even better with the MSCI EAFE Developed Market Index up 2.9%, the MSCI Emerging Market Index up 5.5% and the MSCI EAFE Developed Small Cap Index up 3.5%.    So overall, I think we would all agree a much better start to the year than last year. However, with stock prices near or at record highs, is that cause for concern? In our next ...

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