Monthly Newsletter – March 2019

retirement

Our March newsletter provides insights on relevant and timely topics we hope you find value reading. With tax season around the corner, we share the latest insights from RRBB Accountants & Advisors. We also share BlackRock’s latest retirement insights along with the latest market commentary from Pacific Asset Management.

RRBB March Newsletter

Tax season is in full swing. Early reports from the IRS indicate that, on average, refund amounts are down compared to last year. If this is you, the first article lays out some reasons for the change. This issue also includes a warning to business owners to file their taxes on time, tips to keep your monthly bills in check, and some exciting board games to try. The full newsletter is in the link below:

RRBB March Newsletter

BlackRock Insights – Retirement Concerns

Retirement planning has evolved from a world where pensions and Social Security paid for retirement to a world today where people are living longer and need to depend on their own savings.

Consider the following:

One-third of Americans have less than $5,000 set aside for retirement

Most people born today will live to be 103

90% of the world’s data has been created in the last two years

More than 40% of millennial’s don’t have access to an employer- sponsored retirement plan

Source: BlackRock

Click the link below to read the full article from BlackRock:

BlackRock Insights – Retirement Concerns

Monthly Market Commentary

Our partners at Pacific Asset Management share their latest Market Commentary.  Please click the link below to read the latest monthly commentary:

Pacific Asset Management – March Commentary


Investment Opportunities in Today’s Market Climate – February Newsletter

After posting its worst yearly performance since the financial crisis in 2018 (-6.2%), the S&P 500 just posted its best January since 1987 (+8.01%).  This illustrates how volatile markets are now.  Our February newsletter focuses on three investment opportunities to consider in today’s market climate.  In addition, we provide the latest monthly commentary from Pacific Asset Management. 

Investment Opportunities in Today’s Market Climate

Multifamily Real Estate investing

Multifamily rental housing is a common form of housing in the United States that presents a unique investment opportunity with low correlation to the economy and stock market.  Multifamily real estate investments generally focus on income producing properties with low/defensive risk profiles.

Demand for multifamily rental units remains high.  Research from the Urban Institute predicts that from 2010 to 2030, we will see five new renters for every three new homeowners.

There are significant barriers to homeownership that favor renter and multifamily demand:

  • Millennials are drowning in student loan debt.  According to the Federal Student Aid Office report from Q1 2018, there are more than 44 million borrowers who collectively owe $1.5 trillion in student loan debt.
  • As interest rates rise, it becomes more expensive to borrow money to buy a home.
  • Increased costs associated with home ownership (land, labor, overall construction costs).

Investing passively through a fund focusing on multifamily investment properties offers the ability to co-invest with professionals and diversification in asset types, geography, and business plans.  

Covered Calls

A covered call option strategy can help to control and reduce risk on a stock or exchange traded fund (ETF) you already own.  A covered call strategy is best suited for those with concentrated stock positions and for income-oriented investors. In particular, we have identified employee’s of publicly traded companies with accumulated stock compensation can benefit from a covered call strategy.

In a Covered Call transaction, you are simply giving someone else the right to buy your investment in exchange for cash paid today.  This cash provides immediate income and the potential for downside protection for the investment you own.

For a detailed explanation on Covered Calls, please read Charles Schwab’s article – Reducing Your Exposure with Covered Calls

Short Duration Income

The rising interest rate environment has created investment opportunities within the short duration income space.  The US Federal Reserves objective to normalize monetary policy (largely by raising interest rates) has caused short-term interest rates to rise dramatically, leading to a flattening yield curve (see below chart).

Source: Bloomberg

When comparing today’s US treasury yields (annual), the 2-year US treasury yields 2.52% versus 2.70% for the 10-year US treasury.  This means you are only receiving an additional 0.18% per year for the 8 year difference.  This environment creates an opportunity for investors to reduce risk by lowering their portfolios duration/maturity.

Currently, you can find a number of banks offering 2% or more on savings accounts. It is worthwhile to shop around for the best savings rates available. You can get started by visiting Nerdwallet.com’s Best Saving Accounts of February 2019

For more information on short duration investments, please visit Lord Abbett’s article on Gauging the Opportunity in Short Duration Credit.

Please contact us to explore these investment opportunities based on your personal goals and objectives.

Pacific February Monthly Commentary

Our partners at Pacific Asset Management share their latest Market Commentary.  Please click the link below to read the latest monthly commentary:

PACIFIC ASSET MANAGEMENT – FEBRUARY COMMENTARY

2019 Investment Outlook – January Newsletter

Our January newsletter focuses on the 2019 Investment Outlook, which we hope you find value reading.  In addition, we provide the latest monthly commentary from Pacific Asset Management. 

2019 Investment Outlook

2018 was a challenging year for all investors with global equity markets having their worst year since 2008.  Signs of global economic slowdown, rising interest rates in the US, trade war between the two largest economies, and political uncertainty (including Brexit) all played roles in the 2018 downturn.  Moving ahead to 2019, what can we all expect?

We have researched many of the investment and economic outlooks available and have found a wide range of views for what 2019 has in store.  Here is a great article from Bloomberg providing a reader’s digest of the major Wall Street firms’ outlook for the year ahead:

https://www.bloomberg.com/graphics/2019-investment-outlooks/

Considering 2018’s negative return for the S&P 500, what are the odds that 2019 will also be a down year?  Based on historical data going back to 1928, there were 4 instances (2001, 1974, 1940, and 1930) where the S&P 500 was negative two consecutive years.  There were 12 times where the S&P 500 was positive in the year following a negative year.  Based on this data, the odds of a negative S&P 500 in 2019 is 25%, which appears promising.

However, many if not all the conditions (economic slowdown, rising rates, trade wars, political uncertainty) that caused 2018 will likely persist into 2019.

The common themes to be aware of are listed below:

  • The US/global economy is in the mid-to late part of an economic cycle.  Eventually, like all economic cycles, there will be a recession. 
  • We can reasonably expect a moderate recession as soon as 2020.
  • Discipline around diversification and rebalancing will be important in 2019
  • Equity investors can reduce risk by focusing on quality, larger cap stocks in historically defensive sectors.
  • Before this cycle is finished, equities can still deliver a period of significant out-performance versus fixed income
  • Within fixed income, investors should focus on higher quality debt, avoiding high yield (junk) debt
  • To be clear, the challenges ahead don’t appear to have the makings of another financial crisis

Pacific January Monthly Commentary

Our partners at Pacific Asset Management share their latest Market Commentary.  Please click the link below to read the latest monthly commentary:

PACIFIC ASSET MANAGEMENT – JANUARY COMMENTARY

Please contact us if we can be of further assistance.

Everyone at Touchstone wishes you a happy, healthy, and prosperous 2019!

Monthly Newsletter – December 2018

Our December newsletter covers some relevant and timely topics we hope you find value reading.  We begin by sharing BBC’s latest coverage of Brexit.  We are also pleased to provide the latest commentary from Vanguard’s Chief Investment Officer along with the latest monthly commentary from Pacific Asset Management.

Brexit: All you need to know about the UK leaving the EU

Here is an easy-to-understand guide to Brexit – beginning with the basics, then a look at the current negotiations, followed by a selection of answers to questions we’ve been sent.

Brexit: All you need to know about the UK leaving the EU

Vanguard’s CIO talks expectations, interest rates, and blockchain

In the following interview, Vanguard Chief Investment Officer Greg Davis addresses investment and economic conditions, investor expectations, and some of the way’s technology is improving financial market efficiency and transparency.

To read the full guide, click the link below:

Vanguard –  expectations, interest rates, and blockchain 

Pacific November Monthly Commentary

Our partners at Pacific Asset Management share their latest Market Commentary.  Please click the link below to read the latest monthly commentary:

PACIFIC ASSET MANAGEMENT – DECEMBER COMMENTARY

We wish you and your family a wonderful holiday season.  Please contact us if we can be of further assistance.

Monthly Newsletter – November 2018

Monthly Newsletter – October 2018

Monthly Newsletter – November 2018

Our November newsletter covers some relevant and timely topics we hope you find value reading.  This month’s newsletter focuses on the recent market volatility.  Below we share data and market commentary that we feel is of interest.  We are also pleased to provide Touchstone Advisory’s latest guide on “How to Grow Your Wealth” along with the latest monthly commentary from Pacific Asset Management.

Market Commentary

We experienced the second market correction of 2018 (down 10% or more) in October.  Market corrections happen more often than you may think (more on that below) and we recommend reviewing how your investment strategies manage this type of volatility.  Below is some interesting data to consider regarding investing during periods of increased volatility (Source: Market Watch):

  • From 1996 through 2015, the S&P 500 returned an average of 8.2% a year, yet if you missed out on the top 10 trading days because you were trying to time the market, the returns shrank to just 4.5%. And If you missed out on the top 20 trading days, your returns came in at just 2.1%.
  • On average, the market has seen about one correction — defined as a decline of 10% or more — a year going back more than a century.
  • Fewer than 20% of all corrections turn into a bear market. This means that 80% of corrections are just short breaks during a bull market. When the stock market starts tumbling, it can be tempting to abandon ship by selling assets and moving into cash. However, doing so could be a big mistake. You would likely be selling all of your assets at a low, right before the market rebounds!

How to Grow Your Wealth

Investing can be intimidating, a complex world with its own language.  But by recongising and meeting your distinct requirements, we can have a positive impact on your life and investment objectives and help you through the entire process.

To read the full guide, click the link below:

HOW TO GROW YOUR WEALTH

Pacific November Monthly Commentary

Our partners at Pacific Asset Management share their latest Market Commentary.  Please click the link below to read the latest monthly commentary:

PACIFIC ASSET MANAGEMENT – NOVEMBER COMMENTARY

NEW OFFICE ADDRESS

Please note we have moved our office location to downtown Manhattan’s financial district.  Our new address is below:

Touchstone Advisory, LLC

90 Broad Street, Suite 904

New York, NY 10004

We hope you have a wonderful November.  Please contact us if we can be of further assistance.

 

Monthly Newsletter – October 2018

We begin our October newsletter with gratitude.  Last week, Touchstone Advisory, LLC celebrated our one year anniversary of operations.  We want to take a moment to thank every client and partner for their unwavering support throughout the year.  Our mission is to be the leading provider of comprehensive financial planning services for global executives and expatriates living in the United States and abroad.  Below you will find an overview of the core services we now offer along with the latest Monthly Commentary from Pacific Asset Management.

Touchstone Advisory, LLC – Core Services

Global Retirement Planning

Touchstone Advisory, LLC works with clients around the world to help them achieve their retirement goals and objectives. We offer a wide range of US and international options to establish Personal Retirement Plans that may improve your investment & currency flexibility, estate planning needs, and income flexibility.

UK Pension Consulting

Wealth Management & Estate Planning

Touchstone Advisory is proud to provide holistic Wealth Management and Investment Advisory solutions that help our clients grow, protect, and preserve their wealth.

Alternative Investments

We offer our clients the ability to access a wide range of alternative investments strategies to consider that have the potential to provide diversification and reduced risk.

Please visit our Services Website to learn more

Pacific October Monthly Commentary

Our partners at Pacific Asset Management share their latest Market Commentary.  Please click the link below to read the latest monthly commentary:

PACIFIC ASSET MANAGEMENT – OCTOBER COMMENTARY

We hope you have a wonderful October.  Please contact us if we can be of further assistance.

Monthly Newsletter – September 2018

Our September newsletter covers some relevant and timely topics we hope you find value reading.  Below you will find Touchstone Advisory’s Guide to Asset Allocation, Lord Abbett’s article on Emerging Markets: Turkey and China in the Spotlight, and Pacific Asset Management’s latest monthly commentary:

Touchstone Advisory’s Guide to Asset Allocation

Understanding investment risk and determining what level of risk you feel comfortable with before you invest is an important part of the investment decision process. Your potential returns available from different kinds of investment, and the risks involved, change over time as a result of economic, political and regulatory developments, as well as a host of other factors.

To read the full guide, click here

Emerging Markets: Turkey and China in the Spotlight

While investors have been focusing on Turkey and its plunging currency amid political turmoil, the economic outlook for China also is coming under increased scrutiny, given an intensifying trade war with the United States and the uncertainty arising from the conflict.

To read the full article, click here

Pacific September Monthly Commentary

Our partners at Pacific Asset Management share their latest Market Commentary.  Please click the link below to read the latest monthly commentary:

PACIFIC ASSET MANAGEMENT – SEPTEMBER COMMENTARY

We hope you have a wonderful September.  Please contact us if we can be of further assistance.

Monthly Newsletter – August 2018

Our August newsletter covers some relevant and timely topics we hope you find value reading.  Below you will find articles that cover the 3 biggest risks in global investing today & how to avoid them, the case for electric vehicle investment, one of the biggest retirement planning mistakes, and Pacific Asset Management’s latest monthly commentary:

3 Biggest Risks in Global Investing Today & How to Avoid Them (Barrons)

The world looks a lot different than it did a year ago.

In 2017, it was zipping along: Every major economy was growing, global markets were charging higher, and just about every asset class was rising in value. But by this spring, the smooth sailing had given way to choppy waters, and a sea of new developments has left investors looking for direction.

To read the full article, click here

The Bullish Case for Electric Vehicle Investment (thisismoney)

Continued decline in battery costs + evolving consumer preferences & increasingly environmentally-focused policy are positive catalysts

To read the full article, click here

One of the Biggest — and Often Costliest — Retirement Mistakes Investors are Making Today (CNBC)

Target-date funds are all the rage among retirement investors, making it easy to spread money among stocks and bonds and to rebalance as conditions change. Total assets in this sector topped $1.1 trillion at the end of 2017, up from $158 billion at the end of 2008, according to Morningstar.

But is this too much of a good thing?

To read the full article, click here

PACIFIC AUGUST MONTHLY COMMENTARY

Our partners at Pacific Asset Management share their latest Market Commentary.  Please click the link below to read the latest monthly commentary:

PACIFIC ASSET MANAGEMENT – AUGUST COMMENTARY

We hope you have a wonderful August.  Please contact us if we can be of further assistance.

MONTHLY NEWSLETTER – JULY 2018

Our July newsletter covers some relevant and timely topics we hope you find value reading.  We begin by sharing the latest on Brexit and how our UK pension consulting process can help.  We are also sharing Lord Abbett’s Mid Year Outlook.  Finally, our partners at Pacific Asset Management share their latest monthly commentary:

BREXIT UPDATE

Prime Minister Theresa May’s proposal for the U.K. to maintain close ties to the EU after divorce has resulted in political turmoil as Brexit Secretary David Davis and Foreign Secretary Boris Johnson resigned from their respective posts.  The below Bloomberg article details this further:

Face of Brexit Boris Johnson Resigns Plunging May into Crisis (Bloomberg)

For those that have assets in the U.K. – in particular, pensions – now is a timely opportunity to review the options available to you.  We have prepared the below video explaining the benefits of our UK Pension Consulting service:

 

LORD ABBETT MID YEAR OUTLOOK

Lord Abbett investment leaders offer their insights on the macroeconomic and policy factors that could influence markets in the second half of 2018.

To read the full article, click here

 

PACIFIC JULY MONTHLY COMMENTARY

Our partners at Pacific Asset Management share their latest Market Commentary.  Please click the link below to read July’s monthly commentary:

PACIFIC ASSET MANAGEMENT – JULY COMMENTARY

We hope you have a wonderful July.  Please contact us if we can be of further assistance.