Sell in May, Retirement Living & Western Art

May
13

Written by: Jon McGraw

The Markets

‘Sell in May and Go Away’ is a trading maxim which, according to Investopedia, encourages an investor to “sells his or her stock holdings in May and get back into the equity market in November…” Traders who adhere to that adage may be pondering averages and exceptions right now. During the first two weeks of the month, the Dow Jones Industrials Average, the Standard & Poor’s 500, and the Russell 2000 Indices all reached new highs. The Dow passed 15,000, the S&P reached 1,600, and the Russell 2000 hit 968.

Bulls are in the majority among investors, although there is some bearish sentiment, according to the Bull and Bear Wise Index. Investors’ changing expectations are reflected in CNNMoney’s Fear & Greed Index which showed investor sentiment has shifted from ‘fear’ one year ago to ‘extreme greed’ last week. The premise of the index, which measures seven indicators, is investors are driven by two emotions: fear and greed. When investors are fearful, stock markets may fall more than they should; when investors are greedy, markets may be pushed higher than they should be.

Investors’ inclination toward stocks may be one of the reasons for declines in the value of gold and commodities last week.

Although there was little of it, economic news generally was positive last week. The U.S. Labor Department announced the number of Americans filing initial claims for jobless benefits dropped unexpectedly. Approximately 323,000 people filed for unemployment benefits which was about the same number that filed each week before the recession started in December 2007. According to Bloomberg, investors took the news as a sign the U.S. economy is improving which helped push yields on 10-year Treasuries higher.  For a full rundown of the economic details view our Economic Notes Post

Perceived economic strength in the U.S. caused the U.S. dollar to gain against many of the 16 major world currencies last week, as well as the 24 emerging countries’ currencies tracked by Bloomberg.com.

 


Data as of 5/10/13

1-Week

Y-T-D

1-Year

3-Year

5-Year

10-Year

Standard & Poor’s 500 (Domestic Stocks)

1.2%

14.6%

20.3%

12.1%

3.1%

5.6%

10-year Treasury Note (Yield Only)

1.9

N/A

1.9

3.5

3.8

3.6

Gold (per ounce)

-2.9

-15.8

-10.8

6.0

10.1

15.1

DJ-UBS Commodity Index

-0.9

-5.1

-3.0

0.4

-9.3

1.2

DJ Equity All REIT TR Index

0.8

16.0

22.4

17.4

7.0

12.3

 

Where will you live during RETIREMENT?

As with many of life’s important questions, the answer depends on you and, possibly, your partner or spouse. Before you make a decision and decide to retire to wherever your grandchildren live (or in your favorite vacation spot) you might want to take a moment and consider the tax implications of your decision.

If your grandchildren live in Alaska, Nevada, Wyoming, Mississippi, or Georgia, you’re probably okay. Each year, Kiplinger.com reviews the tax rules of each of the 50 states, giving special consideration to states which offer attractive tax incentives to retirees and then provides a list of those states it deems most tax-friendly for retirees. For 2012, Kiplinger reported the five states listed above were the most tax-friendly.

According to the article, “All of these tax havens exempt Social Security benefits from taxation (and some impose no state income tax at all). Many of them exclude government and military pensions from income taxes, and some exempt private pensions, too. A few offer blanket exclusions up to a specific dollar amount of retirement income from a wide variety of sources, which is important if you depend on distributions from IRAs and 401(k) plans rather than traditional pensions. Review all of your sources of income before you decide which state may be the best fit for your retirement home.”

Kiplinger.com reported the least tax-friendly states included Connecticut, Vermont, Rhode Island, Montana, and Minnesota, which have one or more of the following:

  • Estate or inheritance taxes
  • High property taxes
  • No tax breaks on Social Security benefits
  • No special treatment for various types of retirement income
  • Source: Kiplinger.com

No matter where you decide to settle, it’s important to evaluate all of the factors which may affect your income during retirement.

Weekly Fun – Head “Into the West” at The Kansas City Club!

Grab your Stetson and boots and “cowboy up” for Third Friday Art Night on May 17th, 6-9pm.  Paintings and artwork will transport you into the American West, where cowboys, vaqueros, Native Americans, mountains, desert, horses and longhorns still roam free on the range.

Artists:  Don Dane and Kimbell McCurry with additional works by Ernst Ulmer (1922-2009) & Byron Wolfe, CAA (1904 – 1973).

The Club is open to the public and offering a Dinner Special (Reservations required – Paul @ 816-421-6789: $30):

  • Cactus Salad Pickled Napoles, Serrano lime vinaigrette, chiffonade greens, blistered tomatoes, queso fresco, fire roasted corn.
  • Cast Iron Steak Blackened and rubbed sirloin steak, Charred onion Demi-glace, corn meal dusted BBQ Onion rings
  • Coffee Cake Coffee cake with Sour cream ice cream, blueberry fluid gel, poached blueberries, coffee soil, streusel tuile

For more information: http://www.buttonwoodartspace.com/show/into-the-west