By Edward Leone Jr. CFP RFC DMD MBA
Contact Information: edleonedds@gmail.com
I must comment on a variety of global issues which are clearly having an impact on financial markets. Let’s start with the Middle East. It appears to me that we are observing a religious war involving the variety of Muslim disciplines existing globally just as we observed in history the conflict occurring in Christian religious considerations in the 16th century. As a society we have great concerns over the protection of innocent victims of military conflict. In this religious conflict as I see it, much of this will occur among Christian and Muslim followers. I have no answer as to how to prevent such tragedy. It is clear the Muslims must fight it out to determine the primary influence at the expense of many innocent people. As much as this is troublesome, we need to let it happen without significant intervention if we are going to prevent attack on the home land. This is disgusting!!!
International business has to do with individual government motives clearly and not necessarily what is beneficial to global financial markets. The Russian actions in neighboring countries is a matter of concern. It is my judgment that global economic actions by the US are the most influential actions which the US can take to message the Russian government on the concerns and potential positive and negative effects of their political initiatives. On more of a home front issue, I have great concern over the actions of the Federal Reserve and the impact on the US and global economic issues. We need a US dollar that has credibility in global markets as a measure of value and a local currency that does not further compromise those of other countries.
One additional issue before us which has an economic impact is immigration. Our history with this subject has been mostly positive for immigrants. It is my observation that existing immigration law is not being followed. Do we need some changes? Yes, but also we need disciplined enforcement.
As of January of 2015, holders of IRA accounts (no matter how many you have) will be restricted to one 60 day rollover in a twelve month period. This tax court decision is clearly designed to restrict the opportunity to use an IRA account for a short term interest free loan. One must also check with their accountant and attorney if they hold assets in a trust. Some types of trusts will be experiencing a decline in the amount and type of deductions allowed for their maintenance and operation. This IRS activity will increase the tax burden on revenues generated by trust assets.
T. Rowe Price and Northern Trust are both predicting modest fixed income returns into the near future. This is a result of maintained low interest rates by the Federal Reserve to further the recovery of the US economy. The challenge to those who are in or near retirement can be a problem regarding income preservation since defined benefit retirement plans are on a severe decline. Many are going to annuities to address this problem. This may be a strategy for a portion of retirement assets. However, we must keep in mind that annuities do not allow withdrawal of funds for emergencies usually, you give up ownership of your money, insurance companies must be profitable so fees are high and the insurance company may go bankrupt. There is some risk here!
For The Record:
DJIA 16,662.91
NASDAQ 4,464.93
S&P500 1,955.06
Suggested Reading: “Economics In One Lesson” By Henry Hazlitt
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