4th Quarter Investment Results and More.

Our investment management clients will now find preliminary 4th quarter reports posted in their secure folders. It was a pretty good quarter for most, with the average total return being a gain of 1.92%. The cost of living decreased by approximately 0.15%. Final inflation numbers will become available around the 20th of January.

Category returns for the quarter, and the year are shown below.

Investment Category Representative ETF 2015,Q4 2015
iShares NASDAQ Biotechnology (IBB) 10.95 5.21
Vanguard Healthcare (VHT) 7.99 5.34
Vanguard REIT Index (VNQ) 6.48 -4.15
iShares Russell 1000 (IWB) 6.29 3.57
Schwab International Equity (SCHF) 2.69 -2.56
Vanguard Global ex-US Real Estate (VNQI) 1.31 -4.37
WisdomTree Emerging Markets Local Debt (ELD) 0.30 -13.38
US Inflation (IA SBBI) (Preliminary) -0.15 1.18
iShares Core US Aggregate Bond (AGG) -0.59 -1.54
iShares MSCI Emerging Markets (EEM) -0.82 -15.60
iShares TIPS Bond (TIP) -1.22 -4.83
PowerShares International Corporate Bond (PICB) -1.61 -6.01
SPDR DB Intl Govt Infl-Protected Bond (WIP) -2.16 -9.15
iShares Gold Trust (IAU) -4.93 -17.70

Has the dollar reached a peak? That is the title of a recent WSJ article which suggests that many investors do not believe that the dollar will continue to appreciate versus other currencies in 2016 as it has during the past several years. The dollar’s appreciation has contributed to the mostly negative returns experienced by investors holding foreign securities, especially those of emerging markets. We wouldn’t mind a bit if the dollar were to weaken some during 2016.

As I am writing this the minutes of the December Federal Reserve meeting are being released to the public. The Committee’s notes indicate that Fed Officials are still concerned that even though employment has risen and the jobless rate has declined inflation has remained below their target of 2% for the past 3 years. I have written about the deflationary effects of technology before, but have more to say on this subject. If you are interested you can read my words here.

Recently, as I was reviewing some information concerning IRAs in order to pass a required continuing education exam I was reminded that not all IRA custodians take advantage of all of the desirable features allowed by the IRS. For example, in some cases it is acceptable for an IRA beneficiary to name a beneficiary, thereby possibly extending the period of tax deferral. However, if the custodian’s documents do not conform to the IRS requirements for this feature it will not be available. The custodian’s limitations will control. One reason that we have chosen Schwab to custody our clients’ assets is that they do allow a beneficiary’s beneficiary.

I have received some feedback from readers indicating that my blog posts are sometimes too lengthy. Therefore, beginning with this posting I have reduced the verbiage for easier reading, including links to more information where appropriate. For example, the paragraph about the Federal Reserve meeting and the lack of inflation includes a link to quite a bit more information concerning this topic. If you have comments or suggestions please post them, or email them, or call me.

Now that Disney owns Star Wars, there have been a few changes...

Now that Disney owns Star Wars, there have been a few changes…

And now, a few questions to measure your intelligence:

1. What word becomes shorter when you add two letters to it? Answer.

2. Two children are born on the same day from the same mother but they are not twins. How is that possible? Answer.

3. What word in the English Language is always spelled incorrectly? Answer.

4. If you were running a race, and you passed the person in 2nd place, what place would you be in now? Answer.

How did you do? 100% I’m sure, because my readers are all way above average!

Referrals welcome!

If you know someone who might benefit from our posts – a child, parent, friend, neighbor – please send us their email address. Upon their approval we will put them on our email list.

Here’s hoping that you experience a happy and healthy 2016!

To our clients we pledge to do our best to assist you in using your resources wisely to meet your financial goals.


Carl and Jayne

Financial Planning Associates, Inc.

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