News & Views
Independence Day Edition |
Greetings!
I hope all is well. In this edition of News & Views, I will discuss the markets, take a look back in history, and update the 2013 retirement plan contribution limits. As always, please contact me with any questions or suggestions you may have.
|
| Market Update | |
June Gloom
The second quarter of 2013 was marked by a spike in interest rates that knocked down most asset classes. Virtually all investments (stocks, bonds, real estate, gold, commodities, etc.) were down in the month of June and only stocks managed to squeak out a small gain for the quarter.
Pullbacks are a natural part of investing. In fact, on average, stocks experience drop 10% once per year. That being said, this latest pullback was a bit unusual in that bond holders were hurt at the same time as stock holders. Typically bonds will buffer the volatility in stocks, but not this time.
Despite the short term pain, all accounts are up over the past 12 months and it appears that the rise in interest rates may be done for now. Continuing to diversify across many asset classes remains the best way to create positive gains and reduce volatility in the long run.
|
| 70 Years Ago | | |
A Different Time?
As we approach the July 4th holiday, a time when we celebrate our country's independence, I thought it would be useful to look back in history to 1933. We were in the middle of the Great Depression and Franklin Delano Roosevelt (FDR) had just been sworn in as the 32nd President of the United States.
FDR was convinced that hard economic times were made worse by citizens holding gold coins instead of dollars. He decided that devaluing the U.S. Dollar was the best way to combat the depressed economy and "bailout" the Federal Reserve that had lent out more paper currency then it had in gold reserves to back it up. So once in office, FDR issued Executive Order 6102 criminalizing the possession of gold. All "hoarders" were required to turn in their gold to the Federal Reserve Bank for $20.67 per ounce, the prevailing value of gold at the time.
After the gold was confiscated, the U.S. Treasury raised the spot price for gold to $35 per ounce, devaluing the U.S. Dollar by 70%.
|
| 2013 Retirement Plan Contribution Limits | | |
IRA (Traditional or ROTH) - The standard contribution limit for 2013 is $5,500. If you are age 50 or older, you can make an additional "catch-up" contribution of $1,000 for a total contribution of $6,500.
401(k) or 403(b) - The standard pre-tax contribution for 2013 is $17,500. If your are age 50 or older, you can make an additional "catch-up" contribution of $5,500 for a total contribution of $23,000.
Individual(k) or SEP - Self-Employed individuals can contribute up to $51,000 depending upon their earnings. If you are age 50 or older, you can make an additional "catch-up" contribution of $5,500 for a total contribution of $56,500.
|
|
Sincerely,
Paul Hewitt
(949) 727-4734 x1 | |
|
|
|
|
|
|
|
