Optimus-masthead
News & Views 
Holiday Edition 
 

December 15, 2015



I hope all is well.  In this edition of News & Views, I will discuss the impact of falling oil prices and the new retirement plan contribution limits for 2016.  As always, please contact me with any questions or suggestions you may have.

Oil's Slippery Slope
Caution!

In the December 2014 edition of News & Views, I wrote this:

"The price of crude oil has dropped nearly 50% in the past 6 months, great news for consumers, bad news for oil producing countries."

Here we are one year later and the price of crude oil has dropped another 40%!  Again, this is good news for consumers, but it is also bad news for oil producing countries, energy companies, and their investors.

The Spillover - With the Fed holding rates at zero for the past six years, and investors clamoring for yield, the energy boom in this country has attracted a lot of investor capital. Now, sinking oil and natural gas prices are negatively impacting energy bonds, many of which are high-yield bonds.

The Opportunity - Historically, following a large downturn in high-yield bonds comes huge upside opportunity for those who patiently wait for the storm to pass.  Your accounts are currently positioned with a larger than normal cash position waiting for such opportunity to appear in 2016.

What's New for 2016?
Retirement Contribution Limits 
 
Traditional / ROTH IRA: $5,500 standard contribution limit with a $1,000 catch-up contribution for participants age 50 and above
  
401(k) / 403(b): $18,000 standard pre-tax contribution limit with a $6,000 catch-up contribution for participants age 50 and above
  
SIMPLE: $12,500 standard pre-tax contribution limit with a $3,000 catch-up contribution for participants age 50 and above

Happy New Year!
Thank you for the trust and confidence you place in me.  I wish you and your family all the best in 2015!

Sincerely,
 

Paul Hewitt
 
 
(949) 727-4734 x1