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Home > The Kaighn Report > Jersey Benefits Advisors Investor Newsletter Winter 2020
January 20, 2020
Jersey Benefits Advisors Investor Newsletter Winter 2020

Market Watch

Just as trade issues with China began to subside with the prospects of a “phase one” trade deal on the table ready for signatures, the new year ushered in a big bang and it wasn’t fireworks.  Explosions in Iraq from a US drone took out Iranian general Qassem Soleimani, a major nemesis to the US for the last 40 years, since our diplomats in the US Embassy in Tehran were taken hostage on November 4, 1979 and held for 444 days. 

 

Soleimani has been the architect of many attacks on American interests around the globe for decades and Iran has vowed “revenge”.  With their economy in shambles due to sanctions, and the expenses they incur in support of terrorist groups such as Hamas and Hezbollah, it is hard to imagine their response would be enough to drag the US into an all out war that would more than likely bring about the demise of their Theocracy.  Then again, desperate people can do desperate things.

 

Meanwhile, our economic expansion and bull market continued right up to the last day of 2019, and the markets promptly set new records the first day of trading in the new year.  This is mainly because economic fundamentals continue to be positive with Gross Domestic Product (GDP) growth in the third quarter clocking in at 2.1%, while unemployment was 3.5% in November, job creation was 266,000 and inflation, while accelerating in October and November was still within the Federal Reserve’s comfort zone of 2.1% for all items and 2.3% minus food and energy.  Of course, the new year brings new data to digest beginning on January 10th & 14th, not to mention the beginning of a new earnings season.  Iran’s response, the “phase one” signing of a trade deal, and this fresh data should give us some direction going forward.

 

The markets in 2019 made some impressive gains and it turned out to be a stellar year, as far as investment returns were concerned.  The DJIA* ended the year at 28,538.44 for an increase of 22.34%.  The S&P 500* closed at 3,230.78 which was a 28.88% gain for the year.  Not to be outdone, the technology heavy NASDAQ* delivered a whopping 35.23% return closing at 8,972.60 for 2019.  Global stock markets have also had a torrid run in 2019, adding more than $17 trillion in total value, according to Deutsche Bank calculations. The value of global equities began the year just under $70 trillion but has now surpassed $85 trillion, according to a chart from Deutsche Bank's Torsten Slok. (December 24, 2019)

 

However, just to keep things in perspective a bit, it is interesting to note that if you go back to the various record index levels in 2018, before the Christmas Eve debacle, the increase from those levels to the end of 2019 is more modest.  The DJIA* was only up 6.10%, while the S&P 500* was up 10.24% and the NASDAQ* increased 10.64%.  These are certainly respectable increases in any given year, but it may be why it doesn’t feel 

like your portfolio is on fire, so to speak.

 

So how should you approach the market as we enter this new decade?  In my opinion, the fundamentals of investing for the long haul shouldn’t change all that much for most of us as we head into this election year.  For investors who are fully invested, staying invested is the most important piece of the puzzle, and many times the most difficult to control.  It is tempting to try to time the market but having a systematic investment plan that utilizes Dollar Cost Averaging* can take most of the emotion and guesswork out of investing and can lead to better returns.

 

Having a diversified portfolio with cash and bonds as well as domestic and global equities invested in as many of the sectors of the economy as possible can help weather the eventual storms which the markets are bound to face.  It is also prudent to take some gains, which can be reinvested in the event of a downturn.  Materials (including precious metals), healthcare and energy were three of the worst performing sectors in 2019 and technology was the top performer.  The chances are quite good that this will not be the case in 2020. Of course, if you have cash to invest, there could be ample opportunity in 2020 to put some of it to work.  If you have any questions or concerns, please call.  

Retirement Plan Changes and Contribution Limits

Remember you still have until April 15, 2020 to contribute $6,000 to an IRA or ROTH IRA for 2019.  If you’ve reached age 50, an additional $1,000 catch up contribution can be made.

 

For those of you who have a 401k, 403b or 457 plan at work, the deferral limits are $19,000 for 2019 and increase to 19,500 for 2020.  The catchup limits for these plans, if you’ve reached 50, are $6,000 for 2019 and increase to $6500 in 2020.  The contribution limits for a SIMPLE plan increase from $13,000 in 2019 to $13,500 in 2020.  The catchup contribution for those who have reached the age of 50 is $3000.

 

Those of you who have a SARSEP that was established before 1997 have the same contribution limits as a 401k plan, as well as the same catch up contribution limits.  For individuals who have a SEP plan, the employer contribution cannot exceed the lesser of 25% of the employee’s compensation or $56,000 in 2019 which increases to $57,000 in 2020.  Catchup contributions are not allowed in SEP plans. 

 

Insofar as IRA’s are concerned there are rules regarding deductibility based on whether you are covered by a plan at work and income levels.  If you need any information or assistance, please contact me anytime.

Advisor Group and Ladenburg Thalmann Announce Merger

The following article is an excerpt from a press release.  Phoenix, November 11, 2019.

 

Advisor Group, one of the nation's largest networks of independent wealth management firms, and Ladenburg Thalmann Financial Services Inc. (NYSE American: LTS, LTS PrA, LTSL, LTSF, LTSK, LTSH) ("Ladenburg"), a publicly-traded diversified financial services company, announced that both companies have entered into a definitive merger agreement to join the two companies.

 

Under the terms of the transaction, Ladenburg has agreed to be acquired by Advisor Group through a cash merger, in which each outstanding share of Ladenburg’s common stock will be converted into a cash payment of $3.50 per share. The total enterprise value of the transaction is approximately $1.3 billion, taking into account Ladenburg’s common stock, preferred stock and outstanding debt. The definitive merger agreement and the transactions contemplated were unanimously approved by Ladenburg’s Board of Directors.

The transaction, which is subject to customary closing conditions, including the approval of Ladenburg’s shareholders, and receipt of required regulatory clearances and approvals, is expected to close in the first half of 2020.

 

Following the completion of this transaction, the expanded Advisor Group organization will continue to be led by its current CEO and President, Jamie Price. When the transaction is completed, Advisor Group’s leadership team will include senior executives from both Advisor Group and Ladenburg. Ladenburg’s firms will not be merged with Advisor Group’s firms, reflecting both companies’ commitment to a multi-brand network model.

 

Advisor Group’s network of firms consists of FSC Securities Corporation, Royal Alliance Associates, SagePoint Financial and Woodbury Financial. Ladenburg’s independent advisory and brokerage firms include Securities America, Triad Advisors, Investacorp, KMS Financial Services and Securities Service Network (SSN).

 

Additional Ladenburg subsidiaries include Highland Capital Brokerage, a leading insurance solutions brokerage; Premier Trust, a financial advisor-focused trust services company; and Ladenburg Thalmann & Co., a middle market investment bank. Each of these subsidiaries has played a role in delivering unique, value-added solutions to Ladenburg-affiliated financial advisors.

 

Upon the transaction’s completion, Advisor Group will be one of the industry’s leading providers of a multi-custodial, multi-clearing model that drives choice and flexibility for advisors.  Both Advisor Group and Ladenburg use Pershing and National Financial as their clearing providers.

 

The combined company will be able to support all financial advisor business models, including the hybrid advisor doing both securities and advisory business, as well as the “investment advisor only” professional who is either utilizing a corporate RIA platform, or has an independent RIA.

*The S&P 500, the DJIA, the NASDAQ and others referenced are unmanaged indices that are widely used as indicators of Market Trends. Past Performance does not guarantee future results and the performance of these indices does not reflect the fees and charges associated with investing.  It is not possible to invest directly in an index.

*Dollar Cost Averaging through a systematic savings plan is an excellent way to build an account without a sizeable initial investment.  Saving a portion of our pay each month is very important.  Company sponsored pension plans are one method to save and should be used for retirement.  Other systematic investment accounts, such as ROTH IRA’s, Traditional IRA’s, Coverdell Accounts, 529 Plans, Brokerage Accounts and Annuities can also be opened, and debited directly from checking or savings accounts.  For more information, just call to set up an appointment.  Referrals are always welcome.

Company Information

John H. Kaighn offers various products and services under the trade name of Jersey Benefits Advisors.

 

PO Box 1406

Ocean City, NJ 08270

Phone: (609) 827-0194

Fax: (856) 637-2479

Email: kaighn@jerseybenefits.com

http://jerseybenefits.com

 

John H. Kaighn is an Investment Advisor Representative & Registered Representative of Royal Alliance Associates, Inc.  Securities and Advisory Services are offered through Royal Alliance Associates, Inc. (RAA) Member FINRA & SIPC.  RAA is separately owned and other entities and/or marketing names, products or services referenced here are independent of RAA.

 

10 Exchange Place

 Suite 1410

Jersey City, NJ 07302

 

Royal Alliance Associates, Inc. is not affiliated with Jersey Benefits Advisors or Jersey Benefits Group, Inc.

 

Insurance Services and Third Party Administration offered through Jersey Benefits Group, Inc., a licensed Insurance Agency in the State of New Jersey.

 

PO Box 1406

Ocean City, NJ 08226

Phone: (609) 827-0194

Fax: (856) 637-2479

Email: kaighn@jerseybenefits.com

http://jerseybenefits.com

 

 

All opinions expressed in this newsletter are independent of Royal Alliance Associates, Inc. and solely those of John H. Kaighn and Jersey Benefits Advisors.

 

John H. Kaighn




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*Jersey Benefits Advisors is a trade name for J/M Kaighn, Inc. a corporation registered in the State of New Jersey, and Jersey Benefits Group, Inc. is a corporation registered in the State of DE.

*John H. Kaighn is a Registered Representative and an Investment Advisor Representative of Royal Alliance Associates, Inc. Securities and investment advisory services offered through Royal Alliance Associates, Inc. member FINRA/SIPC. Royal Alliance Associates, Inc. is separately owned and other entities and/or marketing names, products or services referenced here are independent of Royal Alliance Associates, Inc.

*Insurance services provided by Jersey Benefits Group, Inc., a Licensed Insurance Producer in the State of New Jersey.

*John Kaighn is licensed to offer securities through Royal Alliance Associates, Inc. in the states of CO, DE, FL, IL, MD, NC, NJ, NY, and PA., as well as investment advisory services in NJ. This Website should not be considered a solicitation for securities business or investment advisory services in any other state.

*This web page offers links to other companies. Once a hyperlink is activated, you will be leaving Jersey Benefits Group, Inc., and operate outside Jersey Benefits Group, Inc. Website. Jersey Benefits Group, Inc. is not responsible for the validity, completeness or accuracy of any information provided on those sites to which you may link. Furthermore, Jersey Benefits Group, Inc., Jersey Benefits Advisors and Royal Alliance Associates, Inc. shall not be liable for any direct or indirect system damage or other problems you may incur as a result of linking to any other website, including any consequences arising from your accessing third party technologies, sites, information and programs made available through Jersey Benefits Group, Inc.

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