• Raffa Wealth Management

    Raffa Wealth Management is a boutique investment advisory firm. We can help you achieve your financial goals so you can enjoy the freedom to pursue your passion. We know that you’re working to accomplish great things for your families and in our communities. We’re proud to help you Grow it for Good!

Financial News and Portfolio Management Discussion through February 18th

All the news you need to stay informed about what’s currently driving the market – courtesy of Raffa Wealth Management, LLC.

US stocks continued their run of new record highs ending the week at an all time high on strong economic growth and corporate earnings. The S&P 500 rose 1.5% and the Dow gained 1.7% for the week.  Internationally, Japan dropped 0.7%, while Europe was up 0.8% for the week.  The yield on the 10 year Treasury was relatively flat for the week finishing at 2.43%.  Article

In testimony on Capitol Hill Fed Chief Yellen stated an interest rate increase could come as soon as the Fed’s March meeting if economic news remains solid.

Retail sales rose a better than expected 0.4% in January from December and are up 5.6% over the past year.

US factory output increased 0.2% in January.

Inflation reached its highest annual pace in almost five years with the consumer price index rising 0.6% from December and up 2.5% over the past twelve months.

US new housing starts dropped 2.6% on a decline in multifamily construction.

UK retail sales fell for a third straight month, falling 0.3% in January as inflation has started to deter shoppers.

Verizon appears back on track to purchase Yahoo agreeing to reduce its purchase price by $300M after hacking revelations at Yahoo.

 

About

Raffa Wealth Management is an independent investment advisor providing nonprofit organizations, high net-worth investors, and qualified retirement plans with a full range of investment consulting services.  We were established to fill the need for transparency, clarity, and vision in the professional management of investment assets.   Visit us at www.raffawealth.com

 

DiggLinkedInDeliciousRead It LaterStumbleUponEmailGoogle BookmarksGoogle BuzzFacebookShare
Posted in Monthly Market Commentary, Nonprofit Investing, Personal Financial Management | Comments closed

Financial News and Portfolio Management Discussion through February 11th

All the news you need to stay informed about what’s currently driving the market – courtesy of Raffa Wealth Management, LLC.

US stocks hit new record highs on solid corporate earnings and expectations on tax reductions. The S&P 500 rose 0.8% and the Dow rose 1.0% for the week.  Internationally, Japan soared, up 2.5% and Europe rose 0.9% for the week.  The yield on the 10 year treasury eased to end the week at 2.41%.  Article

With 360 firms in the S&P 500 reporting earnings, companies are on pace to report a 5% growth in profits compared to the 3.2% expected at the end of 2016.

European corporations are on pace to post their first profit since 2012 and their strongest growth in five years.

A judge blocked the merger of insurers Anthem and Cigna likely derailing the deal.

 

About

Raffa Wealth Management is an independent investment advisor providing nonprofit organizations, high net-worth investors, and qualified retirement plans with a full range of investment consulting services.  We were established to fill the need for transparency, clarity, and vision in the professional management of investment assets.   Visit us at www.raffawealth.com

 

DiggLinkedInDeliciousRead It LaterStumbleUponEmailGoogle BookmarksGoogle BuzzFacebookShare
Posted in Monthly Market Commentary, Nonprofit Investing, Personal Financial Management | Comments closed

Dow 20,000, What Should you Do?

The US stock market index, the Dow Jones Industrial Average, hit the heralded milestone of 20,000 near the end of January. With the new record high many investors are asking what does it mean for the future of stocks and what should they do with their investments?

Our response to the milestone is, so what? While it is nice to see US stocks hitting new record highs as it means were seeing strong positive returns, a particular round number doesn’t really matter a whole lot.

Investors instead should remain focused and stay disciplined to their investment plans. Investors shouldn’t adjust their investment strategies based on a new stock market high.  Looking to add more to US stock based on recent performance is chasing returns and pulling back from US stock, if not driven by an unbiased rebalancing policy, is letting emotions get in the way of your long term goals.  Both are market timing and can be detrimental to a portfolio.

The stock market is continually factoring in new information to value companies and it reflects the collective wisdom of investors around the world. Even though the stock market has reached record highs it does not mean there is nowhere to go but down.  After hitting a record high of 3,000 in late 1991 the Dow didn’t suffer another sustained decline until mid 1998.

In addition, putting significant weight behind the Dow is misguided as it’s an index tracking just 30 of the largest companies in the US making it possible for just a few stocks to have an outsize impact on the index. Thus it is not providing a full picture of the US stock market. We recommend tracking the S&P 500 or Russell 3000 for a broader view.

While it’s nice to see markets rise, it’s doubtful that an investor has reached the finish line because the market hit an arbitrary milestone. Investors need to remain focused on their long term goals and not get distracted by the day to day noise surrounding the markets.  By maintaining a disciplined approach an investor greatly improves their chances for long term investing success.

 

 

Index Performance    Jan. Trl 1 Yr
US Stock (Russell 3000) 1.88% 21.73%
Foreign Stock (FTSE AW ex US) 3.43% 16.71%
Total US Bond Mkt. (BarCap Aggregate) 0.20% 1.45%
Short US Gov. Bonds (BarCap Gov 1-5 Yr) 0.19% 0.13%
Municipal Bonds (BarCap 1-10yr Muni) 0.77% -0.40%
Cash (ML 3Month T-Bill)  0.04% 0.37%

 

About

Raffa Wealth Management is an independent investment advisor providing nonprofit organizations, high net-worth investors, and qualified retirement plans with a full range of investment consulting services.  We were established to fill the need for transparency, clarity, and vision in the professional management of investment assets.   Visit us at www.raffawealth.com

 

DiggLinkedInDeliciousRead It LaterStumbleUponEmailGoogle BookmarksGoogle BuzzFacebookShare
Posted in Monthly Market Commentary, Nonprofit Investing, Personal Financial Management, Portfolio Strategy | Comments closed

Financial News and Portfolio Management Discussion through February 4th

All the news you need to stay informed about what’s currently driving the market – courtesy of Raffa Wealth Management, LLC.

US Stocks were relatively flat for the week after seeing significant volatility driven by policy changes from the Whitehouse. The S&P 500 edged up 0.1%, while the Dow ticked down 0.1% for the week.  Abroad, Europe fell 0.6% and Japan sank 2.8% for the week.  The yield on the 10 year Treasury was roughly flat ending the week at 2.49%.   Article

The Fed elected to keep rates unchanged after their most recent meeting and said it remained on track to raise them over the course of the year, but did not provide any additional clues about timing.  Article

In January employers added 227,000 jobs, the best month since September, but the unemployment rate rose to 4.8% as more people joined the workforce as past months were revised down. Wage growth disappointed as they grew 2.5% over the past year compared to 2.9% in December.  Article

The Fed’s preferred measure of inflation ticked up 0.2% in December and rose 1.6% for the full year, its largest increase in over 2 years.

After a strong fourth quarter Eurozone GDP rose 1.7% in 2016 slightly topping US growth of 1.6%. The jobless rate also fell to a seven year low.

Inflation is on the rise across the globe. The Eurozone saw prices rise 1.8% in January from a year earlier, Japan’s inflation expectations have risen from 0.45% to 0.61% and the US is at the fastest inflation pace in over two years.

The Case Shiller home price index rose 5.6% for the year ending in November.

President Trump signed an executive order that could undo much of the Dodd Frank financial law and sought to rollback the DOL fiduciary rule.

Apple, Facebook blew past estimates, while Exxon, Deutsche Bank and Amazon disappointed investors with their earnings releases.

 

About

Raffa Wealth Management is an independent investment advisor providing nonprofit organizations, high net-worth investors, and qualified retirement plans with a full range of investment consulting services.  We were established to fill the need for transparency, clarity, and vision in the professional management of investment assets.   Visit us at www.raffawealth.com

 

DiggLinkedInDeliciousRead It LaterStumbleUponEmailGoogle BookmarksGoogle BuzzFacebookShare
Posted in Monthly Market Commentary, Nonprofit Investing, Personal Financial Management | Comments closed

Financial News and Portfolio Management Discussion through January 28th

All the news you need to stay informed about what’s currently driving the market – courtesy of Raffa Wealth Management, LLC.

US Stocks reached new record highs over the week with the Dow topping the 20,000 mark on moves by the new administration and strong corporate earnings.  The S&P 500 rose 1.0% and the Dow gained 1.3% for the week.  Internationally, Europe increased 1.0% and Japan jumped 1.7% for the week.  The yield on the 10 year Treasury was flat over the week ending at 2.48%.  Article

US new home sales sank in December due to higher costs, but still rose over 2016.

The US grew at a 1.9% rate in the fourth quarter, a slowdown from the 3.5% third quarter pace.  Article

The Aetna Humana merger was blocked by a judge on antitrust grounds potentially ending the $34 billion deal.

Boeing posted 4th quarter earnings that topped expectations and raised future estimates. 

Microsoft posted solid results for its second quarter. 

Google’s fourth quarter revenue grew at 3 times the pace of profit as it looked for new sources of growth.  Revenue topped expectations while profit missed. 

Johnson and Johnson agreed to purchase a Swiss biotech’s drug discovery operations for $30 billion.

 

About

Raffa Wealth Management is an independent investment advisor providing nonprofit organizations, high net-worth investors, and qualified retirement plans with a full range of investment consulting services.  We were established to fill the need for transparency, clarity, and vision in the professional management of investment assets.   Visit us at www.raffawealth.com

 

DiggLinkedInDeliciousRead It LaterStumbleUponEmailGoogle BookmarksGoogle BuzzFacebookShare
Posted in Monthly Market Commentary, Nonprofit Investing, Personal Financial Management | Comments closed

Financial News and Portfolio Management Discussion through January 21st

All the news you need to stay informed about what’s currently driving the market – courtesy of Raffa Wealth Management, LLC.

US stocks eased over the week as investors await changes by the new administration. The S&P 500 ticked down 0.1% and the Dow dropped 0.3% for the week.  Internationally, Europe fell 0.9% and Japan 0.8% for the week.  The yield on the 10 Year Treasury rose to 2.48% over the week, the highest level in 2017, as inflation expectations increased.  Article

The CPI rose 2.1% in December over the trailing year, rising above the 2% level for the first time in 2.5 years.

ECB chief Draghi stated they would continue with their stated plans of buying bonds through the end of the year.

China posted a 6.7% GDP growth rate for 2016 as the easy credit and state spending initiatives aided the economy.

In a speech Fed Chief Janet Yellen stated they would continue to look to raise the fed funds rate cautiously and gradually.

Morgan Stanley, Goldman and Citigroup all posted earnings that topped estimates as big banks gained on a surge in trading to end the year.

BAT agreed to take full control of Reynolds in a $49.4 billion deal.

 

About

Raffa Wealth Management is an independent investment advisor providing nonprofit organizations, high net-worth investors, and qualified retirement plans with a full range of investment consulting services.  We were established to fill the need for transparency, clarity, and vision in the professional management of investment assets.   Visit us at www.raffawealth.com

 

DiggLinkedInDeliciousRead It LaterStumbleUponEmailGoogle BookmarksGoogle BuzzFacebookShare
Posted in Monthly Market Commentary, Nonprofit Investing, Personal Financial Management | Comments closed

Financial News and Portfolio Management Discussion through January 14th

All the news you need to stay informed about what’s currently driving the market – courtesy of Raffa Wealth Management, LLC.

US Stocks eased over the week as the post election rally has cooled. The S&P 500 edged down 0.1% and the Dow fell 0.4% for the week.  Internationally, Japan dropped 0.9% and Europe ticked up 0.1% for the week.  The yield on the 10 year Treasury bond fell to 2.38%.  Article

The German economy picked up steam at the end of 2016 with GDP rising 1.9% for the full year. It’s the fastest pace since 2011.

Eurozone industrial output rose 1.5% in November from October well outpacing the 0.5% expected.

Sales at US retailers rose 0.6% in December from November.

GM expects to post record earnings in 2016 and believes 2017 will be even better.

VW is expected to pay $4.3 billion and admit to criminal wrong doing to resolve its emissions cheating scandal with the Justice Dept.

Fourth quarter earnings from JP Morgan Chase, Bank of America and Wells Fargo all were strong.

 

About

Raffa Wealth Management is an independent investment advisor providing nonprofit organizations, high net-worth investors, and qualified retirement plans with a full range of investment consulting services.  We were established to fill the need for transparency, clarity, and vision in the professional management of investment assets.   Visit us at www.raffawealth.com

 

DiggLinkedInDeliciousRead It LaterStumbleUponEmailGoogle BookmarksGoogle BuzzFacebookShare
Posted in Monthly Market Commentary, Nonprofit Investing, Personal Financial Management | Comments closed

Does Diversification Still Work?

US stocks posted a strong year in 2016 hitting record highs after the election and gaining 12.74%. International stocks followed a similar trajectory as US Stocks for the first half of the year, however after the Brexit vote the two diverged and then split further after the US election results.  International stocks posted a 5.12% return for the year.  It marks the fourth straight year that US stocks have outpaced foreign stocks and the fifth time over the past six years.

You might begin to wonder if investing internationally still makes sense? To that question we respond with a resounding yes.  It’s important to remember that investing internationally provides valuable diversification benefits and that recent performance is not a reliable indicator of future returns.

International equity markets represent nearly 50% of the global equity market with more than 10,000 companies in more than 40 countries. By not including international equity in a portfolio an investor would not be exposed to the performance of those markets.

While investing internationally certainly has not worked out in recent years you don’t have to look that far back historically to see international markets in favor.

intl-vs-us-returns-2000-2009

From January 2000 to December 2009, an entire decade, US stocks fell. Over this time period international stocks rose by a cumulative 25% more.  Also, areas we emphasize, small cap, value and emerging markets, performed much better by comparison.  Looking back to 1900, international markets outpaced US markets in six of the eleven decades through 2010.  By not exposing a portfolio to international markets an investor misses out on the potential for these superior returns.

If you think that the best performing countries can be identified beforehand the following exhibit shows how much it changes from year to year and the difficulty in identifying which countries will be the best in any given year. The below chart shows the historical returns for 19 different developed market countries over the past 20 years.

country-returns

(Click to enlarge)

There are significant swings from year to year in what countries are the best and individual countries can also vary widely. The average return of the best performing developed market country has been 37.5% over this time, while the worst performing developed country was down 17.5%.  By just focusing on one country it exposes a portfolio to large swings in performance.

While trailing recently, international equity has shown historically that there are many periods when it has outperformed US stocks. Also, by investing internationally it has the potential to reduce portfolio volatility by exposing a portfolio to markets that are performing quite differently over shorter time periods.  Thus, by investing across the total global equity market a portfolio can provide diversification benefits.

 

Index Performance    Dec. QTD YTD
US Stock (Russell 3000) 1.95% 4.21% 12.74%
Foreign Stock (FTSE AW ex US) 2.74% -0.99% 5.12%
Total US Bond Mkt. (BarCap Aggregate) 0.14% -2.98% 2.65%
Short US Gov. Bonds (BarCap Gov 1-5 Yr) 0.01% -1.14% 1.02%
Municipal Bonds (BarCap 1-10yr Muni) 0.72% -2.62% -0.10%
Cash (ML 3Month T-Bill)  0.04% 0.09% 0.33%

 

About

Raffa Wealth Management is an independent investment advisor providing nonprofit organizations, high net-worth investors, and qualified retirement plans with a full range of investment consulting services.  We were established to fill the need for transparency, clarity, and vision in the professional management of investment assets.   Visit us at www.raffawealth.com

 

DiggLinkedInDeliciousRead It LaterStumbleUponEmailGoogle BookmarksGoogle BuzzFacebookShare
Posted in Monthly Market Commentary, Nonprofit Investing, Personal Financial Management, Portfolio Strategy | Comments closed

Financial News and Portfolio Management Discussion through January 7th

All the news you need to stay informed about what’s currently driving the market – courtesy of Raffa Wealth Management, LLC.

US Stocks continued their post election rally over the week after faltering at the end of 2016.  The S&P 500 gained 1.7% and the Dow rose 1.0% for the week.  Internationally, Japan jumped 1.8% and Europe increased 1.1% for the week.  The yield on the 10 year Treasury ended the week at 2.42% down slightly from where it ended 2016.  Article

US companies added 156,000 employees in December a slowdown from November and the unemployment rate ticked up to 4.7%.  Wages increased 2.9%, over the year the best pace since 2009.  Article

The Eurozone manufacturing sector picked up in December.  It posted its best reading since April 2011.

China’s manufacturing purchasing mangers index remained in expansion territory though it ticked down from November.

December manufacturing in the US hit its highest level in 2 years.  Article

Consumer prices in the eurozone jumped 1.1% in December from a year earlier, the fastest pace in over three years. 

US auto sales hit another annual record in 2016 driven by a surge in sales that was fueled by large discounts. 

The Fed’s December meeting minutes showed that they were unsure on how the new administration’s proposals will impact the economy.

 

 

About

Raffa Wealth Management is an independent investment advisor providing nonprofit organizations, high net-worth investors, and qualified retirement plans with a full range of investment consulting services.  We were established to fill the need for transparency, clarity, and vision in the professional management of investment assets.   Visit us at www.raffawealth.com

 

DiggLinkedInDeliciousRead It LaterStumbleUponEmailGoogle BookmarksGoogle BuzzFacebookShare
Posted in Monthly Market Commentary, Nonprofit Investing, Personal Financial Management | Comments closed

Financial News and Portfolio Management Discussion through December 31st

All the news you need to stay informed about what’s currently driving the market – courtesy of Raffa Wealth Management, LLC.

US Stocks had their worst week since the election as investors moved away from risky assets to end the year. The S&P 500 declined 1.0% and the Dow fell 0.8% for the week.  Internationally, Japan fell 1.4% and Europe rose 0.4% for the week.  The yield on the 10 year Treasury bond fell 0.15% over the week to end the year at 2.45%.  However, it rose 0.18% from the end of 2015.  Article

Home prices rose 5.6% over the trailing twelve months through October according to the Case Shiller Home price index.

Unemployment claims fell 10,000 to 265,000 last week, a healthy measure.

Toshiba announced that it may need to report billions in losses due to cost overruns and missed deadlines for nuclear reactor projects.

 

About

Raffa Wealth Management is an independent investment advisor providing nonprofit organizations, high net-worth investors, and qualified retirement plans with a full range of investment consulting services.  We were established to fill the need for transparency, clarity, and vision in the professional management of investment assets.   Visit us at www.raffawealth.com

 

DiggLinkedInDeliciousRead It LaterStumbleUponEmailGoogle BookmarksGoogle BuzzFacebookShare
Posted in Monthly Market Commentary, Nonprofit Investing, Personal Financial Management | Comments closed
  • Contact Us
    Raffa Wealth Management
    1899 L Street, NW
    Suite 900
    Washington, DC 20036
    Tel: 202-955-6734