• 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 November 11th

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 first down week since September as tax reform came into question. The S&P 500 edged down 0.2% and the Dow fell 0.5% for the week.  Internationally, Japan rose 0.6% and Europe sank 1.9% for the week. The yield on the 10 year Treasury rose over the week to finish at 2.40%.  Article

Chip maker Broadcom made an unsolicited bid for Qualcomm for $105 billion.

US regulators said AT&T needs to sell either CNN or DirecTV if it wants to complete its deal with Time Warner.

Macy’s, Kohl’s and Nordstrom posted mixed results.

 

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

 

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How Does the Proposed Tax Plan Impact You?

A major focus of the President and Congress has been tax reform. After much deliberation the House unveiled the Tax Cuts and Jobs Act which would represent the most sweeping changes to US tax rules in over 30 years. Given it is very early on and there are many competing groups fighting for their interests, there will likely be many changes before anything is passed.

However, we thought it would be helpful to provide a high level overview of the potential changes that are being considered. We don’t recommend taking any actions yet, but if a final version of the bill becomes more likely to pass we may make recommendations in order to best position and take advantage of the changing rules.

This article does a great job of summarizing many of the key changes.

 

Index Performance Oct. YTD Trl 1 Yr
US Stock (Russell 3000) 2.18% 15.55% 24.93%
Foreign Stock (FTSE AW ex US) 1.95% 23.38% 23.82%
Total US Bond Mkt. (BarCap Aggregate) 0.06% 3.20% 0.90%
Short US Gov. Bonds (BarCap Gov 1-5 Yr) -0.10% 0.99% 0.05%
Municipal Bonds (BarCap 1-10yr Muni) 0.07% 3.79% 1.67%
Cash (ML 3Month T-Bill) 0.09% 0.66% 0.72%

 

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

 

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Financial News and Portfolio Management Discussion through November 3rd

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

US stocks rose over the week and ended at record highs on strong corporate earnings and potential tax reform. The S&P 500 gained 0.3% and the Dow rose 0.4% for the week. Internationally, Japan soared 2.4% and Europe climbed 0.7% for the week. The yield on the 10 Year Treasury finished the week at 2.34%, down from the previous week. Oil prices reached their highest level since July 2015, $55.64 a barrel, up 3.2% for the week.  Article

Jerome Powell was nominated to be the next Fed Chairmen. He is expected to continue current Chairwomen’s Yellen’s policies.  Article

Auto makers reported solid October sales.

The Fed left interest rates unchanged at its most recent meeting, but stated they remained on pace for one more interest rate increase this year. The have one remaining meeting in mid-December.

Republicans unveiled their proposed tax overall reducing corporate taxes down to 20% from 35% and making a number of changes to personal taxes.

US companies hired 261,000 new employees in October falling short of expectations. The unemployment rate fell to 4.1% the lowest level since December 2000. August and September were both revised upward by a combined 90,000 jobs. Wage growth cooled to a 2.4% annual rate from 2.8% in September.  Article

The Bank of England raised their benchmark interest rate to 0.5% from 0.25% for the first increase in a decade.

The Eurozone economy grew at a 2.4% rate in the third quarter down slightly from the 2.6% pace in the second quarter. Despite the slowdown the European economy is on pace for its best year since 2007. Inflation rose 1.4% in October down from a month earlier which will likely drive caution from the ECB as it unwinds its easy money policies.

The S&P 500 is expected to post 3rd quarter earnings growth of 4.7%.

 

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

 

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Financial News and Portfolio Management Discussion through October 28th

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

US Stocks ended the week at record highs driven by strong economic readings and corporate earnings. The S&P 500 gained 0.2% and the Dow was up 0.5% for the week. Internationally, Japan surged 2.6% and Europe rose 0.8% for the week. Japan’s Nikkei Index posted a record 15 straight days of gains and is now at its highest level since 1996. The yield on the 10 year Treasury reached 2.43%. Up over the week and the highest level since March. Oil rose 4.5% over the last week to finish at %53.90 a barrel.  Article

Japan’s Prime Minister Shinzo Abe won reelection with a strong majority, driven by his handling of the economy.

The ECB announced it would continue buying bonds through September 2018, but will reduce the amount from 60 billion euros a month after December to 30 billion euros as it moves to curtail its easy money policies. ECB President Mario Draghi indicated bond buying would probably be extended again, beyond September 2018, a surprise, and that rate rises remained well off.  Article

The US economy grew at 3% in the third quarter despite two major hurricanes. It marks the best six month stretch of growth in three years. The gain was driven by higher consumer and business spending and topped expectations.  Article

Over half of the companies in the S&P 500 have reported earnings for the third quarter and over 75% have beaten analysts’ expectations.

CVS Health and Aetna are close to a $66 billion merger.

 

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

 

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Financial News and Portfolio Management Discussion through October 21st

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

US Stocks ended the week at new record highs on strong earnings growth. The S&P 500 gained 0.8% for the week.   The Dow closed above 23,000 for the first time during the week and it ended up 2.0%. Abroad, Europe fell 0.3% and Japanese stocks reached their highest level since 1996, rising 1.4% for the week. The yield on the 10 year Treasury rose after the Senate passed a budget blueprint, the first step towards tax reform. The yield ended the week at 2.38%, the highest close since July.    Article

Yellen still expects the Fed to gradually raise interest rates, but they would be cautious due to the recent weak inflation numbers.

Analysts expect earnings’ of S&P 500 companies to gain 4.2% in the third quarter. Of the S&P 500 companies that have reported earnings to date 75% have outpaced estimates.

 

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

 

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Financial News and Portfolio Management Discussion through October 14th

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

US stocks ended the week higher and hit records during the week on a positive outlook for third quarter earnings. The S&P 500 gained 0.2% and the Dow rose 0.4% for the week. Abroad, Japan surged 2.2% and Europe climbed 0.5% for the week. The yield on the 10 year Treasury bond eased over the week ending at 2.28%.  Article

The IMF raised its estimate of international growth to 3.6% this year and 3.7% in 2018.

Minutes form the Fed’s September meeting showed most officials agreed they would raise interest rates one more time this year, but weak inflation remained a concern.

Social Security payments will rise by 2% starting in late December for the largest increase in six years. However, the rising costs of healthcare likely offset much of the increase.  Article

Banks began reporting earnings with JP Morgan, BofA and Citigroup topping expectations, while Wells Fargo disappointed.

 

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

 

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Financial News and Portfolio Management Discussion through October 7th

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

US stocks posted their fourth straight week of gains on generally solid economic news. The S&P 500 gained 1.2% and the Dow climbed 1.6% for the week. Internationally, Japan rose 1.4% and Europe edged up 0.3% for the week. The yield on the 10 year Treasury ticked up for the week ending at 2.37%.  Article

The September jobs report surprised to the downside with a loss of 33,000 jobs, the first decline in seven years. In addition, August and July were revised and resulted in a decline of 38,000 jobs. On the positive side the unemployment rate fell to 4.2% its lowest level since early 2001 while the labor force participation rate expanded 0.2% to 63.1%. Wage growth also jumped to 2.9%a breakout from the recent increases seen in recent months. However, all of the data was likely impacted significantly by Hurricanes Irma and Maria.  Article

Manufacturing activity reached a 13 year high in September, well outpacing economists’ expectations.

Auto sales hit their fastest pace of 2017 in September, climbing 6.1%, driven by replacing storm damaged vehicles.

Berkshire Hathaway purchased approximately 40% of Pilot and Flying J truck stops in a bet on us economic growth.

Yahoo’s hacking scandal was worse than originally let on with all 3 billion accounts with the firm impacted.

 

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

 

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Active vs. Passive Investing – What is RWM’s take?

What does active vs. passive investment management mean? How do you define these investment styles?

We get this question or hear this discussed frequently and the answer isn’t as black and white as many think.

Active investment managers are actively seeking to outperform an investment benchmark by making decisions on what assets to hold and at what measures that differentiate them from the benchmark. They believe that through their research and investment processes they can identify assets that are under or overvalued and exploit that pricing discrepancy.

On the opposite end of the spectrum is index investing. What investors typically think of with index investing is an investment fund trying to match a widely known index such as the S&P 500, Russell 2000, or MSCI EAFE. The goal of these investments are to try to match the performance of the index (or benchmark) as tightly as possible.

However, there is also a significant gray area. There are investments that seek to track specific industries, sectors, countries, benchmarks that are created by the manager, and certain risk factors like fundamental indexes. There are also funds that broadly cover asset and sub asset classes, but are not beholden to following an index. While you could argue that these funds are not doing due diligence on specific securities in an attempt to determine whether they should be held in the fund, they also are not reflecting a market neutral allocation to a broad market asset class. These strategies are often referred to as passive which may send a conflicting message to investors given that they are not seeking to track a broad asset class.

Where do we land between active investing, passive investing, or tracking an index? Our approach is to advise on the characteristics that are important to delivering a reliable experience rather than focusing on fund descriptors such as “active” and “passive.” Our experience, and the culmination of extensive research, leads us to believe that the most reliable investments are those that are broadly diversified, very inexpensive, and exhibit very little turnover. Mutual funds and ETF’s that track broad market indexes will deliver an almost perfectly “reliable” experience because they are comprehensively diversified, very inexpensive, and exhibit very low turnover. We believe this is a great start!

Broad market index mutual funds form the core or our client portfolios. But we also use additional funds to seek excess returns or mitigate downside risk. And while these additional funds may not seek to track an index, and therefore fall into the gray area, they are all very inexpensive, broadly diversified, and exhibit very low turnover. We know of very expensive and highly concentrated sector specific index funds whose use would not, in our opinion, deliver a reliable investment experience. Similarly, we are aware of very inexpensive, highly diversified funds that seek to outperform markets that we believe to be highly reliable. We strongly believe in focusing on a fund’s characteristics and seeking those funds that will deliver a reliable experience.

 

Index Performance Sept. Qtr. YTD Trl 1 Yr
US Stock (Russell 3000) 2.44% 4.57% 13.91% 18.71%
Foreign Stock (FTSE AW ex US) 1.88% 6.01% 21.03% 19.83%
Total US Bond Mkt. (BarCap Aggregate) -0.48% 0.85% 3.14% 0.07%
Short US Gov. Bonds (BarCap Gov 1-5 Yr) -0.34% 0.29% 1.09% -0.06%
Municipal Bonds (BarCap 1-10yr Muni) -0.51% 0.73% 3.72% 1.00%
Cash (ML 3Month T-Bill) 0.09% 0.26% 0.57% 0.66%

 

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

 

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Financial News and Portfolio Management Discussion through September 30th

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

US stocks had another positive week ending the quarter at record highs on optimism about tax reform. The S&P rose 0.7% and the Dow gained 0.2% for the week. Internationally, Japan edged up 0.2% and Europe increased 1.3% for the week. The yield on the 10 year Treasury ended the month at 2.33% its highest level since late July.  Article

Angela Merkel won a 4th term as chancellor of Germany however a surge from the right reduced her level of support.  Article

Fed chairwomen Yellen defended the Feds expectations to gradually raise rates despite recent weak inflation.

US GDP rose 3.1% in the second quarter in the final revision, up from the previous estimate of 3.0%. It was the best quarter for growth in two years.  Article

Businesses and households were more upbeat in September about their prospects then at any time in the past decade.

The German unemployment rate fell to a record low.

Equifax announced the CEO was resigning in the firm’s latest response to the massive hack of the credit-reporting firm.

Government officials decided to remove federal oversight over insurer AIG after the firm had been monitored since the financial crisis.

 

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

 

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Financial News and Portfolio Management Discussion through September 23rd

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

US Stocks edged up over the week led by bank stocks who reacted positively to the potential for another Fed rate increase this year. The S&P 500 rose 0.1% and the Dow gained 0.4% for the week. Internationally, Europe climbed 0.7% and Japan jumped 2.0% for the week. The yield on the 10 year Treasury rose again for the week finishing at 2.26%.  Article

At the conclusion of its September meeting the Fed announced it would begin shrinking its balance sheet in October by letting bonds mature and not reinvesting the proceeds. It will let $10 billion in bonds it holds mature each month increasing the amount by $10 billion every quarter until it reaches $50 billion. It also signaled that another rate hike this year was on the table.   Article

Housing starts fell 0.8% in August driven by a large decline in multifamily housing.

S&P dropped China’s credit rating to A+ from AA- due to high debt levels. The move now matches the two other credit rating agencies

Northrop Grumman agreed to purchase Orbital ATK, for $7.8 billion in a bid to strengthen its space focused defense capabilities.

Toys ‘R’ Us filed for bankruptcy.

HP Enterprise plans to cut 10% of its workforce.

 

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

 

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    Raffa Wealth Management
    1899 L Street, NW
    Suite 900
    Washington, DC 20036
    Tel: 202-955-6734