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Financial News and Portfolio Management Discussion through September 16th

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

US stocks had one of their best weeks of the year, hitting record highs, with Hurricane Irma not as bad as feared. The S&P 500 rose 1.6% and the Dow jumped 2.2% for the week. Internationally, Japan soared 3.3% and Europe rose 1.4% for the week. The yield on the 10 year Treasury rose over the week to finish at 2.20% up from 2.06% from the previous week.  Article

Median US household income hit the highest inflation adjusted level ever last year, and is up 3.2% from a year before.

The CPI-U rose 0.4% in August, the largest increase since January, topping expectations. Core prices rose 0.2%. For the trailing year prices have risen 1.9%.

The Bank of England announced that they are likely to increase interest rates from their current record low of 0.25% over the coming months. Inflation readings have been higher than expected.

Apple released three new phones including the iPhone X which will retail for $1,000.

 

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 9th

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 on concerns over Hurricane Irma and North Korea tensions. The S&P 500 declined 0.6% and the Dow fell 0.9%, for the week. Abroad, Europe eased 0.2% and Japan sank 2.1%, for the week. Investors flocked to safe havens over the week with the 10 year Treasury ending the week at 2.06% its lowest level since November.  Article

President Trump and Democrats came to an agreement on Hurricane Harvey aid and to suspend borrowing limits for three months. The deal averts a potential government default that would have occurred without an agreement at the end of the month.   Article

The ECB will likely announce plans to begin to reduce their bond buying program at their meeting next month. They also upgraded their growth forecast for the region.

Lily plans to cut 8% 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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Don’t let Another Debt Ceiling Dispute Box in your Portfolio

With the threat of hitting the debt ceiling looming at the end of the month, government leaders were able to strike a deal. The debt ceiling is the self-imposed legislative limit on the amount of national debt that can be issued by the Treasury and thus restricts how much the federal government can borrow. Treasury Secretary Mnuchin estimated that the government would be able to meet its obligations until late September before defaulting on its obligations. However, the agreement reached was just a three month extension, so this issue will resurface in December; no doubt leading to another protracted battle.

We have been down this road before. Political brinkmanship between the different factions in congress and the administration will no doubt bring increased volatility in the stock market In December. However, we don’t think it would be time to run for the exits. As we have seen with the 2011 and 2013 debt ceiling fights moving a portfolio to cash would of had a negative impact.

In both of those previous instances bonds performed well, showing that in times of uneasiness US government debt remains the ultimate safe haven. The yield on the 10 year Treasury bond has steadily fallen since early July. If there was significant fear that the US would default and not make its debt payments the yield would be rising significantly to compensate investors for holding the bonds.

In portfolio construction, RWM believes the fixed income side of the portfolio should provide stability and capital preservation, while the equity side of the portfolio purses growth.  When volatility spikes on the equity side the fixed income allocation will be there to provide support.

While it certainly can be difficult to remain disciplined to your investment allocation reading the incendiary headlines about the debt ceiling, history has shown those who stay committed to a sound investment allocation are the ones who are likely to realize their long-term investment goals.

 

Index Performance August YTD Trl 1 Yr
US Stock (Russell 3000) 0.19% 11.20% 16.06%
Foreign Stock (FTSE AW ex US) 0.50% 18.80% 19.15%
Total US Bond Mkt. (BarCap Aggregate) 0.90% 3.64% 0.49%
Short US Gov. Bonds (BarCap Gov 1-5 Yr) 0.35% 1.43% 0.45%
Municipal Bonds (BarCap 1-10yr Muni) 0.56% 4.25% 1.22%
Cash (ML 3Month T-Bill) 0.09% 0.48% 0.62%

 

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

 

There is no guarantee that any investment strategy, including those described here, will be successful. Any investment or investment strategy can lose money. Past performance does not guarantee or predict future results.  You should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Raffa Wealth Management, LLC.  This information was gathered from reliable sources but we cannot guarantee accuracy.  Indexes do not reflect the fees associated with actual investments and such fees would reduce the performance illustrated.

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Financial News and Portfolio Management Discussion through September 2nd

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

US stocks rose on a news heavy week driven by positive economic and corporate news and despite Hurricane Harvey and tensions with North Korea. The S&P 500 rose 1.4% and the Dow gained 0.8% for the week. The Nasdaq had its best week of the year gaining 2.7%. Internationally, Europe gained 0.6% and Japan increased 1.2% for the week. The yield on the 10 year Treasury bond was flat ending the week at 2.16%. Gas prices jumped 13% over the week, the largest surge in over 5 years, as a result of Harvey. Gold also jumped gaining 2.5% over the week to finish at $1,324.50 an ounce.  Article

The August jobs report missed expectations with 156,000 jobs added and the unemployment rate ticking up to 4.4%. June and July were revised down by 41,000 positions. Wage rates have not accelerated with earnings up 2.5% from a year ago.  Article

US auto sales fell 1.9% in August. The sales pace for the year is down from last year and below analysts’ expectations.

Hurricane Harvey has severely crippled Texas’ oil output with taking offline roughly 30% of US refining capacity.

US 2nd quarter GDP was revised up to 3.0%. It’s the highest growth rate in over two years.  Article

Inflation grew 0.1% in July from a month earlier and is up 1.4% over the past year, well below the Fed’s 2% target level.

In July US personal spending rose at its fastest pace since April and personal income posted its biggest jump since February.

Uber chose Expedia CEO Dara Khosrowshahi to be its new CEO.

Gilead Sciences purchased Kite Pharma, a specialist in a new type of cancer therapy, for $11 billion.  Article

United Technologies agreed to buy aircraft equipment manufacturer Rockwell Collins for over $20 billion.

Wells Fargo revealed that its sales practice scandal covered many more accounts than previously believed, increasing the total to 3.5 million accounts from the 2.1 million previously estimated.

 

 

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 August 26th

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

US stocks rose for the first time in three weeks on advances across a board swath of sectors. The S&P 500 gained 0.7% and the Dow rose 0.6% for the week. Internationally, Europe was flat and Japan posted its sixth straight weekly decline edging down 0.1%. The yield on the 10 year Treasury ended the week at 2.17% down slightly from the previous week.  Article

New home sales plunged 9.4% in July as a lack of inventory has come on the market.

Unemployment has fallen to an 8 year low of 9.1% in the Eurozone.

Japan’s economy grew by 4% in the second quarter.

In speeches at the Jackson Hole economic Symposium Fed Chair Janet Yellen and ECB president Draghi offered few clues on the future moves by their central banks but gave a strong defense for the regulations put in place to ensure increased financial market stability and condemned protectionist trade policies.

Sempra reached a deal to buy power transition company Oncor for $9.45 billion outbidding Berkshire.

Total agreed to buy Maersk’s oil group for $5 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

 

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Financial News and Portfolio Management Discussion through August 19th

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 down on political turmoil, weak corporate earnings and terrorist attacks. The S&P 500 was down 0.7% and Dow fell 0.8% for the week. Abroad, Europe rose 0.6% and Japan sank 1.3% for the week. The yield on the 10 year Treasury was flat for the week ending at 2.20%.  Article

Weak earnings from retailers and declines in energy prices drove both sectors down and both were primary drivers in the decline in US Stocks for the week.

The pace of growth slowed in China in July as industrial output, retail and housing sales and fixed asset investment all ticked down from June and were lower than forecast.

US retail sales rose 0.6% in July, more than expected, and June’s rate was revised higher, but debt levels have increased and savings rates have fallen.

Minutes form the Fed’s July meeting showed that concerns over weak inflation is bringing reservations about the timing of the next interest rate increase. They originally expected to make another interest rate increase later this year. However, they were in agreement about beginning to unwind their balance sheet, perhaps as soon as September.  Article

 

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 August 12th

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 worst week since May on weak earnings from retailers and North Korea tensions. The S&P 500 fell 1.4% and the Dow dropped 1.1% for the week. Abroad, Japan eased 1.1% and Europe sank 2.7% for the week. The yield on the 10 year Treasury fell as investors moved to safe havens ending the week at 2.19%, its lowest level since June. The VIX hit the highest level of the year during the week.  Article

Worker productivity picked up in the second quarter rising 0.9% up from 0.1% in the first quarter. However, the pace remains well below the level required to see GDP growth accelerate.

US inflation continued to be subdued in July. The CPI rose 0.1% from the prior month and is up 1.7% over the trailing year, below the Fed’s target.

Vantiv agreed to buy Worldpay for $10.4 billion in a tie up of payment processing giants.

 

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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Don’t call it a Comeback, International Markets have been here for Years

In January we reviewed the topic of international diversification. With the conclusion of 2016 it had been four straight years that US stocks had outpaced international stocks. We heard from many people why should they continue to hold international stocks? The prospects in Europe looked bleak with the UK leaving the EU, China was a constant source of volatility and Japan posted another year of meager growth and inflation.

Our message was to remain disciplined to an equity strategy diversified globally. There are periods of time when the US outperforms and there are times when international markets outperform. We believed that eventually the recent trend would reverse. There have been multiple decade long periods over the past 110 years when international stocks outperformed and we believed they would eventually be in favor again. When exactly it would occur is unknowable, but if an allocation is not maintained an investor would miss out if there was a sustained rally. Also, with roughly 50% of the world stock market and more than 10,000 companies outside of the US, there is a significant investable universe that you would lose exposure to if only focused on the US.

What have we seen in 2017? A significant reversal in global stock market performance. While US stocks certainly continue to perform well, up almost 11% for the year, international stocks have soared, gaining over 18%. Going back over the past 12 months international stocks have outpaced US stocks by over 3%.

While the recent performance is not a guarantee of future results, it does show the benefits of remaining disciplined to an asset allocation strategy that has set targets to US and foreign stocks. By keeping that broad diversification, the portfolio is set to benefit if either perform well. It also likely reduces the overall volatility of the equity allocation.

We believe that an investor with a long time horizon and a desire for growth from their portfolio is best served by investing globally, and, by avoiding market timing, can best positon themselves to meet their long term investing goals.

 

Index Performance July YTD Trl 1 Yr
US Stock (Russell 3000) 1.89% 10.99% 16.14%
Foreign Stock (FTSE AW ex US) 3.54% 18.20% 19.15%
Total US Bond Mkt. (BarCap Aggregate) 0.43% 2.71% -0.51%
Short US Gov. Bonds (BarCap Gov 1-5 Yr) 0.28% 1.08% -0.20%
Municipal Bonds (BarCap 1-10yr Muni) 0.68% 3.67% 0.62%
Cash (ML 3Month T-Bill) 0.08% 0.31% 0.49%

 

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

 

There is no guarantee that any investment strategy, including those described here, will be successful. Any investment or investment strategy can lose money. Past performance does not guarantee or predict future results.  You should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Raffa Wealth Management, LLC.  This information was gathered from reliable sources but we cannot guarantee accuracy.  Indexes do not reflect the fees associated with actual investments and such fees would reduce the performance illustrated.

 

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Financial News and Portfolio Management Discussion through August 5th

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

US stocks rose higher over the week on corporate earnings and another solid jobs report. The S&P 500 gained 0.2% and the Dow gained 1.2% and ended the week at a fresh all-time high. It also surged past the 22,000 level. Internationally, Europe % and Japan % for the week. The yield on the 10 year Treasury bond ended the week at 2.27%, down slightly from the previous week.  Article

The July jobs report topped estimates by showing 209,000 new hires and the unemployment rate fell to 4.3%, a 16 year low. It was the 82nd straight month of job creation. Average hourly earnings continued to increase at 2.5%.  Article

The Fed’s preferred measure of inflation was flat in June and is up 1.4% from the prior year, far below its 2% target and down from 2.2% in February.

Auto sales dropped significantly in July.

Eurozone inflation rose 1.2% in July slightly faster than expected.

Eurozone growth rose at a 2.3% pace in the second quarter and has outpaced the US over the past 18 months. Unemployment has steadily declined over the first half of the year as well.

Discovery agreed to buy Scripps Networks for $11.9 billion.

Of the 58% of firms in the S&P 500 that have reported earnings 72% topped analyst 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 July 29th

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

US stocks edged down over the week on weakness from tech companies. The S&P 500 ticked down 0.1%, while the Dow, driven by a few firms reporting earnings, gained 1.2% for the week. Internationally, Europe fell 0.5% and Japan dropped 0.7% for the week. Oil surged over the week over concern of supply disruptions from Venezuela. Oil rose 8.6% to $49.71 a barrel. The yield on the 10 year Treasury ended the week at 2.29%, up from the previous week.  Article

The Fed announced after its July meeting that it would begin reducing its balance sheet of bond holdings “relatively soon.” Investors believe this could mean the September meeting. The Fed Funds rate remained in the 1% to 1.25% range.

US GDP rose 2.6% in the second quarter as the country entered its ninth year of economic expansion.  Article

Michael Kors agreed to buy Jimmy Choo for $1.2 billion.

Foxconn announced it would build a $10 billion factory in Wisconsin that would lead to 3,000 jobs.

With over half of companies in the S&P 500 reporting earnings, they are on track to grow 9.1% from a year earlier.

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
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    Tel: 202-955-6734