I hope you have had a wonderful Easter. At the end is some information that I found on Easter celebrations around the world. This week the topic is the performance of different types of bonds during the first quarter 2012. First is the weekly recap from Vanguard which was published before the disappointing jobs report last Friday.
Vanguard
Ahead of the long holiday weekend (for many), most signs suggest that tomorrow's employment report will show the U.S. economy added about 200,000 jobs in March—continuing a string of improvement. Amid the progress, the Federal Reserve signaled that no new monetary stimulus is likely anytime soon. The stock market will be closed on Good Friday; the bond market is expected to close at noon. For the week, through April 5, the S&P 500 Index fell 0.7% to 1,398 (for a year-to-date total return—including price change plus dividends—of about 12%). The yield on the 10-year U.S. Treasury note fell 4 basis points to 2.19% (for a year-to-date increase of 30 basis points).
Performance of Bond Mutual Funds
Bonds come in many different categories. My preference to purchasing bonds is to purchase a mutual fund of bonds rather than individiudal bonds. The April 9, 2012 Barron's publication had a section devoted to the performance of mutual funds including bond mutual funds. As you will see not all bonds and bond funds are created equally and you can lose money on bonds and bond funds.
Barron's shows 17 different categories of taxable bond funds and gave performance during the past quarter,1 year, 5 years, and 10 years. My personal view is that the future for bonds is best represented by the past quarter rather than the other categories. My reason is that bonds have had an unprecedented bull market where interest rates have been declining for about 30 years and that it has come to an end.
Below is the quarterly performance of some of the different types of bond mutual fund categories compared to a money market fund and my favorite bond fund:
Money Market Funds = 0.00%
Short US Government = 0.43%
Short Investment Grade = 1.33%
Intermediate US Government = -0.28%
Intermediate Investment Grade = 1.50%
General US Government = -0.61%
General Bond = 1.78%
GNMA = 0.36%
High Yield - Non Investment Grade = 5.42%
Emerging Market Debt - Non Investment Grade = 6.92%
My Favorite Bond Fund = 3.47%
You will note that investing in bonds issued by the US Government gave the worst return due to rising interest rates. This trend will continue which is why I am avoiding them.
My favorite bond fund did very well compared to the other categories of investment grade bonds. The bond funds that did not have investment grade bonds did better but also have a risk level higher than I do not want to accept. I will continue to hold my favorite bond fund.
Easter Celebrations Around the World from Crown Relocations
In New Zealand, people attend Church Services over the weekend to celebrate both the death and resurrection of Christ and to mark the end of the season of Lent. The stores all carry Hot Cross Buns and stock chocolate Easter eggs for the Easter Bunny to fill his basket in anticipation of his delivery rounds on Easter Sunday morning. This usually results in Easter egg hunts for the children.
France has held on to its traditions by giving eggs (chocolate nowadays) on Easter day, which is related to the renewal of nature in spring time. It has also been related to the end of fast period, a period during which no eggs could be eaten, creating abundance thereafter. Louis XIV gave eggs gilded with gold to his sycophants. They were filled with "surprises" and the tradition remains until today. It is also the symbol of resurrection in Christian religions.
On Easter Sunday in Italy, all members of the family exchange Easter eggs, which can also be made especially for the occasion containing special gifts that are placed inside the egg. On Easter Sunday morning, each family usually eats a breakfast of salami, eggs, a special cheese cake and the traditional ''colomba'' – a sweet cake which contains almonds and candied fruits. On Easter Monday, everybody goes out for a picnic or by the sea and many families eat lamb, broad beans and a strong sheep’s milk cheese.
For the Czech Republic, in general, Easter is no longer considered a great Catholic feast. It is more of a welcome to spring, an opportunity for a family to meet at dinner or to visit one of the cultural events held during Easter. Fairs are held in many places, there is usually a wide offer of beautiful hand-painted Easter eggs, and eggs decorated by different techniques – the so called "kraslice" (yolk and white are removed and egg-shell is decorated), which decorate shops as well as households.
There are a variety of Easter traditions in Australia. Pancake Day is associated with Shrove Tuesday, because pancakes were a dish that could use up perishable foodstuffs prior to the beginning of the 40 days of fasting during Lent. Hot Cross Buns have a cross, the symbol of Christ, placed on top of the buns, either with pastry or a simple mixture of flour and water. The buns are traditionally eaten on Good Friday; however, in Australia they are available in bakeries and stores many weeks before Easter. Easter eggs, symbolizing new life, have long been associated with the Easter festival.
The United States shares many of the traditions with other countries. On Easter Sunday children wake up to find that the Easter Bunny has left them baskets of candy. He has also hidden the eggs that they decorated earlier that week. Children hunt for the eggs all around the house and outside. Neighborhoods and organizations hold Easter egg hunts, and the child who finds the most eggs wins a prize. Families also get together for an Easter meal.
For Ireland, Easter-time is rich with traditions, the overlapping and commingling of centuries of ritual celebrating rebirth, resurrection, salvation and everlasting life. Many of the traditions surrounding Easter in Ireland are universal to the Christian world. Others – such as the dawn dance, the herring funeral, and the cake dance – are distinctly Celtic, and many hark back to the traditions of pre-Christian times.
On Sunday morning in Poland, beautifully laid tables are covered with colored eggs, cold meats, coils of sausages, ham, yeast cakes, pound cakes, poppy-seed cakes, and in the middle of it all, a lamb made of sugar, commemorating the resurrected Christ. No smoke is permitted; therefore no warm meals are served. Sharing a boiled egg with one’s relatives is a national tradition. A piece of egg with salt and pepper, consecrated by priest, is an inseparable accessory in the good wishes we extend to each other at Easter.
In Brazil, parents hide chocolate eggs the Saturday before Easter around the house, so the kids can find them on Sunday morning. There are different sizes but all made out of chocolate. Sometimes close friends and relatives also exchange eggs.
Traditions for the people of the U.K. include eating hot cross buns – meant to symbolize the Cross, exchange chocolate eggs or bunnies (symbols of new life) on Easter Sunday and often small eggs are hidden around house and garden for children to find. Children paint decorations on egg shells and simnel cakes are baked – a rich fruit cake with a layer of marzipan in the middle and 11 balls of marzipan on top symbolizing 11 true apostles (excluding Judas). This is less common now except in a very traditional Easter.
Showing posts with label Happy Easter. Show all posts
Showing posts with label Happy Easter. Show all posts
Sunday, April 8, 2012
Sunday, April 24, 2011
Happy Easter - Social Security Strategy
Happy Easter to you and your family on this special day. This will briefly discuss the principles for developing a strategy of when to take Social Security benefits. Information from Vanguard is at the beginning. At the end are some Easter quotes.
Vanguard
Although a credit-rating agency's warning about the outlook for the U.S. government's debt burden dominated headlines this week, reports on the economy were more optimistic. The housing market, though weak, showed some improvement, and leading economic indicators showed an economic recovery that remains on track. For the week ended April 21, the S&P 500 Index rose 1.3% to 1,337 (for a year-to-date total return—including price change plus dividends—of about 6.9%). The yield of the 10-year U.S. Treasury note fell 3 basis points to 3.40% (for a year-to-date increase of 10 basis points).
Social Security Strategy
Some of the biggest decisions that a person or couple can make is how and when to take Social Security benefits. Unfortunately, little planning seems to be given to optimizing these benefits. Recently, I had lunch with a friend and client to discuss a strategy which is why I am writing about it today. Yes, Social Security will be around for a long time. A strategy should be developed around who is the primary and who is the secondary recipient and the age of the recipient.
The concept is to take Social Security benefits as soon as you can to reduce debt, like car loans and your mortgage. For the average person, it is important to have no debt in retirement. For a couple, the idea is to shift income to a spouse while still contributing and growing future benefits.
Example 1: If you own a business, you can reduce your income from the business and shift it to your spouse. In this manner you can collect benefits and your spouse can build-up their Social Security benefit while having more total income as a couple.
Example 2: If the situation is a working and getting paid spouse, who is the primary recipient, and a working but not getting paid spouse, who is the secondary recipient. The strategy is for the secondary recipient to collect as soon as possible and for the primary recipient to work as long as possible. In this manner the total income goes up and with the primary recipient working the annual amount will continue to increase.
Bottom Line: If you are going to be applying for Social Security benefits soon, please contact me so that we can discuss a strategy.
Easter Quotes
The resurrection gives my life meaning and direction and the opportunity to start over no matter what my circumstances. ~Robert Flatt
The joyful news that He is risen does not change the contemporary world. Still before us lie work, discipline, sacrifice. But the fact of Easter gives us the spiritual power to do the work, accept the discipline, and make the sacrifice. ~Henry Knox Sherrill
Easter is the demonstration of God that life is essentially spiritual and timeless. ~Charles M. Crowe
Let every man and woman count himself immortal. Let him catch the revelation of Jesus in his resurrection. Let him say not merely, "Christ is risen," but "I shall rise." ~Phillips Brooks
On Easter Day the veil between time and eternity thins to gossamer. ~Douglas Horton
Easter spells out beauty, the rare beauty of new life. ~S.D. Gordon
Where man sees but withered leaves, God sees sweet flowers growing. ~Albert Laighton
But from this earth, this grave, this dust, My God shall raise me up, I trust. ~Walter Raleigh
He takes men out of time and makes them feel eternity. ~Ralph Waldo Emerson
For I remember it is Easter morn, And life and love and peace are all new born. ~Alice Freeman Palmer
We live and die; Christ died and lived! ~John Stott
Those have a short Lent, who owe money to be paid at Easter. ~Benjamin Franklin
Let the resurrection joy lift us from loneliness and weakness and despair to strength and beauty and happiness. ~Floyd W. Tomkins
And he departed from our sight that we might return to our heart, and there find Him. For He departed, and behold, He is here. ~St Augustine
The story of Easter is the story of God's wonderful window of divine surprise. ~Carl Knudsen
Our Lord has written the promise of the resurrection, not in books alone, but in every leaf in spring-time. ~Martin Luther
Well pleaseth me the sweet time of Easter
That maketh the leaf and the flower come out. ~Bertran de Born
Easter tells us that life is to be interpreted not simply in terms of things but in terms of ideals. ~Charles M. Crowe
Vanguard
Although a credit-rating agency's warning about the outlook for the U.S. government's debt burden dominated headlines this week, reports on the economy were more optimistic. The housing market, though weak, showed some improvement, and leading economic indicators showed an economic recovery that remains on track. For the week ended April 21, the S&P 500 Index rose 1.3% to 1,337 (for a year-to-date total return—including price change plus dividends—of about 6.9%). The yield of the 10-year U.S. Treasury note fell 3 basis points to 3.40% (for a year-to-date increase of 10 basis points).
Social Security Strategy
Some of the biggest decisions that a person or couple can make is how and when to take Social Security benefits. Unfortunately, little planning seems to be given to optimizing these benefits. Recently, I had lunch with a friend and client to discuss a strategy which is why I am writing about it today. Yes, Social Security will be around for a long time. A strategy should be developed around who is the primary and who is the secondary recipient and the age of the recipient.
The concept is to take Social Security benefits as soon as you can to reduce debt, like car loans and your mortgage. For the average person, it is important to have no debt in retirement. For a couple, the idea is to shift income to a spouse while still contributing and growing future benefits.
Example 1: If you own a business, you can reduce your income from the business and shift it to your spouse. In this manner you can collect benefits and your spouse can build-up their Social Security benefit while having more total income as a couple.
Example 2: If the situation is a working and getting paid spouse, who is the primary recipient, and a working but not getting paid spouse, who is the secondary recipient. The strategy is for the secondary recipient to collect as soon as possible and for the primary recipient to work as long as possible. In this manner the total income goes up and with the primary recipient working the annual amount will continue to increase.
Bottom Line: If you are going to be applying for Social Security benefits soon, please contact me so that we can discuss a strategy.
Easter Quotes
The resurrection gives my life meaning and direction and the opportunity to start over no matter what my circumstances. ~Robert Flatt
The joyful news that He is risen does not change the contemporary world. Still before us lie work, discipline, sacrifice. But the fact of Easter gives us the spiritual power to do the work, accept the discipline, and make the sacrifice. ~Henry Knox Sherrill
Easter is the demonstration of God that life is essentially spiritual and timeless. ~Charles M. Crowe
Let every man and woman count himself immortal. Let him catch the revelation of Jesus in his resurrection. Let him say not merely, "Christ is risen," but "I shall rise." ~Phillips Brooks
On Easter Day the veil between time and eternity thins to gossamer. ~Douglas Horton
Easter spells out beauty, the rare beauty of new life. ~S.D. Gordon
Where man sees but withered leaves, God sees sweet flowers growing. ~Albert Laighton
But from this earth, this grave, this dust, My God shall raise me up, I trust. ~Walter Raleigh
He takes men out of time and makes them feel eternity. ~Ralph Waldo Emerson
For I remember it is Easter morn, And life and love and peace are all new born. ~Alice Freeman Palmer
We live and die; Christ died and lived! ~John Stott
Those have a short Lent, who owe money to be paid at Easter. ~Benjamin Franklin
Let the resurrection joy lift us from loneliness and weakness and despair to strength and beauty and happiness. ~Floyd W. Tomkins
And he departed from our sight that we might return to our heart, and there find Him. For He departed, and behold, He is here. ~St Augustine
The story of Easter is the story of God's wonderful window of divine surprise. ~Carl Knudsen
Our Lord has written the promise of the resurrection, not in books alone, but in every leaf in spring-time. ~Martin Luther
Well pleaseth me the sweet time of Easter
That maketh the leaf and the flower come out. ~Bertran de Born
Easter tells us that life is to be interpreted not simply in terms of things but in terms of ideals. ~Charles M. Crowe
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