Friday Financial Five - October 3, 2014

Friday, October 03, 2014

Dan Forbes, GoLocalProv MINDSETTER™

 

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Bill Gross leaves PIMCO

News in the bond market don’t usually steal headlines from the stock market, but Bill Gross’ departure from the company he founded over 40 years ago took the investment world by storm. As one of the most recognizable names in investment management, Gross will give Janus increased credibility, and the smaller Janus fund he’ll steer should allow for increased maneuverability. As for PIMCO, their recent run of bad luck continues. Funds are already seeing huge outflows and the company has to contend with a pricing probe on the Total Return ETF.

Fannie and Freddie Mac hurt badly by legal ruling

Those holding on to Fannie Mae and Freddie Mac stock in hopes of a big payoff had a disappointing week. On Tuesday, Judge Royce Lambert threw out lawsuits claiming the government illegally swept all Fannie and Freddie profits to the U.S Treasury. The legal basis for doing so took place when the Federal Housing Finance Agency was created to oversee Fannie and Freddie’s placement into conservatorship.  There are still legal battles ongoing, but the legal decision has caused the stocks to drop considerably in just a few days.

SEC budget woes

Congress will operate under a continuing resolution through December 11th and fiscal year 2015 remains unresolved. The Securities and Exchange Commission will continue to make do with the same resources, as their budget is anticipated to remain roughly $1.3 billion. The agency won’t get the additional advisor examiners they seek, as only 9% of registered advisers were examined in 2013. The country continues to clamor for comprehensive regulation of the financial industry, including newly exposed conversations at the New York Federal Reserve, but there still hasn’t been major progress since 2008.

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Kiplinger’s retiree survey

Ranking retiree destinations is all the rage these days, and Kiplinger’s is the latest to join the fray. Again, states in the northeast suffer in the rankings, with New York, New Jersey, Connecticut, Vermont, and Rhode Island all occupying a spot in the 10 least tax-friendly states. As it stands to reason, those states that have no income tax or estate tax fair well, as well as those that offer incentives and tax breaks for residents 65 and over.

65% estate tax proposed

While some surveys highlight low tax retiree destinations, Bernie Sanders would like to see all wealthy people pay significantly more in federal estate taxes. His recent proposal would tax estates valued from $3.5 million to $10 million at 40 percent. There would be progressive increases until the $1 billion estate valuation, which would be taxed at 65 percent.

Dan Forbes is a regular contributor on financial issues. He is a CFP Board Ambassador. He leads the firm Forbes Financial Planning, Inc in Providence, RI and can be reached at [email protected].

 

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