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Dorion-Gray Capital Management® Weekly Commentary January 3, 2017

| January 09, 2017
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THE MARKETS...

The markets’ post-election rally paused as Apple and other tech stocks led a slump. Although Wall Street finished the last week of 2016 on a sour note, major indexes achieved solid gains for the year. For the week, the Dow fell 0.86 percent to close at 19,762.60. The S&P lost 1.08 percent to finish at 2,238.83, and the NASDAQ dropped 1.46 percent to end the week at 5,383.12.

Start Saving Now –

A child born in 2016 who begins kindergarten in 2021 would attend college between 2034 and 2038. If that child attended an average public, in-state, four-year college and if the annual price increases for public colleges experienced over the last 30 years (5.5 percent per year) continue into the future, the aggregate four-year cost of the child’s college education (including tuition, fees, room and board) would total $227,984 or $56,996 per year (source: College Board, BTN Research).

The Cost of Business –

The break-even oil price for Saudi Arabian oil producers is $7 per barrel. The break-even oil price for Russian oil producers is $46 per barrel (source: Deutsche Bank, BTN Research).

More Than Two-Thirds -

The total return of the S&P 500 over the last five calendar years (2011-2015) is 80.7 percent. The best 13 trading days during the five years (i.e., 13 days out of 1,258 total trading days) produced a 55.1 percent gain. Thus, 1 percent of the trading days over the last five years were responsible for 68 percent of the index’s total return (source: BTN Research).

WEEKLY FOCUS - Time for Re$olutions

According to NerdWallet’s first year-end financial survey, many Americans should consider making New Year’s resolutions to save more in 2017. Although 70 percent of the participants reported saving for retirement in 2016, many were concerned about the adequacy of their nest egg. Only twenty-nine percent were confident they saved sufficiently last year, and nearly one in three weren’t saving at all.

Among the three out of four who had financial anxieties, 35 percent were concerned about health care bills and expenses; 35 percent were anxious about not having emergency savings; and 28 percent were worried about their lack of retirement savings.

It’s not surprising health care costs were such a big concern. Last summer, the U.S. Department of Health and Human Services predicted the per-person health care tab for 2016 would top $10,000 for the first time. In 2015, the Centers for Medicare & Medicaid Services projected health spending would grow at an average rate of 5.8 percent per year between 2015 and 2025. This escalating cost makes it more challenging for many Americans to save as much as they’d like.

With higher insurance premiums, greater out-of-pocket costs and slow wage growth, discipline and determination are essential to achieve financial goals. As with most goals, aiming high often improves results. So aim to put 15 percent in your retirement fund. If that is difficult, track expenses to find things to cut and create a strategic budget. Then increase contributions 1 to 2 percent every three months. Try to save additional income from pay increases. Delay gratification. Before putting an item in your shopping cart (in person or online), pause for 10 seconds and ask yourself if you really need it. For larger purchases, wait several weeks to evaluate your decision. And consider an occasional spending fast where you don’t make any unnecessary purchases for a month.

The NerdWallet survey also asked those who were saving for retirement how they were doing so. Fifty-five percent reported using regular savings accounts; fifty percent were using a workplace retirement plan like a 401(k); and 39 percent were using an individual retirement account like an IRA. (Respondents could select more than one.) Those using savings accounts may be missing out on an employer match, tax advantages provided by designated retirement accounts and growth potential other investments may offer.

We can help you find ways to meet your goals this year, no matter how big or small. Call our office to schedule time to discuss what you want to accomplish in 2017 and beyond.

The Dorion-Gray Team

Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. a Registered Investment Advisory Firm. Dorion-Gray Retirement Planning is a trade name of Dorion-Gray Financial Services, Inc. located at 2602 IL Route 176, Crystal Lake, IL 60014. Dorion-Gray and the Securities America companies are separate, unaffiliated entities.

Diversification seeks to reduce the volatility of a portfolio by investing in a variety of asset classes. Neither asset allocation nor diversification guarantee against market loss or greater or more consistent returns.

© 2017. Dorion-Gray Financial Services, Inc.

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