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Dorion-Gray Capital Management® Weekly Commentary October 12, 2015

| October 12, 2015
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THE MARKETS... 

Some rising optimism helped Wall Street cap the strongest week of the year. On the final day, stocks enjoyed a slight bump as investors waited for U.S. companies to report their third-quarter earnings. For the week, the Dow rose 3.75 percent to close at 17,084.49. The S&P gained 3.30 percent to finish at 2,014.89, and the NASDAQ climbed 2.61 percent to end the week at 4,830.47. 

Why Not? – 

Only 26 percent of Americans under the age of 30 own stocks either within a pre-tax retirement account or as a personal investment (source: Bankrate.com, BTN Research). 

At Least That Much – 

In the first quarter of 2015, 21 percent believe they will need to accumulate at least $1 million in order to “live comfortably” during their retirement years, up from 15 percent in 2005 (source: Employee Benefit Research Institute Retirement Confidence Survey, BTN Research). 

Some Up, Most Down -

Eighty individual stocks in the S&P 500 (i.e., 80 of 500 stocks or 16 percent of the stocks in the index) gained at least 10 percent during the first nine months of 2015 (change of the stock price without factoring in the impact of dividends) including 20 stocks that are up at least 25 percent YTD through Sept. 30, 2015. Of the 500 stocks in the index, 330 stocks (66 percent of the stocks in the index) have dropped in value since the end of 2014 (source: BTN Research). 

WEEKLY FOCUS – Mid-Life Divorce and Retirement 

Since 1990, the divorce rate among Americans over the age of 50 has doubled. If fact, one in four divorces now involves a couple in this age group. On top of the emotional impact of a long-term marriage ending, late-life divorces can have a devastating effect on financial well-being in retirement. Coming at a time when there is often more wealth to lose, there is also less time to rebuild assets. If you have friends or relatives contemplating divorce, sharing the following information may improve their situation. 

For starters, it’s a good idea to obtain an accurate picture of potential debts by getting credit reports for both spouses. If a couple resides in one of the nine states with community property laws, each spouse is responsible for half of everything the other owes – even if the debt is only in one name. 

When it comes to splitting pensions and retirement plans, agreeing upon percentages (rather than fixed amounts) can be less risky if the markets turn down and more fair if the markets swing up. Getting a Qualified Domestic Relations Order can protect the husband and wife from incurring tax penalties when funds are transferred to another account. Beneficiary information on remaining accounts should be updated immediately. 

Emotions can cloud the decision of whether to sell or keep the house. A spouse who keeps a home in lieu of other assets may not have the finances needed to maintain it. On the other hand, homes can come with capital gains tax advantages other investments might not enjoy. 

Spouses who have earned lower Social Security benefits than their mates can draw half of their exes’ monthly benefits at the appropriate age, as long as they were married for 10 years or more and they start collecting benefits before remarrying. And this won’t impact the other spouses’ benefits. 

Once everything is finalized, it’s important not to become too risk averse. With inflation and today’s longer life expectancies, portfolios need to grow to provide adequate security. We’re happy to help guide someone you care about through these rough waters so they can look forward to a happier retirement. 

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. 

© 2013. Dorion-Gray Financial Services, Inc.

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