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Dorion-Gray Capital Management® Weekly Commentary September 7, 2015

| September 07, 2015
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It was a rough ride on Wall Street last week. On Friday, U.S. stock indexes dropped more than 1 percent, thanks to a lackluster August jobs report, continued concern over China’s faltering economy and uncertainty about a potential interest rate hike this month. For the week, the Dow fell 3.21 percent to close at 16,102.38. The S&P lost 3.36 percent to finish at 1,921.22, and the NASDAQ dropped 2.99 percent to end the week at 4,683.92. 

Department of Correction – 

The 1,326 calendar days (from Oct. 3, 2011 to May 21, 2015) that the S&P 500 went before beginning a 12.4 percent tumble (through Tuesday, Aug. 25, 2015) is the third longest stretch without a 10 percent or greater drop in the index in the last 50 years (source: BTN Research). 

And Then What Happened? – 

The S&P 500 has been down at least 1 percent on each of at least four consecutive trading days (as it was in late August) just eight times in the last 65 years. After the previous seven times that this “four-day stock tumble” occurred, the S&P 500 averaged a 28.6 percent gain over the subsequent 12 months (source: BTN Research). 

High Standards - 

In the second quarter of 2015, 49.8 percent of the new mortgage originations (by dollar, not by number) were obtained by borrowers with credit scores above 780 (source: Federal Reserve Bank of New York, BTN Research). 

WEEKLY FOCUS – Robin Williams' Heirs Battle Over Personal Belongings 

The late Robin Williams’ third wife, Susan Schneider Williams, and his three children from previous marriages, Zachary, Zelda and Cody Williams, have been engaged in a contentious estate fight for months. Williams left the majority of his estate (estimated at $50 to $100 million) to his children. A second trust stated Schneider Williams could remain in the home she shared with Williams for the rest of her life and provided for “all costs related to the residence.” 

The parties are at odds over Williams’ large bicycle and watch collections, artwork, books and other items worth millions of dollars. Schneider Williams filed a petition claiming Williams’ trust was “ambiguous” regarding many of his personal effects. The children argue the trust clearly states their father wanted them to receive his memorabilia and personal collections acquired prior to his third marriage. 

Distribution of tangible personal property is one of the most overlooked elements of estate planning and a frequent source of bitter disagreements among surviving family members. Whether disputed articles are valuable from a monetary standard or merely for sentimental reasons, the cost of settling ensuing conflicts can be greater than the items’ actual value. 

A unique set of issues accompanies collections. Some heirs may feel strongly about keeping a collection intact while others may want to sell it. Dividing pieces of unequal values can be difficult, and selling artwork and other collectibles can be costly. If the next generation is interested in maintaining the collection as a whole, transferring it to an LLC during an owner’s lifetime may provide tax benefits and enable appointed managers to make decisions regarding insurance, storage, display and possible sales of individual pieces. 

Careful estate planning is essential to prevent or mitigate future family discord. Providing specific instructions for the distribution of particular personal objects is the best way to ensure your wishes are carried out peacefully. Recent and promised gifts to various family members should be recorded to prevent any questions regarding the items later. If you need help reviewing your estate plans or discussing your decisions with your children, please call our office. Although we cannot provide legal or tax advice, we are happy to work with you, your attorney or your accountant. 

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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