What To Know About The RMD Laws

Hi everyone,

If you are aproaching age 70 and own a 401k or IRA, you need to know about the Required Minimum Distribution (RMD) laws, which mandate that you withdraw a certain amount each year starting at that time. Our video below explains what you need to know about the RMD rules, when they apply and how to calculate them.

The RMD rules run deep. Please ask if you have any questions, especially when it comes to the calculations. You can access this video — and others — by visiting the “FAQ” page on our site.

In The Market...

The S&P 500 gained +1.9% last week. Let's look under the hood:

(price data via stockcharts.com)

Stocks put together consecutive weekly gains for the first time since early November. It was a pretty bumpy ride getting to last week’s gains, as is often the case around year-end. We saw decent improvement, but it is tough to make too much out of it considering the market was sleepwalking through New Year’s Eve and closed altogether on New Year’s Day.

The S&P 500 experienced its first truly negative year since 2008, falling -4.5% (including dividends). Coming off of the worst December on record ever for the U.S. stock market, are better things to come in 2019?

The headwinds remain the same as they were in late-November, when stocks looked primed to mount a meaningful rally but instead fell hard in December. There is much ground to be made up, so we must be careful when it comes to trusting any of these short-term rallies. Looking at things through the broad lens of the S&P 500, the following issues persist:

  • Price of S&P 500 is below its 200-day moving average (would like to see the price be above it)

  • Slope of the 200-day moving average is falling (would like to see it rising)

  • Nearly 80% of the companies that comprise the S&P 500 are below their respective 200-day moving averages (would like this to be above 50% or better)

  • Relative Strength (RSI) remains weak, just below 50.0 (would like to see it above 60.0)

These are just a few. Ideally with time the market will stabilize, these measures will strengthen and the long-term outlook will improve as a result. The challenge is how long that may take. Right now we should remain cautious when it comes to short-term gains because we are likely to see more volatility to the downside as well.

We did not make any major portfolio changes last week. We did add to our Long-term Treasury bond fund (SPTL) across most accounts. If the stock market continues to move higher this week we may selectively add to our stock positions, but again, patience is key.

In Our Portfolios...

What's New With Us?

I spent Saturday night sick from a 24-hour stomach flu I picked up from my daughter. It was either that or the Seahawks game that did it. Rough weekend for me, but I’m back at it.

Have a great week!

Brian E Betz, CFP®