When you hear the words “We would like to have you as a member of our team.”, it is beyond exciting, you landed the job. However, reality sets in when Human Resources provides you with a benefits package. You are inundated with information and jargon you may have never heard of. To make this process less daunting, for this month’s blog we decided to focus on a potential piece of the package: medical coverage and specifically the savings accounts that may be offered relating to that medical package.
As we all know the investment industry is filled with jargon and multiple types of accounts such as a Roth IRA, Traditional IRA, Rollover IRA, Inherited IRA, SIMPLE IRA, SEP IRA, and many more. As stated in the name of the blog post, we will focus on one type, the Roth IRA. At LBW, a frequently asked question is: “Should I contribute to a Traditional or Roth IRA?”. More often than not, people are not as familiar with Roth IRAs as they are with Traditional IRAs. So, we are going to break down the Roth IRA into four sections: History of the Roth IRA, Advantages of a Roth IRA, Roth IRA vs. Traditional IRA, and Why and What the Government Wants to Change.
How LBW See’s It
The first quarter of 2016 did not disappoint. The S&P 500 hit a quarter low on February 11, 2016 equating to an approximate decline of -10%, falling to what pundits call a correction. How did the S&P 500 finish the quarter? Up approximately 1%. In short, we experienced more than a 10% swing during LBW’s first full quarter - what a ride. The swing was caused by the usual suspects: the continuing commodity rout, the strengthening U. S. dollar, the unpredictable Federal Reserve’s (“Fed”) interest rate moves, and continuing fears of a global slowdown. Was this volatility valid, or in other words, was the market overvalued on a valuation basis?