Did Congress Just Kill Your Social Security Strategy?


If you were hoping to execute a ‘File and Suspend’ collection strategy of your Social Security benefits, you only have a few months remaining. Under this week’s budget legislation, Congress is killing off the various “File and Suspend” and “Restricted Application” strategies to allow spousal and dependent benefits to be paid while still earning delayed retirement credits, with just a 6-month window before the limitations start to take effect.

The File and Suspend strategy was originally passed by Congress as part of the Senior Citizens Freedom to Work Act in 2000 to allow those who had already started Social Security benefits to stop their payments and earn delayed retirement credits. In the process, however, the new voluntary suspension rules unleashed several additional Social Security claiming strategies, including various “claim now, claim more later” tactics that involved File-and-Suspend and Restricted Applications for spousal benefits.

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A Time for Caution


The third quarter came in like a lamb and went out like a lion, as the return of volatility hit risk assets hard across the globe. As in previous quarters, emerging market stocks and commodities suffered double digit declines as markets continue to deal with the end of the commodity super-cycle and the mix of structural and cyclical problems reverberating throughout the emerging market complex.  But the big news of the quarter was a catch up in developed markets that had previously appeared impervious to the problems that were festering in the developing world.

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Not All Bear Markets Are Created Equal


We’ve recently changed our cyclical view, as we don’t think the recent downdraft we’ve been experiencing is over yet. In fact, while many believe we’re experiencing a ‘garden variety pullback’ that provides us with a buying opportunity, we believe there’s a growing probability that the long running cyclical bull market may be transitioning into a cyclical bear market. We could be wrong—and hope that we are. But hope is not a strategy and we need to align with the evidence that calls for playing defense and protecting against a possible change in the market cycle.

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What’s Going on with the Market?


It is hard to believe that in three trading days, the market has penned its first 10% correction in over 900 trading days. This decline may be an unfortunate reminder of the last bear market, and if you are feeling anxious about your portfolio, don’t worry—you have lots of company. In fact, the market has set a new record for the speed and breadth of market volatility.

Not only has the market dropped, but we have also witnessed several areas of the evidence we follow move into bearish territory. Given this recent downgrade, we now believe the probabilities are high that we are transitioning from a bull market to a bear market cycle.

In the remainder of this post, I’ll summarize our response to the recent market events in each of our three Pinnacle strategies.

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Six Questions to Ask Before Buying That Vacation Home


With a humid mid-Atlantic summer in full swing, many Marylanders are entertaining the idea of purchasing a vacation home. That might be wise — it can be a great place to rejuvenate and spend time with family and friends.

However, a vacation property also comes with its own set of challenges and those considering a purchase should be aware of them. With that in mind, here are six important questions to ask before making the move.

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Will Greece Trip Up the Bull?


The headlines out of Greece are coming fast – deal, no deal, default, referendum, etc. It’s enough to make investors’ heads spin trying to keep up with the news flow. Markets have been volatile this week in reaction to the back and forth, and the rising possibility that Greece may leave the Eurozone. Investors are starting to fear that this could potentially be another “Lehman moment” that results in financial contagion across global markets.

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No Pain, No Gain – Taking the Long View on the Dollar and Commodities


“Long ago, Ben Graham taught me that price is what you pay; value is what you get. Whether we are talking about socks or stocks, I like buying quality merchandise when it is marked down” – Warren Buffett

We pointed out in our recent quarterly commentary that a major countertrend movement was brewing in both the dollar and commodity patch. In other words, the primary trends for the dollar (up) and commodities (down) might have hit a point where their respective gains and losses were overdone in the short-term, but we have a firm conviction that the strong dollar and weak commodity thesis should continue to dominate the backdrop in the long-term.

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Pondering Halftime Adjustments


At the beginning of the year, we wrote about an aging bull market that we thought could be ridden, but with the caveat that one wouldn’t want to take too much risk given the magnitude of the move, current valuation levels in the U.S., and an overall evidence profile that was clearly mixed with pockets of both strength and weakness. When weighing the evidence, our dashboards offered no reason to reach for additional risk this late in the cycle, but instead we tried to focus on some big picture themes that could help us find attractive opportunities to position for.

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