Michael McCormick

5 West Mendenhall, Ste 202 | Bozeman, MT 59715

406.920.1682  mike@mccormickfinancialadvisors.com

Sustainable Income Planning | Investments | Retirement

May 2019
Market Update
(all values as of 02.29.2024)

Stock Indices:

Dow Jones 38,996
S&P 500 5,096
Nasdaq 16,091

Bond Sector Yields:

2 Yr Treasury 4.64%
10 Yr Treasury 4.25%
10 Yr Municipal 2.53%
High Yield 7.63%

YTD Market Returns:

Dow Jones 3.47%
S&P 500 6.84%
Nasdaq 7.20%
MSCI-Europe 1.23%
MSCI-Pacific 3.98%
MSCI-Emg Mkt -0.27%
US Agg Bond -1.68%
US Corp Bond -1.67%
US Gov’t Bond -1.59%

Commodity Prices:

Gold 2,051
Silver 22.87
Oil (WTI) 78.25


Dollar / Euro 1.08
Dollar / Pound 1.26
Yen / Dollar 150.63
Canadian /Dollar 0.73

Dear Friends,

Investing is tricky with higher prices and lots of uncertainty – which is where we are now with trade disputes and slowing growth.  Recent GPD numbers show the country maxed out our productivity at 3% growth, and now are pulling back to 2.5%.  Short term investments are having to compete with relatively good returns in money markets and short-term CD’s and I have been advising many clients to take advantage of this opportunity.  This is the new normal, and behind the headlines I do expect markets to grind higher over time.  But it will continue to be anything but a boring ride.  Keep in mind, however, that in an average year we have several events that cause selloff of more than 5% for very good reasons- at that time.  Long-term risk is still rewarded in our opinion.

So please, enjoy this issue and then go outside and remember what is important to you.

Bozeman 2019 CPA Symposium Roundup

For the past 9 years, we have been hosting local CPA’s for an afternoon of continuing education.  Did you know that CPA’s are required to spend a full 40 hours per year to maintain their license!  McCormick Financial Advisors provided a 4 speaker event that was maybe our best yet :from State Legislative Updates, to Social Security (page 4), to hearing how current tax law can save you significant tax money here in Montana.  I would like to thank our excellent speaker lineup including: Pete Richardson of our local SSA office; Justin Bryan of Bryan Law Firm PC, Bridget Wilkenson of the Bozeman Area Community Foundation, and Katy Sparks of Sparks Law.



30 year mortgage rates fell to 4.14% in april


45% of Americans Pay No Federal Income Tax – Fiscal Policy

An estimated 76.4 million Americans, identified as households, paid no federal income tax for tax 2018. The non-partisan, non-profit tax group known as The Tax Policy Center released income tax data it analyzed for 2018 and found that nearly half, about 44.4% of American households, paid no federal income tax last year. The Tax Policy Center estimates that the number of Americans that did not pay income tax for tax year 2018 increased from 72.6 million in 2016, before the Tax Cuts & Jobs Act became effective.

According to the data, the top 0.1% of taxpayers pay the equivalent of 39.2% of all taxes while the bottom 20% pay no taxes and receive tax refunds in the form of refundable tax credits. The ultra wealthy, also know as the top 1% of taxpayers, with annual incomes of about $2 million, pay about 40% of all of the federal income taxes in the U.S. (Source: Tax Policy Center/Washington D.C.)

Social Security Falls Short On Projections – Retirement Planning

Social Security costs will exceed its income in 2020 for the first time since 1982, forcing the program to dip into it’s trust fund, which is currently just under $3 trillion. Social Security is funded by two trust funds, one for retiree benefits and another for disability benefits. Disability applications have actually been declining since 2010, with a decreasing number of workers receiving disability benefits since 2014.

The latest annual report issued by the trustees of Social Security and Medicare revealed that by 2034, the program’s trust fund will be depleted. Depletion means that Social Security recipients will no longer be receiving full scheduled benefits. Recipients would receive about three-quarters of their scheduled benefits after 2034. Congress can eventually act to fortify the program’s finances, but it may be years before it actually takes effect and funds.

Social Security’s largest costs are attributable to Medicare, which represents over 76% of Social Security benefits. The report also mentioned that Medicare’s hospital insurance fund would be depleted in 2026. The trustees noted that the aging population of the country has placed additional pressure on both the Social Security and Medicare programs. A decade ago, roughly 12% of Americans were age 65 or older, today 16% of Americans have already surpassed 65, the eligibility age for Medicare.


The Social Security Administration considers various factors in projecting its estimates, including fertility, immigration, wages, health, and economic growth. A recent drop in U.S. birthrates along with stagnant wages has placed additional burden on the viability of future benefit payments.

Sources: https://www.ssa.gov/oact/TR/2019/index.html

the average tax refund so far this tax season is $2,725


Oil & Retirees Drive Population Growth – Demographics

Recently released Census data revealed that the fastest growing cities in terms of population growth have been driven by the oil industry and retirees. The Census report documented population growth from July 2017 to July 2018, identifying ten of the fastest growing cities nationwide. Half of the fastest growing cities are being driven by retirees migrating in and the other half attributable to new oil industry jobs.

Midland and Odessa Texas were among the fastest growing cities, with numerous oil industry jobs attracting people from all over the country. Midland saw a 4.2% population gain for the annual period ending July 2018, as the region’s rich petroleum and natural gas deposits boosted the economy and drew workers in seeking new jobs.

Retirement communities including Myrtle Beach, St. George and The Villages, all saw an influx of retirees. These communities have become attractive for seniors providing essential services and amenities all within a single location.

Various factors have historically affected population growth throughout the United States including demographics, local industry and the economy. An aging baby boom generation along with job development in the oil sector has been the primary driver of growth for the nation’s fastest growing cities. (Source: Census Bureau)

the social security trust fund will be depleted by 2034


About Us

Our clients enjoy the feeling of having their financial lives kept in order.  Freedom from worry comes from working with an experienced advisor that understands your entire financial life and is accessible and attentive to your needs.  As a fiduciary, Mike is unable to receive commissions from financial products and free to make recommendations that are unbiased by Wall Street.  With over a decade of experience caring for a small family of clients, our specialties are preserving wealth and generating sustainable income.  Our average client net worth ranges from $2 to $10 Million.  Go outside, we’ve got this.

MFA Events Calendar
GVLT Summer Trails Sponsor June Summer Trails Challenge- Log you miles on Area Trails https://gvlt.org/summer-trails-challenge/

I’m putting my miles under the Big Sky Wind Drinkers Group.  Feel free to join us!

Radio Wednesdays 8am on 1450am KMMSam.com
Radio Fridays 1pm on 95.9fm KGVM.org
Fun and Run 5k Wed Night Brew Run Sponsor.  July 10th, 6pm start at MAP Brewing Co  Bozemanrunningcompany.com
www.mccormickfinancialadvisors.com | 406-522-3201