Transfer Your Values Alongside Your Wealth

wealth and values

There’s this lingering myth of “old money families” where wealth is easily passed from generation to generation. But studies have shown wealth attrition to be more common, as bad investment decisions, mismanagement and dilution of assets between heirs eats into the family fortune.

Overcoming the challenges that plague wealth stewardship comes down to two core elements – strong communication with your next generation and putting a proper wealth transfer plan in place. We’re here to guide you.

The Family Roundtable

One of the most common barriers in wealth transfer is a lack of transparency between generations. In higher net worth families, often the older generations will shield the scope of wealth from other generations to prevent them from abusing their inheritance. But early communication with your adult children about family wealth is key.

Having us as an independent voice to shepherd the conversation can help you and your heirs talk about transfer of wealth on equal footing. It gives you a chance to discuss your financial strategies, your plan for specific family assets including the family business, and any philanthropic goals or values you would like the next generation to steward.

It also provides a forum for the next generation to discuss their own aspirations, to share any fears, and, most importantly, to feel like they play a role not just as an inheritor of the family wealth but also as an active player in the preservation of that wealth.

We can act as an independent voice for the family roundtable, someone who can guide the conversation and ensure all questions are asked and answered. We can also pinpoint challenges and help both you and your heirs come up with strategies to navigate those challenges.

Formalizing the plan

In addition to guiding the conversation, we can also play a critical role in structuring your wealth transfer plan.

We can walk you through the different vessels for protecting wealth in the transfer, advise you on the different structures for trusts, identify assets to include in your will, outline the pros and cons of transferring wealth during your lifetime versus after death, and help you balance personal preferences with tax efficient strategies.

Estate plans are far from static; the wealth transfer process is an evolving discussion, one that we can help you navigate as life events like marriages and remarriages, births of children and grandchildren, significant health issues and death, change your family and your needs.

Amidst the change, it’s good to have a constant – who better to play that role than your financial advisor?

Contact me to learn more about transferring wealth.

Click here if you would like to learn more about your options and if we can assist you with your wealth management, investment, and retirement planning.

This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.

Market Brief May 11 2020

Market Brief May 11 2020

The markets finished up last week. Surprising to some investors as the unemployment numbers for April hit a record setting 20 million. This equates to an unemployment figure of 14.7%! To put the job loss in perspective, from October 2010 to February 2020, the economy added 22.1 million jobs. Last Thursday, 3.1m former workers filed for unemployment benefits. However, it was the 5th straight week when the number of applicants fell. For some, this is a signal of improvement. This also may point to the fact that the worst is behind us. The forward looking market is ready for a turnaround.

Last Week

States are re-opening and sharing their blueprints with others to follow. Companies reporting earnings last week continued to withdraw guidance. Companies are sharing less than optimistic commentary. Economic reports have met the ugly reality, but have not exceeded those benchmarks. This has helped prop up the markets for now. Along with positive news regarding potential vaccine for Covid. The Dow, S&P, and Nasdaq indexes all finished up last week – Dow up 2.6%, S&P 3.5%, and Nasdaq 6.0%.

During the earnings came the release of dividend status. The number of dividends increased in April totaled 19, down from 30 a year ago. Year-to-date, dividend increases totaled 144, down from 148 over the same period a year ago. Twelve dividends were cut in April, compared to one cut a year ago. Twelve dividends were suspended in April, bringing the total to 22 for 2020. This is a sign of uncertainty and caution among companies. Instead of paying a dividend, these companies are raising cash on hand, paying down debt, or using for day-to-day operating expenses until “normal” returns.

Week Ahead

Investors are currently looking at the bright side and trying to figure out when normal is back. Closely watching how states are re-opening and if Covid cases begin to increase in those states. The retail sales report on Friday will tell us one of two things. Is the consumer completely locked down, including their wallets? Or, has the quarantine led to regular or even higher spending with people sitting around their house all day? Other economic news, CPI and PPI will both be released next week as investors digest the impact of the slowdown on both the economy and the stock market.

Continued U.S. and China tension is back on the front burner. Similar to the back-and-forth in 2019, market swill ebb and flow with the latest tweet, response, and action taken by each side. Year-to-date index performance; Dow down -14.7%, S&P down -9.3%, and Nasdaq up 1.7%.

Have a safe week!

Click here if you would like to learn more about your options and if we can assist you with your wealth management, investment, and retirement planning.

This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.

Market Brief April 20 2020

Market Brief April 20 2020

The market rally continued. Finishing strong Friday due to a potential COVID-19 treatment. The Dow, S&P, and Nasdaq indexes all finished up last week. Dow up 2.2%, S&P 3.0%, and Nasdaq 6.1%. Not all was good as many banks reported earnings last week. The large banks are preparing for potential consumer and corporate loan defaults. Unemployment increases continue. In the last four weeks, 22 million Americans have filed for unemployment. This volume erases ten years of job growth. Retail Sales dropped in March and Industrial Production fell to the lowest level since 1946.

So why did the markets finish higher? Good question. The markets response was focused on two things. First, the potential vaccine treatment. If this treatment works or has a strong recovery rate, this is great news for the current time and the future. The markets want to be reassured if the virus returns there is a defense in place. Second, President Trump announced a plan to reopen states. Going back to “normal” is good for small business, consumers, and income earners. It is clear “life after virus” will be different, igniting the economy is certainly a positive for financial markets.

The Week Ahead

COVID-19 hospitalizations are declining in hotspot areas. Government officials are working on plans to gradually reopen their states. On Thursday, another round of unemployment claims is expected. Friday’s durable goods order report will shed light on business spending amid the health crisis.

Corporate earnings season continues. The focus of these calls remain to be the gauge of how negatively affected consumption and credit have been for both consumers and businesses. As well as, the prospects of doing business during the next few quarters. And lastly, for firms not on solid footing, investors will look to their liquidity as key indicator of strength going forward.

Year-to-date index performance; Dow down 15.0%, S&P down 11.0%, and Nasdaq up 3.6%. As the post image says, “Together We Do It” – Have a safe week!

Click here if you would like to learn more about your options and if we can assist you with your wealth management, investment, and retirement planning.

This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.

Market Brief April 6 2020

Market Brief April 6 2020

With each passing day, we hope to be one day closer to the end of this ugly virus. Until that day arrives, continue the social distancing and best hygiene habits. The news ahead regarding the economic state and corporate guidance are likely going to be dismal. Economic numbers outside of jobs report will tell one tale. Company reports during earnings calls will tell another. This past week, unemployment rate jumped to 4.4%, from lows of 3.5%. Weekly unemployment claims surged north of 10,000,000 over the last two weeks. If you have a job, be thankful. The monthly employment numbers are usually the most important. They providing the first, in-depth perspective of the U.S. economy.

The most attention during the week is the weekly job report that comes out each Thursday morning. All eyes again will be watching very closely. Economists ahead of this downward spiral are predicting unemployment to reach as high as 17%! A depressing reality to think about. Jim Reid, a strategist for Deutsche Bank, stated “the contraction from the coronavirus this year is likely to rank among the 10 worst for many countries… that’s remarkable, given the size of the monetary and fiscal stimulus that governments have provided.”

What’s Ahead

The Dow, S&P, and Nasdaq indexes all finished down last week. Dow dropped 2.7%, S&P fell 2.1%, and Nasdaq down 1.7%. The Dow finished the first quarter, which ended last Tuesday, down 23%. The week ahead is mixed with important economic data, as well as, a couple corporate reports worth reading.

Tomorrow, Levi Strauss reports quarterly results. Usually, not a widely followed report, but given the impact of incomes and jobs, the report will provide impact on discretionary spending. On Wednesday, Costco Wholesale reports sales data for March. Another indication of recent spending impact since the virus began hitting U.S. and lock downs began mid-month of this report. Thursday reports include the Producer Price Index, a measure of inflation. Followed by the weekly job report, which comes after a week of 6.6 million claims. Friday reports also include the Consumer Price Index to see the impact of mainly retail prices for consumers in March. Friday the equity markets are closed in observance of Good Friday.

Year-to-date index performance; Dow down 26.2%, S&P down 22.9%, and Nasdaq up 17.8%.

Quarantine continues – have a fun and safe week!

Click here if you would like to learn more about your options and if we can assist you with your wealth management, investment, and retirement planning.

This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.

Positive Investing News

Positive Investing News

Finding good news right now can be tough. The Q&A below highlights some of the positive investing news that can result from a crisis.

What is the one positive that you see coming out of this crisis
that is least expected?

Buying opportunity! Valuations have soared during the bull market run following the 2008-2009 recession, individuals interested in long-term investment growth should consider this as one of the best discount sales in recent years. Many people I speak to wish they could go back to the 2008-2009 time period and buy stocks. Today, some quality companies are down 30-80% year-to-date.

What new businesses will break into the marketplace, as a result of this crisis, that no one expected to grow so fast?

Technology has proven to be the winner. The S&P 500 Info Tech sector index has greatly outperformed the market. Included in this index are businesses supporting those working from home, such as, video conferencing and e-document companies. 

What existing industries do you feel will rebound the fastest
as things begin to return to normal?

The travel industry is taking an enormous hit. This will not last. Consider how many people will need a vacation after being stuck in their homes for a month (or longer). Or even had their trips postponed. Hotels, airlines, cruises, they are beaten down right now but will bounce back as the virus is contained. The stimulus will also aid, to some extent, discretionary spending for some. Travel is a huge component of discretionary spending.

Click here if you would like to learn more about our thoughts on Positive Investing News. Also, to discuss options and if we can assist you with your wealth management, investment, and retirement planning.

This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.

Market Brief March 23 2020

Market Brief March 23 2020

Last week was the worst week the stock markets have seen since 2008. Continued developments of the coronavirus dominated the news, as the number of cases in the U.S. surpassed 15,000. This news left the indexes in a downward free fall. The three major indexes all finished down between 14-17% for the week ending March 20. The increase in cases is also getting the attention of life insurance, as I wrote about last week and you can read it here. Forget gold and oil as great market hedges, the future is now in toilet paper and hand sanitizer! (Just kidding).

To no surprise, economic data last week disappointed. China sales and industrial production was down double digits compared to last year. German economic sentiment also fell to the lowest on record. The lone bright spot from last week, was U.S. sales. For the month of February, U.S. retail sales came in 4.35% higher compared to last year. New home sales dropped for the month, while existing home sales jumped 6.5%. The existing home sales grew to the highest level since 2007, proving the real estate market was on solid ground prior to the virus outbreak.

The Week Ahead

The week ahead will be focused on stimulus news in the U.S., as well as, the flattening of the coronavirus infection curve. Wednesday’s durable goods order report is expected to be positive. However, this could be the last positive report we see for awhile, as business and productivity slows during the state ordered or self-mandated quarantine phases. Thursday’s unemployment claim report will likely soar, as businesses cut staff and hours for workers.

Big Picture and Recovery

Year-to-date index performance; Dow down 32.81%, S&P down 28.66%, and Nasdaq down 23.3%. According to Wilshire, this is approximately $12 trillion of wealth that has evaporated. Due to the recent domestic productivity halt, most banks have cut 2nd Quarter growth outlooks significantly. Goldman Sachs has revised their 2nd Quarter outlook to -24%, while J.P. Morgan cut their outlook to -14%.

The consensus for recovery is based on three outcomes. First, how quickly will the virus be contained. Second, whether businesses will have access to enough liquidity, or capital, over the next 90-180 days. And lastly, whether the fiscal stimulus can stabilize growth forecasts. Until then, volatility looks to remain high and sensitive to the latest news stemming from the virus developments and economic impacts.

Keep your distance, share the TP, and continue to wash your hands this week!

Click here if you would like to learn more about your options and if we can assist you with your wealth management, investment, and retirement planning.

This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.

Market Brief March 16 2020

Market Brief March 16 2020

Not sure where to start today? Every post seems to be outdated the minute it is published! Whether a virus update, Fed decision, a political speech, geo-political affairs, or another stock industry takes a dive downward. Volatility remains high, driving the big daily swings in the stock market.

Last week, President Trump initiated a travel ban and events across the country ceased immediately. Last night, the Fed stepped in with another rate cut. The reaction from the market was one of fear, driving indexes lower, and initiating the third trading halt in the last month to start the week. Despite the historic big rally on Friday, all indexes finished the week down. The Dow dropped 10.46%, the S&P 500 fell 8.86%, and the Nasdaq dropped 8.18%.

The Week Ahead

The week ahead includes Retail Sales, Industrial Production, and Housing Start data. There reports will provide a gauge of the consumer and business sentiment during this time of uncertainty. The mortgage rate drops may act as a tailwind for home buyers and those refinancing, in the near term, but the prevailing headwind of the coronavirus economic disruption remains front and center. Coronavirus focus will be on the growth of new cases, as well as, policies designed to identify and subdue the outbreak.

Big Picture

Year-to-date index performance; Dow down 18.7%, S&P down 16.0%, and Nasdaq down 12.2%. The media is publishing a lot of information regarding corrections, bear markets, and recessions. Let’s break those down. A correction is typically considered when the stock indexes drop 10% from the recent highs. A bear market typically is defined by a drop of 20% from recent highs. And a recession is 2 or more consecutive quarters of declining GDP growth. Our current economic state may be a recession, however, we will not know until the quarterly numbers are published after Q2 2020 is over. Yes, the markets corrected more than 20% from the highs on February 19, therefore, indexes are in bear market territory. Turnaround signs remain high correlated to virus improvement. The slowing of new cases, the decline of deaths, and the increasing number of recoveries. Until then, volatility remains here to stay. Corporate guidance up to this point is hard to judge. The next round of corporate earnings will be very important regarding the impact of the virus disruption and growth prospects going forward. Market volatility is inevitable when investing in the stock market.

Click here if you would like to learn more about your options and if we can assist you with your wealth management, investment, and retirement planning.

This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.

Portfolio Management Perspective

Portfolio Management Perspective

Review of Benchmarks, Strategy, Risk, and Performance – Perspective from one of our Portfolio Manager’s – March 13, 2020

Whenever the topic of investing is discussed we are conditioned to think first of the New York Stock Exchange opening bell and Wall St. bankers in Brioni suits. And why shouldn’t we? Over the past 200 years, stocks have arguably been the most powerful generator of wealth.
 
That rosy conventional wisdom has the benefit of a perpetual time-horizon and an ambivalence towards risk. As we all know, stocks might be notorious for rising over time, but they also can produce nasty results if improperly managed. Very few of us are fortunate enough to be ambivalent towards risk or the trajectory of our investments – if we were, being 100% invested in the DOW or S&P 500 would be a fine strategy. That is where financial planning and asset management comes in.
 
As a conservative asset manager, we are tasked with two main objectives a) produce a rate of return that achieves an objective (generally retirement/self-sufficiency) and b) protect against downside and volatility.  Our definition of success in both goals is directly related to the specifics of your financial situation. 
 
Since the inception of our Total Return strategy in 2004, we’ve employed a mix of equities (stocks), commodities, fixed income, and cash to achieve the objectives stated above for clients. At any given point, we may be more dependent on one asset class or another to provide upside thrust or downside support for our clients’ portfolios. As you might expect, this asset mix is largely dependent on (among other things) the outlook for the economy, interest rates, and the inclination for risk in the markets.
 
In some environments, such as 2017, the stock market and high-quality individual equities genuinely are the best option for capital appreciation.  In other periods such as late 2018 and 2019, a choppy market and unclear fundamental prospects warranted a higher concentration in traditionally less economically sensitive asset classes like bonds, gold, and cash. No matter the environment, we are continually assessing our outlook and corresponding exposures.

In the client updates over the past week, we noted how our conservative positioning at the outset of this decline was yielding promising results. That remains the case, and when we evaluate client performance relative to equity benchmarks (DOW, S&P 500, NASDAQ), we are heartened by the fact that client accounts have a) declined substantially less than the benchmarks and b) exceeded the results previously experienced in similar periods of stress.
 
Since our inception, having a trained eye on risk management has allowed clients to generally experience asymmetric rates of upside and downside participation vs. equity benchmarks. In other words, we’ve consistently achieved more upside than downside through the course of market trends. 
 
Finally, we understand that the personal nature of the virus and the corresponding downside reaction in markets can be especially anxiety provoking.  And while this is everybody’s first time managing through a true pandemic, it is far from our first time managing through a panicked market.  We will get through this turbulent time and be prepared to deploy the capital we’ve preserved throughout the episode.

Click here if you would like to learn more about your options and if we can assist you with your wealth management, investment, and retirement planning.

This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.

Market Brief February 24 2020

Market Brief February 24 2020

The last week in February is here and the markets have dropped on the news of the increasing spread of the coronavirus. Impact beyond health concerns is the slowdown in supply chains for companies, and the downward effect on economic activity. The US economic report of the Services PMI dropped to a 76-month low in February. This follows a January report that was at a 5-month high. The bright spots from last week are found in manufacturing confidence and housing reports. Both housing starts and building permits figures remain at decade highs, with housing starts at the highest level since 2006. WalMart’s earnings report was positive, in-line with expectations. Significant to the investor, as WalMart is a good gauge of the consumer strength, and sales were up 5.7% last year. With that said, the Dow, S&P, and Nasdaq indexes all finished down last week. The Dow down 1.4%, S&P 1.3%, and Nasdaq 1.6%.

This week will have plenty of economic reports to digest, but the coronavirus developments remain top priority. Tuesday’s consumer confidence report will shed light on whether consumers are concerned with the virus or not. Globally, Chinese banks may be on rocky ground. During the month of January, banks in China had loaned 3 times the amount that was loaned in December. Corporate loans also increased 7 times during the same time period. Debt levels this high could cause concern for long-term recovery and repayment issues.

Year-to-date index performance; Dow up 1.59%, S&P up 3.31%, and Nasdaq up 6.73%. I continue to encourage buy and hold investing for the long run and potential short-term disruptions can give investors long term opportunities.

Have a great week!

Click here if you would like to learn more about your options and if we can assist you with your wealth management, investment, and retirement planning.

This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.

Market Brief February 10 2020

Market Brief February 10 2020

Valentine’s Day is almost here, and the stock market continues to show investors plenty of love! The Dow, S&P, and Nasdaq indexes all finished up last week Dow up 3%, S&P 3.17%, and Nasdaq 4.04%. The coronavirus remains a serious threat, but markets shrugged off the virus news in favor of positive U.S. manufacturing data, strong jobs reports, and company earnings. The Dow and S&P index finished the week with the best performance since the 5 trading days leading up to June 7, 2019. The Nasdaq had it’s best week since November 30, 2018.

The number of coronavirus cases continue to grow and estimates of economic growth for China continue to fall. The coronavirus has spread to different industries at different times. Initially, the travel and oil industries took a hit, as obvious travel restrictions were put into place. Oil prices are down 20% since January. Retail chains, such as Starbucks, also took a hit as many stores in China were closed. Currently, the healthcare industry is taking it on the chin, due to cancelled surgeries and disruption in supply chain. Technology may be on the horizon, as companies like Apple look at their own supply chain and impact the virus will have on production. Throughout February corporate earnings calls, the theme was similar, it is too early to tell the impact, but keep a close eye on what is happening. As of last night, the coronavirus death toll has exceeded that of the SARS virus.

Enter Federal Reserve. After Wednesday’s meeting, Wall Street was leaning towards another rate cut. This belief evaporated by Friday when the jobs report was released and the results were very strong. In Germany, industrial production fell in December by 3.5%, the largest drop post-financial crisis. Global woes remain an area of concern.

Year-to-date index performance; Dow up 1.98%, S&P up 3.0%, and Nasdaq up 6.1%. What else? For the S&P companies reporting in January, no dividends were cut, same result as January 2019, and 41 companies increased their dividends, which is up from 36 a year ago. Due to low bond yields, investors are flocking to real estate mutual funds and REIT investments. As reported by EPFR Global, $11B of money flowed into mutual funds with a real estate focus in 2019, and another $3B has moved there in 2020.

Have a great week!

Click here if you would like to learn more about your options and if we can assist you with your wealth management, investment, and retirement planning.

This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.

Market Brief January 21 2020

Market Brief January 21 2020

The Dow, S&P, and Nasdaq indexes all finished up last week Dow up 1.8%, S&P 2.0%, and Nasdaq 2.3%. The indices continued to rise from solid economic reports coming from the housing, retail, and pricing reports, as well as, easing tensions between the U.S. and China. With the trade news somewhat behind us, focus turns towards corporate profits as Q4 earnings season is underway.

This week includes 58 more earnings reports by S&P 500 companies, along with home sales data and jobs numbers keeping investors attention. U.S. existing home sales have missed three consecutive months, so Wednesday’s report will be important. Inflation remains a major headwind for investors.

Caution ahead. The yield curve inversion in 2019 still lingers. As market history proves, the inverted yield curve foresees recession up to 2 years following the initial inversion. Wage growth and corporate earnings. As wages continue to rise and unemployment remains historically low, this puts companies in a tough position. As the expenses rise, the dilemma is whether to pass the cost to the customer, or eat it. Either way, this can lead to a negative outlook for stocks, as companies either will have shrinking margins, or contribute to inflation by way of rising prices. This is worth keeping an eye on going forward.

Have a great week!

Click here if you would like to learn more about your options and if we can assist you with your wealth management, investment, and retirement planning.

This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.

Market Brief January 13 2020

Market Brief January 13 2020

Happy Monday to you all! The markets quickly pushed aside the idea of increasing tension between the United States and Iran, as cooler heads prevailed. Global news is now instantly spread and processed by the markets, and being an election year, further geopolitical volatility should be expected. During an address last Wednesday, President Trump gave no signal of further escalation. The Dow, S&P, and Nasdaq indexes all finished up last week Dow up 0.6%, S&P 0.9%, and Nasdaq 1.7%.

The markets shook off the Middle East tensions and lower payroll figure released on Friday, the U.S. economy added 145,000 jobs in December. Despite being weaker than expected, the jobs report extended the streak of gains to 111 months in a row. The decade wrapped up with 10 straight years of job growth as well. Wage inflation reported a 2.9% increase year-over-year, outpacing current inflation levels. Europe economic reports were positive last week. The Eurozone’s December services PMI’s were revised higher and industrial production rose higher.

U.S. inflation, retail, and housing reports fill up the week of economic news. 2019 holiday sales were a record, so the attention is focused on the Retail Sales report released on Thursday.

From the Stock Trader’s Almanac – the first five trading days of the new year were positive, indicating an increased likelihood of an up year for the market. The Santa Claus rally was also positive. Whenever both the Santa Claus rally and first week of trading are positive, the Dow has gained an average 11.5% for the year and rose 80% of the time.

Year-to-date index performance will begin tracking once we have a month under our belt in 2020. The Oklahoma/Ohio State National title was suppose to be tonight! Since we don’t have a dog in the fight, we will take the Tigers to win the championship! And for the sports nuts reading this, I am referring to the Orange and White tigers!

Have a great week!

Click here if you would like to learn more about your options and if we can assist you with your wealth management, investment, and retirement planning.

This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.

Market Brief January 6 2020

Market Brief January 6 2020

Happy First Monday of 2020! 2019 was a great year for returns in the market, and I am certainly looking forward to what this next year brings. Following the down year in 2018, all the indexes finished above 20%. The Dow up 22%, S&P up 29%, and the Nasdaq up 35%. The year never felt that way. Many headlines focused on negative sentiment to the trade war, manufacturing struggles, and the inverted yield curve. Despite these concerns, a strong consumer, low unemployment, and a Fed willing to reduce interest rates pushed markets higher.

As we enter 2020, we are reminded that not only trade war, but real wars can also cause market corrections and possible recessions. This unfolded last week with tension between the U.S. and the Middle East quickly escalating. Other points of caution ahead include the political environment in the U.S., as well as, the U.K. and China, and the impact rising wages for workers will have on corporate earnings. Lastly, the repo market remains a question mark as to how the economy and markets respond to the Feds actions. A similar buying spree pushed markets on a tear in 1999, followed by the dot com bust.

The markets never act as expected. So where danger lies, is typically determined after the fact. I don’t make market predictions, the market will go up or down, and volatility along the way is to be expected. Planning around the timing of market fluctuations is not sound for reaching goals. A comprehensive strategy that offers options, organization, and structure can provide the best chance for accomplishing financial goals. Whatever your goals may be for 2020 and beyond, the most sound advice is to work with someone to help you get there!

Have a great week!

Click here if you would like to learn more about your options and if we can assist you with your wealth management, investment, and retirement planning.

This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.

Market Brief Dec 23 2019

Market Brief Dec 23 2019

Finish strong! The market continues strength into the holiday season and finishing the year with new record highs! The Dow, S&P, and Nasdaq indexes all finished up last week Dow up 1.1%, S&P 1.7%, and Nasdaq 2.2%. The indices reach for record all-time highs as trade sentiment remains positive and economic reports remain strong from both the U.S. and China. Caution of weakness remain with Europe’s slowing economy and domestic manufacturing.

What a year it has been! Coming off a terrible Q4 of 2018, the question was how far or how much more could the market be beaten down. The market took a few more punches the first week of January, then the snap back rally began. Pullbacks came and went in May, August, and September, stirred up by the trade war uncertainty with China, and perceived economic weakness globally. All pullbacks were short lived, following the Fed’s stance of easing rates, which occurred three times in 2019, and the strength of the U.S. consumer. The theme for the year really is the U.S. Not just companies who primarily have revenues in the U.S, but the consumer and U.S. economy as well. Companies with more than 50% of revenues in the U.S. achieved much better earnings reports than companies selling globally. And the U.S. consumer is strong; unemployment is low, wages are rising, and debt delinquencies are low.

So how about them markets?! Year-to-date index performance; Dow up 22.0%, S&P up 28.5%, and Nasdaq up 34.5%. These numbers are great across the board, given recession fears were news headlines the entire year, impeachments news dominated the latter part of the year, and a trade war with China was never meant to end! Excellent match-up on the last MNF game of the season tonight, for entertainment purposes to keep the pick ’em streak alive its the Pack over the Vikings!

Thanks for reading this market brief, have a fun and safe holiday season, see you in 2020!

Click here if you would like to learn more about your options and if we can assist you with your wealth management, investment, and retirement planning.

This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.

Market Brief December 16 2019

Market Brief December 16 2019

The Dow, S&P, and Nasdaq indexes all finished up last week Dow up 0.49%, S&P 0.77%, and Nasdaq 0.93%. The markets continued to march higher following the final Fed meeting of the year and trade optimism heading into the weekend. The Fed closed the final meeting of the year leaving interest rates unchanged due to favorable economic conditions, strong jobs reports, and low inflation. The U.S. and China reached a phase one trade deal on Friday, easing concerns on the tariff war.

The S&P 500 index has now closed higher in 9 of the last 10 weeks. The Fed meeting last Wednesday went pretty much as expected, no surprises. Fed Chairman Jerome Powell made clear that policies would remain accommodating, positive language for stock market bulls. Powell also reiterated that it would take a significant and sustained rise in inflation for the U.S. Central Bank to raise interests rates in the near term.

Economic reports coming out this week include Tuesday’s Housing Starts for November to give a pulse on the housing market. Wednesday will see the mortgage application report, also provide insight to the housing market, as will Thursday’s existing home sales report. And Friday, Q3 GDP numbers and University of Michigan Consumer Sentiment reports are released. Further details on domestic growth and consumer strength.

Year-to-date index performance; Dow up 20.6%, S&P up 26.4%, and Nasdaq up 31.6%. Stay positive, there are good things going on! Jobs and wages are moving up, companies and consumers continue to benefit from tax cuts, consumer balance sheets look healthy, and serious (90+ day) debt delinquencies are down substantially from post-recession highs. We have a good match-up on MNF tonight, for entertainment purposes to keep the pick ’em streak alive its the Saints over the Colts!

Have a great week! Good luck with your last minute holiday shopping 😉

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Market Brief Dec 9 2019

Market Brief Dec 9 2019

It’s that time of year, yes, the Elf on the shelf is watching! Hopefully, he can add some magic fuel to the stock market before year-end! The Dow and Nasdaq indexes fell slightly, 0.13% and 0.10%, while the S&P index finished the week with a small gain of 0.16%. The week started with a slide, and the markets almost fully recovered by the end of the week. Driving the markets higher on Friday was the jobs report that came out, way above estimates for November.

The jobs data dispelled worries about potential trade-war-induced recession. Aiding the jobs report was the return of General Motors strikers, accounting for 46,000 of the 266,000 gain. Furthermore, upward revisions totaled 41,000 for the two previous months. The unemployment rate came in at 3.5%. Before 2019, the last time the unemployment rate was this low was 1969. The ISM Manufacturing index report signaled a reading of 48.1, indicating a 4th month in the contraction phase as trade uncertainty lingers. The ISM non-manufacturing index remained in expansion territory for the 118th consecutive month. Employment wages also grew at 3.1% over the prior year. Black Friday retailers cashed in on the strong employment situation, as online sales jumped 19.6% year-over-year.

Since October 11, when President Trump acknowledged there were some details needed to finalize Phase One of the trade deal to be concluded. The Fed also announced its program to increase liquidity that same day. Since then, the S&P has risen 7%. The response to Sunday’s tariff deadline could pose a volatile week ahead, as markets have been very sensitive to the latest trade news.

Year-to-date index performance; Dow up 20.1%, S&P up 25.5%, and Nasdaq up 30.5%. What else? This year’s Atlantic hurricane season was the 8th most on record since 1851, I should have been in the catastrophic business! The number of banks on the FDIC list of “problem banks” stood at 55 in Q3 2019. For perspective, the post-crisis high was 888 in Q1 2011. The U.S. Agriculture Department has indicated a 33% decline in Christmas tree production, from 30 million in 1977, to 20 million earlier this decade. Fun fact, it takes nearly a decade to grow a 5-to-6 foot tree! That is some tall inventory to keep around. Awful match-up on MNF tonight, for entertainment purposes to keep the pick ’em streak alive its the Eagles over the G-men! The Oklahoma/Ohio State National title collision course that I predicted in October is still possible but I would say unlikely, as LSU is playing the best football out of the final 4.

Have a great week!

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Market Brief December 2 2019

Market Brief December 2 2019

Did you eat enough turkey and pumpkin pie? The Dow, S&P, and Nasdaq indexes all finished higher ending the holiday shortened week; last week Dow up 0.6%, S&P 1%, and Nasdaq 1.7%. The indices reach for record all-time highs, while November notched the best month since June for the markets.

Black Friday came and went, with estimates of $7.4B in sales. Today’s estimates for cyber Monday are in the $9.5B range. I hope that covers everyone on your list! Friday also welcomed a drop in the markets after President Trump signed a bill from Congress supporting the Hong Kong protesters, adding a new layer to the trade war complexity. Other global data is pointing towards stabilization; Chicago PMI, German retail sales, and Japanese industrial production. On the home front, U.S. Q3 GDP estimates of 2.1% exceeded previous targets of 1.9% growth. Durable goods orders rose as well, and housing continued to outperform expectations, new home sales are up 31.6% from a year ago.

Looking at this week, there is heavy economic reporting beginning today with the ISM purchasing managers index for November. The estimate is 49.3, which is below a reading of 50, which signals contraction in the manufacturing sector. Employment data is due for release on Wednesday, giving a pulse for the number of job gains in November. And Friday ends the week with the University of Michigan Consumer sentiment Index for December, a further reading on the strength of the consumer.

Year-to-date index performance; Dow up 15.6%, S&P up 20.6%, and Nasdaq up 24.2%. What else? The American Farm Bureau Federation reported a 24% increase in U.S. farm bankruptcies. President Trump is leading the way in digital advertising, spending $35.4M for 2020 election ads. Hedge Fund out! According to eVestment, hedge funds have had 8 consecutive months of client redemption’s through October 2019, year-to-date outflows total $87.9B, and fund closures have outpaced fund launches now for 4 straight years! If you are looking to move, the three metro areas with the fastest home price growth in the past twelve months are Phoenix, Charlotte, and Tampa, all in relatively low-tax states; the three areas with the slowest price growth are San Francisco (the only city with an outright price decline), Chicago, and New York, all in high-tax states. We have a great match-up on MNF tonight, for entertainment purposes to keep the pick ’em streak alive its the home team Seahawks over the Vikings!

Have a great week!

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Market Brief November 25 2019

Market Brief November 25 2019

Happy Thanksgiving! A quick market brief for your reading pleasure before you pay the annual homage and devour a bird later in the week! Speaking of turkeys, the market was acting like one last week responding to continued political and trade news. The Dow, S&P, and Nasdaq indexes all finished down last week; Dow down 0.5%, S&P 0.3%, and Nasdaq 0.2%. The indexes briefly touched new highs before retreating by the end of the week. The drop ends the 6 week win streak. Despite concern overseas, notice that the U.S. is not alone in the stock market rally. The Euro Stoxx 50 index is up 19.4% in dollar terms so far this year (as of last Friday close) while Japan’s Nikkei is up 18.2%.

Reaction sentiment indicates there is a stabilization of U.S. manufacturing data, German manufacturing is still in contraction but at a 5-month high, and despite new orders falling, business confidence has turned positive for the first time in 4 months. Housing remains strong. Existing home sales climbed again, home building permits and housing starts posted their best gains in 2019. The building permits surged to the highest levels since August 2007. Overall, easier financial conditions, low unemployment, wage growth, and housing are all supporting the stability of the current economy.

Upcoming week highlights include consumer confidence report on Tuesday, which is expected to rise, and Wednesday’s preliminary Q3 Gross Domestic Product report. Year-to-date index performance; Dow up 19.5%, S&P up 24.1%, and Nasdaq up 28.4%. What else? I feel like a broken record in holiday snowstorms as Colorado is bracing for another storm. So, if you were dreaming of a white Thanksgiving, you might get it this year! Great match-up on MNF tonight, for entertainment purposes to keep the pick ’em streak alive its the high flying Ravens over the Rams!

Safe travels and good times this Thanksgiving week!

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Market Brief Nov 18 2019

Market Brief Nov 18 2019

Not a lot of market and economic changes over the last week. Much of the same continued geo-political and impeachment unrest. The Dow, S&P, and Nasdaq indexes all finished up last week Dow up 1.2%, S&P 0.9%, and Nasdaq 0.8%. The indices reach for record all-time highs. Recent recession concerns have calmed down as trade talks have simmered. Slowdowns from industrial production is drawing the latest concern. However, employment remains strong and the consumer continues to spend. The Friday retail sales data was the latest reading of consumer spending available and showed an October bounce-back after September saw a decline; the first in seven months. 

Industrial production continued to slow in October, as the GM strike dragged on. Manufacturing, excluding autos, had a smaller decline of 0.2% in October. It’s also important to remember that we had a similar slowdown in 2015-16 during the oil price crash, and no recession materialized. Looking ahead to next week, economic data is expected in housing, leading indicators, consumer sentiment and jobs. These are all direct measures of consumer health, which has been the cornerstone of recent market returns. At 3.97%, mortgage delinquencies fell to the lowest level in nearly 25 years, and those in serious delinquency fell to 1.81%, the lowest since Q4 1985! University of Michigan Consumer Sentiment Index showed a small gain over the prior month. It was the third consecutive month of improvement and further indication that the U.S. consumer is on solid footing.

Year-to-date index performance; Dow up 20.1%, S&P up 24.5%, and Nasdaq up 28.7%. What else? Redfin reported that U.S. homeowners are residing in their homes for roughly 13 years, five years longer than the average in 2010, according to The Wall Street Journal. The lack of turnover is contributing to the low inventory levels of homes for sale, now near its lowest point in 37 years, according to CoreLogic Inc. Economists point out that many baby boomers are staying healthier later in life and not downsizing. For entertainment purposes only, we will take the Chiefs over the Chargers in Mexico.

Thanks for reading, have a great week!

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Market Brief Nov 11 2019

Market Brief Nov 11 2019

First off, thank you to all our veterans out there who served us, and our country for all those years.

The markets continue the win streak. All indexes finished up for the week, Dow up 1.2%, S&P up 0.9%, and the Nasdaq up 1.1%. That makes 3 up weeks in a row for the Dow, 5 for the S&P, and 6 for the Nasdaq. Trade optimism, corporate earnings, and economic data continue to support the indices track to all-time highs.

U.S. ISM non-manufacturing exceeded expectation as both new orders and employment jumped noticeably. This report relieved concerns that the manufacturing sector slowdown would ripple into other areas of the economy. Last week there were initially signs of progress with the China/U.S. Phase 1 trade talks. By the end of the week, President Trump indicated possibly being further away than initially perceived from an agreement. The seesaw continues. The preliminary University of Michigan Consumer Sentiment report showed a slight gain over September. If this reading holds, that is 3 months in a row of improved readings, further indicating the strength of the U.S. consumer and financial confidence.

Looking ahead, more of the same headlines loom: trade war, 2020 election, and economic readings this week that include mortgage applications, retail sales, industrial production, and Germany’s Q3 GDP report.

Year-to-date index performance; Dow up 18.7%, S&P up 23.4%, and Nasdaq up 27.7%. What else? According to Generations United, 2.6 million grandparents are the primary caretaker for their grandchildren. Read the headlines with caution, since the last recession, fears of these events were also suppose to lead to another recession: another wave of home foreclosures, a disaster in commercial real estate, the Fiscal Cliff, Greece potentially leaving the Eurozone, German bank defaults, or even the inverted yield curve earlier this year. Historically, stocks have performed well following three successive interest rate cuts (1975, 1996 and 1998). Data from LPL Financial indicates that the S&P 500 Index has risen an average of 10% six months after said rate cuts and 20% a year out, according to MarketWatch. Time will tell how this one plays out! According to Bloomberg, U.S. consumers have worked diligently to get their fiscal houses in order since the 2008-2009 financial crisis. The S&P/Experian Consumer Credit Default Index stood at a reading of 0.93% on 9/30/19, well below its all-time high of 5.51% on 5/31/09 and below its 1.85% average since the inception of the index on 7/31/04. That is more “fiscal” power to the people!

OK sports fans, we have a great match-up on MNF tonight. For entertainment purposes to keep the pick ’em streak alive its the Seahawks on the road over the undefeated 49ers! Bama lost, but I still see them sneaking into the college playoff picture.

Have a great week!

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This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.