What to do When Receiving Life Insurance Money

Life Insurance Money

Recently, I contributed to an article about receiving life insurance money. The Q&A is below followed by a link to Melanie’s full article on the website Meet Fabric.

So do you have an order of things/checklist that people should go through when getting a life insurance payout? 

Receiving a life insurance payout is no different than a financial plan without life insurance proceeds. People have current needs to address. These vary from paying-off debt, building an emergency fund, saving for retirement, replacing the income of the deceased, paying for the final expenses of the deceased, etc. As a financial advisor providing comprehensive planning, I look at everything for my clients. So upon receiving a life insurance payout, the families needs are addressed first. Next, a go-forward plan is built upon their current situation.

For example, the proceeds going to a family who is debt free and the surviving spouse is still able to work. The priority may be to fund a college education account and increase retirement savings. In another example, the surviving spouse is a stay-at-home parent, and carrying mortgage and credit card debt. For this family, it may be in their best interest to pay-off the debt and use the remaining funds to support day-to-day living expenses. 

Also, one of the stories included someone who received a life insurance payout and kept the money in the interest-bearing account from the company and not get a check into her account. Do experts typically advise leaving it in the interest-bearing account, or taking it out and investing it instead?

Upon the death of a loved one, we encourage the beneficiary to receive the proceeds directly. This allows the beneficiary to pay final expenses and evaluate where the remaining proceeds should be allocated. If the beneficiary already has a comfortable savings account balance, and has a long-term investment plan, than yes, investing is a better option for long-term growth than an interest bearing account. Albeit, taking on more risk.


Do you have any tips for someone that is really emotional and maybe not in the best mental space to make financial decisions? How long should they wait to make a decision? How can they do what’s “best” for their money while dealing with grief? 

There is always emotional grievance. That is why hiring a financial professional to guide you through this period is essential. Your advisor will make decisions that exclude the emotions. Part of the planning I do for clients is to run updated scenarios, with the top industry software, of their financial position including the proceeds. This removes the emotions of planning and allows the family to make the best decisions, taking into account multiple options with their proceeds. As a fiduciary, I always serve with my clients best interests, whether a death in the family has occurred or not. It is important to work with a financial advisor who operates under the fiduciary standard of care. 

Follow this link to read the entire article: https://meetfabric.com/blog/what-should-you-do-with-a-life-insurance-benefit

Follow this link to learn more about life insurance.

Click here if you would like to learn more about your options and if we can assist you with your wealth management, retirement, and insurance 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 – 2020 Mid-Year Review

Market Brief 2020 Mid-Year Review

Dog days of summer have arrived. For 2020, it feels like the dog days arrived in March. From the moment the pandemic began to spread, to stay-at-home orders, to lock-downs, to protest rallies, to reopening phases, and back to more restrictions… what a year, and we are only halfway home. Didn’t even mentions the murder hornets! Let’s take a minute to catch our breath and see where we have been, where we are, and where we will go. Currently, we are in the midst of earnings season. Big name stocks will report second quarter earnings this week. Last week the main indexes finished mixed. The Dow up 2.3%, S&P up 1.25%, and Nasdaq down 1.1%. The S&P 500 outperformed the Nasdaq index by the widest margin since February 2016. The markets were mainly buoyed by progress of a virus vaccine.

What Happened?

The year started off strong through mid-February. Early cases and the fast spread of the coronavirus took hold in Asia and quickly jumped country borders to become a worldwide pandemic. Just about a month from the market peak in February came the market lows in March, a 33.9% drop for the S&P index. In just a few weeks, the U.S. economy erased 7 years of employment gains. 30 million Americans lost jobs, driving unemployment as high as 22% in April. By June, the unemployment rate hovered around 14%. Still extremely high, but significantly lower from 2 months prior.

In March, the Fed stepped in and provided a backstop to the equity markets. Stabilizing and possibly adding turbo to the economy via stimulus for individuals and businesses. The pandemic accelerated tech disruption. It changed how companies reach consumers, how supply chains work, how to deal with remote employees, and still build their brands.

Where Are We Today?

Year-to-date index performance; Dow down 6.54%, S&P down 0.2%, and Nasdaq up 17.0% through the close on Friday. Last week, Treasury Secretary Mnuchin said the Trump administration and Senate leadership are discussing a new stimulus bill. The end of July is the target time frame as the previous stimulus benefits are ending. The housing market reports are exceeding expectation. Current metrics show a shortage of existing home inventory, limited housing labor to build new homes, and a shortage of entry level homes for the first time home buyer. Historically low mortgage rates help boost the housing demand. Labor income across the board is surging and consumer spending is rebounding.

The markets are in fairly good position today. Much of the strength is attributed to the Fed and swift implementation of monetary policy. With interest rates near zero, investors are willing to pay for future earnings. Growth stocks have done well, value stocks have lagged. When the economy improves and interest rates rise, growth stocks will be challenged by high valuations. Communities have begun to re-open. The U.S. seems to have chosen independence over lock-down. This has led to a recent uptick in coronavirus cases. Deaths due to the virus have decreased as health care has gotten smarter about how to handle symptomatic cases. The resurgence of hiring and end of mass layoffs indicate the job market is recovering. While the decreasing layoffs and increasing hires offer hope, the reopening process has been trending in the wrong direction.

Where Are We Going?

It’s election season. From here on out, politics will headline media reports. Snippets and quotes from leadership on both sides will sway the markets. Bigger than the election is the Fed’s actions. Interest rates are low and likely to remain low for a very long time. This creates a scenario of easy lending and the opportunity for trillions of dollars to remain invested in the market. The future months will measured by the resurgence of the coronavirus, how quickly a vaccine can be developed, another round of monetary stimulus, and the upcoming election. If you thought the first half of 2020 was a roller coaster, the second half might be just as wild! Take care and be safe.

Market Brief’s are taking a summer hiatus, see you at the end of August!

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 July 6, 2020

Market Brief July 6 2020

Welcome back after the holiday weekend. The markets welcomed us back with a big day today, all indexes were in the green! This positive trend is a continuation from the previous week. Last week all indexes finished up. The Dow up 3.3%, S&P 4.0%, and Nasdaq 4.6%. The markets had a short week due to the holiday observance on Friday. Virus cases continue to rise. The Fed remains extremely helpful. And election season is right around the corner.

Last Week

The markets shrugged off the rising Covid cases. The S&P 500, Dow, and Nasdaq all finished their best quarters in decades. Manufacturing data was better than expected. June payroll was released last Thursday morning, and the positive report sent stocks soaring. The report indicated that 4.8 million jobs were added in the month of June. The U.S. reported a daily record of 52,000 new cases in a 24-hour period. The Fed continues to pump money into the economy. Chances of another round of stimulus are high. And progress for a Covid vaccine get better each day.

The Week Ahead

The markets are in a historically bullish time frame, June 26-July 11. Historically, the market gains 6.3% over this time frame. If history repeats, the indexes could hit all-time highs. On the flip side, it is an election year. The markets tend to fall prior to the election. The beginning of earnings season could help buck the trend as quarterly reports will be released in mid-July.

The U.S. labor market has recouped nearly 1/3 of March and April job losses, but employment fractures linger. Initial jobless claims have provided one of the most current pictures of the state of the economy and have stayed stubbornly high. Continuing claims came in at 19 million last week, so many Americans are still receiving unemployment benefits. This suggest s that either the first wave of job losses continues, or businesses that have re-opened are beg inning to shutter. With the increase of Covid cases, another lock-down is not likely, but delayed progression is inevitable.

Year-to-date index performance; Dow down 9.5%, S&P down 3.1%, and Nasdaq up 13.8% through the close on Friday.

Have a great week. Stay cool and safe!

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 30 2020

Tiger King Market Update

Yes, Tiger King fans, this post is for you. Since the Tiger King rage went viral last week, the market has also hit record setting performance days! Is it safe to say Joe Exotic should be the next Fed Chairman? It’s not a bear market, not a bull market, but a Tiger market! I’m all in … to the show, not stocks…

OK, time to get serious. Market dip to market rip! The Dow soared by 21% over a 3-day span, closing up 12.77% for the week. The largest 3-day gain since October 8, 1931, during the Great Depression. The Dow’s weekly finish was the best weekly gain since 1938, despite losing 4% on Friday. The S&P and Nasdaq indexes also finished up for the week, 10.26% and 9.05%, respectively. The indexes ignored the record weekly unemployment claims of 3.28 million! A record setting number in it’s own right. The U.S. also passed China last week with the number of virus infection cases. The saving grace for markets last week was the announced $2.2 trillion relief plan.

Despite the market bounce that began last Tuesday and continued today, large and fast rallies are frequent characteristics of longer-term bearish periods in the market. The eventual recovery from this public health crisis will be gradual, similar to the financial crisis recovery. The recovery is still unknown, and according to Dr. Anthony Fauci, “the virus makes the timeline,” and that will probably determine the markets recovery as well.

The Bailout

Stimulus, bailout, virus relief, The CARES act, whatever you want to call, came to the rescue at the end of last week. The fiscal policy pumps trillions into the economy, aimed at providing liquidity to households and businesses. These include IRS checks, a major expansion in unemployment benefits, as well as a broad combination of grants, loans, and loan guarantees for businesses (large and small), hospitals, schools, and state and local governments. This stimulus is designed to buffer the economy in the short-term, as the virus hit the hard and fast across the country. Long-term the effects may linger for some time. The upcoming quarterly earnings season will provide investors better guidance on how hard companies have been hit.

The Week Ahead

Policymakers’ huge support has helped stabilize risk, but long-term market stability and declining volatility hinges on the apex of coronavirus infections being in the rear-view mirror. Economic reports for the week include a slew of data including manufacturing and employment. This week’s focus will be on the jobless claims number, showing a more clear picture of the economic state.

Year-to-date index performance; Dow down 24.2%, S&P down 20.96%, and Nasdaq down 16.4%. Volatility remains high and historically market rallies come back after volatility drops to normal range.

Have a safe week and remember to go for a walk outside (after finishing the Tiger King season on Netflix)!

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 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.

Coronavirus and Panic for Life Insurance

Life insurance and the panic for life insurance

The events of the last two months have brought plenty of craze to the insurance world, specifically life insurance. I am using this post to outline and provide clarity around life insurance planning during this time time of a virus outbreak.

People are looking for life insurance due to the coronavirus.
Should people panic and buy life insurance?

The best practice for whether to buy insurance depends on your individual needs. Despite coronavirus, you either need a policy to protect family, business, estate, etc., or you do not. The coronavirus certainly can cause you to think about your plan, as there is no cure at the moment, which draws concern to folks without a plan in place. However, the virus is no different from any other health scare or accident – cancer, heart attack, car crash – all these events will prompt you to rethink your plan and get coverage in place.

Follow this link to learn more about the different types of life insurance.

What should people know and look for that are interested in
buying a policy right away due to the pandemic?
 

Complete an application while you are healthy. If you wait and contract illness, the insurance companies will review your medical records and may have hesitation to approve your policy at the preferred rating. Worse yet, hospitalization or death could seriously impact your chances of an approved policy.

Are there any exclusions people should be aware of? 

If you are healthy and need coverage get it. Do not wait. The younger and healthier you are, the more favorable the cost. It is uncertain how the underwriters at the insurance companies will consider an illness, such as the coronavirus, when reviewing insurance applications. 

What could keep someone from being able to get a life
insurance immediately?
How long should they expect it to take
for the policy to start?

Insurance policies are largely based on your health and age. If you are old and have poor medical history, chances of getting a policy approved would be difficult. Previous medical history with life threatening illnesses, such as cancer, can also impact your ability to obtain coverage. Having bad habits, such as using tobacco, or a bad driving record, such as multiple DUI’s, also impact your ability to get an approved policy at the best rate. Policies can start at the time of application with what is referred to as “Temporary Life Insurance Coverage”. This coverage begins at the time of application, so the applicant has coverage while waiting for the full underwriting process to be complete. Applications can take a week to as long as a couple of months, depending on the applicant’s medical and lifestyle background. Also worth noting, if the applicant has recently traveled abroad to the virus hotspots, this too could cause a postponed application. Ultimately, the insurance companies are looking at the applicant and asking the question, how big of a risk is this person?

Click here if you would like to learn more about your life insurance options and 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.

Life Insurance – How to Make Sure You Have Enough

Life insurance - How to make sure you have enough

It is often recommended to get life insurance when you are younger, but what if you do not buy enough coverage early on and later become wealthier or have a bigger family than you imagined? What options should you consider and when should you start planning? 

If you need more life insurance coverage as your family grows, buying an additional policy is often the solution. Most people will have life events occur which prompt the need for more life insurance, such as a growing family. And there is no reason not to apply for another life insurance policy to make up for the coverage your family needs. I often find couples I work with who have small starter policies in place. After evaluating their needs, it is often determined they are under-insured, and they want more coverage. Term insurance is a great option for families looking for the lowest cost coverage that provides protection for a certain amount of years. If the couple is looking for a permanent life insurance plan, there are options such as universal life and whole life insurance products to explore. As for the timing of the life insurance purchase, the younger and healthier you are, the lower the premium because you are less of a health risk to the insurance company. That is why if you need the coverage, the best time is right now.

Why is group life insurance not necessarily the best way to go? What are the downsides with group life insurance? 

Group life insurance is a great benefit to have from an employer. However, group life insurance has a couple disadvantages, such as, amount and portability. In terms of amount, group life insurance coverage often equates to 1-2 times annual salary, and most people need much more coverage than that for their family and/or estate. If you leave your current job to go to a new company or start a new career, the coverage does not necessarily go with you. Group plans also have rising premium cost. Whether it is annually or every 5 years, the cost of insurance goes up and it is not always covered by the employer. I recently helped a couple lower their insurance cost by applying for individual policies because over the policy term, it would be cheaper to have an individual policy.

What approach should people take to avoid being under-insured when it comes to life insurance coverage? How often should they review and how should they determine an ideal amount of life insurance coverage?

The approach people should take to avoid being under-insured when it comes to life insurance coverage is to have their plan reviewed at least annually. Life events and changes happen over the years and if you stay on top of your coverage needs, you will always have adequate coverage. There is no ideal amount of life insurance, nor rule of thumb. Everyone has a different need and desire for coverage. Working with an experienced financial advisor or insurance professional who can provide a life coverage analysis is the best way to know if you have the right amount of coverage for your family and estate.

Click here if you would like to learn more about your options and if we can assist you with your life insurance 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 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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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 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!

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 October 28 2019

Market Brief Oct 28 2019

Happy Halloween! And the markets either have a trick up the sleeve, or a treat for those invested! The Dow, S&P, and Nasdaq indexes all finished up last week Dow up 0.7%, S&P 1.2%, and Nasdaq 1.9%. The indices reach for record all-time highs, while much of the commentary is pointing to global economic downturn. The lesson here is that stocks are acting better in the face of weak economic data, such as the September ISM reading and weak German production. Stock markets are a leading indicator, and economic data reports are looking backwards. So higher prices are factoring in strong earnings, favorable monetary policy, and (current) positive sentiment from the U.S./China trade war.

As of Friday, the federal-funds futures market priced in a 93.5% probability of a quarter-point rate cut. The Fed aims to keep the economy growing, even with a 50-year low unemployment rate of 3.5%. So what’s with the further rate cut? Well, the central bank’s inflation target is 2%, and current growth is below that target. And it is not just the U.S. participating, globally, there have been 40 rate cuts in the past 3 months. Global rates, however, may have reached a floor, as Sweden’s central bank (also the oldest central bank) hinted to a rate increase in December. Time will tell.

And with all that said, the Citigroup Market Sentiment indicates a reading closer to market panic (vs euphoria). Looking at this week (besides Fed meeting on Wednesday), it is a heavy economic reporting week with Consumer data Tuesday, employment on Wednesday, and manufacturing data on Friday.

Year-to-date index performance; Dow up 15.6%, S&P up 20.6%, and the Nasdaq up 24.2%. What else? Colorado was hit with the second snowfall on the Front Range. So, if you were dreaming of a white Halloween, you might get it this year! We don’t have a great match-up on MNF tonight, but for entertainment purposes to keep the pick ’em streak alive, it’s the Steelers over the Fins! World Series prediction was off with America’s pastime, Astros in 5, and the Oklahoma/Ohio State National title collision course doesn’t seem likely after the Sooners lost this weekend.

Have a fun and safe Halloween week! And turn back the clock Saturday night!!

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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.

Mid Year 2019 Market Brief

Mid Year 2019 Market Brief

Those were some fireworks – what a ride the first half of 2019 has been! After all the news and media reports of volatility, recession, and slowdown concerns, the indexes performed quite well. The Dow ended last week up 15.4% YTD, S&P up 19.3%, and Nasdaq index is up 18.2% – not bad at all! Those are great annual returns. Q1 2019 began with a big rally, followed by a sharp sell-off in Q2 due to the trade war and global economic slowdown concerns. Since the lows in May, the stock market rallied 7.05% in June. There is no Trump tax bump to help corporate earnings this year, so growth is not negative, but growth is slowing and there was fear of more slowing. Early in the 2nd quarter investors worried the central bank would raise rates too fast, and later in the quarter the Fed signaled it may actually lower rates.

Last week, the U.S./China truce led to all time highs across the indexes. President Trump said the 25% tariff on Chinese imports is off the table. Ending the week was a very strong, and unexpected, jobs report pointing to the fact that the Fed, as a result, may not lower interest rates as much. The financial markets are still pricing in a Fed rate cut at the end of July, but 3 more cuts in 2019 is unlikely after the strong jobs report. The addition of 224k jobs in June was the strongest report since January. This signals to investors that recession worries are overblown.

This weeks attention turns to the Fed minutes which will be released on Wednesday and Thursday’s U.S. Consumer Price Index reading to gauge the consumer strength. Last week was a short week for the stock market with the holiday, returns for the indexes include S&P up 1.6%, Dow up 1.2%, and Nasdaq dropped 2.1% as of end of day Friday last week. The hot weather is finally here, enjoy and be safe!

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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.

Market Drivers in 2019

2019 Financial Planning
What will next year hold?  The stock market has been on a great run recovering from 2009 recession lows.  How will the economic landscape move going forward?  We do not know exactly, but there are 3 contributors we are keeping an eye on:
1) Interest Rates – the expectation is that rates will rise in 2019, Fed funds rates are currently pegged to increase by end of 2019.  This impacts the consumer and business borrowing costs, but also raises the interest rate of savings accounts.  For example, savings at 0.2% pay $100/year on a $50,000 account.  Some banks are currently paying 2.35%, which is a $1,175/year payout.
2) Tax Events – more tax cuts seem unlikely with Democrats controlling the house.  However, the President can find other ways to lower costs, and that is by reducing tariffs, essentially lowering trade costs for companies, therefore, not passing on the higher costs to consumers.
3)  Wage Increases – higher wages can result in inflation concern, which can be offset by more production.  Hand-in-hand is business investment in equipment, improving productivity, and allowing for potential wage hikes.  If businesses have confidence in the economy they will make the investment.  Higher wages have a strong correlation with consumer spending, and more consumer spending encourages businesses to invest.

Are you planning your personal finances for 2019?  Get a jump on it today!  Budget planning, investment review, insurance coverage review, we can help you.  Click here if you are not sure how to begin your plan for the upcoming year or if you would like a second opinion of your current plan.

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.