Schwartz Financial ­Weekly Commentary 5/1/17

The Markets

It was a good week to own stocks.

Not all financial news was good news last week, but that didn’t prevent U.S. stock markets from moving higher. Barron’s reported on the good news:

“This past week, welcome political news from Europe, a batch of stellar corporate-earnings reports, and a concrete tax proposal to cut corporate and some personal rates sharply gave the bull even more reasons to rally. By Friday’s close, the Dow Jones industrials and other market measures were standing near all-time highs.”

Overall, corporate earnings were quite strong during the first quarter of 2017, according to FactSet. With 58 percent of the companies in the Standard & Poor’s 500 Index reporting in, earnings are showing double-digit growth for the first time since 2011.

That’s exhilarating news for investors.

Economists had less to celebrate. The Commerce Department’s first estimate indicated the U.S. economy got off to a slow start during 2017. Gross domestic product (GDP), which measures the value of all goods and services produced, came in below expectations and grew at the slowest rate in three years. Bloomberg reported:

“The GDP slowdown owes partly to transitory forces such as warm weather and volatility in inventories, which supports forecasts for a rebound as high confidence among companies and consumers and a solid job market underpin growth. Even so, the weakness at car dealers could weigh on expansion, and further gains in business investment could depend on the extent of policy support such as tax cuts.”

Keep an eye on Congress and the Federal Reserve. Changing fiscal and monetary policies are expected to have a significant influence on markets and the economy.


Data as of 4/28/17 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor’s 500 (Domestic Stocks) 1.5% 6.5% 14.9% 8.5% 11.3% 4.9%
Dow Jones Global ex-U.S. 2.3 9.5 9.6 -0.7 3.1 -1.1
10-year Treasury Note (Yield Only) 2.3 NA 1.8 2.7 1.9 4.6
Gold (per ounce) -1.2 9.3 0.8 -0.8 -5.2 6.5
Bloomberg Commodity Index 0.1 -4.0 -1.8 -15.4 -9.9 -7.0
DJ Equity All REIT Total Return Index -2.3 3.0 6.8 9.8 9.8 5.0
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, Barron’s,, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
what did you say?
If you find yourself tuning-out in loud restaurants, asking people to repeat themselves frequently, or cupping an ear in an effort to better understand what a friend or colleague is saying, then you may be interested to learn that hearing loss is one of the most prevalent health issues for older Americans. It ranks third, right behind arthritis and heart disease, according to the Hearing Loss Association of America (HLAA).

Hearing loss isn’t just an issue for older Americans, though. Twenty percent of American teenagers experience hearing loss, and it’s a significant issue for combat soldiers and veterans. The Washington Post reported:

“A study by the Journal of General Internal Medicine, which covered over 90,000 veterans of Afghanistan and Iraq seeking VA care from fiscal 2006-2007, may serve as a general guide. Among male veterans seeking VA care, 16.4 percent to 26.6 percent suffer from serious hearing loss and tinnitus, and 7.3 percent to 13.4 percent of female veterans are affected. How much of this is combat-related or due to environmental factors such as background noise, training, and even medication is unknown.”

Remarkably, many people ignore their hearing loss. Just 16 percent of Americans (age 69 or younger) with hearing issues use hearing devices. It’s a decision that can have serious consequences since studies have linked hearing loss and cognitive decline, reported NPR.

A new generation of hearing devices, called personal sound amplification products (PSAPs), may help reduce the stigma attached to wearing hearing aids. They’re designed to look like stylish fashion accessories or ear buds, and they’re controlled with smartphone apps.

The real selling point may prove to be that PSAPs are far less expensive than traditional hearing aids.

Weekly Focus – Think About It

“Most of the successful people I’ve known are the ones who do more listening than talking.”

Bernard Baruch, American financier and statesman

Value vs. Growth Investing (4/30/17)

Name 1-Week YTD 4-Week 13-Week 1-Year 3-Year 5-Year
US Market 1.46 7.02 1.05 4.93 18.40 10.18 13.54
US Core 1.00 7.65 0.80 5.70 20.34 11.01 14.70
US Growth 2.40 11.94 3.09 7.93 18.14 11.08 13.04
US Large Cap 1.63 7.46 1.13 5.47 18.23 10.49 13.52
US Large Core 1.09 8.28 0.76 6.32 21.07 11.52 15.14
US Large Growth 2.69 13.04 3.55 8.92 18.45 12.06 13.55
US Large Val 1.10 1.62 -0.86 1.41 15.23 7.87 11.95
US Mid Cap 1.02 6.61 0.86 3.91 18.06 9.56 13.76
US Mid Core 0.61 7.15 0.81 4.70 17.37 9.94 13.72
US Mid Growth 1.57 9.68 2.02 5.65 16.30 8.41 11.54
US Mid Val 0.96 3.01 -0.24 1.30 20.59 10.27 16.08
US Small Cap 1.02 3.91 0.74 2.40 21.17 8.55 12.88
US Small Core 1.25 3.50 1.16 3.04 22.10 9.12 13.15
US Small Growth 1.66 7.15 1.31 4.24 20.31 8.05 11.86
US Small Val 0.15 1.14 -0.31 -0.18 20.84 8.43 13.59
US Value 1.00 1.86 -0.70 1.28 16.71 8.40 12.90
 ©2004 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) is not warranted to be accurate, complete or timely. Morningstar is not responsible for any damages or losses arising from any use of this information and has not granted its consent to be considered or deemed an “expert” under the Securities Act of 1933. Past performance is no guarantee of future results.  Indices are unmanaged and while these indices can be invested in directly, this is neither a recommendation nor an offer to purchase.  This can only be done by prospectus and should be on the recommendation of a licensed professional.

 Office Happenings:

Overcoming the Odds #3: Elizabeth Blackwell

There’s a good chance you’ve never heard of Elizabeth Blackwell before, but she holds a prominent place in history as the first woman to ever receive a medical degree in the United States.

Blackwell was born in England in 1810.  From an early age, her parents encouraged her to read and learn as much as she could.  As a result, she developed strong opinions about many of the pressing issues of the day.

She also sought to educate other young women just as she had been, founding The Cincinnati English and French Academy for Young Ladies.  Her family had moved to America by this time, and by the time she was in her thirties, she began to take a keen interest in politics, especially women’s rights.

But above all, Blackwell wanted to study medicine.

As you can probably guess, there was a lot of resistance to the idea of a female doctor in the 1800s.  It was perfectly natural for a woman to become a nurse, of course, but not a physician.  A letter written to Ms. Blackwell by a prominent doctor sums up the prejudices she had to face:

“… [no] female could become acceptable to us, either as a teacher or practitioner of medicine … In the responsible duties of relieving ills which flesh is heir to, it is appropriate that man may be the physician and woman the nurse.” 

But Blackwell refused to get discouraged.  She saved up the $3,000 she would need for medical school, saying:

“My mind is fully made up.  I have not the slightest hesitation on the subject; the thorough study of medicine, I am quite resolved to go through with.  The horrors and disgusts I have no doubt of vanquishing.  I have overcome stronger distastes than any that now remain, and feel fully equal to the contest.  As to the opinion of people, I don’t care one straw personally.” 

Despite feeling that women were not intellectually capable of becoming doctors, the faculty at one medical school in Philadelphia allowed their male students to vote on whether to admit her.  It would only take one “NO” vote to reject her.  Fortunately, every student voted yes.

After several years of study both in the United States and England, Blackwell became a practicing physician.  But even with the advantage of a degree, she still faced almost constant opposition.  Many male doctors refused to work with her, and her dreams of becoming a surgeon ended when she was forced to have her left eye removed due to an infection.

But Blackwell continued to work and study.  She opened her own practice, established a medical school for women, delivered lectures, and published a book on women’s health.  And she continued to fight for women’s rights.

“It is not easy to be a pioneer—but oh, it is fascinating!  I would not trade one moment, even the worst moment, for all the riches in the world.” 

Blackwell’s dedication to becoming a physician continues to benefit women today.  As of 2012, women now make up 1/3rd of all the doctors in the USA, and the number continues to rise.  All because Elizabeth Blackwell had a goal, stuck to it, and refused to let prejudice and adversity stand in her way.

No matter who we are, we all have goals in life.  Hopefully most of us won’t ever have to overcome the same kind of barriers Blackwell did.  But no matter who we are or what we want, we, too, can achieve our goals if we follow her example.  If we are resolute and persistent, we can do whatever we dream of doing.  We, too, can overcome the odds.

And as to the opinions of other people, well … who cares?


Michael L. Schwartz, RFC®, CWS®, CFS

P.S.  Please feel free to forward this commentary to family, friends, or colleagues.  If you would like us to add them to the list, please reply to this email with their email address and we will ask for their permission to be added.

Michael L. Schwartz, RFC, CWS, CFS, a registered principal offering securities and advisory services through Independent Financial Group, LLC., a registered broker-dealer and investment advisor.  Member FINRA-SIPC. Schwartz Financial and Independent Financial Group are unaffiliated entities.

This information is provided for informational purposes only and is not a solicitation or recommendation that any particular investor should purchase or sell any security. The information contained herein is obtained from sources believed to be reliable but its accuracy or completeness is not guaranteed.  Any opinions expressed herein are subject to change without notice.  An Index is a composite of securities that provides a performance benchmark.  Returns are presented for illustrative purposes only and are not intended to project the performance of any specific investment.  Indexes are unmanaged, do not incur management fees, costs and expenses and cannot be invested in directly.  Past performance is not a guarantee of future results.

* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.

* The DJ Global ex US is an unmanaged group of non-U.S. securities designed to reflect the performance of the global equity securities that have readily available prices. 

 * The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

 * Gold represents the London afternoon gold price fix as reported by the London Bullion Market Association.

 * The DJ Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

 * The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.

 * Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

 * Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

 * Past performance does not guarantee future results.

 * You cannot invest directly in an index.

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