Schwartz Financial­ Weekly Commentary 6/26/17

The Markets

It has been a very good year, so far.

Through the end of last week, the Standard & Poor’s 500 Index posted 24 record highs and delivered returns in the high single digits. The MSCI World ex USA Index was up more than 11 percent, and the MSCI Emerging Markets Index gained more than 17 percent.

After reading those numbers, many people would assume bond markets are down for the year. After all, stock and bond markets tend to move in different directions. Zacks explained,

“Stock and bond prices usually move in opposite directions. When the stock market is not doing well and becomes risky for investors, investors withdraw their money and put it into bonds, which they consider safer. This increased demand raises bond prices. When stocks rally and the risk seems justified, investors may move out of bonds and into stocks, driving stock prices up further.”

That hasn’t been the case recently. Bonds have been delivering attractive returns, too. The Bloomberg Barclay’s U.S. Aggregate Bond Index is up 2.9 percent year-to-date, while its Global Aggregate Bond Index is up 4.7 percent, and its Emerging Markets Aggregate Bond Index is up 5.5 percent.

So, why are stock and bond markets both showing attractive gains for the year?

There are a number of possibilities. Zacks described one of the most straightforward. “When stocks are doing well but investors remain skeptical about how long they will do well, stock and bond prices can rise together. This is because investors continue to put money in stocks but also put money into bonds just in case the stock market drops.”

There is nothing wrong with a little skepticism.

Data as of 6/23/17 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor’s 500 (Domestic Stocks) 0.2% 8.9% 15.4% 7.5% 13.2% 5.0%
Dow Jones Global ex-U.S. 0.1 12.8 14.2 -1.0 6.1 -1.1
10-year Treasury Note (Yield Only) 2.1 NA 1.7 2.6 1.6 5.1
Gold (per ounce) 0.0 8.3 -0.5 -1.5 -4.4 6.8
Bloomberg Commodity Index -2.0 -9.0 -9.9 -16.4 -9.4 -7.3
DJ Equity All REIT Total Return Index 0.0 6.0 4.7 9.5 11.2 6.4
S&P 500, Dow Jones Global ex-U.S., 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.

If you live in Norway, Denmark, Iceland, Switzerland, or Finland, then you’re among the happiest people in the world. On the other hand, if you reside in Sierra Leone, Bulgaria, Egypt, Palestinian Territories, or Tunisia, you’re among the least happy, according to the United Nation’s World Happiness Report 2017.

The report relies on six measurements to “explain happiness differences among countries and through time.” These include:

  • Income (GDP per capita)
  • Healthy life expectancy (Relative to other nations)
  • Social support (Having someone to count on in times of trouble)
  • Generosity (Charitable donations)
  • Freedom (To make life choices)
  • Trust (Defined as the absence of corruption in business and government)

While measuring ‘happiness’ or ‘satisfaction with life’ may seem frivolous to some, others believe it should be a cornerstone of governance. The report’s authors explained, “Happiness is increasingly considered to be the proper measure of social progress and the goal of public policy.”

For instance, Norway, which is an oil-rich nation, is the happiest country in the world even though oil prices are relatively low. The World Happiness Report 2017 suggests the country “achieves and maintains its high happiness not because of its oil wealth, but in spite of it. By choosing to produce its oil slowly, and investing the proceeds for the future rather than spending them in the present, Norway has insulated itself from the boom and bust cycle of many other resource-rich economies.”

The United States ranks 14th in the world. While our country’s income and healthy life expectancy remain high, keeping us at the top of the list, other factors have caused Americans’ happiness to deteriorate. The study found “less social support, less sense of personal freedom, lower donations, and more perceived corruption of government and business.” America’s issues, the report opines, are social, rather than economic.

Weekly Focus – Think About It

“Brigadier General Wilma Vaught spearheaded…the Women in Military Service for America Memorial, a museum-style memorial on the outskirts of Arlington National Cemetery…There are the thigh-high black leather boots worn by enlisted women to protect their legs from mosquitos before they were allowed to wear pants. The cape of a nurse working at a frontline casualty cleaning station in World War I. Army-issue glasses painted with red nail polish worn by the only African-American WAC unit dispatched overseas in World War II—sent to sort letters under the motto ‘No Mail, Low Morale.’”

— National Geographic, May 2017

Value vs. Growth Investing (6/23/17)

Name 1-Week YTD 4-Week 13-Week 1-Year 3-Year 5-Year
US Market 0.26 9.74 1.89 4.56 18.05 9.40 15.19
US Core 0.31 10.70 1.96 4.35 20.44 10.39 16.29
US Growth 1.11 16.71 2.68 8.73 20.37 10.64 15.32
US Large Cap 0.35 10.65 2.04 4.79 18.66 9.94 15.10
US Large Core 0.61 12.34 2.38 4.92 22.69 11.37 16.71
US Large Growth 1.03 17.78 2.64 9.03 21.13 11.62 15.72
US Large Val -0.67 2.53 1.03 0.52 12.36 6.83 12.93
US Mid Cap -0.10 8.35 1.38 3.95 15.97 8.29 15.80
US Mid Core -0.47 8.16 0.90 2.86 14.11 8.31 15.52
US Mid Growth 1.01 14.15 2.32 7.46 17.37 7.94 14.17
US Mid Val -0.93 2.95 0.88 1.62 16.47 8.55 17.77
US Small Cap 0.38 4.74 1.86 3.89 17.81 6.86 14.41
US Small Core -0.33 3.32 1.13 3.25 18.20 6.98 14.77
US Small Growth 2.29 13.01 4.25 9.33 21.10 7.75 14.34
US Small Val -0.86 -1.78 0.10 -0.95 13.73 5.74 14.02
US Value -0.73 2.31 0.94 0.63 13.31 7.12 13.99
 ©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:

Women Must Be Proficient With Money

Some questions for the ladies:

Do you know where your insurance policies are, how much money you owe on your mortgage, what investments you hold? How about the names and phone numbers of your accountant, lawyer and financial planner?

If you don’t know the answers, there is a pressing need to learn them.

Women frequently face greater financial challenges than men. Eight in 10 women will become the sole financial decision-maker at some point in their lives often because of divorce or widowhood. Women typically live seven years longer than men, but earn, on average, 25 percent less. The average age of widowhood is 56.

Women who are unprepared may not fare well. Older women are more than twice as likely as men to be impoverished in their retirement years. Three in four people older than 65 who receive Social Security income are women.

Unfortunately, according to Neale Godfrey, author of Making Change, “Women are dis-empowered when it comes to handling money.”

“In fact, 85 percent of women do financial planning in crisis,” she says. “The time to learn the Heimlich maneuver is not when you’re choking at the dinner table; it’s before you sit down and eat.”

Why are so many women financially unprepared?

“We were raised to be dis-empowered with money,” says Godfrey. “We were raised by women from the Donna Reed generation. People didn’t talk about money. There was someone else in our life to handle that part. We weren’t given the tools.”

Every woman can develop the necessary tools. You need to be involved in deciding how money is spent, whether it’s earmarked for retirement, college, kids, the trip or the house.

“Women feel that we have do everything,” says Godfrey. “You don’t have to do it (financial planning), you just have to know about it.”

The goal of becoming financially educated and competent may seem daunting. However, take one step at a time. Learn one aspect of your financial situation each week, and check it off the list when you feel well-versed.

  • The location of all bank accounts and safe deposit boxes
  • Details of all insurance policies, the agent’s name, and when the premiums are due
  • Cash value of each policy and how to borrow money against any of them
  • Monthly payments on all mortgages and the amount that is still owed on them
  • Location of all receipts needed for tax purposes
  • Accountant’s name and an understanding of all joint tax returns
  • Investments and their value – meet with the financial adviser
  • Amount of monthly bills
  • Details of the will – meet with the lawyer
  • Balances on all credit cards
  • Outstanding debts
  • Spousal benefits of any pension
  • Details of any trusts
  • Location of all important papers, including the will and whether a living will exists

Be proactive, not reactive. The best time to master these skills is before a crisis hits. Responses like, “I always let my husband do that,” or “I have no clue where that information is” will not keep you afloat if you find yourself alone.

Start taking control. Visualize your financial empowerment and work toward it.


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.


* Consult your financial professional before making any investment decision.


* To unsubscribe from our “market commentary” please reply to this e-mail with    “Unsubscribe” in the subject line, or write us at “”.

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