Schwartz Financial Weekly Commentary 9/5/17

The Markets

When it comes to economic growth, the government doesn’t measure twice. It measures three times.

Last week, the Bureau of Economic Analysis revised its initial estimate that the gross domestic product (GDP), which is the value of all goods and services produced by a country or region, grew by 2.6 percent during the second quarter of 2017. The second estimate indicated the economy grew by 3.0 percent from April through June. The third and final GDP estimate for the second quarter will become available near the end of September.

The New York Times reported:

“If the economy were to sustain the current pace of expansion, it would be a significant uptick from the 2 percent annual growth rate that has mostly prevailed since the recovery began. A difference of a single percentage point may not sound like much, but the stakes are huge in a $19 trillion economy. The acceleration could also help lift wage growth, which has been frustratingly slow for years despite steady hiring, a surging stock market, and rising home prices.”

While second quarter’s growth spurt was welcome news, it was overshadowed by the devastation wrought by Hurricane Harvey in Texas and across a swath of the Gulf Coast. Initial estimates of the property damage inflicted by the storm stand between $30 and $40 billion, reported Yahoo! Finance.

Historically, hurricanes have impacted U.S. economic growth and Harvey is likely to be no different. An economist from Goldman Sachs explained the usual progression of economic consequences to Yahoo! Finance:

“…major hurricanes in the past have been associated with a temporary slowdown in retail sales, construction spending, and industrial production, as well as a pickup in jobless claims…However, GDP effects are ambiguous, as the level of economic activity typically returns to its previous trend – or even somewhat above – reflecting a boost from rebuilding efforts and a catch-up in economic activity displaced during the hurricane.”

We send our thoughts and prayers to all of those affected by Hurricane Harvey.

Data as of 9/1/17 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor’s 500 (Domestic Stocks) 1.4% 10.6% 14.1% 7.3% 12.0% 5.2%
Dow Jones Global ex-U.S. 0.7 17.4 16.0 0.6 5.5 -0.5
10-year Treasury Note (Yield Only) 2.2 NA 1.6 2.4 1.6 4.6
Gold (per ounce) 2.7 13.9 0.8 0.9 -4.8 7.0
Bloomberg Commodity Index 2.0 -2.9 3.5 -12.1 -10.3 -6.5
DJ Equity All REIT Total Return Index 0.7 7.0 2.2 8.5 9.7 6.5
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.

If you don’t live near your parents and older family members, you may want to learn more about Social Security’s Representative Payment Program (RPP). The Center for Retirement Research at Boston College (CRRBC) published a brief in August that provided some insight into the need for the program:

“Many older individuals with cognitive impairment, including the vast majority of people with dementia, need help managing their finances. For retirees receiving Social Security benefits, the Representative Payee Program can serve as one source of this help. In the Representative Payee Program, a retiree’s benefit is sent to another person (often a relative) who spends it on the retiree’s behalf and submits records to Social Security documenting that the expenditures were in the beneficiary’s best interest.”

Currently, not many people take advantage of the program. More than 10 percent of people who are age 65 or older have dementia, but just 9 percent of that group has a payee.

That doesn’t mean retirees aren’t getting the help they need. Most are, according to CRRBC. Ninety-five percent of people with dementia have someone to help – an unimpaired spouse, nursing home staff, or adult children. Two-thirds have assigned power of attorney to a trusted party.

If your parents are older and you haven’t talked with them about how to handle issues related to finances and aging, it may be a good time to open a dialogue. Daily Caring suggests you, “Approach the conversation around the most important considerations for older adults: safety, freedom, peace of mind, social connection, and being able to make choices.”

Weekly Focus – Think About It

“Best thing about being in your 90s is you’re spoiled rotten. Everybody spoils you like mad and they treat you with such respect because you’re old. Little do they know, you haven’t changed. You haven’t changed in [the brain]. You’re just 90 every place else…Now that I’m 91, as opposed to being 90, I’m much wiser. I’m much more aware and I’m much sexier.”

–Betty White, American actor and comedienne

Value vs. Growth Investing (9/1/17)

Name 1-Week YTD 4-Week 13-Week 1-Year 3-Year 5-Year
US Market 1.56 11.80 0.23 2.34 16.36 9.26 14.31
US Core 1.48 12.36 0.85 1.87 17.01 10.37 15.38
US Growth 2.23 19.58 0.59 3.09 19.40 10.04 14.42
US Large Cap 1.48 13.15 0.56 2.87 17.45 9.84 14.29
US Large Core 1.45 14.36 1.51 2.54 19.34 11.48 15.88
US Large Growth 2.12 21.15 0.65 3.32 20.77 10.88 14.85
US Large Val 0.79 4.63 -0.50 2.63 12.36 7.12 12.22
US Mid Cap 1.56 9.50 -0.48 0.89 13.79 7.91 14.74
US Mid Core 1.44 9.37 -0.45 0.37 11.66 7.86 14.53
US Mid Growth 2.28 16.04 0.51 2.39 15.86 7.57 13.22
US Mid Val 0.87 3.25 -1.64 -0.21 13.75 8.21 16.50
US Small Cap 2.41 5.05 -1.08 1.02 12.72 7.04 13.20
US Small Core 1.89 2.89 -1.71 -0.23 11.12 6.94 13.30
US Small Growth 3.40 13.46 0.10 2.65 15.29 8.14 13.10
US Small Val 1.91 -0.86 -1.68 0.58 11.42 5.97 13.10
US Value 0.88 3.97 -0.81 1.92 12.62 7.28 13.16
 ©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:

Have we seen the beginning?

For the first time in all the months I have been forwarding our monthly 401k breakouts to clients and prospects, I have called for a new equity/non-equity allocation for 401k positions.  Is this the beginning of the pull back from market highs, we will not know that answer for some time.  It could be a short term event or not.  If you had contacted our office asking for this free information, over the holiday weekend you would have received the below customized for your 401k at work.  It is not too late to maximize what could and should be the largest asset you own besides your home.  Contact our office and let us help you get the most out of your 401k plan.

Neil Andersen Sept 403b_Page_1



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.


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