7 Rules of Investing

From 1977 to 1990, Peter Lynch ran one of the most successful mutual funds ever, posting an average annual return of 29%.

There are many principles of investing Lynch has espoused over his career. I thought you might be interested to see seven of them in a special infographic I’ve created. They are the same principles we follow here at Schwartz Financial.

I hope you find this infographic insightful. As always, please feel free to call us at 215-886-2122 if you ever have any questions about your own investment portfolio!

Have a great week!7 Rules of Investing

Client Partnership Agreement

Does your advisor put in writing from the beginning what yours and our expectations should be? WE DO and have done for over 30 years.

MLS Client_Partner2016_Page_1MLS Client_Partner2016_Page_2

“Five Ways to Get More Out of Your Social Security Benefits” 

Many people don’t realize there are ways to potentially maximize your Social Security benefits.  It’s worth taking some time to educate yourself on your options, as doing so can help you secure more income for retirement!

To help, I’ve included a special infographic with this email called, “Five Ways to Get More Out of Your Social Security Benefits.”  Please take a few minutes to look it over.  Then, let me know if you have any questions, or if you would like to sit down and review your Social Security options together!

I hope you find this infographic helpful.  Please feel free to call at 215-886-2122 to schedule an appointment.

Five Ways to Get More Out of Social Security

Schwartz Financial Weekly Commentary 7/2/18

The Markets

There’s a bear in China – and it’s not a panda.

The Shanghai Stock Exchange (SSE) Composite Index, which reflects the performance of all shares that trade on the Shanghai Stock Exchange, dropped into bear market territory last week, reported CNBC. The Index has fallen more than 20 percent from its previous high. It appears some investors saw an opportunity and bought the dip since the SSE Index bounced higher last Friday, gaining more than 2 percent.

Slower economic growth and rising trade tensions were responsible for much of the red ink in China, reported Barron’s, but the Chinese government may be playing a role, too:

“What’s got global market watchers worried is that China’s stocks are sliding in tandem with its currency, the renminbi or yuan…That suggests China is using the exchange rate as a weapon. ‘The most effective way for China to retaliate [against] rising U.S. tariffs is to weaken the yuan,’ according to the July Bank Credit Analyst. That could roil financial markets, however. The dual declines in China’s equity market and currency are raising concerns of a repeat of 2015. Treasury strategists at NatWest Markets recall that the drop in the yuan that summer sparked severe equity market losses, including a 10.5 percent correction in the S&P 500.”

That may explain, in part, why U.S. Treasury bills were so popular last week, although it probably didn’t hurt the yield on short-term Treasuries was roughly equivalent to the dividends paid by the Standard & Poor’s 500 Index.

The coming weeks may deliver more excitement than Fourth of July fireworks.

 

Data as of 6/29/18 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor’s 500 (Domestic Stocks) -1.3% 1.7% 12.3% 9.7% 11.0% 7.8%
Dow Jones Global ex-U.S. -1.1 -4.9 4.9 2.9 3.8 0.5
10-year Treasury Note (Yield Only) 2.9 NA 2.3 2.3 2.5 4.0
Gold (per ounce) -1.5 -3.6 0.6 2.1 0.1 3.0
Bloomberg Commodity Index 0.1 -0.9 7.5 -4.6 -7.0 -9.3
DJ Equity All REIT Total Return Index 0.9 1.3 4.9 9.4 9.0 8.3
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, djindexes.com, 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.

from asia with love. Sometimes the hottest trends in other regions of the world are similar to those in the United States and sometimes they’re very different. Here are three recent chapters in the book of Asian cultural trends.

Improving your future wife’s ROI. Single men in the Land of the Rising Sun are trying to increase their value on the marriage market by taking parenting classes. The lessons include developing empathy for future spouses by wearing pregnancy suits. The Atlantic reported, “The man in the traditional kimono is having difficulty…The weight of the belly strains his back. Simply walking around the room – a party room in a Tokyo condo building – is more like lumbering. Lying down and getting up again is a struggle. The rest of the men in the Ikumen class laugh as he tries to adjust to the new reality.”

Shopaholics rejoice. ‘Shopstreaming’ is a little bit e-commerce and a little bit live streaming, reports Trendwatching Quarterly. “Asians are social shoppers – they rely on social media recommendations for their purchase decisions. For many, the ability to talk to sellers and buyers can build trust and allay fears about counterfeit goods. In Southeast Asia, 30 percent of e-commerce sales are started on social media and completed in messaging apps…”

It’s not just puppy love. Newly minted middle classes in developing nations are turning to pets for comfort and companionship. In emerging markets in the Asia Pacific region, Spire Research reports, “Changes in consumer lifestyles and rising disposable income are driving acceptance for pets and boosting the entire pet-related industry along the way.”

Trends are entertaining. As in any industry, they also can help business owners unearth expansion opportunities and help asset managers discover companies with potential.

Weekly Focus – Think About It

“I learned to make my mind large, as the universe is large, so that there is room for contradictions.”

Maxine Hong Kingston, Chinese American author

Value vs. Growth Investing (6/30/18)

Name 1-Week YTD 4-Week 13-Week 1-Year 3-Year 5-Year
US Market -1.43 3.08 0.65 3.71 14.70 11.65 13.31
US Core -1.36 -1.27 -0.11 1.71 8.53 10.45 12.40
US Growth -1.92 12.03 1.62 7.71 26.23 14.27 16.70
US Large Cap -1.29 2.88 0.50 3.57 14.87 12.15 13.52
US Large Core -1.24 -1.97 -0.32 1.08 7.56 11.09 12.48
US Large Growth -1.58 12.34 1.65 7.01 27.24 15.21 17.72
US Large Val -0.80 -2.68 -0.03 0.47 8.76 9.68 10.04
US Mid Cap -1.57 3.01 1.12 3.12 13.83 10.33 12.92
US Mid Core -1.51 -0.45 0.62 1.62 10.47 8.68 12.41
US Mid Growth -2.12 8.50 1.45 4.98 20.54 10.70 13.41
US Mid Val -1.06 0.90 1.17 2.56 10.23 11.50 12.85
US Small Cap -2.38 5.33 0.86 7.02 15.52 10.19 12.11
US Small Core -2.37 3.26 0.34 6.28 12.62 9.39 11.78
US Small Growth -2.58 11.57 1.43 7.89 23.70 11.84 13.66
US Small Val -2.15 1.31 0.79 6.85 10.40 9.16 10.76
US Value -0.95 -1.67 0.28 1.33 9.24 10.05 10.69
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:

Independence Day – JFK Speech

Everyone knows that July 4th is “America’s birthday.”  It’s the commemoration of our national independence.  A day for fireworks and fun, patriotism and pie.  A celebration of America itself.

But in a sense, the Fourth of July is even more than that.

Two-hundred and forty-two years ago, a group of Americans gathered together to sign one of the most extraordinary documents ever written.  I’m referring, of course, to the Declaration of Independence.  Historians debate which day the signing actually took place, but in the grand scheme of things, details like that don’t matter.

What matters is what came next.

A Trumpet Call of Freedom

President John F. Kennedy explained it best in a speech he gave on July 4, 1962.1 Standing inside Independence Hall, the same place the founders gathered almost two centuries before, he said:

[The Declaration of Independence] was, above all else, a document not of rhetoric but of bold decision.  It was, it is true, a document of protest – but protests had been made before.  It set forth grievances with eloquence – but such eloquence had been heard before.  But what distinguished this paper from all the others was the final irrevocable decision that it took – to assert the independence of free States in place of colonies, and to commit to that goal their lives, their fortunes, and their sacred honor. 

That Declaration, whose yellowing parchment and fading, almost illegible lines I saw in the past week in the National Archives in Washington, is still a revolutionary document.  To read it today is to hear a trumpet call.  For that Declaration unleashed not merely a revolution against the British, but a revolution in human affairs.  Its authors were highly conscious of its worldwide implications, and George Washington declared [later]that liberty and self-government everywhere were, in his words, ‘finally staked on the experiment entrusted to the hands of the American people.’ 

This prophecy has been borne out.  For 186 years this doctrine of national independence has shaken the globe – and it remains the most powerful force anywhere in the world today.  There are those struggling to eke out a bare existence in a barren land who have never heard of free enterprise, but who cherish the idea of independence.  There are those who are grappling with overpowering problems of illiteracy and ill-health and who are ill-equipped to hold free elections.  But they are determined to hold fast to their national independence. 

In 1861, Abraham Lincoln spoke in this hall, [paying] a brief but eloquent tribute to the men who wrote, who fought for, and who died for the Declaration of Independence.  Its essence, he said, was its promise not only of liberty ‘to the people of this country, but hope to the world…hope that in due time, the weights should be lifted from the shoulders of all men, and that all should have an equal chance.’  

The theory of independence is old as man himself, and was not invented in this hall.  But it was in this hall the theory became practice; that the word went out to all, in Thomas Jefferson’s phrase, that “the God who gave us life, gave us liberty at the same time. 

When word first came out that the United Colonies were henceforth free and independent States, it didn’t stop at this country’s borders.  As if carried on the wind, it flew across oceans and over mountains.  It rang in valleys and swept across desert plains.  It penetrated walls and fortresses and iron curtains.  It launched revolutions and birthed democracies.  It was a trumpet call that reached every corner of the world – one that still echoes to this day.

When we celebrate the Fourth of July, we’re observing more than just our nation’s birthday.  We’re commemorating an event that shook the world off its old axis.  We’re participating in a grand, ongoing experiment.  An experiment to maintain, to protect, to uphold certain truths – that all people are created equal.

This Independence Day, take a moment to look over at your friends and family as they look to the skies.  And when the first glint of rockets reflects in their eyes, ask them if they hear it.  The word.  The prophecy.  The trumpet call.

Because there’s no sound more beautiful.

On behalf of all of us at Schwartz Financial, I wish you a safe and happy Independence Day!

1 “President Kennedy at Independence Hall, 4 July 1962,” John F. Kennedy Presidential Library & Museum.  https://www.jfklibrary.org/Asset-Viewer/RrjaDhW5B0OYm2zaJbyPgg.aspx

Regards,

Mike

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 “mike@schwartzfinancial.com”.

Schwartz Financial Weekly Commentary 6/25/18

The Markets

What time is it?

The yield curve may be the pocket watch of economic indicators. It’s been around for a long time and it’s often right, but not always.

The yield curve is the difference between the interest paid on two-year government bonds and 10-year government bonds. In normal circumstances, an investor would expect to earn a higher rate of interest when lending money to a government for 10 years than when lending money for two years because there is more risk associated with lending for a longer period of time.

When the yield curve flattens or inverts, it suggests a shift in investors’ expectations. Financial Times explained:

“The slope made up of bond yields of various maturities has a record of predicting recessions that would make even the savviest econometrician turn pea-green with envy. It is not perfect, but the curve has become flat and inverted – when short-term bond yields are actually higher than long-term ones – ahead of most economic downturns in most major countries since the second world war.”

In the United States last week, the difference between yields on 2-year Treasuries (2.56) and 10-year Treasuries (2.90) flattened. The gap narrowed to 34 basis points (a basis point is one-hundredth of one percent). The change reflects higher short-term rates, courtesy of the Federal Reserve. It also suggests tariffs and trade issues have made bond investors more pessimistic about prospects for U.S. growth, reported The Wall Street Journal.

Globally, the yield curve is inverted. “The average yield of bonds in JPMorgan’s broadest Government Bond Index that mature in seven to 10 years last week slipped below the average yields of bonds maturing in one to three years for the first time since 2007…that indicates that investors have a pretty grim view of where the world economy and equity markets are heading,” reported Financial Times.

We’re keeping an eye on developments in the financial markets and will keep you informed.

 

Data as of 6/22/18 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor’s 500 (Domestic Stocks) -0.9% 3.0% 13.2% 9.1% 11.9% 7.7%
Dow Jones Global ex-U.S. -1.2 -3.8 6.5 2.2 4.9 0.5
10-year Treasury Note (Yield Only) 2.9 NA 2.1 2.4 2.6 4.2
Gold (per ounce) -1.3 -2.1 1.5 2.3 -0.3 3.7
Bloomberg Commodity Index -0.4 -1.0 10.0 -4.4 -7.1 -9.2
DJ Equity All REIT Total Return Index 2.4 0.3 3.4 7.8 9.7 7.9
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, djindexes.com, 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.

You knew carrots were good for your eyes, and a newly discovered use for the orange veggie may help farmers and/or food processing companies find a new source of revenue. That’s because carrots can make concrete stronger – and so do sugar beets.

Engineers at Lancaster University in the United Kingdom are infusing nano platelets from discarded carrots and root vegetable peels into concrete. This strengthens the material in an environmentally friendly way. Durability + Design reported:

“These vegetable-composite concretes were also found to out-perform all commercially available cement additives, such as graphene and carbon nanotubes and at a much lower cost…The root vegetable nano platelets work both to increase the amount of calcium silicate hydrate – the main substance that controls the performance of concrete – and stop any cracks that appear in the concrete.”

The Economist reported adding 500 grams of platelets reduced the amount of cement required to make a cubic foot of concrete by 10 percent. In addition to reducing the amount of building material needed for a project, carrot concrete also reduces CO2 emissions.

Another natural material is getting a makeover, too. Researchers at the University of Maryland are refining processes that make wood stronger than steel, reported Scientific American. It may compete with titanium alloys and have applications beyond building:

“A five-layer, plywood-like sandwich of densified wood stopped simulated bullets fired into the material – a result Hu and his colleagues suggest could lead to low-cost armor. The material does not protect quite as well as a Kevlar sheet of the same thickness, but it only costs about 5 percent as much, he notes.”

If demand for carrots (and sugar beets and wood) increases and supply remains constant when we may see prices for those goods increase.

Weekly Focus – Think About It

“A person with a new idea is a crank until the idea succeeds.”

–Mark Twain, American author and humorist

Value vs. Growth Investing (6/22/18)

Name 1-Week YTD 4-Week 13-Week 1-Year 3-Year 5-Year
US Market -0.80 4.57 1.59 5.05 16.00 11.13 13.89
US Core -1.05 0.10 0.04 3.32 9.77 9.79 12.93
US Growth -0.67 14.22 4.58 8.75 27.22 14.03 17.43
US Large Cap -1.00 4.23 1.21 4.73 15.71 11.61 14.01
US Large Core -1.31 -0.74 -0.51 2.55 8.37 10.36 12.94
US Large Growth -0.95 14.14 4.01 7.97 27.39 14.91 18.32
US Large Val -1.05 -1.89 -0.85 1.64 10.06 8.99 10.40
US Mid Cap -0.52 4.66 2.22 4.85 15.89 9.79 13.69
US Mid Core -0.54 1.08 1.45 3.59 12.39 8.13 13.09
US Mid Growth -1.06 10.85 3.92 6.41 22.78 10.34 14.32
US Mid Val 0.09 1.98 1.10 4.49 12.30 10.77 13.57
US Small Cap 0.41 7.89 3.72 9.23 19.39 9.92 13.07
US Small Core 0.28 5.77 2.68 8.62 16.54 9.27 12.77
US Small Growth 0.04 14.52 5.22 9.59 26.65 11.60 14.63
US Small Val 0.94 3.54 3.17 9.45 15.09 8.70 11.69
US Value -0.68 -0.72 -0.18 2.75 10.92 9.36 11.16
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:

Soul Surfer

On October 31, 2003, an aspiring professional surfer named Bethany Hamilton went onto the ocean near her home in Hawaii.  As she had done many times before, she lay down on her board and trailed her left arm through the warm water, watching nearby sea turtles.

That’s when the shark came.

Within seconds, what started as an idyllic day turned into a nightmare.  The shark attacked Bethany’s arm.  Some nearby friends pulled her from the water and fashioned a tourniquet before an ambulance arrived to rush her to the hospital.  Bethany’s father was already there, scheduled to have surgery that morning, but he promptly gave up his place in the operating room for his daughter.  To save her life, doctors were forced to amputate.

Why am I sharing this harrowing story?  That’s what I wondered when someone first shared it with me.  But the truth is, it’s not harrowing, but inspiring ­– because of what came after.

Whenever disaster happens, it would be perfectly normal and understandable for someone to “cut their losses” and move on.  But not Bethany.  The incident may have taken her arm, but it could not take her love of surfing.  She returned to the water less than a month later, surfing week after week on a modified board her father built.

Twenty months later, in June of 2005, she won her first national championship.

Today, experts consider her one of the top surfers in the world.

Bethany not only fulfilled her dream of becoming a professional surfer, but began sharing her story and outlook on life as a writer and inspirational speaker.  In interviews and her autobiography, Soul Surfer, her faith and can-do attitude inspired thousands.

Bethany’s story highlights how it’s possible to overcome almost any obstacle.  The trauma and loss of limb she suffered did not stop her from pursuing her passion.  If anything, it only drove her more.  It is this attitude that has made Bethany such an inspiration to so many.  Through determination and personal faith, Bethany achieved her dreams.  She also used adversity as a platform to raise money for disabled children.  Her foundation, Friends of Bethany, reaches out to amputees to provide the support they need to overcome adversity in their own lives.

As we travel on the road to our life goals, I hope we can remember Bethany’s example whenever adversity rears its ugly head.  I hope we can remember that on that road, adversity is a speed bump, not a stop sign.  Most of us will never experience what she did, but we will all experience times that will test our resolve.

When those times happen, remember Bethany – and get back in the water.

Regards,

Mike

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 “mike@schwartzfinancial.com”.

7 Steps to Bring Your Estate Plan Up to Date After The New Tax Law

  1. Create or Update Your Will
  2. Review Any Trusts and Update All Beneficiaries
  3. Review Your Power of Attorney’s
  4. Create or Review Your Healthcare Power of Attorney
  5. Gift in the Most Advantageous Way
  6. Check in With Your State’s Estate Laws
  7. Review Your Life Insurance