Schwartz Financial Weekly Commentary 8/7/17

The Markets

Who’s been buying shares of company stock?

Since the start of the bull market in 2009, U.S. companies have been buying their own stock. Stock buybacks peaked during the first three quarters of 2016 and have dropped off sharply since then, reports Financial Times citing a report from Goldman Sachs.

Companies participate in stock buyback (a.k.a. share repurchase) programs to improve shareholder value. For example, if company management believes a company’s shares are undervalued, it can buy shares on the stock market or offer shareholders a fixed price to purchase their shares. This reduces the number of shares in the marketplace and increases earnings per share, which has the potential to boost the company’s stock price.

The slowdown in stock buybacks hasn’t hurt stock markets. Financial Times reported:

“The slowing pace of companies buying back their own shares has certainly not halted Wall Street’s stellar run so far this year. While there is a reduced tail wind of buybacks helping boost earnings per share via a lower share count, U.S. companies have reported robust year-on-year sales and earnings growth for the recent quarter. That has helped offset the decline in buyback activity, but some warn that the clock is ticking for Wall Street bulls.”

There was no sign of a slowdown in the bull market last week, though. The Department of Labor reported the United States added more new jobs than anyone had expected during July, and the unemployment rate fell to 4.3 percent – the same level as May 2017, which was the lowest in 16 years, according to Barron’s.

Jobs growth was music to many investors’ ears.

Financial Times reported, “U.S. equity indices hovered near record highs – with the Dow Jones Industrial Average touching an all-time peak of 22,089.05 in early trade – with financials bolstered by the rise in yields. European [markets] ended the week on a strong note, helped by a sharp retreat for the euro against the dollar.”

Data as of 8/4/17 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor’s 500 (Domestic Stocks) 0.2% 10.6% 14.4% 8.5% 12.2% 5.4%
Dow Jones Global ex-U.S. 0.6 17.0 17.5 0.8 5.4 -0.4
10-year Treasury Note (Yield Only) 2.3 NA 1.5 2.5 1.6 4.7
Gold (per ounce) -0.6 8.5 -7.7 -0.4 -4.8 6.4
Bloomberg Commodity Index -1.4 -4.8 -0.8 -13.3 -10.3 -6.8
DJ Equity All REIT Total Return Index -0.2 6.1 -0.5 9.2 9.6 7.0
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, 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.

Saving Is as Easy As Riding A Bike! If you would like to save more money – for retirement, college tuition, healthcare costs, or some other financial priority – hop on your bike and ride.

As it turns out, riding your bike may help boost your savings. Whether you commute to work on two wheels or cycle around town doing errands, opting for manpower instead of horsepower can help generate some additional savings, according to a source cited by Bankrate.com:

“The average American household spends over $9,000 a year on transportation, making it the second-largest expense after housing…Many families simply take for granted the two-car, driving-to-work arrangement that’s the norm for American households and often don’t consider alternatives like public transportation, carpooling, or biking…That’s a shame, because its status as a major household cost means cutting transportation can radically cut your overall costs and, potentially, increase your ability to save…”

If you are serious about saving, imagine what your finances would look like if you:

  • Drove less. AAA reported owning a small car costs about $6,600 a year, while rumbling around in an SUV costs more than $10,000 annually. (The estimate includes fuel, insurance, depreciation, maintenance, fees and licensing, finance charges, and tires.) Eliminating a car could significantly improve your ability to save.
  • Cycled more. Not everyone can get by without a car; however, if you bike shorter distances or when the weather is good, then you could qualify for a low mileage discount on your auto insurance.
  • Didn’t go to the gym. If you’re riding a bike to work or to run errands, then you probably don’t need spin class. The average gym membership runs $54 a month or almost $650 a year.
  • Bought less stuff. Impulse purchases are less tempting when you’re cycling because bike baskets and saddlebags have limited storage space. Who knows how much that could help you save?

In addition to saving money, two-wheeled travel options are likely to improve your fitness and reduce the stress of rush hour driving. Cycling may even eliminate the need for dieting and some medications. Here’s an added bonus: If biking improves your longevity, you may have more time to spend the money you save!

Weekly Focus – Think About It

“Life is like a 10-speed bicycle. Most of us have gears we never use.”

–Charles M. Schultz, Cartoonist

Value vs. Growth Investing (8/04/17)

Name 1-Week YTD 4-Week 13-Week 1-Year 3-Year 5-Year
US Market 0.13 11.51 1.87 4.08 16.82 10.50 14.62
US Core 0.52 11.87 1.11 3.74 17.41 11.45 15.70
US Growth -0.49 18.39 3.37 5.23 17.68 11.29 14.68
US Large Cap 0.38 12.73 2.41 4.59 17.53 10.95 14.51
US Large Core 0.84 13.54 1.40 4.46 19.38 12.38 16.08
US Large Growth -0.29 20.06 4.25 5.65 18.58 12.09 15.07
US Large Val 0.66 5.23 1.40 3.59 14.71 8.35 12.46
US Mid Cap -0.39 9.51 0.76 3.02 14.96 9.50 15.24
US Mid Core -0.08 9.55 0.89 2.49 12.19 9.33 15.06
US Mid Growth -0.92 14.59 1.19 3.90 15.32 8.94 13.55
US Mid Val -0.13 4.56 0.14 2.72 17.60 10.19 17.18
US Small Cap -1.00 5.17 -0.43 1.92 14.87 8.70 13.99
US Small Core -0.88 3.58 -1.10 0.55 14.50 8.73 14.23
US Small Growth -1.55 12.08 0.32 4.60 14.85 9.34 13.71
US Small Val -0.55 0.11 -0.49 0.64 14.95 7.95 13.96
US Value 0.42 4.74 1.02 3.21 15.34 8.71 13.53
 ©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:

How to Know if Your Financial Advisor is Working in Your Best Interest

I hope this article finds you well.  Even though I’m not currently your financial advisor, I’ve enjoyed communicating with you in the past and wanted to share some important information about the financial services industry that you may not be aware of.  This topic is a little bit dry, but it’s something all investors should be familiar with.

A NEW RULE FOR FINANCIAL ADVISORS

On June 9 of this year, a new rule went into effect for the financial services industry. Commonly known as the “DOL Fiduciary Rule,” it requires all financial advisors to act in the best interests of their clients when giving advice on retirement accounts.  (A “fiduciary” is someone legally bound to act in another person’s best interest.)

That’s the key word—requires.  Before this rule, most advisors did not have to work under this requirement.

“Now, wait a minute!” you’re probably thinking.  “Are you saying advisors didn’t already have to act in their clients’ best interests?”

Actually, yes.  That’s exactly what I’m saying.  Traditionally, most advisors were not required to put their clients’ interests first.  Instead, advisors were required to follow a simple suitability standardThis means they are only expected to make recommendations considered “suitable” for their clients.  To put it bluntly, this allowed advisors to give advice that was primarily in their best interest, and not the client’s best interest, so long as that advice could still technically be considered “suitable.”

But there’s another, higher standard that some advisors hold to.  It’s called the fiduciary standard.  Advisors who are fiduciaries must put their clients’ interests before their own.  Even if the advice an advisor gives is less good for the advisor, they must give it if that’s what is best for the clients they serve.

Under the Fiduciary Rule, any financial advisor providing advice pertaining to retirement savings, qualified plans, or IRAs is now classified as a fiduciary.1  That meant many advisors who previously followed the “suitability standard” will have to make a major change in how they do business.

Here at Schwartz Financial, we’ve long held ourselves to that type of standard.  But that’s not what this letter is about.

As you can see, there have long been two types of financial advisors: those who put their clients’ best interests first, and those who didn’t.  The question you and every other investor should ask is,

“Which type is my financial advisor?”

Does your financial advisor put your best interests first, or does he or she not?  That’s what you must find out.  Fortunately, there are some simple steps you can take to learn the truth.  Just take this short little test:

  1. Does your current advisor routinely review your current investments with you?
  2. Can your current advisor demonstrate how every investment is designed to help you reach your goals and needs?
  3. Because of the new Fiduciary Rule, many advisors will have to recommend new investments for their clients, because the old investments only fit the suitability standard instead of the fiduciary standard. Has your advisor recommended new investments to comply with the new law?  Can they explain why they were investing in something else before the new law went into place?
  4. Do you understand exactly how your current advisor is being compensated? Have they taken the time to explain it to you?  Could you repeat it to someone else?
  5. Does your current advisor provide the same type of recommendations for non-retirement accounts as he does for retirement accounts? (Remember, the new “best interests” rule only applies to advice given on retirement accounts.)
  6. Do you know if your advisor has any incentives to recommend certain products over others?
  7. Does your current advisor have a plan for how to protect your assets before the next bear market?

If you don’t know the answer to some of these questions or if you don’t like the answers you have, then you may have some work to do.

Compare it to having a car mechanic.  Everyone wants the mechanic who is willing to say, “We’ll keep an eye on this, but I don’t recommend you replace this part on your car right now.  Why spend money when you don’t absolutely have to?”

No one wants a mechanic who is always trying to urge you into buying that high-priced part or upgrade when it’s not absolutely necessary.  That’s because the first mechanic has your best interests in mind.  They’re not trying to wring as much money from their customers as they can; they’re trying to ensure the customers are always on the road, happy and taken care of.

It’s critical that your financial advisor be like the first mechanic.  It’s critical that your financial advisor always have your best interests in mind.  Not just because the law requires them to, but because they’d never work any other way.

As I mentioned, here at Schwartz Financial, we’ve long held ourselves to the fiduciary standard.  Putting our clients’ best interests first is the foundation of our business.  Of course, it’s one thing to say that.  For it to mean anything, we need to prove it.

Here are some of the ways we prove it to our own clients every day:

  1. We are compensated mainly through fees instead of commissions (there are times when commissions come into play, for insurance transactions for example). Instead of being compensated every time we make a trade (which can incentivize advisors to make unnecessary trades to get paid more), we are compensated based on a percentage of the assets we manage.  Thus, we only succeed by helping you succeed, not by trying to wring as much “paying activity” from you as we can.
  2. We offer a financial plan to every one of our clients (in our case we make every plan a living plan updated online each and every day, via your own personal financial website). We believe strongly that all investment recommendations should be made as part of an overall financial plan.  Furthermore, a good plan should encompass a person’s entire financial life, not just retirement.  For us, your plan is the basis for all the recommendations we make, because it ensures that piece of advice leads directly to your financial goals.
  3. We are upfront about the services we provide. We don’t seek compensation for many of those services, but we do them because they need to be done.  From the start, you and every client we serve knows exactly what we do and what we don’t do, so that you always have clear expectations of us.
  4. We contact you regularly. Our goal has always been to send you written messages every month or so, combined with regular phone calls and meetings throughout the year.  You don’t just hear from us when the markets are up and the sun is shining.  We also strive to be there when times are tough.  We’re happy when you’re happy—and we sweat when you do.

Here’s what I recommend.  If you would like more information about the new DOL Fiduciary Rule, or a second opinion on whether your current portfolio is working in your best interests, please contact my assistant.  She will set either a phone appointment or better yet make time for us to meet personally.  Just take a minute to call my office at 215-886-2122.

Whether we ever work together or not, please take the time to ensure your financial advisor is truly working in your best interest.  Your financial goals are too important to risk.

After all, you’d expect nothing less from your mechanic, or your doctor, or your plumber.  Shouldn’t your financial advisor have the same standard?

Please let me know if there’s ever anything my team and I can do for you.

 

Regards,

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 7/31/17

The Markets

There was some good news and some bad news last week.

First, the good news: Thanks to consumer spending and an upturn in federal government spending, the U.S. economy grew faster from April through June this year. Gross domestic product (GDP) grew by 2.6 percent during the period, according to the advance estimate for economic growth. This was an improvement over growth from January through March, when GDP increased by 1.2 percent.

Now, the bad news: Personal income did not grow as fast from April through June as it did from January through March. Wages and salaries grew at a slower pace, as did government social benefits and other sources of income. The New York Times wrote:

“Wage growth, however, decelerated despite an unemployment rate that averaged 4.4 percent in the second quarter. Inflation also retreated, appearing to weaken the case for the Federal Reserve to raise interest rates again this year.

‘Although growth is solid, the lack of wage pressure buys the Fed plenty of time, and works with a very ‘gradual’ tightening cycle,’ said Alan Ruskin, global head of G10 FX strategy at Deutsche Bank in New York. ‘There is more here for the Fed doves than the hawks.’”

The Federal Reserve Open Market Committee left rates unchanged at its meeting last week, commenting, “The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a sustained return to 2 percent inflation.”

The Standard & Poor’s 500 Index finished the week flat. Yields on 10-year Treasury bonds moved slightly higher.

Data as of 7/28/17 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor’s 500 (Domestic Stocks) 0.0% 10.4% 13.9% 7.7% 12.3% 5.3%
Dow Jones Global ex-U.S. 0.2 16.3 17.1 -0.1 5.6 -0.6
10-year Treasury Note (Yield Only) 2.3 NA 1.5 2.5 1.5 4.8
Gold (per ounce) 1.3 9.1 -5.7 -1.0 -4.8 6.7
Bloomberg Commodity Index 1.8 -3.5 1.3 -13.2 -10.3 -6.8
DJ Equity All REIT Total Return Index 0.4 6.3 -1.2 8.7 9.8 7.2
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.

cooking illiteracy could improve happiness…What does heavy cream become when you whip it? If you answered ‘whipped cream,’ try this one: What does whipped cream become when you whip it a little longer? If you said, ‘butter,’ congratulations! You may possess above average knowledge of cooking.

You may have heard about the death of the culinary arts. According to various surveys and news reports, few people today possess the skills required to boil an egg. In 2014, The Seattle Times reported:

“As cooking has been rendered optional – the victim of rising restaurant culture, myriad takeout options, and supermarket sections packed with pre-cut vegetables, shredded cheese, and prepared foods – [cooking instructors] say cooks are increasingly losing touch with skills considered basic, or even essential, just a generation or two ago. And that is changing the way…recipes are developed and written.”

It’s also changing the restaurant industry. An April 2017 survey from Morgan Stanley found demand for online order and delivery from restaurants is growing rapidly. By 2020, digital food delivery may comprise “…40 percent of total restaurant sales – or $220 billion…compared with current sales of around $30 billion.”

Before you lament the ignorance of today’s youth, consider the results of seven surveys, completed by Harvard University and the University of British Columbia, encompassing more than 6,000 respondents in four countries. The Washington Post reported:

“Across all surveys, life satisfaction was typically higher for people who regularly spend money to save time. This was true regardless of household income, hours worked per week, marital status, and number of children living at home…working adults in the United States reported higher life satisfaction if they regularly paid to outsource household tasks such as cooking, shopping, and general maintenance.”

This may be the new math. Spending money to increase ‘free’ time equals improved happiness.

Weekly Focus – Think About It

“Cooking with kids is not just about ingredients, recipes, and cooking…it’s about harnessing imagination, empowerment, and creativity.”

–Guy Fieri, Founder of Cooking with Kids Foundation

Value vs. Growth Investing (7/28/17)

Name 1-Week YTD 4-Week 13-Week 1-Year 3-Year 5-Year
US Market -0.05 11.37 1.32 4.06 16.41 9.75 14.65
US Core -0.53 11.30 0.42 3.39 16.75 10.62 15.60
US Growth -0.13 18.98 2.31 6.29 18.28 10.92 14.87
US Large Cap 0.02 12.31 1.42 4.51 17.01 10.09 14.53
US Large Core -0.60 12.59 0.29 3.98 18.55 11.43 15.93
US Large Growth -0.13 20.41 2.64 6.52 19.27 11.63 15.30
US Large Val 0.81 4.55 1.19 2.88 13.20 7.18 12.41
US Mid Cap -0.17 9.93 1.16 3.12 14.49 8.93 15.29
US Mid Core -0.38 9.64 0.92 2.32 11.66 8.69 15.00
US Mid Growth 0.02 15.66 1.55 5.45 15.16 8.75 13.64
US Mid Val -0.16 4.70 0.99 1.64 16.83 9.31 17.30
US Small Cap -0.42 6.24 0.72 2.24 15.78 8.51 14.08
US Small Core -0.30 4.50 0.28 0.97 15.06 8.53 14.38
US Small Growth -0.57 13.84 0.92 6.24 16.74 9.55 13.78
US Small Val -0.37 0.67 0.97 -0.47 15.24 7.38 14.01
US Value 0.54 4.30 1.14 2.40 14.10 7.63 13.52
 ©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:

The dangers of company stock in a 401(k) plan

Earlier this month, Jason Zweig wrote a very informative article on the dangers of company stock in a company 401(k) retirement plan account. You can find a link to the article here.

I have met with many individual company 401(k) retirement plan participants who own “too much” company stock in their retirement plan account. This article speaks very well to the high degree of risk involved in this company 401(k) investment management strategy.

Mr. Zweig states the facts correctly. Just because you work for the company does not mean that the company stock is a safe investment. Working at your company does not make you an expert on the direction of the price of the company stock.

Regards,

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 7/24/17

The Markets

Do we have central banks to thank?

Low interest rates, accommodative monetary policy, and improving economic growth have helped stock markets around the world reach record highs, reports Barron’s:

“…a look around the globe shows the surge of the U.S. market to new peaks to be anything but unique. Major [markets] in Europe and Asia also have been setting records. Even in South Korea, the Kospi closed at a new peak and is up 25 percent from its 52-week low last year, as the global technology rally has proved to be more powerful than the threat of a nuclear-missile launch from North Korea. Last week also saw a record close in the S&P BSE Sensex in India. Japan’s Nikkei is up 25 percent from last August and near a 52-week high (albeit still down 48 percent from its 1989 bubble peak). The Shanghai Composite is a relative laggard, with a 9.6 percent gain from its August lows, bolstered by a 3.7 percent jump over the past five weeks.”

Eventually, central banks are expected to tighten monetary policy by raising interest rates and reducing the size of their balance sheets and that could affect markets. The U.S. Federal Reserve released its Policy Normalization Principles and Plans back in 2014. Last month, Chair Janet Yellen indicated the Fed currently intends to begin normalizing policy during 2017.

U.S. monetary policy isn’t the only phenomenon investors may want to keep an eye on.

Fiscal policy (the steps a government takes to influence its country’s economy) deserves some attention, too. The United States will, once again, hit its legal spending limit (the debt ceiling) this fall. U.S. News reported, “Were the United States to hit its borrowing limit – and thus have to start missing payments and stiffing creditors – there’s no telling the exact consequences, but they wouldn’t be good.”

The bond market does not appear to be confident fiscal policy will proceed smoothly. Barron’s reported, “Yields on T-bills that mature in mid-to-late October jumped relative to surrounding maturities, a sign that the money market saw a risk – however slight – of not getting paid on time.”

Data as of 7/21/17 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor’s 500 (Domestic Stocks) 0.5% 10.4% 14.2% 7.8% 12.9% 4.8%
Dow Jones Global ex-U.S. 0.8 16.0 17.2 0.1 6.5 -1.2
10-year Treasury Note (Yield Only) 2.2 NA 1.6 2.5 1.4 5.0
Gold (per ounce) 1.5 7.7 -5.5 -1.6 -4.5 6.2
Bloomberg Commodity Index 0.4 -5.2 -2.3 -13.8 -10.4 -6.9
DJ Equity All REIT Total Return Index 0.7 5.9 -1.4 8.7 10.1 6.4
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.

So, here’s another college conundrum: College is a hot topic. College is a hot topic. In recent years, pundits have debated whether students should attend college or skip it and start their own companies. The Thiel Fellowship, founded by tech entrepreneur Peter Thiel, offers students $100,000 to do just that.

For students who choose college, much has been made about which degrees will pay off. Some argue liberal arts degrees lack value, and technical instruction is the real ticket to success. Meanwhile, technology company leaders have reported liberal arts are essential because “they train students to thrive in subjectivity and ambiguity, a necessary skill in the tech world where few things are black and white.”

College is also known for changing the way students think. A new survey indicates it may alter their culinary perspectives. The Economist commissioned a poll to see if residence, income, education, or political affiliation has an effect on food preferences and, guess what? College and post graduate work may expand students’ gustatory preferences and change their eating habits! No, they don’t develop an unhealthy obsession with ramen noodles, boxed mac and cheese, or free food (usually). The survey found:

  • People with post graduate degrees dine out more frequently – often weekly – than people with high school diplomas.
  • Post grads also tend to eat Indian foods, like curries, more often than people with high school diplomas.
  • College grads are more likely than non-college grads to have eaten sushi within the past year.
  • College grads are also more likely than non-college grads to know what prosciutto is and to have eaten it recently.

As it turns out, the great equalizer was Mexican food. A majority of Americans have eaten Mexican food during the past year, regardless of educational attainment.

Weekly Focus – Think About It

“Peanut butter and jelly in the same jar. I don’t understand that. I mean, I’m lazy but I’d like to meet the guy that needs that. This guy must be thinking, “I could go for a sandwich, but I’m not gonna open TWO jars. I can’t be opening and closing all kinds of jars and cleaning WHO KNOWS how many knives.”

–Brian Regan, American comedian

Value vs. Growth Investing (7/21/17)

Name 1-Week YTD 4-Week 13-Week 1-Year 3-Year 5-Year
US Market 0.57 11.43 1.76 5.64 16.89 9.85 15.03
US Core 0.26 11.89 1.45 4.97 18.06 10.64 16.07
US Growth 1.20 19.13 2.39 8.98 19.40 11.22 15.21
US Large Cap 0.60 12.29 1.55 6.19 17.18 10.17 14.91
US Large Core 0.21 13.27 1.19 5.75 19.73 11.43 16.46
US Large Growth 1.35 20.56 2.44 9.53 20.32 11.95 15.60
US Large Val 0.15 3.70 0.91 3.17 11.55 7.08 12.73
US Mid Cap 0.43 10.12 2.09 4.36 15.60 9.10 15.73
US Mid Core 0.32 10.06 2.01 3.33 13.31 8.82 15.45
US Mid Growth 0.69 15.63 2.09 7.08 15.91 8.97 14.09
US Mid Val 0.25 4.87 2.18 2.78 17.66 9.47 17.72
US Small Cap 0.73 6.68 2.98 3.71 17.64 8.55 14.33
US Small Core 0.65 4.82 2.32 2.54 16.54 8.35 14.49
US Small Growth 0.94 14.50 2.75 8.64 19.83 9.75 14.17
US Small Val 0.58 1.04 3.96 0.05 16.24 7.49 14.24
US Value 0.20 3.75 1.37 2.87 13.11 7.60 13.85
 ©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:

Do you have 401(k) Mechanic?

Everyone wants the auto mechanic who is willing to say, “We’ll keep an eye on this, but I don’t recommend you replace this part on your car right now. Why spend money when you don’t absolutely have to?”

No one wants a mechanic who is always trying to urge you into buying that high-priced part or upgrade when it’s not absolutely necessary. That’s because the first mechanic has your best interests in mind.

They’re not trying to wring as much money from their customers as they can; they’re trying to ensure the customers are always on the road, happy and taken care of.

Here are three separate parts of every company 401(k) retirement plan account. There is the sponsor (the company you work for), the provider (the company who has custody of your company 401(k) money), and you, the company 401(k) retirement plan participant.

Which of these three groups has the highest level of concern regarding your company 401(k) retirement plan account?

The U.S. stock markets are near all-time highs. The Federal Reserve is already in the process of rising interest rates from all-time lows. Now is an excellent time to ask yourself about who has the best interest in mind for your 401(k).

If you currently have old company 401(k) accounts laying around from previous employers, this question is especially timely now. Every company 401(k) retirement plan menu has its own set of risks.

If you would like an experienced and qualified mechanic for your company 401(k) retirement plan accounts please consider our office and we will do our best to make sure that your 401(k) continues to act in your best interest.

Regards,

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 7/17/17

The Markets

It was a good week for a lot of stocks but not bank stocks.

The Standard & Poor’s 500 (S&P 500) Index and the Dow Jones Industrial Average (DJIA) both finished at record highs last week. Barron’s indicated investors owe Federal Reserve Chair Janet Yellen a debt of gratitude:

“The main force behind the rally was the dovish performance by Federal Reserve Chair Janet Yellen in Congress on Wednesday and Thursday when she reiterated that rate hikes would most likely be gradual. On balance, her remarks were interpreted as evidence of continued accommodative monetary policy and, from there, stocks were off to the races. The ignition of the rally can almost be time-stamped to her appearance. Before her speech, the market was down for the week.”

Of course, some sectors of the stock market did better than others last week. In the S&P 500, Real Estate, Information Technology, and Consumer Staples stocks had the highest percentage gains at the close on Friday, while Financials, Telecommunications, and Consumer Discretionary stocks lagged, according to Fidelity.

In the Financials sector, banks were the weakest performers, finishing Friday almost a full percent lower. It was a bit of a mystery, wrote Financial Times (FT), since several banks beat earnings expectations. FT reported:

“Perhaps the most important factor that weighed on bank stock prices, however, had nothing to do with the comments from executives nor the quarterly financial results. Macroeconomic data published on Friday showed U.S. inflation at the consumer level cooled last month while retail sales fell short of estimates, pushing Treasury bond yields lower. Lower interest rates are bad news for banks, which make more money if they can charge borrowers more.”

Investors appear to believe there is smooth sailing ahead. The CBOE Volatility Index remained below 10.

Data as of 7/14/17 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor’s 500 (Domestic Stocks) 1.4% 9.9% 13.7% 7.6% 12.7% 4.7%
Dow Jones Global ex-U.S. 2.8 15.1 16.3 -0.4 5.9 -1.3
10-year Treasury Note (Yield Only) 2.3 NA 1.5 2.6 1.5 5.0
Gold (per ounce) 1.2 6.1 -7.8 -2.0 -5.0 6.3
Bloomberg Commodity Index 1.1 -5.5 -5.1 -14.0 -10.2 -7.0
DJ Equity All REIT Total Return Index 1.4 5.1 -1.3 8.6 9.5 6.0
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, 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.

merriam webster defines ‘disrupt’ as ‘To break apart,’ and ‘to throw into disorder.’ While disruption doesn’t sound like something anyone would enjoy much, it has the potential to create investment opportunities for those who share a vision and are willing to take risks.

Morgan Stanley recently wrote, “It’s hard to think of an industry that won’t be touched in some way by technological disruption over the next decade.” Here are a few of the trends that may really stir things up during the next few decades:

  • Machine learning. “The transportation and medical industries are likely to be first in line for disruption,” Morgan Stanley A disruptive change researcher wrote, “If we think about what machine learning really is, it’s pattern recognition. We might see radiology and scans detecting cancers earlier than they’re detected today. And it’s possible that in the future we can also use machine learning to scan for genes that might predispose us to certain kinds of diseases.”

 

  • Autonomous vehicles. The auto industry, as we know it, is likely to change in some significant ways when self-driving vehicles become more prevalent. Other industries will be affected, too. For instance, insurance could change dramatically. After all, who do you insure when software is driving?

In addition, cities may lose a source of revenue if there is less need for parking. CNBC wrote, “Reports estimate self-driving vehicles have the potential to reduce parking space by about 61 billion square feet, which is about the size of Connecticut and Vermont combined.” This may be a boon for the real estate market.

The responsibilities of law enforcement may change, too, and crash test dummies may be out of work.

  • Augmented reality. Imagine a surgeon being able to practice a surgery, a rigger learning their craft without scaling heights to lift heavy objects, or a teacher making students’ textbooks come alive. Augmented reality has the potential to help professionals refine their skills, make dangerous training safer, and fascinate students at all levels of learning.

Morgan Stanley also pointed out that Blockchain, which enables electronic contracts and custody, may change the financial industry, and Clustered Regularly Interspaced Short Palindromic Repeats (CRISPR) may help cure disease at the genetic level.

We live in interesting times!

Weekly Focus – Think About It

“Companies don’t have ideas. Only people do. And what motivates people are the bonds of loyalty and trust they develop around each other.”

–Margaret Heffernan, International businesswoman and author

Value vs. Growth Investing (7/14/17)

Name 1-Week YTD 4-Week 13-Week 1-Year 3-Year 5-Year
US Market 1.40 10.79 0.98 6.13 16.38 9.54 14.98
US Core 1.16 11.60 0.95 5.74 18.15 10.51 16.03
US Growth 2.24 17.73 1.60 9.64 18.35 10.43 15.10
US Large Cap 1.41 11.62 1.04 6.41 16.63 9.91 14.88
US Large Core 1.22 13.04 1.21 6.23 19.94 11.38 16.42
US Large Growth 2.51 18.95 1.63 10.00 19.11 11.11 15.53
US Large Val 0.41 3.55 0.19 3.00 11.00 7.21 12.77
US Mid Cap 1.44 9.66 0.85 5.40 15.22 8.78 15.69
US Mid Core 1.24 9.70 0.57 4.59 13.23 8.57 15.49
US Mid Growth 1.50 14.84 1.33 8.17 15.31 8.44 13.95
US Mid Val 1.62 4.61 0.65 3.55 17.19 9.30 17.70
US Small Cap 1.09 5.91 0.68 5.36 17.05 7.83 13.97
US Small Core 0.39 4.14 -0.48 4.52 16.04 7.77 14.14
US Small Growth 1.49 13.43 2.08 10.07 19.15 8.77 13.81
US Small Val 1.42 0.46 0.46 1.56 15.66 6.89 13.87
US Value 0.72 3.54 0.30 3.01 12.58 7.63 13.85
 ©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:

Budgets

Having a problem getting a budget together, request our interactive budget spreadsheet.

personalbudget_schwartz_v2_Page_1

Regards,

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 7/10/17

The Markets

Things you may want to know…

Last Friday, Financial Times (FT) published, ‘Five markets charts that matter for investors.’ Among the issues addressed in the charts were:

  • The bond market bear watch. The yield on 10-year German Bunds (Germany’s government bonds) reached an 18-month high of 0.58 percent recently. Yields rose after the European Central Bank’s Mario Draghi indicated its stimulus efforts would end at some point.

When bond yields rise, bond values fall, and that makes rising interest rates quite a significant event for anyone who holds lower yielding bonds. In the United States, 10-year U.S. Treasuries moved to a seven-week high last week and then dipped lower following the release of the Federal Open Market Committee meeting minutes, reported CNBC.com.

  • Financial companies gaining favor. During the past month, U.S. stock markets have seen a sector rotation. FT reported:

“…S&P financials have gained some 6 percent, with tech sliding almost 4 percent. That still leaves financials lagging behind the S&P 500 for the year and well behind the roughly 17 percent gain for tech. A similar story has unfolded in Europe between banks and tech.”

Investors’ appetite for financial companies may reflect the belief higher interest rates are ahead. Banks and other financial firms generally benefit when interest rates rise. Investor’s Business Daily reported:

“Several Wall Street giants have warned of weak trading revenue in Q2, continuing the lackluster trend in 2017…Still, bank stocks large and small have been leading in recent weeks, helped by higher bond yields and massive buyback and dividend plans.”

Last week, the unemployment rate in the United States rose from 4.3 to 4.4 percent. It was good news according to an expert cited by Barron’s, “…the rise in labor force participation indicates slack remains in the labor market.” That may be the reason wages showed little improvement.

Data as of 7/7/17 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor’s 500 (Domestic Stocks) 0.1% 8.3% 15.6% 7.0% 12.4% 4.7%
Dow Jones Global ex-U.S. -0.6 12.0 18.2 -1.4 5.3 -1.4
10-year Treasury Note (Yield Only) 2.4 NA 1.4 2.6 1.5 5.2
Gold (per ounce) -2.1 4.9 -10.4 -2.5 -5.2 6.3
Bloomberg Commodity Index -1.0 -6.5 -4.4 -14.9 -10.1 -7.2
DJ Equity All REIT Total Return Index -1.3 3.6 -0.7 8.5 9.4 5.7
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.

It doesn’t appear to be common knowledge but there may be an affordable car crisis in the United States. The latest Bankrate.com Car Affordability Study found:

“…typical households in most of America’s larger cities don’t earn enough to afford the average new vehicle, under a common budgeting rule for buyers… The ‘20/4/10’ rule says you should aim to put down at least 20 percent of a vehicle’s purchase price, take out a car loan for no longer than four years, and devote no more than 10 percent of your annual income to car payments, interest, and insurance. If you can’t stay within those lines, you can’t afford the car.”

The only major city where a new car remains affordable is Washington, D.C.!

For some, the obvious solution is choosing a less expensive model. For others, the answer is buying a used vehicle. For the latter group, here’s some bad news: even an average-priced used car – nationally, the average price is about $19,200 – is unaffordable for households in eight of the 25 largest cities.

Leasing is also an option; one that may have helped create an oversupply of used cars. In July, Automotive News reported:

“…millions [of] cars that were leased two or three years ago, many of them used compact and midsized cars with low mileage, are heading toward auction lots and used car dealerships. That surge in supply threatens to depress prices for new and used vehicles, raising the risk of losses for automakers and finance companies on lease deals. It also undercuts the value of cars customers want to trade in for a new vehicle.”

The rising popularity of ride-sharing and car-sharing, and the introduction of self-driving vehicles, may also depress prices. In fact, some automakers have introduced their own ride-sharing services.

Weekly Focus – Think About It

“A man is rich in proportion to the number of things he can afford to let alone.”

–Henry David Thoreau, American philosopher and naturalist

Value vs. Growth Investing (7/07/17)

Name 1-Week YTD 4-Week 13-Week 1-Year 3-Year 5-Year
US Market 0.10 9.26 -0.07 3.50 18.45 8.98 14.67
US Core 0.12 10.32 -0.19 3.45 20.50 10.03 15.83
US Growth 0.18 15.15 -1.19 6.34 19.03 9.54 14.52
US Large Cap 0.15 10.06 -0.24 3.80 18.45 9.42 14.63
US Large Core 0.08 11.68 -0.40 3.92 21.98 10.93 16.28
US Large Growth 0.23 16.05 -1.65 6.44 19.36 10.25 14.94
US Large Val 0.14 3.13 1.45 1.14 14.22 7.10 12.78
US Mid Cap -0.04 8.10 0.16 2.70 17.68 8.08 15.18
US Mid Core 0.30 8.36 0.08 2.20 15.72 8.07 15.04
US Mid Growth 0.01 13.14 -0.07 5.68 17.09 7.53 13.42
US Mid Val -0.50 2.94 0.45 0.31 20.41 8.57 17.16
US Small Cap -0.11 4.77 1.03 2.78 20.78 6.89 13.50
US Small Core -0.03 3.73 1.08 2.68 21.10 7.08 13.98
US Small Growth 0.12 11.77 0.68 7.19 21.14 7.53 13.19
US Small Val -0.43 -0.95 1.33 -1.50 19.67 5.98 13.26
US Value -0.02 2.80 1.24 0.79 15.86 7.34 13.71
 ©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:

Your 401k Plan

Last week my office forwarded information on 40 different 401k plans (as we do the first week of the month) to both clients and non-clients about which funds in their company 401k plans were out performing the other choices in these plans.

If you wish we can also provide this information for your plan simply by reaching out and requesting that my office provide this information to you.  Since, in all probability this will be your largest retirement asset, should you not make sure that you are maximizing this investment to your benefit?

If you happen to work for CBS Radio these were the best performing funds currently in your 401k this month.

July 401k_Page_1

Regards,

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”.

Regards

Schwartz Financial Weekly Commentary 7/3/17

The Markets

This is the way the quarter ends – with a central bank scare.

Central bankers are stodgy. They speak carefully. For many, reading the words ‘Federal Reserve’ is enough to cause boredom to set in and web surfing to ensue.

Last week, though, the European Central Bank and Bank of England cracked the ‘open secret’ (i.e., central banks will provide less stimulus and increase rates at some point), and investors did not like what they heard.

Central bankers were quick to say they didn’t necessarily mean what people had heard, but the rumor of less accommodative monetary policy was already moving markets. Barron’s wrote:

“But make no mistake: Last week was a game changer. Federal Reserve Chair Janet Yellen fretted about the high level of asset prices, the Bank of England’s Mark Carney hinted at a rate hike, and Mario Draghi suggested the European Central Bank could be nearing the end of its bond buying…The market didn’t take it sitting down. Long-term Treasury yields surged, resulting in a wider spread off of short-term bond yields.”

A wider spread between short- and long-term Treasuries could be good news. The Federal Reserve Bank of Cleveland explained:

“The slope of the yield curve – the difference between the yields on short- and long-term maturity bonds – has achieved some notoriety as a simple forecaster of economic growth. The rule of thumb is that an inverted yield curve (short rates above long rates) indicates a recession in about a year, and yield curve inversions have preceded each of the last seven recessions…”

Central bankers comments affected U.S. stock markets, too. The technology sector lost its allure, while the possibility of rising interest rates made the financials sector more attractive. It didn’t hurt that all major institutions passed the Fed’s stress tests for the first time. That could translate into share buybacks and higher dividends, reported Financial Times.

There were some notable statistics during the second quarter of 2017. For instance:

Investors were preternaturally calm  

Throughout second quarter, investors have been confident the Standard & Poor’s 500 Index would offer a smooth ride. The CBOE Volatility Index (VIX), a.k.a. the fear gauge, has only closed below 10 sixteen times; seven occurred during the second quarter of 2017.

Consumer sentiment was quite positive

Consumers were feeling highly optimistic throughout the quarter. In June, the University of Michigan Consumer Sentiment Survey reported, “Although consumer confidence slipped to its lowest level since Trump was elected, the overall level still remains quite favorable. The average level of the Sentiment Index during the first half of 2017 was 96.8, the best half-year average since the second half of 2000…”

Investor sentiment shifted into neutral

Last week, the number of investors who were neutral (rather than bullish or bearish) about markets hit its highest level in a year. The AAII Blog reported:

“This year’s record highs for the S&P 500 and the NASDAQ have encouraged some individual investors, but the Trump administration’s ability (or lack thereof) to move forward on economic and tax policy remains on the forefront of many others’ minds. Also playing a role in influencing sentiment are earnings, valuations, concerns about the possibility of a pullback in stock prices, and interest rates/monetary policy.”

The U.S. economy appears to be growing, albeit slowly. Last week, the Federal Reserve Bank of Atlanta forecast real GDP (Gross Domestic Product) growth during the second quarter of 2017 at 2.7 percent.

Data as of 6/30/17 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor’s 500 (Domestic Stocks) -0.6% 8.2% 15.5% 7.3% 12.2% 4.8%
Dow Jones Global ex-U.S. -0.2 12.6 17.4 -1.1 5.1 -1.2
10-year Treasury Note (Yield Only) 2.3 NA 1.5 2.5 1.6 5.0
Gold (per ounce) -1.1 7.2 -5.9 -1.9 -4.8 6.6
Bloomberg Commodity Index 3.7 -5.6 -7.0 -15.0 -9.5 -7.0
DJ Equity All REIT Total Return Index -1.0 4.9 0.2 9.0 9.7 5.9
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 say potato, i say potato. A persistent debate among the geek set is how to pronounce the abbreviation for Graphics Interchange Format (GIF). You know, GIFs, the animated images you see online. Graphics starts with a hard ‘g’ sound, but pronunciation conventions suggest that ‘g’ makes a soft sound before the vowel ‘i.’ The Economist wrote:

“Some questions will be pondered for all eternity. What is the meaning of life? Where do you go when you die? And, even more puzzlingly, what is the right way to pronounce “GIF?”…Debates over whether it begins with a hard “g,” as in “gift,” or a soft one, as in “giraffe,” can make discussions about religion or politics look civil by comparison. Well aware of the risk that taking a side could lead to protests, boycotts, or worse, the Oxford English Dictionary and Merriam-Webster have maintained strict neutrality. They proclaim that both pronunciations are acceptable, betraying nary a hint of favoritism.”

It’s interesting that dictionaries, those arbiters of correct spelling and pronunciation, would stake out neutral ground. After all, in the early days of the United States correct spelling was open to interpretation. In the American Constitution, the word ‘choose’ is spelled ‘chuse’ and ‘Pennsylvania’ was spelled ‘Pensylvania’ (the Liberty Bell inscription has one ‘n,’ as well). Also, ‘defense’ was spelled ‘defence.’

The first American dictionary wasn’t published until 1806. Its author, Noah Webster, decided many spelling conventions were artificial, so he imposed the standards he preferred, changing ‘musick’ to ‘music,’ ‘centre’ to ‘center,’ and ‘women to wimmen.’ Not all of his changes were accepted.

This year, in an effort to resolve the GIF issue once and for all, a forum for computer programmers surveyed 50,000 users in 200 countries. Sixty-five percent believed a hard ‘g’ pronunciation was correct, while 26 percent believed the soft ‘g’ was right.

The survey results inflamed soft ‘g’ users, who claim it was rigged.

Weekly Focus – Think About It

“My seven-year-old grandson sleeps just down the hall from me, and he wakes up a lot of mornings and he says, ‘You know, this could be the best day ever.’ And other times, in the middle of the night, he calls out in a tremulous voice, ‘Nana, will you ever get sick and die?’ I think this pretty much says it for me and most of the people I know, that we’re a mixed grill of happy anticipation and dread.”

–Anne Lamott, American novelist and non-fiction writer

Value vs. Growth Investing (6/30/17)

Name 1-Week YTD 4-Week 13-Week 1-Year 3-Year 5-Year
US Market -0.53 9.16 0.81 3.07 18.35 9.20 14.57
US Core -0.47 10.18 0.74 3.17 20.32 10.30 15.69
US Growth -1.51 14.95 -0.06 5.86 19.76 9.77 14.55
US Large Cap -0.69 9.89 0.63 3.42 18.42 9.73 14.49
US Large Core -0.67 11.59 0.74 3.84 21.92 11.29 16.12
US Large Growth -1.70 15.78 -0.62 6.07 20.18 10.60 14.96
US Large Val 0.44 2.98 1.87 0.46 13.43 7.32 12.50
US Mid Cap -0.19 8.14 0.84 2.32 17.43 8.10 15.16
US Mid Core -0.11 8.03 0.16 1.63 15.27 8.13 14.90
US Mid Growth -0.89 13.13 1.11 5.23 17.68 7.53 13.44
US Mid Val 0.50 3.46 1.29 0.19 19.52 8.58 17.20
US Small Cap 0.14 4.88 2.72 1.68 20.34 6.77 13.70
US Small Core 0.43 3.77 2.51 1.42 20.59 7.04 14.15
US Small Growth -1.21 11.64 2.82 5.55 21.28 7.15 13.30
US Small Val 1.28 -0.52 2.76 -1.95 18.74 6.02 13.56
US Value 0.51 2.83 1.81 0.24 15.04 7.50 13.53
 ©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 for Early Americans

On July 3rd, 1776, John Adams sent a now-famous letter to his wife Abigail, describing what he thought the future of Independence Day would look like:

I am apt to believe that it will be celebrated, by succeeding generations, as the great anniversary festival. It ought to be solemnized with pomp and parade, with shows, games, sports, guns, bells, bonfires, and illuminations from one end of this continent to the other from this time forward forever more.

As we know, Adams’ prophecy came true. Independence Day is indeed celebrated with “pomp and parade.” From the fantastic firework displays to the patriotic music, the 4th of July has become a grand celebration like no other.

I think one of the things I like most about Independence Day is that it makes me feel a connection with those first Americans who lived and died so long ago. It’s comforting to know that the feelings of patriotism and pride I feel are exactly what they felt.

Here’s an example of one of the earliest Independence Day celebrations that took place in Philadelphia back in 1777:

Yesterday the 4th of July, being the Anniversary of the Independence of the United States of America, was celebrated in this city with demonstration of joy and festivity. About noon all the armed ships and gallies in the river were drawn up before the city, dressed in the gayest manner, with the colors of the United States and streamers displayed. At one o’clock, the yards being properly manned, they began the celebration of the day by a discharge of thirteen cannon from each of the ships, and one from each of the thirteen gallies, in honor of the Thirteen United States. The band of music attended and heightened the festivity with some fine performances suited to the joyous occasion.

After dinner, a number of toasts were drank, all breaking independence, and a generous love of liberty, and commemorating the memories of those brave and worthy patriots who gallantly exposed their lives, and fell gloriously in defense of freedom and the righteous cause of their country. Each toast was followed by a discharge of artillery and small arms, and a suitable piece of music by the band. The glorious fourth of July was reiterated three times accompanied with triple discharges of cannon and small arms, and loud huzzas that resounded from street to street through the city.

The evening was closed with the ringing of bells, and at night there was a grand exhibition of fireworks, which began and concluded with thirteen rockets on the commons, and the city was beautifully illuminated. Everything was conducted with the greatest order and decorum, and the face of joy and gladness was universal. Thus may the 4th of July, that glorious and ever memorable day, be celebrated through America, by the sons of freedom, from age to age till time shall be no more.

So many generations have passed since that particular celebration. We all wear different clothes, play different games, and eat different food. More than anything, the flag looks much different now, having gone from thirteen stars to fifty.

But the emotions we feel are still the same. Our love of liberty hasn’t changed. We still commemorate the memories of “those brave and worthy who gallantly exposed their lives.” And every 4th of July is still marked by the same expressions of joy and gladness.

Many years have passed since those early Americans. But for one day every year, the great span of time that separates us shrinks to the width of a thread. We are Americans, just as they were. All the differences between our lives and theirs vanish in importance.

For one day, at least, we are the same.

From all of us here at Schwartz Financial, I wish you and your family a safe and happy Independence Day! May it be a day of joy and gladness.

Regards,

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 6/26/17

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, 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.

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.

Regards,

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”.