Schwartz Financial Weekly Commentary 10/16/17

The Markets

There’s a new kid in town: narrative economics.

Last week, Richard Thaler was awarded the Nobel Prize in economics. His work in behavioral economics and finance recognizes not all economic and financial decisions are made after rational reflection. In Nudge, he wrote:

“The workings of the human brain are more than a bit befuddling. How can we be so ingenious at some tasks and so clueless at others?…Many psychologists and neuroscientists have been converging on a description of the brain’s functioning that helps us make sense of these seeming contradictions. The approach involves a distinction between two kinds of thinking, one that is intuitive and automatic, and another that is reflective and rational.”

Yale professor Robert Shiller, another Nobel laureate in economics, is exploring a field of study related to Thaler’s. It’s called narrative economics. Narratives are the stories we share with each other. They are fuel for conversation and popular narratives often become viral. During a presentation at the University of Chicago, Schiller explained narrative economics is “the study of the spread and dynamics of popular narratives, the stories, particularly those of human interest and emotion, and how these change through time, to understand economic fluctuations.”

Today, a popular narrative in financial circles focuses on Professor Shiller’s cyclically-adjusted price-earnings (CAPE) ratio, which suggests the market may be overvalued. Barron’s reported, “The CAPE, which is based on average inflation-adjusted earnings over the trailing 10 years, stands at 31, versus 32.5 in 1929 and 44 in late 1999.”

If stocks are overvalued, why do investors keep buying shares? It’s a question narrative economics hopes to help answer in the future.

Data as of 10/13/17 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor’s 500 (Domestic Stocks) 0.2% 14.0% 19.7% 10.8% 12.1% 5.1%
Dow Jones Global ex-U.S. 1.7 21.3 21.8 5.0 5.4 -0.9
10-year Treasury Note (Yield Only) 2.3 NA 1.7 2.3 1.7 4.7
Gold (per ounce) 3.0 12.1 3.1 1.9 -5.6 5.5
Bloomberg Commodity Index 2.4 -1.8 -0.4 -10.3 -10.0 -7.1
DJ Equity All REIT Total Return Index 1.6 8.4 8.8 10.4 10.3 6.1
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.

self-driving cars, life-like robots, artificial intelligence, and video phones. Millennials and members of Gen Z may find the original Blade Runner movie a bit dated. After all, many of the tech innovations imagined have become a part of our daily lives and others, like mood organs, are in the works.

Mood organs were among the human enhancements imagined by Philip Dick in Do Androids Dream of Electric Sheep? (The book upon which Blade Runner was based.) A recent c|net.com article explained:

“Dick doesn’t describe the design of the mood organ or how it works, only specifying that it can stimulate or sedate the user’s cerebral cortex. Users simply dial up the emotion they want, such as 481 (awareness of the manifold possibilities open in the future) or 594 (pleased acknowledgement of a spouse’s superior wisdom).”

Neural implants are a reality already, although they’re not used to control human emotion. Thousands of people with Parkinson’s have implants to manage tremors and applications to help with epilepsy and depression are being explored, according to IEEE Spectrum.

Medical treatments are not the only applications for neural implants. Elon Musk is developing ‘neural lace,’ a brain-computer interface (BCI) that may be injected into the human body, travel through the bloodstream, and settle over the cerebral cortex. While neural lace someday may be used to treat or diagnose neurological issues, The Economist reports Mr. Musk has argued, “human beings need to embrace brain implants to stay relevant in a world which, he believes, will soon be dominated by artificial intelligence.”

Musk is not the only entrepreneur pursuing brain interfaces. IEEE Spectrum reported Mary Lou Jepsen, an MIT alumnus and tech executive, has founded a company which is working on non-invasive BCIs “for imaging and telepathy (the latter could conceivably be done by reading out thought patterns in the brain).”

It’s possible the idea of humans with superpowers may seem quaint to future generations.

Weekly Focus – Think About It

“The real question is, when will we draft an artificial intelligence bill of rights? What will that consist of? And who will get to decide that?”

–Gray Scott, Futurist philosopher

Value vs. Growth Investing (10/13/17)

Name 1-Week YTD 4-Week 13-Week 1-Year 3-Year 5-Year
US Market 0.12 15.69 2.58 4.89 22.40 13.22 14.72
US Core 0.21 15.70 1.96 4.15 22.18 13.62 15.79
US Growth 0.31 23.25 2.31 5.32 25.82 14.30 14.98
US Large Cap 0.15 16.78 2.28 5.12 22.88 13.31 14.61
US Large Core 0.33 17.13 1.40 4.15 23.08 13.95 16.13
US Large Growth 0.39 24.56 1.93 5.39 26.46 14.70 15.35
US Large Val -0.29 9.25 3.55 5.75 19.25 11.22 12.43
US Mid Cap 0.12 13.58 2.96 4.04 20.89 13.00 15.27
US Mid Core 0.02 13.71 2.87 4.05 19.88 12.91 15.21
US Mid Growth 0.18 19.91 2.98 4.91 23.85 12.79 13.91
US Mid Val 0.15 7.30 3.03 3.04 18.76 13.19 16.71
US Small Cap -0.19 10.85 4.65 4.95 21.72 13.01 14.17
US Small Core -0.35 8.52 4.79 4.36 20.70 12.89 14.49
US Small Growth -0.25 19.34 4.47 5.64 24.65 14.30 14.14
US Small Val 0.05 5.08 4.72 4.88 19.49 11.78 13.83
US Value -0.18 8.57 3.52 5.15 19.21 11.67 13.41
 ©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.

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17 Reasons You Should Attend Our “Social Security Planning For Women Event”

  • The triple whammy many women face in retirement
  • Why singling out women for Social Security planning is important?
  • Why women really need Social Security planning—and why men should care?
  • How Social Security benefits women?
  • What all women need to know about Social Security?
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  • What if you divorce in retirement?
  • Why it is important to report all marital events to Social Security

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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 10/9/17

The Markets

Slow and steady…

It has been 332 days since the Standard & Poor’s 500 (S&P 500) Index experienced a 5 percent drop, reported Barron’s. If there isn’t a selloff on Monday or Tuesday, this will become the longest rally without such a drop.

During this period, the Index has gained 33 percent. Think about that for a moment: 33 percent over 332 days. By Barron’s calculations, the market has gained less than 0.1 percent per day. That’s a very slow rate of increase, relatively speaking. The longest-ever rally without a 5 percent drop, which began in November 1994, was accompanied by a gain of 56 percent or 0.17 percent per day.

The most recent issue of The Economist pondered the phenomenon of the slow-as-molasses bull market that has pushed asset prices higher:

“No one would mistake the bloodless run-up in global stock markets, credit, and property over the past eight years for a reprise of the ‘roaring 20s,’ or even an echo of the dotcom mania of the late 1990s. Yet only at the peak of those two bubbles has America’s S&P 500 been higher as a multiple of earnings measured over a ten-year cycle. Rarely have creditors demanded so little insurance against default, even on the riskiest ‘junk’ bonds. And rarely have property prices around the world towered so high…the world is in the throes of a bull market in everything.”

It would be a mistake to assume asset prices will continue to move higher indefinitely. One characteristic that may signal the onset of a bear market is investor euphoria, and we haven’t seen that. The most recent American Association of Individual Investors’ Sentiment Survey showed 2.3 percent more investors were bullish last week, pushing the total to 35.6 percent. That’s still well below the historic average of 38.5 percent.

Last week was punctuated by a senseless shooting. Our hearts and prayers are with the people of Las Vegas.

Data as of 10/6/17 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor’s 500 (Domestic Stocks) 1.2% 13.9% 18.0% 9.1% 11.9% 5.1%
Dow Jones Global ex-U.S. 0.5 19.3 17.5 3.3 4.8 -1.0
10-year Treasury Note (Yield Only) 2.4 NA 1.7 2.4 1.8 4.6
Gold (per ounce) -1.7 8.9 0.6 1.8 -6.6 5.6
Bloomberg Commodity Index -0.6 -4.1 -1.9 -11.1 -10.6 -6.9
DJ Equity All REIT Total Return Index 0.5 6.6 8.6 10.2 10.1 5.6
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.

Zombie tourism and zombie companies. Zombies have a special place in the heart of pop culture. The undead are pivotal characters in books, movies, games, and television shows. The practical can read The Zombie Survival Guide. Thrill seekers can binge on The Walking Dead. Romantics have Pride and Prejudice and Zombies. Anyone looking for a laugh can watch Shaun of the Dead or Zombieland.

If you’re one of those people who just can’t get enough of roamers, rotters, biters, and crawlers, you’re in for a treat: zombie tourism. National Geographic has identified several travel destinations that are steeped in zombie legend:

  1. American zombie culture appears to have origins in Haiti, where slaves believed death would reunite them with their gods and homelands. The exception was suicide. If slaves took their own lives, they “would be forced to remain in their bodies, soulless, and continue to work the plantations.”

 

  1. In Greece and elsewhere, folklore historians have found anyone who died of plague or was cursed, murdered, or born on an inauspicious day, could potentially rise from the dead. Some archeology digs have found graves with skeletons weighted by rocks or millstones.

 

  1. Georgia (in Europe). You won’t find any zombies here – and that’s the point. Apparently, Georgia boasts some of the world’s most promising zombie-proof dwellings. The village of Chazhashi, at the confluence of the lnguri and Black Rivers, has more than 200 nearly impenetrable medieval tower houses.

Zombies aren’t always undead humans. There are zombie companies, too. A zombie company is debt-laden and on the edge of bankruptcy. In fact, the Organization for Economic Co-operation and Development (OECD) thinks zombie firms may be one reason economic growth has been so slow. The Economist reported:

“We know that a few companies are still producing substantial productivity gains but it may be that monetary policy, by keeping rates low, has stymied the forces of creative destruction; ‘zombie’ companies have been kept alive, dragging down the productivity numbers. Whatever the reason, economic growth won’t rebound until productivity perks up.”

 

Perhaps National Geographic should add some quarterly earnings calls to its zombie tourism list.

 

Weekly Focus – Think About It

 

“Fear is the main source of superstition, and one of the main sources of cruelty. To conquer fear is the beginning of wisdom.”

–Bertrand Russell, British philosopher

 

Value vs. Growth Investing (10/6/17)

Name 1-Week YTD 4-Week 13-Week 1-Year 3-Year 5-Year
US Market 1.27 15.55 3.89 6.49 20.58 11.36 14.18
US Core 1.06 15.46 3.38 5.38 20.53 11.89 15.15
US Growth 1.50 22.88 3.02 7.79 23.35 12.10 14.39
US Large Cap 1.32 16.61 3.52 6.63 21.32 11.53 14.06
US Large Core 1.03 16.75 2.62 5.15 21.63 12.36 15.42
US Large Growth 1.47 24.08 2.59 8.00 24.16 12.57 14.74
US Large Val 1.44 9.57 5.46 6.55 18.27 9.61 12.09
US Mid Cap 1.13 13.45 4.28 5.78 18.40 10.74 14.78
US Mid Core 1.17 13.68 4.72 5.92 17.70 10.61 14.74
US Mid Growth 1.53 19.69 3.58 6.75 20.80 10.25 13.32
US Mid Val 0.65 7.14 4.56 4.53 16.48 11.26 16.30
US Small Cap 1.17 11.06 6.69 7.07 19.36 11.39 13.72
US Small Core 0.99 8.90 6.91 5.92 18.65 11.32 14.06
US Small Growth 1.67 19.63 6.09 8.52 22.18 12.33 13.66
US Small Val 0.79 5.03 7.14 6.80 16.90 10.45 13.35
US Value 1.24 8.77 5.40 6.17 17.85 10.01 13.04

©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 Three Key Challenges of Retirement”

Planning for your retirement can be challenging. It can be scary, and it can be frustrating. I have seen many clients who felt their plan was a disaster waiting to happen. As an advisor, I am here to say that you can handle it. Planning for retirement doesn’t have to be difficult—in fact, it can be fun! But in order to achieve the retirement of your dreams, you must prepare for three major challenges that every retiree is likely to face.

Challenge #1:

Ensuring a Long Retirement Savings Lifespan

One of the greatest fears people have in retirement is that they will outlive their savings. Fortunately, by taking steps now, you can ensure this doesn’t happen to you.

The first step is to budget your expected expenses based on your normal day-to-day costs and any activities you want to pursue during retirement. Things like travel, hobbies, remodeling your home, etc.

Next, take a hard look at your current savings and level of income. How much are you setting aside for retirement? How much more do you need to be saving or investing in order to meet your expected budget? This is where working with a financial advisor can come in handy, because an advisor can help you determine

  • how much your savings need to grow to meet your needs;
  • how long you can expect your savings to last, based on when you plan on retiring, your general health, and activities;
  • how to maximize your income opportunities after retirement; and
  • what the ideal rate of withdrawal will be from any retirement accounts you have so you don’t run out of

Once you have a plan for your retirement savings, you can move onto the next challenge:

 

Challenge #2:

Planning for Health Care Expenses

As we age, health care becomes a bigger concern, and a more difficult one to deal with. It can be hard to find a plan that provides the coverage you need at a price you can afford. All the politics and legislation affecting the healthcare industry don’t make it easier, either.

The answer, again, is to plan ahead. Here are a few things you can do:

  1. Learn about your various Medicare

If you are one of the lucky few who will have employer-provided health care coverage even after retirement, congratulations. But if not, start familiarizing yourself with the intricacies of Medicare now. The Federal government’s health insurance program for seniors is often referred to as a single plan, but in reality, it’s many types of plans rolled into one. From the basic level of coverage (Part A), to “Medicare medical insurance” (Part B) which covers outpatient hospital care, physical therapy, and home health care, to the more elaborate “Medicare Advantage” plans, most retirees are confronted with too many options, some of which are more appropriate than others. Choosing the best type of coverage for you will be crucial when it comes to paying for your medical expenses.

  1. Look at

Medigap supplemental insurance is sold by private insurance companies, and is designed to help pay those costs not covered by Medicare. Medigap isn’t free, and certain criteria must be met before you can purchase it, but it’s definitely a route to consider.

  1. Consider long-term care

Important disclaimer: not everyone will need long-term care or assisted living in their lives. That said, many people do, and long-term care (LTC) insurance is one of the best ways to pay for it. It can be beneficial to purchase LTC insurance sooner rather than later, as premiums often grow higher as you grow older. However, LTC is expensive in and of itself, so give the subject a lot of careful consideration before making a decision.

As you can see, paying for health care expenses is a huge part of retirement. As you create your retirement plan, make sure you give the subject all the attention it deserves.

Challenge #3:

Planning for Unexpected Expenses

While health concerns are a major source of unexpected costs, there are many other types of expenses that could impact your retirement. For instance

  • Car repairs. You know it will happen one day: the strange clunk-clunk sound you start hearing from your engine ends up being a problem that will cost hundreds, maybe even thousands, to fix. And if it happens more than once …
  • Your bills keep going up. What goes up does not necessarily go down. Anyone who has ever paid for an internet connection or satellite TV knows that prices tend to rise over the years. Your basic utilities are prone to price fluctuation as well. A really cold winter means your gas bill will go up. If you have children in the house who keep leaving the lights on, your electricity bill will go up. You get the picture.
  • Household repairs. When the toilet clogs or the faucet leaks; when a window breaks or the roof starts to degrade; when wood-boring beetles infest the tree in the backyard; unless you really like to DIY, that means paying for a professional … who usually aren’t

The point of all this, is to show that unexpected expenses can come at any time, in many different forms. What’s more, they can really pile up.

So, what’s the solution? Start a rainy-day fund! When most people save, they tend to just throw everything into one savings account and withdraw money whenever they either need or want to. Instead, I suggest creating a separate type of savings account: one that can only be touched whenever the unexpected happens. Every month, devote a set percentage of your income to the rainy-day fund in addition to your regular savings. Then, when your car inevitably breaks down, you won’t have to worry about it interfering with that vacation you’ve been dreaming about for years, because you’ve already set aside the funds to deal with it.

The key to starting a rainy-day fund is to do it now. If you wait until after retirement, you’ll probably have waited too long. Plus, once you’re retired, you’ll likely have less to set aside for those unexpected expenses.

Which brings us to the single most important thing you can do to meet these three key challenges of retirement. Have you guessed what it is yet?

That’s right: plan ahead.

By being proactive, by starting now, you can mitigate these challenges and prevent them from derailing your dream retirement.

As always, if you’d like any assistance with creating a retirement plan, or if you have questions about how to maximize your savings and cover your expenses, feel free to contact me at 215-886-2122.

 

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 10/2/17

The Markets

A lot happened during the third quarter of 2017, but not much changed.

The bull market in U.S. stocks continued to charge ahead. Traditional measures of valuation continued to suggest the market is overvalued, but some analysts argued it’s different this time. The Economist explained:

“The current [cyclically-adjusted price-to-earnings] ratio of 31 suggests that stocks are about 50% over-valued – a figure that has only been exceeded in the past 60 years during the dot-com bubble. Bulls argue that the S&P 500’s constituents can justify this heady valuation. Big American companies are wielding increased market power, enabling them to earn outsized profits at the expense of America’s customers.”

The bull market in U.S. bonds continued. Interest rates on 10-year Treasury bonds were lower at the end of September than they were at the start of the year, despite the Federal Reserve increasing rates in March and June. The Fed also has indicated it will soon begin to unwind its balance sheet, which includes about $4.5 trillion in Treasury bonds, mortgage-backed securities, and government agency debt.

Geopolitical tensions remained high, but investors were impervious to the potential effect of various conflicts on stock and bond markets. In August, Barron’s wrote:

“The biggest surprise of 2017 remains that geopolitical risk continues to not matter. Until Monday, North Korea’s nuclear missile program had again faded into the background as just another high impact/low probability risk with no discernible effect on market sentiment. Brexit, the changes in leadership roles in China after the 19th National People’s Congress, the possibility of a United States-China trade war, and the unpredictable nature of the Trump presidency are not weighing on stocks.”

The CBOE Volatility Index (VIX) keeps plumbing historic lows. The VIX reflects investors’ expectations for market volatility in coming months. The lower the Index reading, the lower volatility expectations are. The historic average for the VIX is about 19.

During 2017, the number of days on which the VIX finished below 10 – suggesting investors are exceptionally calm – increased significantly. In early June, the VIX had closed below 10 just 14 times since 1990. Six of those closes had occurred in 2017. By the end of September, the VIX had closed below 10 on 32 days since 1990 and 24 times in 2017.

We’re still waiting for inflation to move higher. At the end of the quarter, inflation appeared to be heading the wrong way. The core Personal Consumption Expenditures (PCE) index, which is the Federal Reserve’s favorite measure of inflation, came in at 1.3 percent, year-over-year. That’s its lowest level since October 2015, reported Barron’s. The Fed’s goal is to have inflation at 2 percent. It has raised rates during 2017 in anticipation of higher inflation rates, but those higher rates have yet to materialize.

Data as of 9/29/17 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor’s 500 (Domestic Stocks) 0.7% 12.5% 17.1% 8.4% 11.8% 5.0%
Dow Jones Global ex-U.S. -0.6 18.7 16.5 2.7 4.9 -0.9
10-year Treasury Note (Yield Only) 2.3 NA 1.6 2.5 1.6 4.6
Gold (per ounce) -0.9 10.7 -2.7 1.7 -6.4 5.6
Bloomberg Commodity Index -0.5 -3.5 -0.9 -11.2 -10.8 -7.2
DJ Equity All REIT Total Return Index 0.7 6.1 2.1 10.1 10.2 5.8
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.

the case of the swirling Euros. In mid-September, local authorities in Geneva, Switzerland were investigating an unexpected deposit. Reuters reported:

“…the first blockage occurred in the toilet serving the vault at [a] bank…in Geneva’s financial district, and three nearby bistros found their facilities bunged up with 500-euro notes a few days later…The cash was confiscated during the investigation and it was unclear who would get it if it was found to be lawful. There was no immediate reason to think it was dirty money…”

Whoever was responsible for flushing about $100,000 worth of 500-euro bills may have jumped the gun. The €500 note will be discontinued by the European Central Bank because authorities suspect it has been used to facilitate illegal activities, but production continues until the end of 2018.

The perpetrator hasn’t committed a crime, reported Bloomberg. While it’s illegal to mutilate or deface bills in the United States, that’s not the case in Switzerland. The European Commission isn’t concerned when small amounts of euro are damaged. Its rules for legal tender state:

“The destruction of small quantities of euro banknotes or coins by an individual should neither be prohibited nor penalized. The justification for the non-prohibition is the fact that the lawful owner of a banknote should be able to do what he/she wants with his/her own good as long as there is no impact on third parties.”

Why investigate if there is no crime? There’s nothing like a good mystery to occupy the mind!

Weekly Focus – Think About It

“The problem with putting two and two together is that sometimes you get four, and sometimes you get twenty-two.”

Dashiell Hammett, American author

Value vs. Growth Investing (9/29/17)

Name 1-Week YTD 4-Week 13-Week 1-Year 3-Year 5-Year
US Market 0.82 14.10 2.30 4.52 18.65 10.74 14.21
US Core 0.74 14.25 1.93 3.70 18.91 11.43 15.33
US Growth 0.80 21.07 1.29 5.33 20.90 11.32 14.23
US Large Cap 0.62 15.09 1.87 4.73 19.46 10.92 14.10
US Large Core 0.52 15.56 1.20 3.56 20.23 11.97 15.66
US Large Growth 0.70 22.28 0.90 5.61 21.90 11.81 14.59
US Large Val 0.65 8.02 3.63 4.89 16.38 8.95 12.12
US Mid Cap 1.03 12.18 2.89 3.73 16.25 10.12 14.81
US Mid Core 0.92 12.37 3.17 4.01 15.36 9.98 14.83
US Mid Growth 0.75 17.89 1.77 4.21 17.82 9.50 13.15
US Mid Val 1.47 6.44 3.85 2.88 15.42 10.82 16.52
US Small Cap 2.29 9.78 5.09 4.67 17.41 10.73 13.66
US Small Core 2.46 7.83 5.45 3.92 17.02 10.69 13.96
US Small Growth 2.15 17.66 4.12 5.40 19.38 11.35 13.37
US Small Val 2.27 4.21 5.82 4.75 15.55 10.07 13.58
US Value 0.92 7.43 3.82 4.48 16.15 9.42 13.12
 ©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:

“Social Security Planning for Women”

 Our one and only Social Security Planning educational event for 2017 is now open for registration:

MLS_Women_Retirement+SS-NOV2017email

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 9/25/17

The Markets

Geopolitics, what is it good for? Absolutely nothin’!

In January, Robert Kahn of the Council on Foreign Relations wrote in Global Economics Monthly:

“Markets showed impressive resilience in the face of a range of geopolitical shocks in 2016, but recent market moves suggest this year could be different…It should be the year that global geopolitical risks provide the volatility in markets that I, and many other economists, have been predicting for some time.”

Kahn may share the bemusement of bond market prognosticators who have anticipated the end of the bull market in bonds for years and have yet to see their predictions prove out.

So far in 2017, investor confidence has remained impervious to geopolitical threats. Bloomberg reported, while diplomats at the United Nations stress over North Korea’s threat to drop a hydrogen bomb, Russia’s provocations along the borders of Eastern Europe, rising Middle East tensions, and conflict between the United States and China in the South China Sea, investors remain relatively sanguine.

The CBOE Volatility Index, or VIX, which measures market expectations for near-term volatility in the Standard & Poor’s 500 Index (S&P 500), finished below 10 on Friday. Historically, the VIX has finished below 10 on just a few days in its history. While the very low level of the VIX doesn’t tell us much about the future, Barron’s reports it indicates investors are not too concerned about “what’s happening now and what has happened.”

That contention appears to be supported by U.S. stock market performance. Despite hostile rhetoric between the United States and North Korea last week, the S&P 500 and Dow Jones Industrial Average both finished slightly higher.

Data as of 9/22/17 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor’s 500 (Domestic Stocks) 0.1% 11.8% 14.9% 87.9% 11.4% 5.1%
Dow Jones Global ex-U.S. 0.4 19.4 15.7 2.0 4.7 -0.6
10-year Treasury Note (Yield Only) 2.3 NA 1.6 2.6 1.7 4.6
Gold (per ounce) -2.1 11.7 -3.3 2.2 -6.0 5.9
Bloomberg Commodity Index -0.4 -3.0 -0.8 -10.6 -10.3 -7.1
DJ Equity All REIT Total Return Index -2.5 5.4 0.5 9.8 9.6 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.

it’s the ig nobel awards! On September 14, the 27th First Annual Ig Nobel Prize Ceremony kicked off with a flight of paper airplanes.

The winners were chosen by the publishers of the Annals of Improbable Research, which reviews, “Real research, about anything and everything, from everywhere. Research that’s maybe good or bad, important or trivial, valuable or worthless.” The most important characteristic of the works published is they make people laugh and think.

The evening’s entertainment included ceremonial bows from returning Ig winners John Culvenor, who received the 2003 Physics Prize for analyzing the forces required to drag sheep across various surfaces, and Deborah Anderson, who received the 2008 Chemistry Prize for testing whether a dark cola is an effective spermicide.

This year’s winning research explored diverse and improbable ideas, including studies entitled:

  • Didgeridoo Playing as Alternative Treatment for Obstructive Sleep Apnoea Syndrome: Randomised Controlled Trial, which discovered that, “Regular didgeridoo playing is an effective treatment alternative well accepted by patients with moderate obstructive sleep apnoea syndrome.”
  • Never Smile at a Crocodile: Betting on Electronic Gaming Machines is Intensified by Reptile-Induced Arousal, which showed that, “At-risk gamblers with few self-reported negative emotions placed higher average bets at the EGM after having held the crocodile when compared to the control.”
  • Is That Me or My Twin? Lack of Self-Face Recognition Advantage in Identical Twins concluded that, “identical twins cannot tell themselves apart, visually.”
  • On the Rheology of Cats, which explored whether a cat can be both a solid and a liquid and determined, “much more work remains ahead, but cats are proving to be a rich model system for rheological research.”

Each of the 10 Ig Nobel winners was given 60 seconds to explain themselves before being awarded a bust replica of a human head with a question mark on top of it, a certificate signed by a Nobel Laureate, and one trillion Zimbabweans.

Russian-born physicist Andre Geim was the first scientist to win both awards. He received a 2000 Ig Nobel Prize for his work using magnets to levitate frogs, and a 2010 Nobel Prize for discovering graphene (a new form of carbon).

Weekly Focus – Think About It

“Like a welcome summer rain, humor may suddenly cleanse and cool the earth, the air, and you.”

Langston Hughes, American poet

Value vs. Growth Investing (9/22/17)

Name 1-Week YTD 4-Week 13-Week 1-Year 3-Year 5-Year
US Market 0.21 13.17 2.52 3.35 17.22 10.00 13.71
US Core -0.23 13.41 2.07 2.68 17.41 10.65 14.87
US Growth -0.12 20.10 2.03 3.28 19.17 10.83 13.66
US Large Cap 0.06 14.37 2.15 3.49 18.15 10.32 13.68
US Large Core -0.59 14.96 1.45 2.52 18.93 11.32 15.29
US Large Growth -0.39 21.44 1.54 3.35 20.21 11.46 14.05
US Large Val 1.21 7.32 3.51 4.60 15.45 8.14 11.77
US Mid Cap 0.44 11.04 3.03 2.90 15.01 9.18 14.18
US Mid Core 0.41 11.35 3.28 3.27 14.00 9.08 14.23
US Mid Growth 0.63 17.01 2.94 3.13 16.61 8.78 12.59
US Mid Val 0.25 4.90 2.84 2.20 14.24 9.60 15.75
US Small Cap 1.07 7.32 4.96 3.24 14.13 9.04 12.69
US Small Core 1.42 5.24 4.61 2.46 13.21 8.85 12.94
US Small Growth 0.54 15.19 4.80 2.92 15.63 10.01 12.47
US Small Val 1.28 1.89 5.55 4.48 13.28 8.21 12.57
US Value 1.03 6.46 3.52 4.12 15.10 8.46 12.65
 ©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:

Hurricane Season and Your 401k

“We’ve had three 100-year floods in the last 18 months. This one looks like a 1,000-year flood.”
– Congressman Pete Olson of Texas (source: NPR)

The historic amount of rainfall caused by Hurricane Harvey last month caused flooding in the city of Houston. This storm marked the third flood event to hit the Houston area in as many years (Memorial Day floods in 2015 and 2016 accounted for the first two).

Every time I read or hear about sophisticated assumptions about future weather patterns I am reminded of the computer models used to predict stock market risk.

The current generation of robo-advisors use Modern Portfolio Theory to construct individual company 401(k) retirement plan mutual fund portfolios with the lowest possible risk.

Just in case you are interested, the financial industry jargon for the lowest possible risk for a given level of expected return is standard deviation.

The robo-advisor “sales pitch” for Modern Portfolio Theory is that it will weather any stock market storm in a company 401(k) retirement plan account. This investment management process will “diversify away” potential historic company 401(k) retirement plan principal losses.

If you are a long-time resident of the Houston area, you have been warned on three separate occasions over the last few years was to evacuate areas of the metro. For those few citizens who lacked those skills, mandatory evacuations were ordered.

If you choose to live in Houston, you will live to see more historic flooding. You can’t diversify your way around that fact. At some time in your future another evacuation will save your life.

Fortunately, there are equally sophisticated computer model tools that will help individual company 401(k) retirement plan participants identify heightened risk levels in changing stock market environments.

These tools don’t rely on historical correlations. Instead, they help identify the realities of lower stock prices caused by more sellers than buyers. These tools don’t have to predict. They just need to react to what is going on in the stock markets.

It is much too late now for Houston residents to buy flood insurance. Just like it is much too late for Florida residents to buy hurricane insurance. It is not too late to put in place a stock market risk management game plan for your company 401(k) retirement plan account.

Computer models can provide more than enough time to alert you to “get out of the way” when you need to. Diversification does not get you out of the way. Instead, you sit and take it and hope for the best.

Make sure that you have more than enough time to safely evacuate with a large part of the last several years of your company 401(k) stock market investment gains.

If you are a set it and forget it investor (index funds) here is an article you might want to take a few seconds to read.

http://www.marketwatch.com/story/the-shocking-truth-about-stock-returns-in-this-century-2017-09-22?mod=mw_share_facebook

Give our office a call at 215-886-2122 to see how we can provide you a monthly breakdown of the investments in your 401k plan.

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 9/18/17

The Markets

“In theory, there is no difference between theory and practice, in practice there is.”

Yogi Berra was talking about baseball, but the concept also applies to diversification, according to the GMO White Paper, The S&P 500: Just Say No. From the title, you might think the authors – Matt Kadnar and James Montier – don’t like U.S. stocks. They do:

“Being a U.S. equity investor over the past several years has felt glorious. The S&P 500 has trounced the competition provided by other major developed and emerging equity markets. Over the last 7 years, the S&P is up 173 percent (15 percent annualized in nominal terms) versus MSCI EAFE (in USD terms), which is up 71 percent (8 percent annualized), and poor MSCI Emerging, which is up only 30 percent (4 percent annualized). Every dollar invested in the S&P has compounded into $2.72 versus MSCI EAFE’s $1.70 and MSCI Emerging’s $1.30.”

The authors’ concern is U.S. markets have performed so well, investors may be tempted to abandon diversification and concentrate their portfolios in indexed U.S. stocks. Kadnar and Montier wrote, “Human nature is to extrapolate the recent past. It is easy to see, given the strong performance of U.S. equities in both absolute and relative terms, why many are suggesting they are the only asset you need to own.”

Focusing assets in the United States, according to GMO, ignores the most important determinant of long-term returns: valuation. “From our perspective, one has to make some fairly heroic assumptions to believe that the S&P is even remotely close to fair value.”

High valuations haven’t dulled the appeal of U.S. stocks for investors, though. Last week, the S&P 500 closed at a record high, and the Dow Jones Industrial Average posted its biggest gain since last December, reported CNBC.com.

Data as of 9/15/17 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor’s 500 (Domestic Stocks) 1.6% 11.7% 16.4% 8.0% 11.3% 5.4%
Dow Jones Global ex-U.S. 0.7 18.9 18.3 1.6 4.4 -0.2
10-year Treasury Note (Yield Only) 2.2 NA 1.7 2.6 1.8 4.5
Gold (per ounce) -1.7 14.1 0.9 2.3 -5.7 6.3
Bloomberg Commodity Index 0.5 -2.6 2.6 -11.1 -10.5 -6.9
DJ Equity All REIT Total Return Index 0.4 8.1 7.1 10.5 9.5 6.7
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.

7 steps to protect yourself after the equifax breach. From May through July, hackers exploited a website vulnerability at Equifax, one of the major consumer credit reporting agencies. If you have a credit report, there is a chance your sensitive and personal information including Social Security numbers, birth dates, addresses, and driver’s license numbers, may have fallen into the wrong hands. The stolen information could be used in tandem with passwords taken from other databases to commit financial crimes against you, reported a source cited by Consumer Reports.

Here are seven steps to take to help protect your assets and credit:

  1. Find out if you were affected. From a secure computer or encrypted network connection, go to the Equifax website, equifaxsecurity2017.com. Scroll down and click on ‘Potential Impact.’ You will be asked to provide your last name and the last six digits of your Social Security number.
  2. Enroll in TrustedID Premier. If your data has been breached, Equifax will offer enrollment in TrustedID Premier. The program provides up to $1 million in ID theft insurance, Social Security Number Scanning, 3-bureau credit file monitoring, and the option to freeze your Equifax credit report.
  3. Place a fraud alert or credit freeze on your other credit reports. Experian, TransUnion, and Innovis also provide credit reporting services. Contact each of the companies to place an alert or a freeze on your credit report:
  • A fraud alert warns both current and prospective lenders they must take reasonable steps to verify your identity before providing credit. When you’re a victim of ID theft, an alert can be put in place for up to seven years.
  • A credit freeze is different. It restricts access to your credit report. If you request a freeze, the credit agency will send a letter with a personal ID number (PIN). Keep the PIN in a safe place. You’ll need it to unfreeze your accounts, according to the Federal Trade Commission.
  1. Change your passwords. Create new passwords for online banking, brokerage, and financial accounts. Each account should have a unique password. Best practices suggest passwords have 12 to 14 characters.

 You may want to consider using a password management application. They’re designed to store and retrieve passwords so you can keep track of multiple long, unique password combinations without security issues like storing passwords improperly or failing to remember them.

  1. Activate two-factor authentication. Two-factor authentication provides an additional layer of security for email and other accounts. After you enter your user ID and password, you’ll be asked for a code to verify your identity. You can have the account provider text a code to your phone, although that creates vulnerability if your phone is stolen. A better option may be to download an authenticator app so you can generate your own code.
  2. Beware email links. Some fraud attempts are obvious: text or email from a Nigerian prince or an update request from a financial institution where you don’t have an account. Others may be more difficult to spot. As a rule of thumb, if you receive an email with a link requesting you update or make changes to a financial account, don’t click on it. Call the financial institution or go directly to its website to make any changes.
  3. Keep an eye on your accounts. Check bank, brokerage, and other financial statements for suspicious transactions. If you find unauthorized activity, report it to the institution and the proper authorities.

If you have any questions or concerns about this breach or the markets, please contact us.

Weekly Focus – Think About It

“The most effective way to do it, is to do it.”

–Amelia Earhart, American aviation pioneer

Value vs. Growth Investing (9/15/17)

Name 1-Week YTD 4-Week 13-Week 1-Year 3-Year 5-Year
US Market 1.69 12.93 1.85 3.18 18.78 10.01 13.53
US Core 1.66 13.67 1.78 2.95 19.44 10.88 14.80
US Growth 0.89 20.25 2.12 4.12 21.39 10.90 13.60
US Large Cap 1.65 14.30 1.62 3.67 19.64 10.52 13.61
US Large Core 1.53 15.65 1.57 3.57 21.12 11.82 15.38
US Large Growth 0.88 21.91 1.83 4.52 22.76 11.73 14.14
US Large Val 2.63 6.03 1.44 2.82 15.21 7.98 11.40
US Mid Cap 1.63 10.56 2.26 1.97 16.74 8.79 13.73
US Mid Core 1.93 10.90 2.30 1.98 15.76 8.83 13.84
US Mid Growth 0.62 16.28 2.67 2.80 17.92 8.28 12.10
US Mid Val 2.46 4.64 1.75 1.03 16.36 9.18 15.31
US Small Cap 2.26 6.19 3.04 1.54 15.77 8.18 12.07
US Small Core 2.19 3.77 2.30 -0.23 14.61 7.88 12.20
US Small Growth 1.81 14.57 3.81 3.72 17.09 9.46 12.05
US Small Val 2.85 0.60 3.03 1.14 15.26 7.15 11.87
US Value 2.61 5.37 1.61 2.35 15.49 8.19 12.24

©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:

Income protection. What’s that?

 

If you don’t know what income protection is, don’t worry. Income protection, or individual disability insurance, is new for a lot of people. But it is a very important step in your financial journey. And, we’re here to help you navigate the ins and outs of it.

To get started, take a few minutes to:

  1. Watch this short video. It’s an easy-to-understand snap shot of what income protection is.
  2. Think about what your income makes possible in your
    life
    – your home, activities, savings. If you couldn’t work because of an illness or injury, what would you do?
  3. Talk to me about your needs. In 30 minutes, we can see how income protection could make a big difference in your financial journey.

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 9/11/17

banner

The Markets

Last week, the aftermath of Hurricane Harvey and potency of Hurricane Irma dominated hearts and minds, but there were some diversions and some welcome news, too.

The NFL kicked off its 2017 season with the Chiefs’ win over the Patriots. The men’s U.S. soccer team tied Honduras to stay in the running for a World Cup spot. And, Sloane Stephens made the jump from 957th best on the women’s tennis tour to U.S. Open Champion.

Also, last week, President Trump signed a bipartisan bill authorizing relief for victims of Hurricane Harvey. The damage from Harvey has been estimated at about $50 billion, reported Yahoo! Finance, and the damage from Hurricane Irma may be even greater.

The signed bill also raised the debt ceiling, avoided a U.S. Treasury default, and funded the government for three months. These aspects of the legislation may have been more important to stock markets, according to a source cited by Barron’s:

“Dubravko Lakos-Bujas, head of U.S. equity strategy and global quantitative research at JPMorgan, observes that the S&P 500 has dropped about 2 percent when hurricanes make landfall, as sectors that get slammed – think insurance companies, hotels, and cruise lines – are offset by ones that benefit, like autos, energy and equipment services, and basic materials for construction. A failure to raise the debt ceiling or pass a budget, though, has typically caused the market to drop 3 percent to 5 percent. ‘In essence, the market risk associated with the failure of passing the budget and addressing the debt ceiling has been pushed out for now…’”

Major U.S. stock markets finished the week slightly lower. The Standard & Poor’s 500 Index remains less than 1 percent below its all-time high.

Data as of 9/8/17 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor’s 500 (Domestic Stocks) -0.6% 9.9% 12.8% 7.1% 11.5% 5.4%
Dow Jones Global ex-U.S. 0.6 18.1 14.1 1.0 5.0 -0.2
10-year Treasury Note (Yield Only) 2.0 NA 1.6 2.5 1.7 4.3
Gold (per ounce) 2.0 16.2 0.2 2.3 -4.9 6.7
Bloomberg Commodity Index -0.3 -3.1 -0.5 -12.0 -10.5 -6.7
DJ Equity All REIT Total Return Index 0.6 7.7 1.8 8.4 9.9 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.

how do you protect personal data? Last week, Equifax, one of three major consumer credit reporting agencies, was hacked. The New York Times reported the company had data on more than 820 million consumers and more than 91 million businesses worldwide. Estimates suggest 143 million Americans may have been affected.

It’s no surprise new ways to safeguard personal data are on the horizon. Some involve blockchain technology, which underlies cryptocurrencies but has many other potential applications. PCMag.com described it like this:

“People often get bogged down in technological complexity when trying to understand blockchain, but the basic concept is a simple and universal one. We have facts and information we don’t want accessed, copied, or tampered with, but on the Internet, there’s always a chance it could be hacked or modified. Blockchain gives us a constant – a bedrock we know won’t change once we put something on it and where a transaction will be verified only if it follows the rules.”

In July, The Economist reported startup companies have begun using blockchain to register valuable assets, manage personal information, and provide ‘truth’ services that ensure research data integrity. Governments are embracing blockchain applications to manage land registries and corporate recordkeeping, among other things. Another potential application for blockchain is maintaining immutable personal data:

“One of the first things done for a baby could be to give the newborn an entry in a blockchain, the crypto-equivalent of a birth certificate. This sounds Orwellian, but it does not have to be. On the contrary, if people’s identity is anchored in one or several blockchains, this would give them more control over it and their personal data.”

If blockchain applications are successful, it may become easier to keep personal data safe online.

 Weekly Focus – Think About It

“I’m not much but I’m all I have.”

–Philip K. Dick, Author of Martian Time-Slip

Value vs. Growth Investing (9/8/17)

Name 1-Week YTD 4-Week 13-Week 1-Year 3-Year 5-Year
US Market -0.32 11.18 -0.46 1.68 14.73 8.98 13.63
US Core -0.33 11.72 -0.40 1.08 15.64 9.98 14.78
US Growth 0.07 19.61 0.80 2.64 18.42 10.08 13.89
US Large Cap -0.27 12.67 -0.22 2.13 16.14 9.60 13.70
US Large Core -0.19 13.96 0.07 1.63 18.32 11.17 15.41
US Large Growth 0.15 21.37 0.85 2.87 20.06 10.97 14.42
US Large Val -0.81 3.39 -1.71 1.71 10.12 6.61 11.35
US Mid Cap -0.38 8.62 -0.93 0.64 11.59 7.51 13.87
US Mid Core -0.60 8.26 -1.36 -0.01 9.72 7.23 13.68
US Mid Growth -0.12 15.70 0.85 2.18 14.56 7.44 12.48
US Mid Val -0.42 2.07 -2.42 -0.41 10.31 7.74 15.47
US Small Cap -0.72 3.71 -1.53 0.01 9.57 6.66 12.10
US Small Core -0.89 1.36 -2.14 -1.24 8.12 6.44 12.15
US Small Growth -0.34 12.62 0.09 1.44 12.49 8.05 12.18
US Small Val -0.95 -2.46 -2.62 -0.22 7.75 5.40 11.87
US Value -0.74 2.71 -1.92 1.15 10.03 6.77 12.23
 ©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 Protect Yourself—and Your Money—From Hackers (Equifax Hack)

You’ve probably seen headlines like this over the past few days:

Equifax® Says Cyberattack May Have Hit 143 Million Customers 1

Every year, it seems more and more companies are falling victim to hackers. Even large organizations like Verizon®, Walmart®, and Target® aren’t immune. But the recent cyberattack on Equifax is especially noteworthy. As one of the three largest credit-reporting companies in the United States, Equifax stores a lot of private information. In this case, names, addresses, birthdates, Social Security numbers and even driver’s license numbers were stolen.

What can hackers do with someone’s name, birthdate, address and Social Security number? The answer is chillingly simple: take the victim’s identity and use it for themselves.

Fortunately, there are steps you can take to protect yourself.

What to Do After a Data Breach

In a situation like this, there are both reactive and proactive steps to take. Let’s cover reactive steps first.

You may be asking yourself, “How do I know if I have personally been affected by Equifax’s data breach?” Equifax has created a website, http://www.equifaxsecurity2017.com, where you can check if your personal information has been compromised. You can also enroll in a free credit- monitoring service provided by Equifax.

However, I would exercise caution before going there. The website asks you to provide the last six digits of your Social Security Number to perform the check. Given their recent history, it’s reasonable to be wary of providing Equifax more personal information.

In addition, a report by the Washington Post suggests that “enrolling in the Equifax checker program … potentially restricts your legal rights. Buried in the terms of service is language that bars those who enroll … from participating in any class-action lawsuits that may arise from the incident.”2

It’s not my place to tell you whether to use the website or not, and indeed, the Federal Trade Commission’s official position is that “if a company responsible for exposing your information offers you free credit monitoring, take advantage of it.”3 But whether you choose to use Equifax’s checker website or not, there are additional steps the government suggests you take:3

  1. Get a free credit report from annualcreditreport.com. Check for any accounts or charges you don’t recognize.
  2. Consider contacting your financial institution and placing a “credit freeze.” This makes it harder for someone to open a new account in your name.
  3. File your taxes as early as possible—before a scammer can. Tax identity theft happens when someone uses your Social Security number to get a tax refund or a job.
  4. Don’t believe anyone who calls and says you’ll be arrested unless you pay for taxes or debt—even if they have part or all of your Social Security number, or say they’re from the IRS.
  5. Watch for signs of identity theft. Warning signs include withdrawals from your bank account you can’t explain, failure to receive expected bills, and merchants refusing your checks.

Changing your online passwords and signing up for a third-party credit-monitoring service are also prudent steps.

For more information, I recommend visiting www.identitytheft.gov.

Proactive Steps to Take

Whether your personal information was exposed or not, there are some basic steps everyone should take to protect their identity. Here are just a few:

  • Delete your saved payment methods from online shopping You will have to reenter your billing information each time you make a purchase, but it will protect your payment information if your account is breached or someone gains access to your login.
  • Review statements and credit reports regularly. Look for unauthorized charges or small amounts appearing on statements. Check your credit report regularly. Federal law allows you to get a free credit report every 12 months to review. Make sure all information is correct.
  • Don’t make impulsive decisions based on If you receive an email or phone call stating that it’s from your bank or the government, and that you’re in trouble, don’t provide the sender with any personal information. Typically, the government will not contact you by email or phone. They will contact you by mail. Your bank will never ask you to provide information through email either. If you’re concerned about the credibility of a call or email from your bank, contact the nearest branch and ask them.
  • If someone contacts you saying they’re a relative in trouble and need your help, ask them something that only your relative would know. Or ask a trick question that reveals they’re lying, such as “How’s your dog Scruffy? Did he get better?” when you know that relative doesn’t have a dog. If they say, “Oh he’s doing much better,” then you know they’re a fraud and you should immediately hang up.
  • Keep all personal documents in a safe place. Don’t carry them around with you, especially not your Social Security card.
  • Don’t open emails from senders you don’t recognize, no matter how interesting the subject line.
  • Choose a different way to Many merchants accept alternative ways to pay for goods and services, including Google® Wallet, Apple Pay®, or PayPal®. These services provide an extra layer of protection because they keep your credit card information stored but do not actually provide it to retailers when you pay.
  • Don’t use your bank cards online unless the site is secure and Make sure you are purchasing from a reputable company and website. Don’t trust a site just because it claims to be secure. Use credit cards so you can dispute the charges if something goes wrong. You can still be reimbursed for fraud on a debit card but the process often takes longer and your money is already gone.

None of these steps are foolproof, but by taking concrete steps to protect yourself, your identity, and your money, you make it much, much harder for hackers and scammers.

As always, please let me know if you have any questions or concerns. My team and I are always happy to be of service in any way we can.

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 9/5/17

The Markets

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

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

The New York Times reported:

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

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

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

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

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

Data as of 9/1/17 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor’s 500 (Domestic Stocks) 1.4% 10.6% 14.1% 7.3% 12.0% 5.2%
Dow Jones Global ex-U.S. 0.7 17.4 16.0 0.6 5.5 -0.5
10-year Treasury Note (Yield Only) 2.2 NA 1.6 2.4 1.6 4.6
Gold (per ounce) 2.7 13.9 0.8 0.9 -4.8 7.0
Bloomberg Commodity Index 2.0 -2.9 3.5 -12.1 -10.3 -6.5
DJ Equity All REIT Total Return Index 0.7 7.0 2.2 8.5 9.7 6.5
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, Barron’s, 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 don’t live near your parents and older family members, you may want to learn more about Social Security’s Representative Payment Program (RPP). The Center for Retirement Research at Boston College (CRRBC) published a brief in August that provided some insight into the need for the program:

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

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

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

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

Weekly Focus – Think About It

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

–Betty White, American actor and comedienne

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

Name 1-Week YTD 4-Week 13-Week 1-Year 3-Year 5-Year
US Market 1.56 11.80 0.23 2.34 16.36 9.26 14.31
US Core 1.48 12.36 0.85 1.87 17.01 10.37 15.38
US Growth 2.23 19.58 0.59 3.09 19.40 10.04 14.42
US Large Cap 1.48 13.15 0.56 2.87 17.45 9.84 14.29
US Large Core 1.45 14.36 1.51 2.54 19.34 11.48 15.88
US Large Growth 2.12 21.15 0.65 3.32 20.77 10.88 14.85
US Large Val 0.79 4.63 -0.50 2.63 12.36 7.12 12.22
US Mid Cap 1.56 9.50 -0.48 0.89 13.79 7.91 14.74
US Mid Core 1.44 9.37 -0.45 0.37 11.66 7.86 14.53
US Mid Growth 2.28 16.04 0.51 2.39 15.86 7.57 13.22
US Mid Val 0.87 3.25 -1.64 -0.21 13.75 8.21 16.50
US Small Cap 2.41 5.05 -1.08 1.02 12.72 7.04 13.20
US Small Core 1.89 2.89 -1.71 -0.23 11.12 6.94 13.30
US Small Growth 3.40 13.46 0.10 2.65 15.29 8.14 13.10
US Small Val 1.91 -0.86 -1.68 0.58 11.42 5.97 13.10
US Value 0.88 3.97 -0.81 1.92 12.62 7.28 13.16
 ©2004 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) is not warranted to be accurate, complete or timely. Morningstar is not responsible for any damages or losses arising from any use of this information and has not granted its consent to be considered or deemed an “expert” under the Securities Act of 1933. Past performance is no guarantee of future results.  Indices are unmanaged and while these indices can be invested in directly, this is neither a recommendation nor an offer to purchase.  This can only be done by prospectus and should be on the recommendation of a licensed professional.

  Office Happenings:

Have we seen the beginning?

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

Neil Andersen Sept 403b_Page_1

 

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”.