Schwartz Financial Weekly Commentary 6/25/18

The Markets

What time is it?

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

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

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

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

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

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

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

 

Data as of 6/22/18 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor’s 500 (Domestic Stocks) -0.9% 3.0% 13.2% 9.1% 11.9% 7.7%
Dow Jones Global ex-U.S. -1.2 -3.8 6.5 2.2 4.9 0.5
10-year Treasury Note (Yield Only) 2.9 NA 2.1 2.4 2.6 4.2
Gold (per ounce) -1.3 -2.1 1.5 2.3 -0.3 3.7
Bloomberg Commodity Index -0.4 -1.0 10.0 -4.4 -7.1 -9.2
DJ Equity All REIT Total Return Index 2.4 0.3 3.4 7.8 9.7 7.9
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

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

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

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

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

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

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

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

Weekly Focus – Think About It

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

–Mark Twain, American author and humorist

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

Name 1-Week YTD 4-Week 13-Week 1-Year 3-Year 5-Year
US Market -0.80 4.57 1.59 5.05 16.00 11.13 13.89
US Core -1.05 0.10 0.04 3.32 9.77 9.79 12.93
US Growth -0.67 14.22 4.58 8.75 27.22 14.03 17.43
US Large Cap -1.00 4.23 1.21 4.73 15.71 11.61 14.01
US Large Core -1.31 -0.74 -0.51 2.55 8.37 10.36 12.94
US Large Growth -0.95 14.14 4.01 7.97 27.39 14.91 18.32
US Large Val -1.05 -1.89 -0.85 1.64 10.06 8.99 10.40
US Mid Cap -0.52 4.66 2.22 4.85 15.89 9.79 13.69
US Mid Core -0.54 1.08 1.45 3.59 12.39 8.13 13.09
US Mid Growth -1.06 10.85 3.92 6.41 22.78 10.34 14.32
US Mid Val 0.09 1.98 1.10 4.49 12.30 10.77 13.57
US Small Cap 0.41 7.89 3.72 9.23 19.39 9.92 13.07
US Small Core 0.28 5.77 2.68 8.62 16.54 9.27 12.77
US Small Growth 0.04 14.52 5.22 9.59 26.65 11.60 14.63
US Small Val 0.94 3.54 3.17 9.45 15.09 8.70 11.69
US Value -0.68 -0.72 -0.18 2.75 10.92 9.36 11.16
2004 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) is not warranted to be accurate, complete or timely. Morningstar is not responsible for any damages or losses arising from any use of this information and has not granted its consent to be considered or deemed an “expert” under the Securities Act of 1933. Past performance is no guarantee of future results.  Indices are unmanaged and while these indices can be invested in directly, this is neither a recommendation nor an offer to purchase.  This can only be done by prospectus and should be on the recommendation of a licensed professional.

 Office Happenings:

Soul Surfer

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

That’s when the shark came.

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

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

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

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

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

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

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

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

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

Regards,

Mike

Michael L. Schwartz, RFC®, CWS®, CFS

P.S.  Please feel free to forward this commentary to family, friends, or colleagues.  If you would like us to add them to the list, please reply to this email with their email address and we will ask for their permission to be added.

 

Michael L. Schwartz, RFC, CWS, CFS, a registered principal offering securities and advisory services through Independent Financial Group, LLC., a registered broker-dealer and investment advisor.  Member FINRA-SIPC. Schwartz Financial and Independent Financial Group are unaffiliated entities.

 

This information is provided for informational purposes only and is not a solicitation or recommendation that any particular investor should purchase or sell any security. The information contained herein is obtained from sources believed to be reliable but its accuracy or completeness is not guaranteed.  Any opinions expressed herein are subject to change without notice.  An Index is a composite of securities that provides a performance benchmark.  Returns are presented for illustrative purposes only and are not intended to project the performance of any specific investment.  Indexes are unmanaged, do not incur management fees, costs and expenses and cannot be invested in directly.  Past performance is not a guarantee of future results.

 

* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.

 

* The DJ Global ex US is an unmanaged group of non-U.S. securities designed to reflect the performance of the global equity securities that have readily available prices. 

 

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

 

* Gold represents the London afternoon gold price fix as reported by the London Bullion Market Association.

 

* The DJ Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

 

* The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.

 

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

 

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

 

* Past performance does not guarantee future results.

 

* You cannot invest directly in an index.

 

* Consult your financial professional before making any investment decision.

 

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

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

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

401k Costs Got You Concerned?

Concerned by either the start up costs or the continuing costs for your company 401k plan.  These are our costs, contact our office at 215-886-2122

 

Summary of 401k implementation costs
Adopting Employer Setup & Conversion Fee
– One-Time Setup Fee $0.00
Adopting Employer Annual Administration Fees*
– Annual Base Fee – See note below* $0.00*
Adopting Employer First Year Fee Estimate
– Setup and Annual Asset Based Fee $0.00
Adopting Employer Ongoing Annual Fee Estimate
– Annual Adminstration Fees $0.00
Trustee, Administrator and Custodian Fees
– All costs of Fiduciary Wise, FutureBenefits of America and MidAtlantic Trust 0.65%
– Per Participant Annual Fee $35.00
Servicing Advisor Fee
– Servicing Advisor 0.35%
Potential Additional Fees (charged to participant)
– CMS Risk Managed Portfolios 0.50%
– Termination and Withdrawals $50.00
– Loan Setup (per loan, from participant accounts) $50.00
– Loan Annual (per loan, from participant accounts) $0.00
NOTE REGARDING ADOPTING EMPLOYER ANNUAL ADMINISTRATION FEES: 
*For plans with assets less than $167,000, a $187.50 quarterly fee will be assessed until assets reach $167,000. Employers may optionally pay this fee.
 

Schwartz Financial Weekly Commentary 6/18/18

The Markets

Deal or no deal?

Last week opened with heightened trade tensions between the United States and its allies. It closed with the United States imposing new tariffs on $50 billion of Chinese goods. The Chinese declared it was the start of a trade war, reported Financial Times.

U.S. markets largely ignored the potential impact of trade wars on multiple fronts. Barron’s reported the Dow Jones Industrial Average, which includes companies that are vulnerable to tariffs, moved slightly lower. However, the Standard & Poor’s 500 Index shrugged off the possibility of trade wars, and the NASDAQ Composite gained more than 1 percent.

While Barron’s has written the largest risk to the U.S. stock market is the possibility of global trade wars, it appears many investors believe tariffs are a negotiating tactic. Barron’s reported:

“The market’s apparent indifference suggests it doesn’t see these tariffs as the reincarnation of Smoot-Hawley, but just the latest in President Trump’s negotiating tactics. Moving away from his denunciation of Kim Jong-un as “Little Rocket Man” inviting “fire and fury” by missile launches, Trump last week declared the threat from North Korea neutralized. Similarly, many professional investors view the bluster on tariffs as part of Trump’s negotiating tactics, rather than the start of an actual trade war.”

News that monetary policy is becoming less accommodating in certain regions of the world didn’t have much impact on markets either. Reuters reported the Federal Reserve raised its benchmark rate 0.25 percent last week. The European Central Bank is ending its bond-buying program and gave notice it expects to begin raising rates next summer. The Bank of Japan is still easing.

There was a lot of red ink in Asian emerging markets. China’s Shanghai Composite finished the week lower, as well. However, stock markets in Canada and Mexico finished the week higher.

 

Data as of 6/15/18 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor’s 500 (Domestic Stocks) 0.0% 4.0% 14.3% 10.1% 11.1% 7.4%
Dow Jones Global ex-U.S. -1.0 -2.6 8.3 3.4 3.8 0.4
10-year Treasury Note (Yield Only) 2.9 NA 2.2 2.4 2.2 4.2
Gold (per ounce) -1.0 -0.9 2.5 2.9 -1.5 3.8
Bloomberg Commodity Index -2.5 -0.5 8.4 -4.4 -7.7 -9.1
DJ Equity All REIT Total Return Index -0.7 -2.0 0.3 7.5 7.9 6.9
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.

sorry America, you’re not in the tournament. If you’ve been watching the World Cup – the global soccer championship – you’ve probably seen the commercials entreating Americans to root for another country since we don’t have a team playing. The ads offer encouragements like, “Iceland could really use your support. We don’t have enough people to do the wave,” and “Cheer for Germany. We gave you the frankfurter!”

If you haven’t already chosen a favorite team, you may want to consider (or not) the insight of economists before making your choice. Since the demise of Paul, the octopus that successfully predicted winners during the 2010 final, various firms’ economists have offered opinions about this year’s possible winner. Financial Times reported:

  • Multinational analysts at a Japanese bank concluded “…using portfolio theory and the efficient-markets hypothesis as well as data on the value, form, and historical performance of players, that France will beat Spain in the final, with Brazil in third place.”
  • A German bank predicted Germany will win, and so did a Swiss bank that relied on unspecified econometric tools to determine that Germans have a 24 percent chance of victory.
  • A Dutch bank concluded Spain will be the big winner.

Perhaps the most interesting analysis was done by the Toulouse School of Economics, which employed automated face-reading software on World Cup sticker albums from the 1970s through the present. They found teams that did better in the group stage had players who looked happier or angrier on the stickers. Happiness showed confidence and anger led to fewer goals allowed.

Weekly Focus – Think About It

“Winning is great, sure, but if you are really going to do something in life, the secret is learning how to lose. Nobody goes undefeated all the time. If you can pick up after a crushing defeat, and go on to win again, you are going to be a champion someday.”

–Wilma Rudolph, American sprinter and Olympic champion

Value vs. Growth Investing (6/15/18)

Name 1-Week YTD 4-Week 13-Week 1-Year 3-Year 5-Year
US Market 0.15 5.41 3.04 2.14 16.98 12.12 13.57
US Core -0.27 1.16 1.90 0.48 10.97 10.84 12.73
US Growth 1.26 14.99 5.64 5.33 28.96 15.16 17.02
US Large Cap 0.04 5.28 2.78 1.60 17.16 12.65 13.76
US Large Core -0.27 0.58 1.48 -0.22 10.28 11.51 12.85
US Large Growth 1.10 15.23 5.38 4.74 29.56 16.11 17.96
US Large Val -0.86 -0.85 0.88 -0.80 10.65 9.86 10.16
US Mid Cap 0.48 5.20 3.44 2.73 15.95 10.74 13.22
US Mid Core 0.06 1.63 3.02 1.22 12.04 8.97 12.58
US Mid Growth 1.43 12.04 5.52 4.73 24.48 11.67 14.01
US Mid Val -0.17 1.89 1.61 2.12 11.19 11.42 12.97
US Small Cap 0.36 7.45 4.57 6.18 18.19 10.55 12.48
US Small Core -0.18 5.48 3.96 5.36 14.77 9.78 12.17
US Small Growth 1.82 14.47 5.57 7.25 28.27 12.75 14.32
US Small Val -0.67 2.58 4.12 5.87 11.79 8.94 10.83
US Value -0.70 -0.04 1.26 0.26 10.91 10.15 10.80
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:

This is an incredible #Fact” In 2016, roughly 12.8% of the American population was disabled. And roughly half of those people were working age. Do you have disability insurance and if you do is it enough?  If not contact my office. #disabilityinsurance

Here is a story you may have seen before in this column:

“barrel of bricks”

Consider this humorous accident report from someone who should have considered disability insurance sooner.

I am writing in response to your request for additional information on my accident report.  In block number three of the accident reporting form I wrote, “Trying to do the job alone,” as the cause of my accident.  You said in your letter that I should explain more fully and I trust the following details will be sufficient.

I am a bricklayer by trade.  On the day of the accident I was working alone on the roof of a new six-story building.  When I completed my work I discovered that I had about 500 pounds of brick left over.  Rather than carry the bricks down by hand, I decided to lower them in a barrel by using a pulley, which fortunately was attached to the side of the building at the sixth floor.

Securing the rope at ground level, I went up to the roof, swung the barrel out, and loaded the bricks into it.  Then I went back to the ground level and untied the rope, holding tightly to it to ensure a slow decent of the 500 pounds of brick.  You will note in block eleven of the accident report that I weigh 135 pounds.

Due to my surprise at being jerked off the ground so suddenly, I lost my presence of mind and forgot to let go of the rope.  Needless to say, I proceeded at a rather rapid rate up the side of the building.

In the vicinity of the third floor I met the barrel coming down.  This explains the fractured skull and broken collarbone.

Slowing down slightly, I continued my rapid ascent, not stopping until the fingers of my right hand were two knuckles deep into the pulley.  Fortunately, by this time I had regained my presence of mind and was able to hold tightly to the rope in spite of my pain.

At approximately the same time, however, the barrel of bricks hit the ground and the bottom fell out of the barrel.  Devoid of the weight of the bricks, the barrel now weighed approximately 50 pounds.  I refer you again to my weight in block eleven.  As you might imagine, I began a rapid decent down the side of the building.  In the vicinity of the third floor I met the barrel coming up.  This accounts for the two fractured ankles and the lacerations of my legs and lower body.

The encounter with the barrel slowed me enough to lessen my injuries when I fell onto a pile of bricks and, fortunately, only three vertebrae were cracked.

I am sorry to report, however, that as I lay there on the bricks in pain, unable to stand, and watching the empty barrel six stories above me I again lost my presence of mind.  I let go of the rope.

Moral of this tale: #It doesn’t pay to try to do the job alone.

Give our office a call at 215-886-2122 for more information or a second opinion quote.

PUB8547WEBP

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”.

 

Please own more than a single target date fund

Need more than a single target date fund

Schwartz Financial Weekly Commentary 6/11/18

The Markets

G whiz!

Never before could the Group of 7 (G7) Summit have been mistaken for reality TV.

The generally dignified annual meeting of leaders from the United States, Canada, France, Germany, Italy, Japan, and the United Kingdom (along with the heads of the European Commission and European Council) was a lot more contentious than usual, reported Reuters.

Disagreements about trade were the reason for heightened tensions among world leaders. At the end of May, the United States extended tariffs on aluminum and steel imports to U.S. allies. They had previously been exempted. These countries “account for nearly two-thirds of the [United States’] $3.9 trillion annual merchandise trade,” reported The Washington Post.

Retaliation to U.S. sanctions was fast and furious. Mexico implemented “…a 20 percent tariff on U.S. pork legs and shoulders, apples, and potatoes and 20 to 25 percent duties on types of cheeses and bourbon,” reported Reuters.

Canada imposed $16.6 billion in tariffs on U.S exports of “…steel and aluminum in various forms, but also orange juice, maple syrup, whiskey, toilet paper, and a wide variety of other products,” says Reuters.

The European Union has a 10-page list of goods targeted for sanctions, including bourbon and motorcycles, reported The Washington Post. Complaints that U.S. tariffs are illegal also are being filed with the World Trade Organization.

Difficult relationships with allies are “expected to complicate U.S. efforts to confront China over trade practices that the administration regards as unfair,” reports The Washington Post.

Canadian, Mexican, and U.S. stock markets remained unfazed. Major indices in each country moved higher last week. Some American indices reached new highs. European markets fared less well. Markets may be bouncier this week as investors digest the costs and benefits of trade sanctions.

 

Data as of 6/8/18 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor’s 500 (Domestic Stocks) 1.6% 3.9% 14.2% 11.1% 10.8% 7.4%
Dow Jones Global ex-U.S. 0.8 -1.6 8.7 3.7 4.0 0.2
10-year Treasury Note (Yield Only) 2.9 NA 2.2 2.4 2.2 4.0
Gold (per ounce) 0.3 0.1 2.0 3.5 -1.3 3.8
Bloomberg Commodity Index -0.5 2.1 9.5 -3.7 -7.2 -8.6
DJ Equity All REIT Total Return Index 1.1 -1.4 3.3 7.7 8.1 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.

the struggle is real. Millennials are known – and often disparaged – for being innovators and disrupters. According to Business Insider, the generation has been credited with ‘killing’ everything from starter homes to napkins. There’s a reason for that. Millennials are the biggest generation and have become the world’s most powerful consumer group, reports Financial Times:

“The coming of age of the world’s 2bn millennials is not only a generational shift, it is one of ethnicity and nationality. Forty-three percent of U.S. millennials are non-white, and millennials in Asia vastly outnumber those in Europe and the U.S. Despite China’s former one-child policy, it has 400m millennials, more than five times the U.S. figure (and more than the entire U.S. population) while Morgan Stanley estimates that India’s 410m millennials will spend $330bn annually by 2020.”

Millennials have different buying habits and preferences than previous generations. They opt for access rather than ownership, reports Goldman Sachs, which has helped fuel the growth of the gig economy’s sharing services.

As the first digital natives, Millennials also tend to favor brands that offer the greatest convenience at the lowest price. The most successful brands have strong social media presence.

Weekly Focus – Think About It

“Millennials are more aware of society’s many challenges than previous generations and less willing to accept maximizing shareholder value as a sufficient goal for their work. They are looking for a broader social purpose and want to work somewhere that has such a purpose.”

–Michael Porter, Harvard Business School Professor

Value vs. Growth Investing (6/8/18)

Name 1-Week YTD 4-Week 13-Week 1-Year 3-Year 5-Year
US Market 1.70 5.25 4.35 2.33 16.78 12.18 13.32
US Core 1.74 1.44 3.45 0.79 11.16 11.06 12.60
US Growth 1.60 13.55 5.46 4.94 26.04 14.75 16.45
US Large Cap 1.64 5.24 4.42 1.93 17.02 12.76 13.52
US Large Core 1.64 0.85 3.29 0.04 10.29 11.75 12.71
US Large Growth 1.75 13.98 5.51 4.63 26.64 15.74 17.39
US Large Val 1.72 0.01 4.01 0.12 13.05 10.36 10.17
US Mid Cap 1.91 4.70 3.79 2.52 15.68 10.64 12.95
US Mid Core 1.81 1.58 3.33 1.33 12.35 8.98 12.43
US Mid Growth 2.09 10.46 4.70 3.93 22.34 11.26 13.44
US Mid Val 1.82 2.07 3.26 2.26 12.16 11.59 12.91
US Small Cap 1.65 7.07 5.32 6.03 17.54 10.63 12.25
US Small Core 2.09 5.67 5.02 5.67 15.17 10.09 11.99
US Small Growth 0.89 12.43 4.80 5.91 24.15 12.26 13.86
US Small Val 2.04 3.27 6.21 6.55 13.35 9.37 10.82
US Value 1.77 0.67 4.00 1.00 12.95 10.57 10.80
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:

Is Your Spouse in Your Investment Loop?

In an interview on MsMoney.com, Kerry Hannon, author of Suddenly Single: Money Skills for Divorcees and Widows, said she wrote her latest book after seeing loved ones face financial difficulties after becoming widowed or divorced.

“Some didn’t even know where their investments, insurance policies and the like were, or have a grip on their cost of living,” Hannon told MsMoney.com.

Being clueless about the family finances isn’t a gender issue. Plenty of men rely on their wives to pay bills, put money aside for savings and retirement, and keep important documents safely stored.

If you’re the one responsible for the household investing and finances, you need to make sure you are keeping your spouse in the loop. That includes:

  • Knowing the names, firms and phone numbers for key advisors including your investment manager, accountant and estate attorney.
  • Knowing where key documents, such as insurance policies, copies of your wills and investment account statements, are stored.
  • Having an overall idea of your financial situation.
  • Knowing where all banking and investment accountants are held.

Even a non-working spouse should have an estate plan that includes cash and investments, real estate and insurance proceeds. If one spouse does not work, the working spouse should have not only life insurance but disability insurance. Life insurance on the non-working spouse can also help offset costs such as childcare that may be needed after her death.

If you have an elderly parent who is widowed or divorced, you may want to have the same discussion (although it may be more difficult than with a spouse.) If a parent plans to leave a sizable estate to a child, it’s important that the heir know where documents have been kept and which key advisors to contact.

If you have trouble figuring out what your spouse does and does not need to know, ask yourself this question: If tomorrow I were killed in an accident, what would my spouse need to know to ensure the family could survive financially?

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.

 

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* 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. 

 

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* 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”.

 

Is Your Spouse In Your Investment Loop?

In an interview on MsMoney.com, Kerry Hannon, author of Suddenly Single: Money Skills for Divorcees and Widows, said she wrote her latest book after seeing loved ones face financial difficulties after becoming widowed or divorced.

“Some didn’t even know where their investments, insurance policies and the like were, or have a grip on their cost of living,” Hannon told MsMoney.com.

Being clueless about the family finances isn’t a gender issue. Plenty of men rely on their wives to pay bills, put money aside for savings and retirement, and keep important documents safely stored.

If you’re the one responsible for the household investing and finances, you need to make sure you are keeping your spouse in the loop. That includes:

  • Knowing the names, firms and phone numbers for key advisors including your investment manager, accountant and estate attorney.
  • Knowing where key documents, such as insurance policies, copies of your wills and investment account statements, are stored.
  • Having an overall idea of your financial situation.
  • Knowing where all banking and investment accountants are held.

Even a non-working spouse should have an estate plan that includes cash and investments, real estate and insurance proceeds. If one spouse does not work, the working spouse should have not only life insurance but disability insurance. Life insurance on the non-working spouse can also help offset costs such as childcare that may be needed after her death.

If you have an elderly parent who is widowed or divorced, you may want to have the same discussion (although it may be more difficult than with a spouse.) If a parent plans to leave a sizable estate to a child, it’s important that the heir know where documents have been kept and which key advisers to contact.

If you have trouble figuring out what your spouse does and does not need to know, ask yourself this question: If tomorrow I were killed in an accident, what would my spouse need to know to ensure the family could survive financially?