Viewing posts categorised under: %s
09Oct
What May Happen to Prices in 2018
Economy

I read some predictions in the August 25 Kiplinger Letter which I thought might interest you.

  • Energy prices are on the rise. Crude oil is expected to increase “a few dollars a barrel”.  Natural gas could increase as much as 10% and electricity about 2%.
  • Employers can expect to pay an additional 4% for health insurance while prescription drugs could increase by 10.3%.  This is actually down from the 11.6% increase in 2017!
  • Airfares and freight costs will increase by about 2%. Hotels up about 2.2% and car rentals by 3%.
  • UPS and Fed Ex are expected to increase their rates by 3-5%.

So is anything expected to decrease in cost?  YES! Technology and telecom costs will continue to slide; smartphone, tablets, PC’s and printers may decrease by as much as 10%!

As Wall Street reaches new highs, hopefully it will provide a means for you to handle the higher prices.

Barbara A. Culver
CFP®, ChFC®, CLU, AEP®
Resonate, Inc.
(513) 605-2500

Read More
06Oct
What the Future May Hold for U.S. Large Caps
Economy

Of course, no one knows for sure, but I thought you might be interested in the latest opinions I have received recently.

Tailey Leger, equity strategist for the Oppenheimer Funds states that she expects the large cap rally to continue for at least two more years.

Here is the thinking that supports this position:

  1. A weakening U.S. dollar and strengthening international economies are key reasons.  The foreign exposure of U.S. large cap companies results in 30% of the S&P 500 revenues coming from outside the U.S.
  2. If the president comes through with tax cuts for businesses, it may create more opportunity for growth.
  3. The Federal Reserve is committed to normalizing monetary policy and flattening the yield curve.  Historically large caps have outperformed small caps by an average of 1.8% in flattening yield curve regimes.

Please contact me to discuss your personal objectives and portfolio strategy.

Barbara A. Culver
CFP®, ChFC®, CLU, AEP®
Resonate, Inc.
(513) 605-2500

Read More
19Sep
Your Children and Athletic Scholarships
College Planning

The new school year has begun!  Besides a new school year, fall also rings in another sports season for many families.  I have an 8-year old son, and for the first time, he will be playing tackle football.  I still don’t know how I feel about that!

He also plays fall soccer for a club team, winter basketball for his school, spring baseball with his school, and another round of club soccer in the spring.  He plays these sports out of passion for the game and being a “Energizer” bunny full of athleticism.

While he may play a lot of sports, I always instill that school comes first and if he starts to struggle in school, the sports schedule will be fiercely re-evaluated.

I tell you all of this because at 8 years old, I am already hearing other parents and coaches tell me that he could be a candidate for athletic scholarships for college.  First, I am by no means taking any of that to heart.  He is 8 years old and has many moons before college.  Second, it triggered this blog post, because I had an article from Wealthmanagement.com magazine titled “How to Get an Athletic Scholarship”, written by Lynn O’Shaughnessy.

I found the article very interesting because as financial planners, we do a lot of education projections and creating strategies for families to afford not only college, but in some cases, elementary and high school educations.  Through our experience with the education planning, we run across parents who are “counting on” athletic scholarships to pave the financial way for their children to attend college.

The reality may be different from what many parents anticipate.

The article pointed out that the odds of receiving an athletic scholarship are very small; “2% of high school athletes receive a sports scholarship at a National Collegiate Athletic Association (NCAA) school”.  The article further points out that the scholarships tend to be less generous than the financial aid or merit scholarships that students can receive.

It was an interesting read and pointed out a couple of other college funding options for athletes – focus on merit scholarships and financial aid.  If you have a student who wants to get noticed by college coaches, have them utilize an online recruiting service (Next College Student Athlete (NCSA) or BeRecruited).  The students can also reach out to college coaches to introduce themselves and follow up with the coaches.  Another resource for students and parents would be the ScholarshipStats.com website.  This site is a source for athletic scholarship statistics to research specific sports and individual schools.

When it comes to financial planning for your children’s education, putting too many hopes onto an athletic scholarship is not advisable.  Let’s talk through all the options that your children will have for college and beyond.

Erin Savage-Weaver
CFP®
Resonate, Inc.
(513) 605-2500

Read More
16Aug
How Resonate Provides Value
Economy
Richness of LifeIn case you have not read the first blog in this short series, I invite you to do so.

Since completing it, I have given thought to which of the many client stories I wanted to share with you.

The first story is that of a recent widow who was referred to us.  When I met with Alice, (not her real name, of course), I found her to be very clear and communicative in spite of the recent and sudden passing of her husband.

The stories she told me about her experiences in the financial services world both angered and saddened me.  Assumptions were made that, of course, she would not be able to “handle her own affairs nor make thoughtful decisions” primarily because she was a woman.  On several occasions, male advisors from different companies assured her that “they knew what was best” and even provided “solutions” without bothering to understand the client and her life.

In contrast, I discovered, that when given the opportunity, this woman was quite amazing in how quickly she was adjusting to new life and found her thought process to be remarkably clear.

This included her clarity of thought that the “solutions” provided probably benefited the advisor more than they would benefit her.  Upon discussion and review of the various recommendations, I supported her thinking.

Read More
04Aug
Client Fees & Value
Economy
It seems that everywhere we turn today, the media is emphasizing advisory and product fees.

Common questions are:

“Are you paying too much?”

“Do you know what you are paying for?”

I consider this type question to be one-dimensional and shortsighted.  For example, if one wants to “stay on the numbers’ side”, then where is the question:

 “Are you receiving value for your fees?”

The interesting thing that happens when we insert the word “value” is that we add the possibility for an intangible answer in addition to the one-dimensional tangible answer.

Here are two recent examples of how we have added both tangible and intangible value for our clients:

Example One:

Clients recently came in for their conversation with us, which includes portfolio review. They brought a folder with them and asked: “Will you please look over these estimates for us to pre-pay our funerals?”

This led to a conference call with the clients and the director of the funeral home.  At the end of the conversation in which I asked many questions, the clients said, “Thank you so much.  We understand this now, and are very pleased with the decisions we have made.  Mostly, we feel wonderful that we have taken this burden off of our family.”

Tangible Results: the clients ended up saving $1100 from the original quote.

Resonate Time: 90 minutes

Resonate Fee for this work: $0 

 

Intangible Value Received by the Client: Relief; peace of mind.

Intangible Value Received by Resonate: Knowing we did the “right thing” for aging clients.

 

Another Example…

A client called recently and said: “I’m not sure if these new legal documents prepared by an attorney match our objectives discussed with you.”

Read More
05Jul
Bull Market – Is It Time to Get Out of Stocks?
Economy

The U.S. and International equities markets have just given us yet another great quarter end.

How much longer can this continue?

In spite of the fact that this Bull Market is getting to be very long, it’s important to remember that Bull Markets don’t end just because of time.

One of the indicators that a Bull Market is about to end is that the country is entering into a recession.

What are the signs of a recession?

Sam Stovall, chief investment strategist at investment research firm CFRA, looks at four indicators:

  1. Every recession since 1960 has been preceded by a year-over-year decline in housing starts, says Stovall.  The dips have ranged from a 10% decline to a drop of 37%, and they have averaged 25%.  The most recent report on housing starts showed a decline of less than 3%. “So we’re on yellow alert, not red,” says Stovall.
  2. Consumer sentiment is another signpost. Before a recession kicks in, you’ll typically see an average decline of 9% in the University of Michigan’s monthly sentiment index compared with the previous year, says Stovall.  Current reading: up 2.4%.
  3. A drop over a six-month period in the Conference Board’s Index of Leading Economic Indicators means trouble, too, with declines of 3%, on average, registering ahead of an economic downturn. Latest six-month change: up 3%.
  4.  Finally, when yields on 10-year bonds dip below the yields on one-year notes – known as an inverted yield curve – look out, says Stovall. Ominously, long-term rates recently have been under pressure while the Federal Reserve pushes short-term rates higher. “We’re getting a flatter yield curve, but nowhere near an inversion,” says Stovall.  His conclusion: No recession is in sight.

Sometimes people exit a Bull Market too early.

(Source: Kiplinger “When Will the Bull Market End?” by Anne Kates Smith, Senior Editor, June 26, 2017)

Your Resonate advisory team is cautious and continues to follow these important indicators.

If anyone would like to have your current portfolio reviewed or has any questions, we’d welcome a conversation with you.

Barbara A. Culver
CFP®, ChFC®, CLU, AEP®
Resonate, Inc.
(513) 605-2500

Read More
03Jul
What We’re Thinking About the Rest of the Year – Part 3 of 3
Economy
VIX is the ticker symbol for the Chicago Board Options Exchange (CBOE) Volatility Index.  This shows the market’s expectation of 30-day volatility as conveyed by S&P 500 stock index options prices. (www.cboe.com/products/vix=index-volatility/vix-options  and…/vix-index)

As the chart below depicts, the volatility index is currently very low.

Yet, compared to earnings, sales, and other corporate performance measures, stock prices are very high.

The current S&P 500 price-earnings ratio is 25.70 –  above the five-year average P/E of 15 and the 10-year average P/E of 14. (Source: www.multpl.com/  6/2/17)

Based on the chart above, consumers are shaking this off and focused on other factors.

Your Resonate team thinks this could be an example of what is called “home country bias”.  It means that investors’ natural tendency is to be most comfortable with investments in their home country,

Read More
30Jun
What We’re Thinking About the Rest of the Year – Part 2 of 3
Economy
In January, Kiplinger had predicted that the S&P 500 could yield a 6% return in 2017.  In just the first four months of the year, it exceeded that prediction by delivering 7.2%.

Kiplinger’s is now foreseeing a 9% to 11% return for the year—including a 2% dividend yield.  The considerable gains during the first half of the year may foreshadow subpar results for the second half of the year.

According to Burt White, chief investment officer of LPL Financial Research, investors should think beyond a portfolio of U.S. stocks and bonds.  Investors could score big in this market by venturing overseas.  Your Resonate team agrees with this and have been increasing our international exposure in investment models since third quarter of 2016.  Before making international investments, please have a conversation with us regarding risks and strategies that would be suitable for you.

It appears that investors can benefit from this rare, synchronized, economic expansion across the globe.  For the first time, all three major global regions (the U.S., Europe, and Asia) are all growing at the same time.[i]  The International Monetary Fund forecasts world economic growth at 3.5% in 2017, the highest growth rate in five years and up from 3.1% in 2016.[ii]   With consumer confidence at a decade high, consumer spending makes up for about 70% of the U.S. economy.[iii]

Read More
27Jun
What We’re Thinking About the Rest of the Year – Part 1 of 3
Economy
Many of you are asking how much longer the bull market can last.

While no one can answer the question, I thought that the information in this three-part blog might be of interest.

 The Current Bull Market

Read More
09May
Why Might I Want to Invest in Emerging Markets – 2 of 2
Economy

(Nothing I write is to be construed as a recommendation to buy or sell.  This blog is intended for informational use only.  I give full credit to Krishna Momani, Chief Investment Officer of the Oppenheimer Funds, for the information in this blog).

If you missed Part One of this blog, may I encourage you to read it before Part Two?

As you will see in the following chart, growth rates in many of the largest emerging market economies have stabilized and are now trending higher, commodity prices have bottomed, and currencies have steadied, bringing inflationary pressures under control.

Next, as you will see in the following chart, China is successfully transitioning from a manufacturing economy to a service-oriented economy.

The cyclical emerging market economic backdrop combined with still-relatively cheap valuations suggest that emerging market equities are poised to outperform the developed world over the next market cycle.

If you have questions or interest in learning more, I’d love to share a conversation with you!

Barbara A. Culver
CFP®, ChFC®, CLU, AEP®
Resonate, Inc.
(513) 605-2500

Source of charts: OppenheimerFunds, “The Case for Emerging Markets”, Krishna Memani, CIO
Disclosure:  These views represent the opinions of OppenheimerFunds, Inc. and are not intended as advice or to predict or depict the performance of any investment.  These views are as of the close of business on March 31, 2017, and are subject to change based on subsequent developments.  Equities are subject to market risk and volatility; they may gain or lose value.  Fixed-income investing entails credit and interest rate risks. Bonds are exposed to credit and interest rate risk.  When interest rates rise, bond prices generally fall, and a fund’s share prices can fall.  Investments in securities of growth companies may be especially volatile. Foreign investments may be volatile and involve additional expenses and special risks, including currency fluctuations, foreign taxes and geopolitical risks.  Emerging and developing markets may be especially volatile. Eurozone investments may be subject to volatility and liquidity issues.  The mention of specific countries, regions, or sectors does not constitute a recommendation by any particular fund or by OppenheimerFunds, Inc.
Read More