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16Oct
What If We Have Excess Money in a 529 Plan?
College Planning
With the ever increasing costs for college and post-high school education, parents and grandparents often contribute to Section 529 Plans.

529 college savings plans are often thought to be the most effective way to save for college education expenses.  Contributions to these plans can be deducted from state income tax, grow federal and state tax-free, and can even be withdrawn tax-free for the use of higher education expenses, such as tuition, room and board, books and other similar costs.  With the increasing amount of 529 plans, some are finding that a portion of the plan balance may not be needed, in fact, for college expenses.

Due to the variability in college expenses, planning for the precise amount can be difficult.  There are so many factors that affect college expenses.  In-state versus out-of-state tuition costs vary, as do public versus private institution costs.  Future tuition inflation levels and scholarships also can greatly affect a student’s college expenses.  Unlike some other child savings avenues, 529 plans give account owners control.  529 plans also provide ways to divert and divest the surplus or unused amount in the plan.  Some options account owners have are:

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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

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03Oct
Is There a Hidden Agenda with Robo-Advisors?
Investing
The market for working with robo-advisers is growing rapidly.

As with anything that increases in popularity, there is new research available about these seemingly “neutral” programs.

Before I share it, let’s define a robo-“advisor”.

Roboadvisors are a class of financial adviser that provide financial advice or portfolio management online with minimal human intervention.  They provide digital financial advice based on mathematical rules or algorithms. (Wikipedia)

In other words, this is nothing more than computer- based programs into which certain data is fed about the investor.  Then, the computer applies algorithms to the data and spits out an allocated investment program.

Here in lies the potential problem.

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22Sep
Investing Tips from Warren Buffett
Investing

Warren Buffett is arguably one of the best investors of all times.  Here are three investing tips from the “Oracle of Omaha”.

  1. “Never lose money.”

    While even the legendary Buffett has suffered stock market losses, one key to his success is that the losses are small and infrequent compared with his larger long-lasting positions.(Please do not take this direct quote literally.  There are no guarantees in investing and there is always the potential to lose money.)

  2. “Be an investor, not a speculator.”

    Speculators tend to bet on price without paying much attention to earnings or dividends.  Speculators tend to be short term technical traders.  On the other hand, investors tend to take the long view and expect to be paid continuously for owning an asset.  This could be in the form of interest or dividends.

  3. “Diversify, diversify, diversify.”

    This advice includes owning both U.S. and International positions, stocks and bonds, multiple sectors, and non-correlated asset classes.

While we understand that each client’s investment strategy and risk tolerances are unique, I hope that these general investing tips are both of interest and value to you.

I also look forward to sharing a conversation with you, to discuss these concepts further and explore how they could apply to your investment goals and objectives.

(Credit for some of this information goes to Steve Jurich, IQ Wealth Management September 2017.)


Barbara A. Culver

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

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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.

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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.”

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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

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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,

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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]

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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

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