Client Communications

Over the years we have all seen the equity markets rise, fall, then rise again. Our lives inevitably change due to circumstances beyond our control. At times, it may seem there is not much that we do actually control at all. That is why we set goals, look to the future, formulate a plan.

As we reach the halfway point of 2017, we can summarize the year as being positive so far. In terms of the various markets, results have been on the positive side for most sectors. Except for the one day in May where the Dow Industrials dropped over 350 points, the equity markets have gradually climbed without any sustained declines. Large company stocks have gained about 9% year to date, Small company issues 2%, and Technology 16%. The commodity sector has experienced consistent declines as inflation continues to stay subdued and supplies plentiful. The grains remain cheap, precious metals remain well below their highs of last year, and oil has recently declined about 30% in the past month or so due to oversupply.

While the first smartphones were actually created in the late 1990’s, it wasn’t until 2007 that Apple famously unveiled its first iPhone and revolutionary touch display. The ten years since saw the smartphone become intertwined with our daily lives because of ingenuity and seemingly limitless applications. It is estimated over one billion smartphones were sold worldwide in 2014 alone.

We would like to take this opportunity to wish you a safe, healthy, and prosperous New Year and to recognize and appreciate the relationship that we have with you. Your family’s well-being and financial progress is the cornerstone of our commitment, which we take very seriously. Change has been a constant during our time together and if there’s one guarantee we can make, it is that the future will continue to evolve both here at home and also worldwide in ways we have yet to imagine. It is this change that we find so exciting, as a challenge to stay on the cutting edge of strategy, technology, and service.

By keeping interest rates near zero for such an extended period, The Federal Reserve has forced the large population of savers to look for returns in more aggressive areas. Those savers, which as a percentage are mostly retired, simply cannot get by when their income has been reduced to nearly nothing from the average 4-5% returns of prior decades.

There really is only one way to properly describe the present environment – Normal. Take into consideration some of what is going on around the world right now: international conflict (ISIS, Eastern Europe, South China Sea just to name a few), economic instability (Brexit, European Union, Japan, Emerging Markets), and political uncertainty (U.S. Presidential Election).

Often times you will hear us state that we make recommendations within the context of your financial plan and comfort level. It is a basic tenet of our overall philosophy because, quite simply, achieving your goals and placing your interests first matters the most to us. However, this is not new to our firm, but rather a philosophy embraced by our founder, John Lesjak, almost 40 years ago. Below you will find excerpts from an article John wrote in 1977 that we find timely, informative, and reflective of how we feel financial planning should be provided.

The recent decision by the people of the U.K. to back out of the European Union is historic, only in that they are the first to leave the relatively young collaboration of countries. What makes it similar to other events in history is that a group of people are choosing to separate from a larger consortium to gain greater autonomy regarding trade, immigration, currency and economic policies.

Market pundits, financial news stations, and even major brokerage firms seem to be trying to create a self-fulfilling prophecy by continuing to warn of a coming financial Armageddon. For nearly the past year we have been pounded continuously about the coming crash as a result of (take your pick): The Presidential race, banking crisis, recession, war in the Middle East, inflation, and the crash of oil prices.

When markets decline or rise in a spectacular fashion, we attempt to try to figure out if there is a way we should have anticipated or seen this and if there is, what action could we have taken. Can the way the markets move at any point in time actually tell us anything?