Jul 212014
 

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Last week was a pretty robust week as the S&P 500 and the Dow were up. While the Ukraine situation influenced the markets, investors should also look at four reports from last week.

  1. Retail Sales
  2. Retail sales, which measures half of consumer spending, was disappointing in January but revised up in April. This tells us that consumer spending is still on track and looking good for the second quarter.

  3. Producer Price Index
  4. The Producer Price Index, which measures how inflation is affecting corporations and how it is translated to the consumer, was up mostly in the energy sector. This tells us that manufacturing is pretty healthy.

  5. Industrial Production
  6. We track the industrial production reports because it tells investors about trends in manufacturing and it is another gauge for inflation. This started off as a disappointment this year but was later revised up.

  7. Housing starts
  8. The trend in housing starts is beginning to slip a little. Investors should watch this because it affects other areas of the economy. For example, when houses start to sell, people need to buy other things to go in those houses.

Janet Yellen’s comments

Every thing Janet Yellen commented on last week was very expected. Although she made some comments about biotechnology stocks, it is common for biotech stocks to become pricey when there is quantitative easing. It is something we are watching closely but we don’t feel like investors need to be worried about it at this time.

How the Ukraine situation affected the markets

The Middle East events and the Ukraine situation impacted the markets last week. We saw the market react to the news and then automatically rebound. This is a sign of a healthy market. What investors and traders did is what is called, “buying the dips.” This is where they are waiting for the prices to go down and, seeing it as an opportunity, begin buying stocks which drive prices back up. This is not unusual and we believe it is somewhat healthy.

The Ukraine situation will dominate this week

This week is a little lighter in market data but still very important. The Consumer Price Index numbers will show if producers (See Producer Price Index above) will be able to transfer inflation to the consumer. If not, that will hurt their profits which affects corporate earnings. Corporate earnings help drive stock market valuations.

This week investors should watch the reports on new home sales, existing home sales, and durable goods because it gives us a feel for the trends in manufacturing. All this will be overshadowed this week by the Ukraine situation and investors need to keep an eye on how events unfolding there are affecting the markets.

Please send me your comments or questions and we will be happy to address those in our next video or directly with you.

Franklin Bradford, CMT
Senior Vice President
Wealth Consultant
Email Franklin Bradford here

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fi-Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. fi-Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

The S&P 500 index is a measure of performance of the broad domestic economy through 500 stocks from major industries. The Dow Jones Industrial Average measures the average price of a group of 30 high value stocks.

Stock investing involves risk including potential loss of principal. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.

Jul 142014
 

“So go interest rates, so goes the economy.” Interest rates are influenced by unemployment and today we will be talking about the reality of the recent unemployment report.

Be sure to watch last Friday’s vlog on the Fed announcing the ending of quantitative easing and the changes they will be making.

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Where the markets ended last week

Last week we saw some weakness in the markets as they dropped from .7 to .9 depending on which index you look at (more data in the video). While the markets where down last week, remember it hit record highs the week before.

What investors need to watch this week

Because we are in the midst of earnings season, we are looking at reports that will give us a good idea of how the overall economy is doing. We are very focused on the reports coming from the financial sector because that’s a big section of our economy. Financial institutions, especially banks, are tied to so many other industries as they lend money to them. We believe Wall Street is basing their projections for the next quarter on this as it tells us a great deal about the over all economy (more in the video).

The retail sales report will be important for investors as it covers half of consumer spending and represents two thirds of our economy. It was down in May, but revised up in April. We are also watching the Producer Price Index for inflation and profit margins for companies (more insight in the video).

We are also watching jobless claims, the Philly Fed Survey and tracking industrial production, which also is a good indicator of inflation. Needless to say, it’s going to be a big week.

Janet Yellen could be the celebrity of the week

Janet Yellen may well be a celebrity this week as all eyes and ears will be on her concerning the Fed’s comments last week and her up coming congressional testimony on Tuesday and Wednesday. Investors should be very interested in the comments by Janet Yellen concerning unemployment. While unemployment is down, it does not feel like it is. This is important because the unemployment rate influences interest rates which affects everyone.

Why it doesn’t feel like unemployment is down?

One of the reasons it doesn’t feel like unemployment is down is because people are still scared to move upward in their careers by changing jobs. Because many business models are changing in so many industries people are scared to make any kind of move (more insight in the video).

Moving up in your job and wage by changing it is a very American experience. In Japan the average tenure is higher than in the United States. That upward dynamism is what is missing in our economy and this is why Janet Yellen is concerned.

The participation rate is also a big factor in why it doesn’t feel like unemployment is down. If a person is not actively looking for a job, the government doesn’t include you in the unemployment numbers. As an investor, you need to be looking at these underlying facts concerning the numbers because it all affect interest rates.

Again, we encourage you to watch last Friday’s vlog on the Fed announcing the ending of quantitative easing and the changes they will be making. This will give you so much more insight into what we have talked about today and how it impacts you and your investments.
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Greg Powell, CIMA
President/CEO
Wealth Consultant
Email Greg here

Franklin Bradford, CMT
Senior Vice President
Wealth Consultant
Email Franklin here

Ashley Page, JD, MBA
Senior Vice President
Wealth Consultant
Email Ashley here

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fi-Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. fi-Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

Jul 112014
 

Who took the punchbowl away?

Today we will be talking about quantitative easing and the Fed taking the punchbowl away from the party.

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The Ending of Quantitative Easing

This is a very historic time as the Fed announced on July 9, 2014 that it would be stopping quantitative easing this fall. It was a historic entrance into quantitative easing in post 2008 and it will be a historic exit in October when they won’t do any bond buying at all.

Wayne Gretzky when asked why he was a great hockey player, replied it was because he went to where the puck was going to be. This action by the Fed may be telling us this is where the economy is going. Quantitative easing has gone on for six years and this will be a big change.

A look back at the life of quantitative easing

We believe the events of 2008 were about a lack liquidity in the markets. In 2009 the economy needed the stabilization of quantitative easing to help get us through the effects of 2008 to the point where it could grow again. Without it, the economy could have very well locked up. There is no doubt in our minds it was a positive thing.

We feel the first two years of quantitative easing where the critical years. Bernanke was the right man at the right time. His academic specialty was in the Great Depression and Janet Yellen, who worked for him, was the architect of quantitative easing.

In 2009 the mortgage market was stabilized. It was very out of whack and only by stabilizing it, and keeping those rates low, could that system get going again. Quantitative easing for 2010-12 was a support of an underperforming economy that helped consumer confidence.

What hindered quantitative easing

Quantitative easing probably would have worked faster if it wasn’t for all the debates between the President and Congress. Just when it would start to pick up steam, politics would let the air out of it. It wasn’t that the political debates were bad, it was the fact the liquidity and the mortgage system was so bad, there was no other choice. So the Fed started to reduce the amount of bonds they were buying back at the beginning of the year and this October is when the will bring it to a halt.

The impact on investors

The impact on our economy will clearly come in the rise of interest rates perhaps in 2015 and beyond. The toolbox for controlling interest rates is now going to have to be different which is historic in itself.

It is exciting to see quantitative easing end because it means there are fundamental strengths in the markets and the Fed believes there is enough confidence in the economy. There are a lot of positives in the economy but there are still no guarantees. This is a challenge that we enjoy as we stay on top of the markets for our clients and put all the pieces together.

We will keep you up to date as the rippling effects of the announcement a few days ago play out through the fall. Please contact us if you have any questions on how this could affect you and your investments. We’d love to talk with you.
Quantitative Easing
Greg Powell, CIMA
President/CEO
Wealth Consultant
Email Greg Powell here

Ashley Page, JD, MBA
Senior Vice President
Wealth Consultant
Email Ashley Page here

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fi-Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. fi-Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC.

Jul 072014
 

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Economic trends that could affect your portfolio:

  • Unemployment
  • Inflation
  • Market all-time highs

Economic Trends and numbers

One of the biggest economic trends right now is how unemployment is continuing to come down but the numbers from the Labor Department are deceiving (more in the video).

Another economic trend that we have been talking about for several years here at fi-Plan Partners is how business models are changing, especially in healthcare and education. It’s called “Creative Disruption” and it’s being caused by innovation. As old industry models are crumbling, innovation is allowing for the creation of new models. Last week’s edition of The Economist magazine has “Creative Disruption” on the cover. It discusses education and especially how online education is dramatically changing universities.

As we watch the employment numbers rise, The Economist is telling us that by 2025, two thirds of universities could be closed or drastically changing how they operate. We look at these kinds of trends for our clients to find new investments that will benefit from these changes (more in the video).

We are also seeing market highs as well as inflation and prices going up. It’s important for investors to know tht if your portfolio is not staying ahead of inflation, you are not going to have enough money to continue living the lifestyle you’ve grown accustom to.

The economic trend of another market all-time high

The week was pretty slow until Thursday when we saw the DOW hit an all-time high at 17,000 points being pushed by the employment numbers. From a historical perspective, this is occurring quite differently than in the past (more in the video).

Why are we concerned about this? The employment report comes out at the beginning of the month and it covers all areas of the economy. The big take away is that this report shows how retail stores are hiring. This is important data about the economy because it tells us that the retail industry is confident that people are going to be buying products. This is confirming the second quarter momentum we have been seeing.

The ISM manufacturing report is also giving us a good feel for the economy and we are looking at the details closely. This week begins the earnings season which we will be analyzing beginning on Thursday when those numbers come out. Currently, we are watching the data that the Federal Reserve is focused on, as well as what the everyday individual is seeing in the economy. You may be seeing prices rising at the grocery store on meat, seafood, milk, cheese and other perishable products. Between disease and droughts, the meat industry is being hit hard (more in the video).

What is impacting your wallet?

The Fed is trying to control the economy to keep inflation in a “sweet spot” (more in the video). The Fed is looking at every bit of data that has to do with food and fuel which comes from The Personal Consumption Expenditure Price Index. That index is going up and we are watching this closely, as we could be seeing an important turn as people are impacted in their wallets (more in the video).

We celebrated independence this weekend and as an independent wealth management firm, we keep up with all this data and more to help guide our clients towards more independence. Our independence as a financial firm gives us access to so much data that we are confident we provide a higher level of service to our clients.
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Greg Powell, CIMA
President/CEO
Wealth Consultant
Email Greg here

Ashley Page, JD, MBA
Senior Vice President
Wealth Consultant
Email Ashley here

Franklin Bradford, CMT
Senior Vice President
Wealth Consultant
Email Franklin here

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fi-Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. fi-Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

Jun 232014
 

This week in the economy is very busy. Be sure to watch to the end of the video for a viewer question about the US dollar losing status as the world currency.

Last week in the economy

Last week in the economy the DOW, S&P 500, and the NASDAQ were up. Year to date that puts the S&P 500 up 6.2%. Manufacturing is up but housing is still struggling. The Fed had their meeting and made some positive moves (more in the video).

Housing starts where disappointing but that could change in the future. We watch housing starts closely as investors should because of it’s rippling effect.

Industrial construction made a come back which gives us a feel for the GDP numbers that will come out later this week. We are looking closely at the Consumer Price Index (CPI) numbers from last week. This is very important for investors because it is the basis for Social Security payments, union contracts and it measures inflation in the system (more in the video).

What investors need to watch this week in the economy

For investors, this is a pretty big week in the economy because of the data that is coming out. We will be comparing the home sales and new home sales numbers to the new housing starts data from last week. We will also be watching the new GDP numbers as well as personal income and outlay. These are all big data for investors and we will keep you updated on how this could affect the economy and your investments.

Viewer question on the US dollar

One of the comments we received last week came from a viewer who had concerns about the cost healthcare and inflation. He asks, “What are the chances of the US dollar losing its status as World Reserve currency and serious US dollar inflation?” This is a great question. The dollar has been declining for the past 30 years because of public debt, the Fed. printing money, and the US credit rating being down graded. This should all make the US dollar collapse but it didn’t. I explain why in the video.

Please send us more questions as we want these videos to address your concerns as an investor.

Franklin Bradford, CMT
Senior Vice President
Wealth Consultant
Email Franklin Bradford here
This week in the economy

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fi-Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. fi-Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

NASDAQ Composite Index represents all the stocks that trade on the Nasdaq

Dow Jones Industrial Average Index measures the average price of a group of 30 high value stocks

S&P 500 Index designed to measure performance of the broad domestic economy through 500 stocks representing all major industries

Jun 162014
 

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Summary:

  1. Economic data from last week
  2. Economic data from this week
  3. How and why Iraq is impacting the U.S. economy

Understand more about what is going on with your investments

Send us your comments because it helps us give you the information you need to understand about what is going on with your investments. Please comment below and let us know what questions you have or areas in the markets you are concerned about.

Last week in the markets

The markets were affected last week by the issues in Iraq and by the effect that it had on our political leaders. The stock market’s Dow Jones Industrial Average was down a little less than 1% and the S&P 500 was down about 7%. Even with all the bad news in the media, it wasn’t as bad as it could have been. We believe it is actually healthy when we do have a sell off because it helps bring more buyers into the markets (more in the video).

Listen to the trends not the news media,

We look at the trends in the markets which can give you a different perspective than what you are hearing in the news. Retail sales were below expectation but previous sales were up. This gives us a good snapshot of what GDP numbers could look like down the road. Consumer sentiment was also below expectations, however, when you look at it, the consumer is not overly pessimistic nor are they optimistic. The news media will spin this with fear to get you to watch or read what they have to say because they have to sell advertising.

This week’s market watch

This week we are watching the Fed meeting that occurs in the middle of a week. We are also looking at industrial production, the consumer price index which is tied to inflation, and housing starts. This is important for investors because housing starts will have a ripple effect on the economy (more in the video).

Iraq’s economic impact on the U.S.

The situation in Iraq has everyone’s attention including ours. Iraq is the 7th largest oil producing nation in the world. This situation has caused gas prices to go up. We believe gas prices will just see a temporary spike. It’s interesting to note that current gas prices are very near the same as this time last year. It’s good for investors to know that there are political and religious causes for Iraq’s economic impact on the U.S. (more in the video).

Current economy conditions

What is impacting our economy more than Iraq is the effect of the news media is having on consumer confidence. As previously mentioned, the news media is selling fear. That hurts consumer confidence. When consumer confidence is down people aren’t as confident about their lives and their spending habits change affecting the economy.

The reason for Iraq’s economic impact

So why then is a country that is only the 7th largest in oil production be such a big deal. It’s because the supply and demand is so tight that even the smallest disruption will have an impact. As the U.S. becomes more energy independent, situations like this will have a much smaller impact (more in the video).

We encourage you to send us your comments because it will help us tailor theses posts to help you understand out the markets are impacting your investments.

Franklin Bradford, CMT (Chartered Market Technician)
Senior Vice President
Wealth Consultant
Email Franklin here

Ashley Page, JD, MBA
Senior Vice President
Wealth Consultant
Email Ashley here

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fi-Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. fi-Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

Securities and advisory services offered through LPL Financial, a registered investment advisor.  Member FINRA/SIPC
Economic Impact video