Aug 252014
 

Today we will be giving your our insights on interest rates and what will cause inflation to rise in the near future as Janet Yellen spoke about these issues last Friday. Investors need to remember that we are in mid-term elections. While everything seems to be running smoothly right now between Congress and the President, after the elections we may see a return to less cooperative times. This kind of political environment could have a significant impact on the economy, your portfolio and possibly cause inflation to rise

A good week for the markets

It was a good week for the Stock Market last week as the DOW was up about 2%, the S&P 500 was up 1.7% and the NASDAQ was up 1.6%. Overall we saw better than expected economic numbers last week and Consumer Price Index (CPI) was in-line as anticipated. Housing starts and existing home sales were fantastic which was a big surprise. The Philly Fed’s report on manufacturing was also good.

The Fed addresses inflation in the near future

The Fed minutes were released last week indicating that they are still committed to raising interest rates in 2015. This has a broad impact on credit cards, mortgages, home equity lines and more. Often the anticipation of rates going up causes more tension in the markets than when it actually happens.

We are concerned over inflation rearing it’s ugly head. We do not want to see inflation like we saw in the 1970s, but when the Fed floods the market with money as it has been doing, this will cause inflation to rise. The Fed has said they don’t see inflation staying under 2% indefinitely as they’ve seen, since 1980, a big divergence growing between wage growth and inflation. This means as people are starting to make more money again, they will start spending it which produces more demand on a limited number of goods. This will cause inflation to rise.

Janet Yellen’s view of the economy

Janet Yellen has said there are the worst economic conditions since the Great Depression and we agree. It has been difficult to anticipate and look at these conditions from a historical perspective especially when it comes to labor. Also with the slack in the labor market, it has been difficult for the Fed to look at the real unemployment problem.

Technology will cause inflation to rise

What the Fed is just now seeing we have talked about in previous videos. We’ve been seeing technology driving down prices for a while now. Consumers are now able to go out and buy technology items, like flat screen TVs, because the prices have dropped so much in the past few years. It’s now becoming cheaper to buy fast food than it is to eat healthier at home.

Technology will change the government soon

We believe the next big industry to be impacted by technology is the government. Within the next few years we will see political candidates win because they are pro technology and they are pressing the government to streamline and downsize.

What we anticipate this week

This week new home sales numbers, durable goods orders, and a second revision of GDP will be released. Investors should not be surprised if we see this pull back. It is anticipated. We will also see personal income numbers revealed which helps the Fed uses to track inflation.

We are constantly tracking this kind of data on what could cause inflation to rise and we have many strategy planning meetings concerning this throughout the week. We are committed to keeping you up to date with these videos and on our podcast. If you have concerns about how this applies to your portfolio and other issues that develop this week, please email us or call us at (205) 989-3498.

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Greg Powell, CIMA
President/CEO
Wealth Consultant
Email Greg Powell here

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

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. performance referenced is historical and is no guarantee of future results. indices are unmanaged and may not be invested into directly.

Aug 182014
 

We have a lot of economic news and data to share with you today to help you gain confidence in your life. As we celebrate our co-host Franklin Bradford’s birthday today we see the markets showing strengths in corporate mergers and acquisitions. Obviously, corporate America is seeing some good signs in the economy as the Dollar General and the Family Dollar stores talk about a merger.

Economic news and data

The market is being driven geopolitically and especially by what is going on in the Ukraine. The situation in the Gaza Strip doesn’t seem to have as much of an impact. What is predominately driving the market is oil prices and our troops on the ground. This is causing expectations and fear in the markets.

The latest economic data is telling us that consumer spending is not starting the third quarter as strong as it did in the second. The good news is that this will leave the Fed on the sidelines until next year. Domestic demand for automobiles is strong and oil prices are coming down. The Producer Price Index shows that inflation was soft which will keep the Fed from raising interest rates.

A popular topic in the mainstream economic news is the fact that there have been two market corrections in 2000 and 2008. There is concern we might be getting ready to have another. Investors need to remember that this was driven by liar loans, a housing crisis, people building more than they could afford, and an overall bubble. While we are paying very close attention to this, we still see positive opportunities in the markets.

European economic news

The European economy is something that we are watching very carefully. GDP for the European Union was lower than expected. There is also data showing high European unemployment especially among young people. This is important economic news because Europe is such a big part of the global economy.

Good economic news for small businesses

What causes markets to move? Corporate earnings. As a successful owner managed business we track this nationally. Recent studies by The FDIC and the University of Chicago shows that banks lending to smaller companies has been extremely off since 2008. Small businesses make up the largest part of the American economy so this is not good news.

Over this past year we have started to see growth in banks lending to small businesses. Smaller companies are starting to be able to raise the capital they need for growth. This will strengthen the economy and we could potentially see some economic breakout.

What this means to the investor

If you have publicly traded companies in your portfolio, small businesses might be suppling or buying their products. Also, technology has allowed corporate America to become much smaller which means the small business sector is growing. These trends are connected to a stronger economy.

Finding the economic trends

These trends are on the “back pages” of the news. They can only be found in the economic data details which mainstream media is not reporting. Tracking smaller corporate America can give us a better indication of how strong our economy is over the big economic news topics.

Send us your comments and questions so we can keep giving you the information important to you.

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Greg Powell, CIMA
President/CEO
Wealth Consultant
Email Greg Powell here

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

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

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.
Economic news

Aug 132014
 

How bad can it get?

I’m talking about all the world event headlines that are going on right now. Some days you turn on the TV or read the news headlines and you end up shaking your head at what is being reported. As an investor, you need to remember that these are just headlines. The events are not finalized when the headline comes out.

Current world event headlines

There are many world event headlines hitting the news right now. We all know that the Portuguese bank is in a bad situation. The ebola outbreak is making big headlines as international air travel could be heavily impacted. These are big headlines but if they don’t pan out, they will not affect our economy at all.

Interest rates are also another big headline but if you are watching the economic data, rates will probably not go up until later in the year. The drama in Russia is a big headline but if it comes to a resolution, it also will not affect the economy.

The outcome of the Israel and Gaza strip conflict is still to be determined. ISIS is making big headlines and it is good for us to be concerned about this terrorist group but again the impact on our economy is still unsure.

The investor’s response to world event headlines

The question you need to be asking when watching or reading the news is, “How could this world event really impact my portfolio?” The message coming from the media can cause some investors to over react. At fi-Plan Partners we are conducting diligent research and data analysis to make portfolio decisions that are in the best interest of our clients and not influenced by the media.

Greg Powell, CIMA
President/CEO
Wealth Consultant
Email Greg here

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Greg Powell is President and CEO of fi-Plan Partners, 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 economic forecasts set forth in the presentation may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

Aug 042014
 

The big trade back last week

Last week we saw the market trade back in multiple indices and we had quite a few world news events occur last week that may have influenced this. All the economic restrictions placed on Vladimir Puttin and Russia is causing jitters in the markets. Also, Argentina gave strong indications that they are not financial sound.

The big topic is inflation and what Janet Yellin and the Federal Reserve is talking about. There is a lot of talk concerning when to raise interest rates. As we at fi-Plan Partners maneuver through all this information that is impacting the markets, we are determining whether it’s a good time to move into the markets or take profits and move into cash (more in the video).

Interest rates at some point will have to move up and that will impact the bond market which is why we’ve moved to positions with short term maturities. If corporate earnings continue to do well, the stock market might take a breather and not plow back into it.

Is there momentum in the economy?

What is really encouraging is watching the revenue numbers coming from large corporate America. Through becoming more efficient and cutting costs, companies are driving up their revenues. What we are seeing now is that people are starting to buy again now that corporate America is inching back up to where it needs to be. With over 75% of corporations having turned in their earnings report, the numbers are looking very good which is an indication of momentum in the economy (more in the video).

We are seeing corporate America starting to feel better about their back log of products and about who is buying and who is about to buy. That is why we track the trucking and railroad shipping industries. Businesses have to order in advance and have it shipped to them before they can use it or sell it. This tells us what is about to happen.

Sectors with momentum in the economy

The upward momentum in the economy is very broad based. Momentum is coming from healthcare, technology, telecom, consumer staples, and consumer discretionary sectors. Higher end retail numbers are coming out in the next week or two and that will give us a good idea on where our economy is headed.

We believe the U.S. is looking very strong economically. The international economy might not be looking so good, but there are many great things going on here in the United States. As we comb through all this data we are committed to keeping you updated to help you live with confidence.

Please send us your comments and concerns or call us at (205) 989-3498.

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.

Jul 282014
 

Nervousness In The Markets

Today we are discussing the nervousness in the markets over geopolitical and domestic situations. The DOW Jones has hit new highs eleven times in a row (between May and July) but last week it tapered off. This can impact your broad based portfolio and individual investments.

Vladimir Putin, the situations in the Gaza Strip and Israel have contributed to the Dow ending it’s eleven new highs in a row streak. The nervousness in the markets is really with the individual investors. Corporate America on the other hand, is showing signs of real confidence (more in the video).

Corporate confidence in the markets

We are in the middle of earnings season and half of the S&P 500 companies have published their reports. 76% of those have beaten expectations for their earnings and 67% have beaten expectations on sales. That is in line with what we’ve seen since 2009.

This week we are watching reports coming from:

  1. CPI (Consumer Price Index)
  2. Existing home sales
  3. Durable goods
  4. GDP (Gross Domestic Product)
  5. Employment
  6. Personal income
  7. ISM manufacturing (Institute for Supply Management)

(More on each in the video)

Home sales impact on the economy

We are especially focused on the home sales reports as we’ve had several clients tell us they were sticker shocked at the appraisal on their houses. As we look at these home sales reports, they are not always lining up with our findings.

The new home sales multiplier effect

Even though existing home sales are rising nicely, new home sales are down. They dropped in June by 8.1%. There is an important multiplier effect of a new home sale. If you build a new home, three full-time jobs are created for one year. 1.5 of that is a person who is building your home, the other 1.5 full-time jobs are for products related to building that home. These jobs would be anything from prefabrication, to hardware and furniture sales.

The types jobs related to new home sales are missing from our economy because people are not building as many new homes. People are renovating or buying existing homes. This is another reason investors and consumers are nervous.

The lack of new home sales is important for investors to follow because it is starting to create a broader drag on the economy. It has a lot to do with the nervousness in the markets and with the consumer. Janet Yellen even mentioned recently that new home sales are a problem.

Also contributing to the lack of new home sales is the fact that many younger generations are saying they don’t need a bigger place. There are also those who have just paid off their homes and, after what happened in 2008, are not interested in buying a new home.

Nervousness in the markets from geo political situations

Will Rogers said, “History doesn’t repeat itself but it sure does rhyme.” 100 years after World War I we are seeing some similarities to that time. Russia is again a big player as Vladimir Putin is moving forward on acquiring more territory for Russia adding tension across the globe.

We are will keep you updated as we watch how these political situation could impact you, the investor, and our economy. We still believe there is plenty of opportunities in the market and there is no need to be nervous at this time.

Send us you comments and questions or call us at (205) 989-3498 to discuss with us you current financial situation.
nervousness in the markets
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 Dow Jones Industrial Average measures the average price of a group of 30 high value stocks. The S&P 500 index is a measure of performance of the broad domestic economy through 500 stocks from major industries.

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 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.