Nov 242014
 

Last week showed a continuing strong US market, Japan declared they are in a recession, and China surprised everyone last Friday with an interest rate cut. Today we will discuss how these and other international issues can affect US markets and ultimately your portfolio.

Mistakes in evaluating a stock’s move

Think of any stock in the US market. If that stock moves one dollar, we believe there are factors that affect 75% of that move and other factors that affect 25% of it. Most investors focus on the 25% over the 75%. These factors are the individual fundamentals of the company of that stock, such as their balance sheet, how much money they are making, accounts receivable, and their income statements. The factors that cause 75% of the stock’s move are the macro factors. These include what is going on in international markets, other countries’ central banks, and what our market as a whole is doing.

How we evaluate a stock’s move

We spend 75% of our time focused on the factors that make up the 75% of a stock’s move because we think that is a more fair and balanced way to look at the risk. The media and the general public focus just on what the company is doing and not all the other factors that made the stock move. The 25% is important but at the end of the day, it’s the factors that make up the 75% that cause the stock to move.

Potential currency war

The Japanese Yen is declining which is good for Japan because their goods are cheeper to the rest of the world. While they are in a recession, their citizens are tolerant to this as long as everyone is affected equally. This mindset is a part of their culture. But this is putting pressure on Europe because now buyers are starting to buy from Japan instead of Europe. With the Euro still highly valued and the Yen depreciating, we could see a potential currency war. Ultimately, this will impact US markets and your investments.

US market overview

As Japan slipped into a recession last week they delayed an increase in their sales tax. It remains to be seen if that will have an impact. Oil prices continue to decline as the Senate rejected the Keystone Pipeline vote. We are watching to see how oil prices react to the OPEC meeting on Thanksgiving Day. Retail earnings continue to continue to be strong. As we prepare for Black Friday, the reduction in gas prices is like a tax cut which will give consumers more money to spend and help with the already good retail sales. While this is great for the US it’s a whole other story for the Middle East which is being negatively impacted by oil prices coming down and the US becoming more energy self-sufficient.

We hope you have a happy Thanksgiving. We are here all week except on Thursday for the holiday. Feel free to call or email us with your questions or concerns.US Markets

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

Franklin Bradford, CMT
Senior Vice President
Wealth Consultant

Bobby Norman, CFP®
Vice President
Wealth Consultant

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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.

Stock investing involves risk including potential loss of principal.

Nov 172014
 

Every Monday we give you our insights on how the markets performed last week and what you, as an investor, need to be aware of this week.

The effect of dropping oil prices

October’s sales numbers came in last week surprisingly better than expected. Dropping oil prices continue with the average price per gallon at $2.92 in the United States. This adds up to 52 billion dollars in savings to consumers which is good news as we head into the holiday season.

Another S&P 500 all time high

The S&P 500 hit another all time high on Friday. This is due to overall positive economic news, better than expected corporate earnings, and belief that the Federal Reserve will keep interest rates down.

Recession worries in Japan and Europe

Dropping oil prices brings good news for Asian countries as they import most of their oil, so its cheaper for them. Unfortunately this has not helped out the Japanese and the Europeans. Europe is experiencing extremely slow economic recovery which recently posted only a 0.02% growth. France and Italy would have been in a recession if it had not been for government spending. Germany also barely missed a recession. Japan is experiencing slow growth and will probably have another round of a stimulus package.

Economic data to watch this week

The minutes from the Fed meeting last week will come out this week. We will also see reports on existing home sales and housing starts. We will get a look at US inflation through the CPI numbers. We are watching news from the Bank of Japan meeting in the middle of the week as well as data from Germany and the UK.

If you would like to talk with us about your market or investment concerns, feel free to email us here or call Franklin, Ashley or Bobby at (205) 989-3498.
Dropping oil prices
Franklin Bradford, CMT
Senior Vice President
Wealth Consultant

Ashley Page, JD, MBA
Senior Vice President
Wealth Consultant

Bobby Norman, CFP®
Vice President
Wealth Consultant

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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.

Nov 102014
 

What in the world happened last week?

Last week the DOW, the DOW Industrial, the DOW Utilities, and the S&P 500 ended at all time highs. That hasn’t happened since 1998. The unemployment rate ticked down to 5.8 percent but we are still concerned about the labor and participation rate. The United States continues to lead the global recovery as the strongest market in the world. We see this trend continuing.

This week’s market focus

It’s a light week for market data. Our main market focus will be on retail sales reports at the end of the week. This will give us an indication on what consumers are doing. We are also watching the jobless claims which are reported weekly. Tomorrow on Veteran’s Day the Bond Market will be closed but the Stock Market and Futures will be open as usual.

International market focus

Our international market focus is on the Bank of England, which will be giving a quarterly report on inflation. We are interested to see if they will raise interest rates. China will also be releasing a good amount of data including the CPI, the PPI and retail sales.

The Impact of deflation

Deflation is still a negative force in our economy. The Japanese have been dealing with deflation since the late 1990s. They have recently been very aggressive with their Central Bank using stimulus packages as a way to get out of it. This is starting to slowly inflate their economy. Central banks can be very effective against deflation if they focus solely on it. The problem is the many other policy issues that can go along with it. We feel like this is a good lesson for the Europeans to learn. Europe is on the cusp of deflation and there are many comparisons to Japan.

Veteran’s impact on our economy

Without the sacrifice and service of our veterans, we would not live in a free market society and able to live as we do. We are grateful for our nation’s veterans and we hope everyone will celebrate their service tomorrow on Veteran’s Day.

If you have any questions or concerns about your investments, please call us at (205) 989-3498 or email us here.

Market Focus
Franklin Bradford, CMT
Senior Vice President
Wealth Consultant

Ashley Page, JD, MBA
Senior Vice President
Wealth Consultant

Bobby Norman, CFP®
Vice President
Wealth Consultant

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.
TheDow Jones Industrial Average measures the average price of a group of 30 high value stocks. The Dow Jones Utility Average keeps track of the performance of 15 prominent utility companies.

The S&P 500 index is a measure of performance of the broad domestic economy through 500 stocks from major industries.

Nov 072014
 

What if things don’t get better in the world? There’s a lot of bad news out there. There are several scenarios that could have a dramatic economic impact in the United States. Let’s take a look at several of these and how we believe they could impact our economy and your investments.

The economic impact of Baby Boomers and technology

The Baby Boom generation is aging which means they are not buying as much because they are not accumulating wealth. Technology is changing everything from how we do business to how products are made. These two factors combined could bring about deflation in our country.

Economic impact from Russia

Vladimir Putin may be the richest man in Russia but his country could very well go bankrupt. US sanctions against Russia, because of the situation in the Ukraine, are having a huge economic impact on Russia. As these sanctions cause their economy to slow down, we could be getting ready to see things unravel in Russia.

Economic impact from the Middle East

If ISIS continues to get out of control, the US will have to reconfigure their strategy in the Middle East. This could get more complicated. By 2021 the US will be the biggest exporter of energy in the world with Israel in second place. If Europe starts buying more of its energy from Israel, that will change the US strategy in the Middle East. This political and economic scenario will continue to change so we are watching this closely.

The economic impact on the US

It’s important for investors to remember that 90% of the internet and technology companies in the world are based in the United States. While technology may be brining prices down which could contribute to deflation, the US greatly benefits from having these companies in the country.

Because the US is leading the world in technology development and is also the largest exporter of energy, it makes us the best house in a bad neighborhood. While China on the outside appears to have a growing economy, with the population explosion and lack of jobs, they are not the power house they want everyone to believe they are. So we don’t view China as a big threat economically.

We are constantly researching and debating these potential scenarios and many others. If you have questions about this or your current investments, call me at (205) 989-3498 or email me here.
Economic impact scenarios
Greg Powell, CIMA
President/CEO
Wealth Consultant

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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.

Nov 032014
 

Thought it’s not socially acceptable to talk about politics and money, we have a lot of that to talk about today. Last week was a very eventful week as we saw Japan announce it’s stimulus plan. This week will not be any different.

How Japan could cause the markets to move

Last week the Bank of Japan announced they will increase their stimulus by buying government bonds. They also announced their pension plan, which is like our Social Security, will be shifting from a bond to a stock exposure. We believe it is a big possibility that Japan will be investing in U.S. Stocks, which will cause the markets to move.

The Nikkei, Japan’s stock exchange, was up 4% on Friday which is a big move in any indices. The Nikkei average is now half of what it was in 1989 which is when deflation started. This impact of deflation is why we watch watch deflation closely.

New Market Data

Manufacturing data and the jobs report will be coming out this week which is important for investors to watch as it gives good insight to the strength of the economy.

The impact of the midterm elections

Midterm elections can cause the market to move. Since 1949 the markets have gone up in the fourth quarter following midterm elections. We are also in the last few years of a presidential cycle which, historically, can also impact the markets. There are no guarantees that this will cause the markets to move, but we are watching it closely as we would want to take advantage of this should it occur.

Will the Republicans take the Senate?

There will be a huge debate about whether or not the Republicans will take the Senate. The polls can show one thing, but in elections, it’s all about voter turnout. It’s possible that Georgia and Louisiana will go into a runoff, which in Georgia won’t happen until January. This means we won’t know which party will control the Senate until after the new term starts.

Factors that can cause the market to move

We are watching all these movements in the market and the political and economic factors that could impact it. The Fed has stopped quantitative easing. The Bank of Japan is putting more money into the system. Consumer and business spending will soon be changing during the holiday season. All these factors and the key role Europe is playing could cause the markets to move.

Should you have any questions or concerns, email us here or call us at (205) 989-3498.
Factors that cause the markets to move
Greg Powell, CIMA
President/CEO
Wealth Consultant
Email Greg Powell here

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

Bobby Norman, CFP®
Vice President
Wealth Consultant
Email Bobby Norman 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.

Oct 302014
 

In light of the recent decisions by the Federal Reserve regarding the end of Quantitative Easing, we are doing a special edition of Investors’ Insights. There are mixed emotions about this decision. There are those who believe that the Fed should continue with Quantitative Easing and there are those who agree that they made the right decision.

Quantitative Easing is the printing of money by the Federal Reserve. It can be compared to a patient getting medication to help them get back their health. In this case, we believe that Quantitative Easing was a good decision by the Federal Reserve.

We explain what Quantitative Easing is in this video but you can also watch a previous and more in depth video blog we posted “What Is Quantitative Easing?” here.

What is the Fed doing and what they aren’t

In Quantitative Easing the Fed was printing money to buy bonds on the open market. As of yesterday, the Fed is no longer buying bonds on the open market. What they are not doing is selling the ones they currently own. It’s important for investors to note that the Fed now owns 50% of the Treasuries that are issued. The Fed was not created to do that.

How could the Fed handle this?

Although the Fed is ending Quantitative Easing, they are not going to start increasing interest rates. As long as they don’t see inflation and job growth, we should not see interest rates rise soon.

The Fed can work their way out of this but it will take some time. One possibility is they could let all these bonds they own mature and not reinvest the proceeds.

Will the end of Quantitative Easing bring volatility?

We are expecting some volatility in the markets because the debate will continue about whether this was a good decision or not by the Fed. We’ve taken a conservative approach because of this along with the upcoming mid-term elections.

We are going to continue to analyze all this, stay conservative and methodically move back into the markets when the time is right and moving other positions to cash.

We will keep you updated as time goes on so keep checking back with us.
End of Quantitative Easing
Greg Powell, CIMA
President/CEO
Wealth Consultant

Franklin Bradford, CMT
Senior Vice President
Wealth Consultant

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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.