May 262015
 
#105 Interest Rates Are Going Up

Today we are discussing various economic issues that are holding this market back.

The State of The Affordable Healthcare Act

The burden for funding The Affordable Healthcare Act has been on owner managed businesses who are very large segment of our economy. Investors should be watching the Supreme Court case on the docket in June called King vs. Burdwell, which states that the way The Affordable Healthcare Act is being funded is unconstitutional. If this rules in favor of being unconstitutional, we believe this could be a good tailwind for owner managed businesses that a lot of people are not expecting. Furthermore, this could ignite the markets.

Interest rates are going up

Last week Janet Yellen announced that interest rates are going to go up sometime later in the year. She was not specific about an exact time frame, but she never is. Yellen sited recovering home values, a growing global economy, and an improving job situation as her reasoning for interest rates going up.

The issue of interest rates going up is very data dependent. We believe a rate hike in June is very unlikely but a possibility in September. Remember though that there is a lot of data that will come between now and then which is why we are here every day tracking it.

What has beat expectations?

Housing starts increased 20% in April which is the highest level it has been since 2007, easily beating expectations. Japan’s GDP also beat expectations growing 2.4%.

Does anyone care about Greece?

The Interior Minister of Greece stated over the weekend that they will not be paying back their loan to the IMF. The markets seemed to say, “So what, who cares,” and did not react to this news. While we look for the back page stories that will become front page stories, this is an instance where the opposite has occurred.

Short week but lots of data

While this week is short because of Memorial Day, there is a good deal of data coming out. The Durable Goods Orders numbers came out lower than expect and the Case-Shiller report shows that home prices are up, but did not meet expectations. There are other home sales reports this week as well as GDP data.

So why don’t we go to cash?

The VIX Indicator which measures volatility in the market is around 11. In 2007 and 2008 it spiked up to 40. What usually happens when it gets to this level is that the market will stay flat or drop anywhere from 2-4%. The question investors may ask is, “So, why don’t we go to cash?” We hold cash to take advantage of market opportunities and transaction costs. We believe this possible volatility is just a normal part of the markets. In other words, it rains every now and then. You don’t cancel your kids camping trip because they are predicting rain. We are watching the indicators but at this point we are not abandoning the markets.

Please keep sending us your comments and questions.

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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


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

Trey Booth, CFA®
Vice President
Wealth Consultant
Email Trey Booth 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.

Stock investing involves risk including potential loss of principal.

May 182015
 
#103 Can A Bull Market Climb A Wall Of Worry?

Concerns over a possible recession

Markets are moving towards an all time high which brings up the debate of whether we are in a bull market or are they about to trade back? Last week was positive overall with jobless claims at an all time low. There are some concerns about retail sales and industrial production being down. The last two times industrial production was down three months in a row we were in a recession.

Can we have a bull market in a recession?

Bad news can be good news, as one of the Fed governors this weekend mentioned that in light of the recent bad data they should push the lift back of interest rates to 2016. This will prove positive for the markets as a market can climb a wall of worry.

Earnings Season pushes a bull market

Adding to a possible bull market is the fact that 92% of S&P 500 companies have reported positive earnings. While expectations where down 3%, the reports are up 2%. While it doesn’t sound like much, it’s pretty remarkable considering the market headwinds of the rising dollar and declining oil prices. Companies are making money even though we are in this deflationary period or headed into a possible recession. Even in this climate, the market can climb a wall of worry.

Implications of the Pacific Rim Trade Agreement

The Pacific Rim Trade Agreement has moved from the back page to a front page story. This has become a potent possibility for multi-national growth. Congress is now fast tracking this trade agreement. This could be the most important vote they have this year. It impacts investors that have international positions in precision engineering, aircraft, and agriculture. This will also help jump start Japan’s economy and encourage a bull market globally.
Bull Market
Thank you for your comments and questions. Please keep them coming.

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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


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

Trey Booth, CFA®
Vice President
Wealth Consultant
Email Trey Booth 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.
The economic forecasts set forth in the presentation may not develop as predicted.

Stock investing involves risk including potential loss of principal.

May 042015
 
#102 A Possible Market Tailwind

Current market update

We saw a lot of volatility in the markets last week but with a strong rally on Friday, the S&P 500 was down just under 1/2 of a percent. While that’s not what we are looking for, it does show the strong support levels. The main cause was the GDP report that showed a tepid economy in the first quarter.

Bounce back indicators

There was this same kind of fist quarter last year but then the economy bounced back in the second quarter. Upcoming data will help us determine if that could happen again. We will start to see some of this data near the end of the week with the Jobs Report. Other indicators will be the earnings reports that are still coming out. Even though expectations where lowered, many companies are exceeding expectations.

Possible Market Tailwind

Although the news media is not reporting on the rising level of corporate debt, it continues to be something we are watching very closely. New corporate debt tells us that companies are being more active by borrowing money to expand their business. This has a rippling effect in the economy and is leading consumers to be more confident to borrow money themselves. With interest rates so low, this could be a possible market tailwind.

Investors should watch

Investors should pay attention, as we are, to how this money is being spent, how it is working, and how many times it changes hands. This could create sustainable market growth. We will keep you updated on this as the data comes out as the year progresses.

Thank you for your comments and questions. They help us provide the information you really want. Keep them coming.

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


Trey Booth, CFA®
Vice President
Wealth Consultant
Email Trey Booth 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.
Stock investing involves risk including potential loss of principal.

Apr 272015
 
#101 Good Economic Data For Investors

Last week’s economic data

Last week was another good week for the markets both domestically and internationally. Economic data in retail sales and durable goods orders beat expectations and we are continuing to see an increase in consumer spending. Home sales continue to be a bright spot as it rose 6.1% in March.

Economic data reports to watch

Hopefully last week’s trends will continue this week as we will be watching for the GDP report and the Fed announcement from their meeting this Wednesday. The topic will be interest rates and there are very low expectations that they will raise them at this time.

Earnings report update

So far 201 S&P 500 companies have reported their earnings and the numbers are down 2.3%. While that sounds bad, 73% are those are beating expectations. Another 150 companies will report this week so we will be watching this closely and will update our followers soon.

From a price performance view, the market still looks good as people are voting with their dollars, unswayed by mainstream media’s fear reporting.

One important story not in the news

A “back page item” that is not getting much media attention is that the Japanese Prime Minister is here in the United States to meet with President Obama. We believe this is very important to investors as Japan and the U.S. are getting closer to a trade agreement called the Pacific Trade Partnership. As this partnership would open up a greater amount of trade, this could significantly boost the U.S. economy in large caps especially in the auto and agricultural industries.

Please send us your comments and questions.

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Good Economic Data

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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


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

Trey Booth, CFA®
Vice President
Wealth Consultant
Email Trey Booth 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.
Stock investing involves risk including potential loss of principal.

Apr 202015
 
#100 Avoiding The Volatility In The Markets

Our 100th Episode!

Today we celebrate bringing you our 100th episode of Investors’ Insights. Today we are discussing earnings season, oil prices going lower, volatility in the markets, the Fed being on hold, and asking consumers, “Where are you?”

The Fed is on hold with interest rates

An interesting CNBC.com article came out that showed how global demand for bonds is going to out pace supply by $450 billion this year. That’s an increase over the $380 billion from last year. When there is more demand for a product, it pushes prices up. For bonds that will push yields down. This should stall any expectations for worldwide rates to rise. The Fed is on hold with interest rates as the German 10 year bond is paying .07%, Greece bonds are at 12.9% and the U.S. bond is around 1.8%.

What in the world happened last week?

We saw volatility in the markets last week as U.S. industrial production declined and the manufacturing index turned negative. All eyes continue to be on Greece for a possible default. There was some good news as oil prices rebounded sharply and US retail sales saw solid gains in March. The average number of jobs rose, but wage numbers are not following.

Although retail sales have gone up, the consumer is not showing up as consumer spending is down. We are concerned that oil prices might have to go lower to get consumer spending going again. We believe consumers are paying down debt and saving money rather than spending it in the economy.

The 7 Year Presidential Cycle Effect

Historical data shows that in the 7th year of a presidential cycle there tends to be a lot of volatility in the markets, which we have seen already this year. This data also shows that most of the growth has occurred in the 2nd and 3rd quarter which again we are seeing right now. There are no guarantees that this will all happen but we know that history can repeat itself and we are watching this closely.

Avoiding the current volatility in the markets

The S&P 500 went below the 2080 support level last week but there is still a lot of support at 2070 and 2050. In light of all that went on Friday in the markets, it could have been much worse. Because of all this volatility our clients have seen us adjust their portfolios to strategies that strive to avoid as much of this as possible.

The government contributes to the GDP

After the downturn of 2008, tax revenues decreased and federal, state, and local government spending pulled back. Now that the economy is doing better, the government is now spending again and actually contributing to the countries Gross Domestic Product. We are hoping to see more of this later in the year in defense spending and healthcare.

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volatility in the markets
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


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

Trey Booth, CFA®
Vice President
Wealth Consultant
Email Trey Booth 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.
Stock investing involves risk including potential loss of principal. Investing in a specific sector involves additional risk and will be subject to greater volatility than investing more broadly.

Mar 302015
 
#97 Finding The Positives In The Markets

Last week in the markets

Last week was a rough week in the markets worldwide. The GDP declined and came in below expectations. Also, corporate profits fell. Most analysts feel like this is because of the higher dollar, which is something we have been talking about for weeks. However, there was some good news, as consumer confidence and new home sales both grew.

This week in the markets

We have a good bit of data coming out this week that we will be watching. Personal income has already come out this morning, and Wednesday we will see ISM Manufacturing numbers. Thursday we will see jobless claims, international trade data, and Janet Yellen’s speech. The big news on Friday will be the employment situation. Additional data we will continue to monitor as it comes out this week will be the Case–Shiller Home Price Index and consumer confidence reports.

Personal income data and an impact in the markets

Disposable income is inching up a little which is good. We are also seeing a little wage growth and the employment situation getting better. Interestingly, the savings rate has now risen to about 5.5 %, which is around 1.5% higher than we saw last year after the first quarter. Additionally this year we are seeing tax refund checks trending higher. For most people, this is their largest singular payment. We think that higher tax refunds this year, combined with the increased saving rate, can be very impactful and help with a pickup in the markets. As a reminder, the majority of the markets are consumers so people being confident and spending can be very powerful.

Greece

In the beginning of this year Greece was front page news. Since then they were able to get a holdover from their creditors in order to put together a plan. They are now supposed to present that plan this week, so we could see Greece move back to more of a front page news story again. The concern is that if Greece can’t meet what their creditors need, they may exit the Euro. We don’t expect this to happen, however, it could bring some volatility back in the markets in terms of perception.

If you have any specific questions or comments, please email us here or call us at (205) 989-3498.

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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


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

Trey Booth, CFA®
Vice President
Email Trey Booth here

Finding The Positives In The Markets 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.