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.

Jun 022014
 

Listen to our podcast on iTunes. More information here.

This weeks financial market summary

  1. Books for the investor
  2. Stagflation and deflation
  3. The bond market
  4. HELOC impact on the markets

What happened last week in the markets?

Stocks were up moderately carried by larger cap stocks. Year to date the S&P 500 is up .85 and the S&P 500 is up about 4.

Durable goods where higher expected. GDP, which gives us a good feel for how we are doing as a country, was revised down dramatically but the market still was able to do ok.

As we looked at the personal income numbers we saw income was up and spending was off. While this was a good monthly report, we like to look at the trend and not the month by month data. The PCE inflation measure is below what the Federal Reserve is looking at. We think this is important for investors to monitor as it deals with stocks and bonds.

The second quarter is looking better than the first. There are more reports coming out this week that we will be watching (More in the video).

The bond market is rallying. The media has a different point of view than we do about this (More in the video).

We have been talking about deflation since the beginning of the year in spite of what traditional media is reporting. What we are seeing now tells us we are on the right track for our clients.

Market impact issues

The market is driven as much as 70% by the consumer. Home equity lines of credit (HELOC) are coming due as we move closer to the 10 year mark from when the housing market was good. Many consumers with HELOC will see their payments jump dramatically which will put a drag on consumer spending and impact the markets. If we see any interest rate hike during that time, that could really cause some damage. People could also be enticed to pull their money out of the markets to pay these increasing HELOC payments (More in the video).

There are many variables that are adding pieces to the puzzle. We still feel very good about the current economy provided we maneuver through it. We will keep you updated in our weekly financial market summary. Please send us your questions or comments below, email any of us, or call us at (205) 989-3498.
financial market summary
Greg Powell, CIMA
President/CEO
Wealth Consultant
Email here

Franklin Bradford, CMT
Senior Vice President
Wealth Consultant
Email here

Ashley Page, JD, MBA
Senior Vice President
Email here

Do you have a question about our Financial Market Summary?

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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.

May 302014
 

Markets are still reaching all time highs

Six months ago I posted a video concerning the markets hitting all time highs and how that relates to your portfolio. Here we are now, months later, and we are still seeing stock market all time highs. While this is good for the markets, this can be a stumbling block for some investors in relation to how they view their investments.

Importance for investors

I am reposting this vlog with a new introduction because I believe it is important for investors to have a proper perspective on the markets so they can make good investment decisions. The question you need to ask is, “How should you evaluate your portfolio in comparison to the record highs of the various stock market indices like the S&P 500 and the DOW?”

If investors gain a proper perspective on these indices, they can learn much about their investments and how to work towards achieving their financial goals.
Stock market hit all time high
Greg Powell, CIMA
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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.

May 052014
 

Now On Podcast!

Listen to the audio of this Current Economic Data And Market Update on our Investors’ Insights podcast here.

Macro Economic Data

Last week stocks were up about 1% mostly driven by the Fed statements about bond buying tapering, first quarter GDP reports, and the jobs report. People are watching to see if any of this data is weather related and if the data will keep getting better as the year goes on.

This week will be a light week for economic data. We are watching manufacturing which has been doing well in the United States. The service sector, which is not manufactured goods, has data coming out this week. The service sector is a big component of our economy.

We will also be watching international trade and the jobless claims. We watch this because it moves weekly and the Federal Reserve watches it.

Franklin Bradford, CMT
Senior Vice President
Wealth Consultant

Current Economic Data And Market Update

We are still following our top five items affecting economic data that we believe could lead us to economic outbreak this year. They are:

  1. Corporate earnings
  2. International markets
  3. The Federal Reserve
  4. Housing
  5. The political environment

Our Economic Data focus

Today we are focusing on corporate earnings. The S&P 500 and the Dow Jones Industrial Average have reached all time highs although they got there at a slow grind. Mergers and acquisitions have helped that greatly this year. The think tank Deal Logic reports that there are a huge amount of mergers and acquisitions relative to history. Deal Logic started tracking this since 1995 and this is the biggest amount of mergers and acquisitions since.

Most mergers and acquisitions have been in three main areas:

  • Technology
  • Healthcare
  • Telecommunications

If you are the company being bought, your stock will rise the next day on average 18.1%. The stock of company buying will drop the next day on an average of 1.4%. What we are seeing now is a 4.6% appreciation in the purchaser. The market is rewarding risk taking on the buy side than ever before.

This is very interesting to us and we will continue to watch it closely.
economic data video thumb
Please send us a comment below or email us here with any questions or additional thoughts. You can also call us at (205) 989-3498.

Ashley Page, JD, MBA
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.

Apr 282014
 

Investor insights overview

Today we discuss the tech sector troubles, the housing markets, international economic impact, and rumors of Amazon buying a baseball team. We will give you the investor insights you need. You may watch the video or read on.

Greg Powell, CIMA
President/CEO
Wealth Consultant

International economic update

Asia is still creating a drag on the global economy. The Asian export powerhouses are Japan, Taiwan, China and South Korea. For decades they have focused on dominating the export industry by using cheap labor to manufacture for others and then export. They make their money in the trade channel. The trade channel model, which once was a huge trade engine of the world, is now busted. These powerhouse countries have been expecting the trade channel economy to bounce back but it has not. They need serious reforms to become a true free market and boost the economy.

Ashley Page, JD, MBA
Senior Vice President
Wealth Consultant

Domestic economic update

Earnings Season is officially here. We may see a boost in the economy as many companies are turning in mostly positive reports. We saw mixed economic news last week with good news in manufacturing. When labor cost becomes equalized and land cost is cheaper in the U.S. we believe we are seeing a resurgence of manufacturing.

New home sales where better than expected while existing homes sales were down. Durable goods numbers where also up which means people are buying things that have a longer life. One of the reasons we may not have seen home sales rise is because the Millennials have watched their parents and grandparents home values go down and they do not want to own a house. Also, the supply of new homes is not keeping up with the demand.

We’ve seen encouraging economic data over the last few weeks. This week we are watching the Fed. to see if they will continue to taper as they have been, and the Jobs Report that comes out on Friday. If we see a pick up in jobs in April as opposed to the low number in March, we will know that it is weather related. Weather has had an impact on all the data, as now we are seeing rebounds across the board.

Franklin Bradford, CMT
Senior Vice President
Wealth Consultant

Rumors of Amazon buying a baseball team

There has been a rumor going around that Amazon.com is looking into buying the Mariners Major League Baseball Team. Amazon is a great example of a company that is transforming itself with other media and entertainment ideas.

Whether the Amazon rumor is true or not, we do not know. What we do know is the “Amazonians” sounds a lot more threatening than the “Mariners.”

All joking aside, the year is moving by fast. You can stay on top of what is rumor and what is truth by watching this vlog weekly or by listening to our podcast, Investors Insights. For more information on our Investors Insights podcast, click here.

Please send us your comment below, email me here, or call us at (205) 989-3498.

Greg Powell, CIMAInvestor Insights President/CEO
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.

Apr 282014
 

Are all stocks in the S&P 500 created equal?

The Standard and Poor’s 500 is a collection of 500 stocks that is a broad spectrum of the the stock market for the United States. Using the S&P 500 gives us an overall view of the U.S. economy. Each stock in the S&P 500 is weighted differently meaning that a stock will impact the index more or less than another.

A simple explanation of this is to compare the S&P 500 to the United States House of Representatives. Each state has a certain number of representatives in the House depending on it’s population.

The S and P 500 is like the House of Representatives

California is our most populated state carrying 12% of the country’s population. Therefore, California has 12% of the representatives in the house. Less populated states have fewer representatives. It follows that California could have more of an impact on decisions made in the House of Representatives than other less populated states who have less representatives.

Which stock will move the S&P 500 more

A bigger company whose stock is in the S&P 500 that has more shares outstanding will have a bigger impact on the index when it goes up or down than a smaller company stock. A large technology company selling smartphones and computers will have a heavier weighting in the S&P 500. When its stock moves, the S&P 500 moves.

Note: Indices such as the S & P 500 may not be invested into directly.

Understanding this is important to investors as they see the S&P 500 fluctuate. Knowing which stocks are weighted heavier than others will give investors a proper perspective on market growth and volatility, and help them make better decisions about their investments.

What part of the investing world would you like me to discuss next? Please comment below, email here, or call me at (205) 989-3498.

Franklin Bradford imageFranklin Bradford, CMT
Senior Vice President
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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.