Jul 132015
 

This morning in our portfolio strategy meeting we had a hot debate over China. Currently, there are several countries around the world that could have an impact on your portfolio. Greece is having to make another decision about their relationship with the European Union and in Iran there is hope that a decision could be made tonight or later this week about their nuclear program. At the moment, the debate over China is something investors should be watching.

Bobby Norman debates Franklin Bradford over China

Bobby Norman’s opinion is that, in the short term, China’s current market situation is not that big of a deal. Only 1.5% of Chinese shares are owned by foreigners. China’s market is still up for the year and most Chinese people keep their wealth in cash and real estate. Stocks only make up about 15% of the average Chinese family’s household assets. There is no sign that the Chinese people are concerned about their market. Finally, all Chinese banks are owned by the communist government which has vast resources to fine tune the economy.

Franklin Bradford disagrees

In this debate over China Franklin Bradford recognizes that when you combine the Shanghai Stock Exchange and the Shenzhen Stock Exchange, they make up the 2nd largest exchange in the world. The communist government controls the banks and can report anything they want. In fact, the government has shown concern over their markets by injecting cash into the system, suspending all initial public offerings, forbidding executives to sell their stocks for the next six months, not allowing half of their stocks to be traded, and by encouraging their pension fund companies to increase their positions in Chinese stocks. While the market situation in China doesn’t look contagion right now, if the government is this concerned, it has the potential to be.

The state of U.S. economic status

We still believe interest rates will stay down and not be raised for some time. We also believe that the United States is a safe haven for the world to invest. Deflation is still the primary problem. To explain it further, you can look at it like owning a suit. When you buy a suit, that’s buying a product. When you have it dry cleaned, that’s a service. In our economy, the price of products, like a suit, have gone down. But services, like dry cleaning, has gone up 9.2%. Prices directly affect whether or not the Fed raises interest rates but they are having a hard time assessing which way prices are going.

We’d love to hear if you agree with Bobby or Franklin or if you have your own opinion. Please send us your comment.

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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

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 economic forecast set forth in this presentation may not develop as predicted. 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.

Jun 082015
 
Do Economists Think We Are Idiots?

We had a big debate on some issues this morning as some economic news from last week got Greg really fired up. Volatility was a theme last week even though there were some good economic reports, especially on the job front and labor participation. A reported 280,000 new jobs were created in May which were considerably higher than expectations.

Do economists think we are idiots?

As we listen to the economic reporters, we have to ask, “Do economists think we are idiots?” Of course the employment numbers are higher in May. Thousands of universities across the nation just had graduation. All those new graduates have moved back home and their parents are now saying, “Go find a job.” Maybe we should call it “job inspiration” instead of job participation.”

Where are the new jobs?

Most of the new jobs were created by small and midsize companies which is very important for a growing economy. We are at a point, however, where more good news like this could make the Fed raise interest rates sooner. We are watching to see if these job numbers are a trend because we believe the Fed won’t raise rates off of one month’s reports. Be careful because politicians and the news media will keep hyping this up because they need to sell ads and stay in the public eye.

The DOW Theory breaks down

For years the financial industry has had a DOW theory: This theory states that as the larger companies in the DOW go up, the Transportation Index will follow suit. This is true about 50% of the time. Currently the DOW is up but the Transportation Index is off 6.9%. There are four reasons for this; technology, less manufacturing and more service, transportation stocks were high last year, and natural gas is being used more than coal lowering the energy stocks.

Politics and bureaucracy are slowing down economic growth

The month of May was one of the best on record for the most announcements of mergers and acquisitions. Rates are low and money is cheap which has helped companies buy their competitors. This, in turn, can boost the economy. The problem is that while there are more announcements of mergers and acquisitions, we are not seeing many of these deals closing. The Justice Department and the FTC have extended the average closing to 10 months. In the past it has been as low as 3 months. This is another example of how politics and bureaucracy are slowing down economic growth.

Two key things to watch this week

Retail sales and the Consumer Price Index numbers will be reported this week. Retail sales account for two thirds of the economy so this report will tell us if consumers are still saving money or if they are beginning to spend it. We will be looking at inflation from the PPI report as it measures this on the production level.

Please continue to send us your questions and comments.

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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 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.

Apr 062015
 
#98 What Economic News To Trust?

With so much economic news coming at investors from so many sources, we often get asked which headlines can be trusted and which cannot? Currently one of the big discussions is about Greece leaving the European Union. Our response is, “So what? Who cares?” Greece is going to make good economic news headlines for mainstream media but in the end, it might not impact Europe at all.

Economic news worth following

Emerging markets have seen the largest capital outflow since the beginning of the crisis. This is because people are starting to put money back into safer places instead of taking higher investment risks to regain losses from 2008. While this is good for U.S. investors in the short-term, in the longterm it could be bad because when markets in these smaller countries turn over, governments can topple. This is a headline worth following but investors should still be cautious as there may still be market volatility based on news hype, like Greece, and not actual economic news.

Last week’s market recovery

Last week we saw the market recover some of it’s losses with moderate gains. The price of oil increased and new home sales rose. Manufacturing and personal income also increased however, we are seeing the American consumer save their money more than spend it. Many economists have been surprised at this but our research is telling us that it could take up to 10 years for people to get debt back under control after a financial crisis. We might not see good consumer spending until 2018. This is one factor that has really held our economy back.

Weak markets and interest rates

In other economic news, the Jobs Report was lower than expected last week which is being contributed partially to bad weather. The silver lining in this is that it will keep the Fed from raising interest rates. The news media will make a big deal out of the Jobs Report and the market can react whether the news spins it as good or bad.

Mid March is historically a weak period for the markets because of Easter and financial industry trends (more in the video). Sometimes this leads to a good April so we could see the market turn around.

The strong dollar

Another silver lining, like the weak Jobs Report, is the fact that even though the dollar has dropped about 2% recently, this actually helps U.S. companies that are in multinational sales. The energy industry also benefits from a weaker dollar and it is starting to show signs of recovery.

Keeping up with the details

We are watching a lot of these market details right now for the domestic and global economy. We will keep you update here on economic news you can trust as well as through our market outlook letters and on social media.

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Economic News
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
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. 

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.

Mar 232015
 
#96 Have The Markets Peaked?


Today we will be talking about how fast the dollar is going up, how will that affect your portfolio, job and other assets around the world, and answer the question, “Have the markets peaked?”

The Fed is supporting the market

On last week’s Investors Insights we talked about how the market is really being moved by the Fed. As the week went on, the Fed announced they have removed patience from their statement. This made everyone, as well as the markets, concerned the Fed would raise interest rates. However, the Fed lowered their expectations for economic growth. While that sounds bad for the economy, it is good for the market because it shows the Fed is supporting it. At fi-Plan Partners we are still in the opinion that interest rates will not be going up any time soon.

Last week’s market snapshot

Last week was great for domestic and international markets. Both the DOW and the S&P 500 were up 2%. The bank of Japan continued its bond buying program and other countries are looking to reduce energy cost to encourage consumer spending.

Housing starts went down 17% in February which is the lowest in four years. There is speculation that this is because of tighter mortgage lending.

What to expect this week in the market

Investors will get two more looks at housing numbers this week with new and existing home sales reports. Investors will also get to see the Consumer Price Index (CPI) numbers, which helps determine inflation and deflation. Durable Good Orders and Gross Domestic Product (GDP) numbers will also be coming out.

The fast and furious dollar

The dollar is continuing to strengthen and it is causing problems for companies that sell multi-nationally. When the dollar goes up, their goods become less competitive. On the other side, smaller to mid-size domestic companies (small caps) are doing better because of a stronger dollar. The speed that the dollar is rising is faster than ever. This is causing commodity prices to come down, like the cost of milk and gas. Since all commodities are priced in U.S. dollars, international money is flowing into the United States making America an oasis in the desert right now. That’s why you may be seeing profits falling but the prices in equities are going up.

Have the markets peaked?

Since the NASDAQ and S&P 500 are at an all time high, the question is, “Have the markets peaked?” While the typical thought is to always buy low and sell high, there is also the ability to buy high and sell higher. Just because there is a new all time high doesn’t mean the markets peaked. Remember, every new market high eclipses an old market high. When you peel back the onion you will see there are a lot of positive things going on in our country and in the markets. Investors will be seeing a lot of negative news in mainstream media but there are many positive stories “on the back pages.” So, have the markets peaked? In our opinion, we believe that it could go higher.

Send 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

Have the markets peaked
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 economic forecasts set forth in the presentation may not develop as predicted.

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.