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 112014
 

Using a historical perspective to look at news headlines

With a lot of data and geopolitical issues in the news it can be useful sometimes to look back on times in the past that seemed troubling and see that the we were able to come through. (more in the video)

Data and news from last week

Last week was a great week in the stock market. The Dow Jones, S&P 500, and NADAQ were all up for the week ending 8/8/14. The 10 Year Treasury, which we watch as a barometer of risk in the market, is also at a 2.42% yield. Remember, as yield goes down, prices go up.

Most of the excitement we saw in the markets came at the end of the week. In the video I discuss what happened in the markets on Thursday and Friday as a result of the geopolitical issues in the news, including how statements from Russia could have impacted the stock futures numbers.

There were three key pieces of economic data that were of particular interest to us last week. The ISM Report, which gives us a good idea about the overall feel of the economic data, was the strongest it has been in this recovery. Secondly, the Factory Orders Report, which gives us combined data on durable and non-durable goods was very good. Finally, the Consumer Credit data, which measures all installment loans by consumers, was also positive. Although this has been the slowest recovery, all of this data indicates there is still growth.

This week we are watching for reports on:

Retail sales
Industrial production
Consumer sentiment
Producer Price Index

(More on each in the video)

Key data and terminology from The Federal Reserve

One of the ways the Federal Reserve interprets all of the economic data, like the data Franklin presents in the video, is through a term called “slack”. In order to calculate the slack the governors of the Federal Reserve will compare the top level capacity of an industry or segment vs the current level, the result is the “slack”. It is important to note that the governors of the Federal Reserve can each interpret the measurement of slack differently. For instance, Janet Yellen is very concerned about the labor market where there is a lot of slack in wage growth. However, there is not a lot of slack in the industrial production and real estate numbers which may lead other governors of the Federal Reserve to suggest a different approach to interest rates. We are closely watching the Fed minutes and the Fed’s discussion on slack because this can give us some indication on the future of inflation and interest rates.

As we do each week, we will continue to monitor the data and news that can impact the markets and your portfolio. Please send us your comments and concerns or call us at (205) 989-3498 at any time.

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

The NASDAQ Composite represents all the stocks that trade on the Nasdaq.

The Dow Jones Industrial Average measures the average price of a group of 30 high value stocks

S&P 500 index is designed to measure performance of the broad domestic economy through 500 stocks representing all major industries.

InvestorsInsightsNewsandData08.11.14

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 072014
 

Listen to our Investors’ Insights podcast

Click here to listen to or learn more about our podcast.

Economic trends that could affect your portfolio:

  • Unemployment
  • Inflation
  • Market all-time highs

Economic Trends and numbers

One of the biggest economic trends right now is how unemployment is continuing to come down but the numbers from the Labor Department are deceiving (more in the video).

Another economic trend that we have been talking about for several years here at fi-Plan Partners is how business models are changing, especially in healthcare and education. It’s called “Creative Disruption” and it’s being caused by innovation. As old industry models are crumbling, innovation is allowing for the creation of new models. Last week’s edition of The Economist magazine has “Creative Disruption” on the cover. It discusses education and especially how online education is dramatically changing universities.

As we watch the employment numbers rise, The Economist is telling us that by 2025, two thirds of universities could be closed or drastically changing how they operate. We look at these kinds of trends for our clients to find new investments that will benefit from these changes (more in the video).

We are also seeing market highs as well as inflation and prices going up. It’s important for investors to know tht if your portfolio is not staying ahead of inflation, you are not going to have enough money to continue living the lifestyle you’ve grown accustom to.

The economic trend of another market all-time high

The week was pretty slow until Thursday when we saw the DOW hit an all-time high at 17,000 points being pushed by the employment numbers. From a historical perspective, this is occurring quite differently than in the past (more in the video).

Why are we concerned about this? The employment report comes out at the beginning of the month and it covers all areas of the economy. The big take away is that this report shows how retail stores are hiring. This is important data about the economy because it tells us that the retail industry is confident that people are going to be buying products. This is confirming the second quarter momentum we have been seeing.

The ISM manufacturing report is also giving us a good feel for the economy and we are looking at the details closely. This week begins the earnings season which we will be analyzing beginning on Thursday when those numbers come out. Currently, we are watching the data that the Federal Reserve is focused on, as well as what the everyday individual is seeing in the economy. You may be seeing prices rising at the grocery store on meat, seafood, milk, cheese and other perishable products. Between disease and droughts, the meat industry is being hit hard (more in the video).

What is impacting your wallet?

The Fed is trying to control the economy to keep inflation in a “sweet spot” (more in the video). The Fed is looking at every bit of data that has to do with food and fuel which comes from The Personal Consumption Expenditure Price Index. That index is going up and we are watching this closely, as we could be seeing an important turn as people are impacted in their wallets (more in the video).

We celebrated independence this weekend and as an independent wealth management firm, we keep up with all this data and more to help guide our clients towards more independence. Our independence as a financial firm gives us access to so much data that we are confident we provide a higher level of service to our clients.
economic trends video thumb
Greg Powell, CIMA
President/CEO
Wealth Consultant
Email Greg here

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

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

Your Name (required)

Your Email (required)

Subject

Your Message

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.