Thursday, June 29, 2017


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Health care funding continues to dominate the political conversation, with the Senate introducing its version of a new health care financing arrangement.  Stay tuned for more on this, as the House and Senate attempt to develop a bill that will pass both houses of Congress.  And whatever legislation is passed, look for it to be challenged in court.  Finally, keep in mind that in the U.S., we have the finest health care on the planet.  It’s the paying for it which remains the challenge.
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In economic news, new home sales rose 2.9% in May, to an annualized rate of 610,000 units.  The Fed rate increase last week took the Fed Funds rate to a range of 1% to 1.25%.  Before the economic implosion of 2008-09, this rate was almost five times as much.  Those attempting to live on interest income have experienced this first hand.  And, this inordinately low interest rate environment has been one of the drivers in the outperformance of dividend paying stocks over the last five years.
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On the business front, Coke has announced the layoff of 400 Atlanta based employees.  This news follows an announcement from earlier in the year that Coke is reducing staff by 1200 worldwide, in order to create a leaner organization. 

And Fulton County Commissioners decided to freeze property tax assessments at 2016 levels.  Smart move on their part.  Jurisdictions with taxing authority are finding that they can’t simply continue to raise taxes, in order to fund whatever they have agreed to pay for.  At some point, taxpayers resist, many voting with their feet that they simply won’t stay and pay, indefinitely.  Just ask Illinois.

According to Automotive News Europe, the U.K. government plans to invest more than 800 million
pounds, or more than $1 billion, in new driverless and zero-emission vehicle technology, as it seeks to become a leader in such technologies.  You can read the entire article at 
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In mid-May, a cyberattack hit Microsoft Windows-based computers through a malware known as ransomware.  While ransomware attacks are becoming increasingly common, this attack, known as WannaCry, was noted for its speed of transmission. 

Ransomware is generally spread via email messages that contain infected attachments.  When a user opens the attachment, a program runs that encrypts the user’s computer and demands a ransom be paid, typically in bitcoin, for a key that will unencrypt the files.

Internally, we teach our team some basic security protocol, as a means of protecting technology
tools and data.
  First, we have tight filters on what emails actually get through.  We review all emails caught by the spam filter, and whitelist only those we recognize, and want to receive.  Second, we don’t open any attachments from anyone, including clients and trusted vendors, unless we were expecting the attachments. 

Third, we don’t forward “cute” emails, regardless of the heart touching story, or cute butterfly/kitten/baby picture.  These are often forwards themselves, and could have picked up any number of viruses in transmission. 

Fourth, we don’t automatically send money to a client, simply because we get an email from them saying “send money”.  Those emails are currently the primary means and source of financial fraud, by the schmucks who specialize in this type of behavior.  When we do receive a request for funds, we evaluate the email, to confirm the email address, and the type and amount of content, to determine that it is consistent with the communication style of this particular client.  We also confirm by phone call.  This is simple to do, preserves capital, and avoids grief for all parties involved.

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Next week, we celebrate Independence Day, in honor of the signing and adoption of the Declaration of Independence, in July 1776.  It was during the summer of 1776 that the thirteen colonies declared themselves a new and free nation, independent of England and King George.

In thinking about our heritage as a country, and the concept of independence and freedom, several things come to mind.  First is that it takes very few to make a difference.  Those few though, must be resolute in their conviction.  The signers of the Declaration of Independence pledged their lives, their fortunes, and their sacred honor.  A number of them did give their lives and fortunes to the cause of liberty.
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Another thought is that there are differing kinds of freedom.  Freedom can encompass the personal freedom of self-determination, and economic freedom, to pursue whatever we choose as a way to engage with work and life.  It can also encompass emotional, mental, and spiritual freedom, though these are in the realm of personal choice.  If you are bound in some way, will you choose to be free?

Quote of the week:

“Is life so dear, or peace so sweet, as to be purchased at the price of chains and slavery?  Forbid it, Almighty God!  I know not what course others may take; but as for me, give me liberty, or give me death.”

                                                     Patrick Henry, St. Johns Church, Richmond, Virginia, March 23, 1775

Thursday, June 22, 2017


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Jeff Bezos has announced his intent to buy Whole Foods, in a deal valued at $13.7 billion, or $42 per share for Whole Foods.  Stock prices of Whole Foods, WFM, and Amazon, AMZN, were up on Friday, with stock prices on most other grocery retailers down.  This isn’t the end of the story.  Look for both regulatory scrutiny, but more particularly, competing bids by other grocers, or a consortium of such.  And, look for Bezos, in the next ten years, to announce that he’s buying all the companies in the S&P 500.

Tech stocks sold off last week, with the NASDAQ closing at 6151, down 2.7% since its high of 6321 on June 8th.  The NASDAQ Composite Index is still up 768 points, or more than 14.2%, since the first of the year.  Unless 100% of your portfolio is in tech stocks, I wouldn’t let this little hiccup keep me up at night.

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The FOMC announced an interest rate increase of 0.25% in its Fed Funds rate, when it met this last week.  Chair Janet Yellen made the announcement on Wednesday afternoon, after the 8-1 vote to raise rates.  Minneapolis Fed President Kashkari was the lone dissenting voice.  Yellen also said the Fed plans to reduce its $4.5 trillion balance sheet this year.  Most observers anticipate one more interest rate increase this year, which rate increase has already been factored into bond prices.

Attorney General Jeff Sessions has asked Congress to allow the Justice Department to prosecute businesses and individuals in the 29 states that have medical marijuana laws.  In response, Senators Rand Paul, Corey Booker, and Kirsten Gillibrand introduced a bill which would end federal prohibition of medical marijuana, and take steps to improve research.  This whole marijuana conversation is interesting, and certainly different than it was in the ‘70’s.  My only observation is that Cheech and Chong movies were just funny.
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Hodgkinson taking a gun to congressmen playing baseball is just the latest in all sorts of very uncivil and violent discourse, both stateside, and around the world.  Seems far too many feel comfortable with personal attacks, meanness, and even physical violence, against those who are different than they are, or with those who they disagree.  And the tension isn’t limited to politics.  It appears to include religion, lifestyle choices, skin color, and every imaginable sort of difference.  Whatever happened to concepts such as “quick to listen, slow to speak”, “a soft answer turns away anger”, or “come now and let us reason together”?  All of us as humans have much more in common, than we do that separates us.

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Charlie Maupin and Jim Wooters, both in their mid-90’s, were interviewed recently by the Columbus Ledger-Enquirer.  They were on board different ships in the English Channel, on the morning of June 6, 1944.  The interview is more than interesting, and you can find it at  One quote stands out.  Wooters said “when you know you are going to die, you are no longer afraid”. 

Yes.  So, what’s stopping you?  And me?  We know we are going to die.  Why not then, fully live?

Quote of the week:

“The only thing we have to fear is fear itself.”
                                        FDR Inaugural Address, March 4, 1933

P.S.  You can find the entire Inaugural Address, in either text or audio, at

Wednesday, June 7, 2017


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U.S. stock markets closed the 100th trading day of 2017 on May 25th, with the S&P 500 having risen 7.9% over that period.  This continues the bull market that began in early March of 2009, with this bull into its 9th year.

There have been 23 years since 1950, not including 2017, where the S&P 500 has risen 7.5% or more during the first 100 trading days.  In all those instances, the S&P 500 closed higher for the year, with an average gain of 23.4%.  If 2017 performs at the average, and we have no reason to believe it will, the S&P 500 would finish the year at 2760.

While the domestic bull continues to run, we find much the opposite story internationally.  International Developed Markets,  primarily Europe, remains below 2007 highs, and Emerging Markets have performed more poorly than International Developed.  Year to date, both International Developed and Emerging Markets have outperformed the S&P 500, though they have a long way to go before they get back to their long term mean return.

The DOL fiduciary rule, which was to have gone into effect on April 10th, and whose start date was delayed until June 9th, with full implementation by January 2018, has become a political football.  The short version is that the rule would impose on those advisors who manage IRAs for clients, the same fiduciary standard which the DOL uses for those offering advice to retirement plans.

Needless to say, this rule is being heavily opposed by sellers of annuities, as it is difficult, if not impossible, to serve as a fiduciary and sell a variable annuity at the same time.  Our recommendation for consumers is to work only with a financial professional who will choose to be a fiduciary.

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Turning to economic news, the Bureau of Economic Analysis revised the Q1 GDP numbers, showing a gain of 1.2%, compared to previous estimates of 0.7%.  During Q1 2017, consumer spending increased 0.44%, compared to a 2.40% increase in Q4 2016.  And, fixed investment jumped to an increase of 1.85%, compared to a 0.46% increase in Q4 2016.  The bulk of this fixed investment was non-residential.

The Census Bureau reported 138,000 new jobs were created in May, less than the expected 185,000 new jobs.  Private sector gains were 147,000, meaning there was a decrease in government jobs by 9000.  A decrease in government payroll is a positive, as far as we are concerned.  And, the Census Bureau reported the official unemployment rate at 4.3%.

The FOMC meets next week, on the 13th and 14th.  Expect some announcement regarding interest rates, even if the announcement is that there will be no change.

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The U.S. Federal Reserve holds about $4.2 trillion in Treasury and mortgage backed securities, up from about $800 billion in 2007.  The Fed plans to begin reducing this position later this year, though by as little as $10 billion to $15 billion per month.

Many of us are invited into conversations from time to time, where our best approach is to listen, and seek to understand.  This could be with a child, spouse, business partner, employee, client or customer, or other situations.  Over the years, we have learned several things which help, when we are in these conversations.  Since we are still learning, we invite you to share what you have learned.  Here is what I have learned so far.

Be engaged with my eyes and your posture.  Look at the person, and choose not to be distracted.  As one author said, lean into the conversation.  A slouched position, or folded arms, communicates unavailability and disinterest.

Do not interrupt when someone else is talking.  Interrupting when someone else is talking diminishes the other person, and communicates that who they are, and what they have to say, doesn’t matter to me. 

And, give the person who is talking the time to finish.  Just because someone stops talking doesn’t mean they are finished talking.  It may mean they are organizing their thoughts, or deciding how much to share.  Or they may be deciding if they can trust me enough to really share their heart.  If I jump into the conversation, as soon as someone takes a breath, I may miss the thing I needed to hear most, and will almost always miss an opportunity to build trust and confidence. 
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My friend Cheryl teaches her team the nine second rule.  That is, she teaches her team to allow nine seconds of silence to pass, once someone finishes talking, before someone else speaks.

Don’t attempt to top their stories.  If someone shares an experience in this context, attempting to share one of my own experiences which was better/more exciting both diminishes the person, and speaks to my insecurities.

Ask questions, for the sake of clarity.  It is true that I see and hear the world as I am, not as it is.  Therefore, as I hear someone share, what I’m understanding, and what they are meaning, may well be two different things.  I’ve learned, if I am unsure of what I’m hearing, to simply say “Here is what I heard.  Is that what you meant?”

Seek, and listen, to understand, not to reply.  Developing a reply while someone is talking distracts me from the conversation, and increases the likelihood that I will miss important information.  It also communicates that I am not actually listening.  Often, the greatest thing we can do for someone else is to allow them to be and feel known, heard, and understood.

What can you add to this list, in the interest of helping all of us improve?

Quote of the week:

“Every time you make a choice, you are turning the central part of you into something a little different than it was before.”
                                                                                                                                                                                                                                                    C.S. Lewis